SENATE JOURNAL

SEVENTY-NINTH LEGISLATURE — REGULAR SESSION

AUSTIN, TEXAS

PROCEEDINGS

SEVENTY-NINTH DAY

(Thursday, May 26, 2005)

The Senate met at 1:15 p.m. pursuant to adjournment and was called to order by Senator Carona.

The roll was called and the following Senators were present:iiArmbrister, Averitt, Barrientos, Brimer, Carona, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hinojosa, Jackson, Janek, Lindsay, Lucio, Madla, Nelson, Ogden, Seliger, Shapiro, Shapleigh, Staples, VanideiPutte, Wentworth, West, Whitmire, Williams, Zaffirini.

The Presiding Officer announced that a quorum of the Senate was present.

The Reverend Charles Whitmire, Crestview Baptist Church, Austin, offered the invocation as follows:

O great and merciful God, we thank You that today You have given us another opportunity to serve the great people of Texas. We are humbled by the scope of the work before us, and as we start this session today, we request Your involvement and guidance in our lives. You know, O Lord, that the decisions we make today are very important. Please help us to lead with wisdom and courage. Give us clear minds, articulate voices, and passionate hearts. Give us the strength to do what we feel as right even when we may be acting alone. Help us to protect those we are elected to serve, especially the weak, the poor, and our Texas children. You have placed a tremendous responsibility in our hands and we are very much honored by this task. To You be all glory, and honor, and power. Amen.

Senator Whitmire moved that the reading of the Journal of the proceedings of yesterday be dispensed with and the Journal be approved as printed.

The motion prevailed without objection.

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 26, 2005

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

HCR 7, Memorializing Congress to preserve the community development block grant program and its funding at the U.S. Department of Housing and Urban Development.

HCR 222, Congratulating Francis Vernon Ruble and Aimer Loutency Ruble on their 63rd wedding anniversary.

Respectfully,

/s/Robert Haney, Chief Clerk

House of Representatives

SENATE RESOLUTION 1028

Senator Averitt offered the following resolution:

WHEREAS, The Senate of the State of Texas is pleased to recognize United States Olympic swimmer Dana Vollmer of Granbury for her momentous achievement of winning a gold medal at the 2004 Olympic Games in Athens, Greece, as a member of the women's 800-meter freestyle relay team; and

WHEREAS, Dana swam the third leg of the relay, helping her team set a world record of 7:53.42 in the Olympic finals; their time shattered a 17-year-old record by more than two seconds; and

WHEREAS, Dana also placed sixth in the individual 200-meter freestyle; she was the only American to reach the finals in that event and was the first American to do so in eight years; Dana's other accomplishments include winning the 200-meter freestyle at the 2003 Pan American Games and at the 2004 Olympic Trials; and

WHEREAS, Dana has been swimming competitively at a very high level for many years; she holds several age-group records in Texas, and she was the youngest competitor at the 2000 Olympic Trials at the age of 12; and

WHEREAS, Dana is recognized for her courage; she competes daily with an ongoing, serious heart condition that sometimes causes her heart to stop without warning; and

WHEREAS, An exemplary young woman with a promising future, Dana inspires others with her spirit, tenacity, and athleticism, and her accomplishments are a source of pride to her family, her community, and her state; now, therefore, be it

RESOLVED, That the Senate of the State of Texas, 79th Legislature, hereby commend Dana Vollmer for her outstanding achievements in the Olympic Games; and, be it further

RESOLVED, That a copy of this Resolution be prepared for her as an expression of esteem from the Texas Senate.

SR 1028 was read and was adopted without objection.

3762 79th Legislature — Regular Session 79th Day

GUESTS PRESENTED

Senator Averitt was recognized and introduced to the Senate Olympic Gold Medal Winner Dana Vollmer, her parents, Les and Kathy Vollmer, accompanied by her swimming coach, Ron Forrest.

The Senate welcomed its guests.

PHYSICIAN OF THE DAY

Senator Fraser was recognized and presented Dr. Robert Hogue of Brownwood as the Physician of the Day.

The Senate welcomed Dr. Hogue and thanked him for his participation in the Physician of the Day program sponsored by the Texas Academy of Family Physicians.

GUESTS PRESENTED

Senator Ellis was recognized and introduced to the Senate the Texas Legislative Internship Program Class of 2005:iiKeith Brooks, Melisha Craft, Derrick Davis, Mary Dean, Orianna Diaz, Carlos Doroteo, Melissa Duncan, Patrick Embry, Shannon Garth-Rhodes, John Guess IV, Terry James, Amy-Kristen Jones, Darrell Jordan, Jr., Emily King, Hendrik Maison, Akilah Mance, Dolly Marchena, Kelechi Meremikwu, Gulani Moeti, Xolisile Moloi, Shelley Morrison, Vanessa McMahan, Nicholas Ngcobo, Ephraim Ngoasheng, Henal Patel, Simeon Popoff, English Pratts, Monica Ramasehla, Nicholas Reed, Hamilton Rucker, Geneza Simoes, Valerie Simpson, Candice Smith, Christopher Smith, Nikki Starr, Anthony Stewart, Kevin Vickers, Rebecca Walton, and Courtney White; accompanied by honorary interns Rachel Grove, Wendolynn Montoya, and Justin Schwartz.

The Senate welcomed its guests.

SENATE RESOLUTION 987

Senator Van de Putte offered the following resolution:

WHEREAS, Brigadier General Charles G. Rodriguez of San Antonio has been appointed by Governor Rick Perry to serve as Texas adjutant general; and

WHEREAS, The first Hispanic to hold that office, General Rodriguez assumes his new post in June 2005; in that capacity, he will lead more than 18,000 members of the Texas Army and Air National Guard, the Texas State Guard, and the Adjutant General's Department; and

WHEREAS, Presently, General Rodriguez serves as assistant adjutant general for homeland defense in the Texas Joint Forces Headquarters, a position he has held since November 2004; and

WHEREAS, This distinguished Texan graduated from the U.S. Military Academy at West Point in 1975 and began his military career in the Signal Corps; during his eight years of active duty, he served with the 101st Airborne Division at Fort Campbell in Kentucky and with the 1st Armored Division in Ansbach, Germany; he subsequently spent 11 years in the U.S. Army Reserve, during which time his assignments included tours with the National Security Agency, the U.S.A. Command, and West Point; and

Thursday, May 26, 2005 SENATE JOURNAL 3763

WHEREAS, Since joining the Texas National Guard in 1995, General Rodriguez has commanded the 136th Signal Battalion and the 136th Regiment; in 2002, he was made deputy commander of the 71st Troop Command; and

WHEREAS, Along with a bachelor of science degree, General Rodriguez has earned a master's degree in communications research from Wheaton College Graduate School, a master of business administration degree from Keller Graduate School of Management, and a doctorate in philanthropic leadership from The Union Institute and University; and

WHEREAS, Charles Rodriguez currently serves as assistant vice president for university relations and as deputy director of the Center for Public Health Preparedness and Biomedical Research at The University of Texas Health Science Center at San Antonio; he and his wife, Cappy, are the parents of a son, Christopher, and a daughter, Johnny Marie; and

WHEREAS, In these challenging times, the State of Texas is indeed fortunate to have an officer of such outstanding ability to oversee the training of its military forces, and it is a privilege to recognize General Rodriguez as he prepares to take the helm of the Adjutant General's Department; now, therefore, be it

RESOLVED, That the Senate of the 79th Texas Legislature hereby congratulate Brigadier General CharlesiG.iRodriguez on his appointment as adjutant general of Texas; and, be it further

RESOLVED, That an official copy of this resolution be prepared for General Rodriguez as an expression of high regard by the Texas Senate.

SR 987 was read and was adopted without objection.

GUEST PRESENTED

Senator VanideiPutte was recognized and introduced to the Senate Brigadier General Charles G. Rodriguez of San Antonio.

The Senate welcomed its guest.

SENATE RESOLUTION 1027

Senator Averitt offered the following resolution:

WHEREAS, The Senate of the State of Texas is pleased to recognize Robert B. Sloan, Jr., who served as president of Baylor University from June 1, 1995 through May 31, 2005, during a time of great change and progress in the state's oldest institution of higher education; and

WHEREAS, One of President Sloan's greatest achievements has been implementing Baylor 2012, the university's 10-year plan that calls for Baylor to become a nationally recognized research institution and at the same time strengthen its Christian mission; and

WHEREAS, During President Sloan's tenure, the Baylor faculty has grown from 644 to 780, and faculty research has greatly increased; and

WHEREAS, Numerous new schools have been established at Baylor since 1995, including the School of Engineering and Computer Science, the Honors College, and the School of Social Work; and a number of new doctoral programs were developed during this time; and

3764 79th Legislature — Regular Session 79th Day

WHEREAS, Minority student enrollment has increased to 30.3 percent in the 2004 fall semester freshman class, and graduate student enrollment has grown to an all-time high of 1,297 students; and

WHEREAS, Baylor's operating budget and its endowment have more than doubled; campus size has increased from 450 acres to almost 750 acres, and many new facilities have been built; and

WHEREAS, President Sloan set high standards for his faculty, administrative officers, and students and provided an environment conducive to excellence in teaching and learning; he has had a positive impact on the lives of many students, and Baylor University will long benefit from his leadership; now, therefore, be it

RESOLVED, That the Senate of the State of Texas, 79th Legislature, hereby commend Robert B. Sloan, Jr., for his outstanding achievements as president of Baylor University and his many contributions to the educational system of this state and extend to him best wishes in his new role as university chancellor; and, be it further

RESOLVED, That a copy of this Resolution be prepared for him as an expression of esteem from the Texas Senate.

SR 1027 was read and was adopted without objection.

SENATE RESOLUTION 995

Senator Ellis offered the following resolution:

WHEREAS, The Senate of the State of Texas is pleased to recognize Dr.iMargaret Penn Sherrod for creating and directing the Black Foxes, the majorette dancing line that performs with the Prairie View A&M University Marching Storm Band; and

WHEREAS, Dr. Sherrod has directed the popular dance troupe for 30 years, and she works closely with band director George Edwards to provide entertainment at local athletic events, as well as throughout the state and nation; under her tutelage, the Black Foxes has grown from eight to 20 dancers, and the group has a reputation around the country for first-class precision and showmanship; and

WHEREAS, Performing with the Marching Storm Band, the Black Foxes have danced in numerous high-profile events, such as inaugural parades for President George W. Bush, the nationally televised Dallas Cowboys 2004 Thanksgiving Day game, and the Honda Battle of the Bands in Atlanta, Georgia; and

WHEREAS, A former Miss Prairie View A&M University, Margaret Sherrod was the first African-American contestant in the Miss Texas and Miss America Pageants; and

WHEREAS, She expects performance excellence, good grades, character development, and community involvement from the members of the Black Foxes program; and

WHEREAS, The Prairie View A&M University Marching Band and the Black Foxes are a source of great pride to the university and our state, and Dr. Margaret Penn Sherrod deserves recognition for creating the Black Foxes and making the dancers the tremendous success they are today; now, therefore, be it

Thursday, May 26, 2005 SENATE JOURNAL 3765

RESOLVED, That the Senate of the State of Texas, 79th Legislature, hereby commend Dr. Margaret Penn Sherrod for her exceptional achievements and congratulate her on her outstanding work as director of the Black Foxes; and, be it further

RESOLVED, That a copy of this Resolution be prepared for her as an expression of esteem from the Texas Senate.

ELLIS

ARMBRISTER

SR 995 was read.

SENATE RESOLUTION 996

Senator Ellis offered the following resolution:

WHEREAS, The Senate of the State of Texas is pleased to recognize George Edwards, who is the director of the widely acclaimed Prairie View A&M University Marching Storm Band; and

WHEREAS, Under the leadership and direction of Professor Edwards, the Marching Storm Band has earned a reputation as one of the best bands in the country and has won many accolades for its outstanding performances and showmanship; and

WHEREAS, Members of the band and of its majorette dance program, the Black Foxes, perform at athletic competitions and at such high-profile events as President George W. Bush's 2001 Presidential Inaugural Parade in Washington, D.C., and the Dallas Cowboys' 2004 Thanksgiving Day game; and

WHEREAS, One of the top 10 marching bands in the country selected by the Historically Black Colleges and Universities to participate in the Honda Battle of the Bands Invitational Showcase in Atlanta, Georgia, the Prairie View A&M Band has proved to be an audience favorite; and

WHEREAS, George Edwards has directed the Marching Storm Band for 20 years, and in that time span, it has grown from a band with 25 instruments to nearly 300; in addition to developing his students' musical and performing talents, he coaches them in personal conduct and character development; and

WHEREAS, The Prairie View A&M University Marching Storm Band is renowned for its excellence and is a source of tremendous pride to the university and to our state, and George Edwards deserves recognition for making the band such a success; now, therefore, be it

RESOLVED, That the Senate of the State of Texas, 79th Legislature, hereby commend George Edwards for his exceptional achievements and his outstanding success as director of the Prairie View A&M University Marching Storm Band; and, be it further

RESOLVED, That a copy of this Resolution be prepared for him as an expression of esteem of the Texas Senate.

ELLIS

ARMBRISTER

SR 996 was read.

SR 995 and SR 996 were adopted without objection.

3766 79th Legislature — Regular Session 79th Day

GUESTS PRESENTED

Senator Ellis, joined by Senator Armbrister, was recognized and introduced to the Senate Margaret Sherrod, Kaneisha Black, George Edwards, and Samuel Towsel.

The Senate welcomed its guests.

SENATE RULE 11.13 SUSPENDED

(Consideration of Bills in Committees)

On motion of Senator Deuell and by unanimous consent, Senate Rule 11.13 was suspended to grant all conference committees permission to meet while the Senate is meeting today.

CONFERENCE COMMITTEE ON HOUSE BILL 969

Senator Hinojosa called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi969 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi969 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Hinojosa, Chair; Whitmire, Duncan, Carona, and Seliger.

SENATE BILL 624 WITH HOUSE AMENDMENTS

Senator Hinojosa called SBi624 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer, Senator Carona in Chair, laid the bill and the House amendments before the Senate.

Amendment

Amend SB 624 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of bail bond sureties.

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

SECTIONi1.iiSection 1704.001(4), Occupations Code, is amended to read as follows:

(4)ii"Bonding business" or "bail bond business" means the solicitation, negotiation, or execution of a bail bond by a bail bond surety.

SECTIONi2.iiSection 1704.002, Occupations Code, is amended to read as follows:

Sec.i1704.002.iiAPPLICATION OF CHAPTER. This chapter applies only in a county with a population of:

(1)ii50,000 [110,000] or more; or

Thursday, May 26, 2005 SENATE JOURNAL 3767

(2)iiless than 50,000 [110,000] in which a board is created.

SECTIONi3.iiSection 1704.051, Occupations Code, is amended to read as follows:

Sec.i1704.051.iiMANDATORY CREATION OF BOARD. A board is created in each county with a population of 50,000 [110,000] or more.

SECTIONi4.iiSection 1704.052, Occupations Code, is amended to read as follows:

Sec.i1704.052.iiDISCRETIONARY CREATION OF BOARD. A board may be created in a county with a population of less than 50,000 [110,000] if a majority of the persons who would serve as members of the board under Section 1704.053, or who would designate the persons who would serve as members of the board, determine to create a board.

SECTIONi5.iiSection 1704.152(a), Occupations Code, is amended to read as follows:

(a)iiTo be eligible for a license under this chapter, an individual, including an agent designated by a corporation in an application, must:

(1)iibe a resident of this state and a citizen of the United States;

(2)iibe at least 18 years of age;

(3)iipossess the financial resources required to comply with Section 1704.160, unless the individual is acting only as agent for a corporation holding a license under this chapter; and

(4)iisubmit documentary evidence that [have], in the two years preceding the date a license application is filed, the individual:

(A)iihas been continuously employed by a person licensed under this chapter for at least one year and for not less than 30 hours per week, excluding annual leave, and has performed duties that encompass all phases of the bonding business [of continuous work experience in the bail bond business]; and

(B)iicompleted in person at least eight hours of continuing legal education in criminal law courses or bail bond law courses that are approved by the State Bar of Texas and that are offered by an accredited institution of higher education in the state.

SECTIONi6.iiSection 1704.163, Occupations Code, is amended to read as follows:

Sec.i1704.163.iiATTORNEY EXEMPTION. (a) Except as provided by this section, a person not licensed under this chapter may execute a bail bond or act as a surety for another person in any county in this state if the person:

(1)iiis licensed to practice law in this state; and

(2)iiat the time the bond is executed or the person acts as a surety, files a notice of appearance as counsel of record in the criminal case for which the bond was executed or surety provided or submits proof that the person has previously filed with the court in which the criminal case is pending the notice of appearance as counsel of record [represents the other person in the criminal case for which the bond was given].

(b)iiA person executing a bail bond or acting as a surety under this section may not engage in conduct involved with that practice that would subject a bail bond surety to license suspension or revocation. If the board determines that a person has violated this subsection, the board may suspend or revoke the person's authorization

3768 79th Legislature — Regular Session 79th Day

(c)iiA person executing a bail bond or acting as a surety under this section [who has been paid a fee for executing the bond or acting as the surety] is not relieved of liability on the bond solely because the person is later replaced as attorney of record in [has not been employed to represent the principal on the merits of] the criminal case.

SECTIONi7.iiNotwithstanding Section 1704.051, Occupations Code, as amended by this Act, a county with a population of 50,000 or more that has not established a county bail bond board under Chapter 1704, Occupations Code, as amended by this Act, is not required to establish a county bail bond board before January 1, 2006.

SECTIONi8.iiThis Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 624 (House committee report) by striking SECTIONS 2, 3, 4, and 7 of the bill (page 1, line 9, through page 2, line 4, and page 4, lines 4 through 9) and renumbering subsequent SECTIONS of the bill accordingly.

The amendments were read.

Senator Hinojosa moved to concur in the House amendments to SBi624.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 427 WITH HOUSE AMENDMENTS

Senator Van de Putte called SBi427 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 427 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to providing notification to a county voter registrar of the change in boundaries of a political subdivision located in the county.

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

SECTIONi1.iiSubchapter C, Chapter 42, Election Code, is amended by adding Section 42.0615 to read as follows:

Sec.i42.0615.iiNOTICE TO REGISTRAR OF BOUNDARY CHANGE OF POLITICAL SUBDIVISION. A political subdivision that changes its boundaries or the boundaries of districts used to elect members to the governing body of the political subdivision shall not later than the 30th day after the date the change is adopted:

(1)iinotify the voter registrar of the county in which the area subject to the boundary change is located of the adopted boundary change; and

(2)iiprovide the voter registrar with a map of an adopted boundary change in a format that is compatible with the mapping format used by the registrar's office.

SECTIONi2.iiThis Act takes effect September 1, 2005.

Thursday, May 26, 2005 SENATE JOURNAL 3769

Floor Amendment No. 2

Amend CSSB 427 (House committee printing) as follows:

(1)iiBetween the enacting clause and SECTION 1 of the bill (page 1, between lines 5 and 6), insert:

ARTICLE 1. AMENDMENT OF ELECTION CODE

(2)iiRedesignate SECTION 1 of the bill as SECTION 1.01.

(3)iiStrike SECTION 2 of the bill (page 1, line 19), and substitute the following:

ARTICLE 2. AMENDMENT OF RED BLUFF WATER POWER CONTROL

DISTRICT LOCAL LAW

SECTIONi2.01.iiDEFINITIONS. In this article, "Red Bluff District" means the Red Bluff Water Power Control District.

SECTIONi2.02.iiNATURE AND COMPOSITION OF DISTRICT. (a) The Red Bluff Water Power Control District is a water power control district in Loving, Pecos, Reeves, and Ward Counties:

(1)iicreated under Section 59, Article XVI, Texas Constitution; and

(2)iigoverned by:

(A)iiChapter 76, General Laws, Acts of the 43rd Legislature, Regular Session, 1933 (Article 7807d, Vernon's Texas Civil Statutes);

(B)iiChapter 19, General Laws, Acts of the 43rd Legislature, 1st Called Session, 1933 (Article 7807dd, Vernon's Texas Civil Statutes); and

(C)iiother provisions of general law.

(b)iiThe Red Bluff District is composed of the seven following member districts regardless of whether a district is a water improvement district operating under Chapter 55, Water Code, or an irrigation district operating under Chapter 58, Water Code:

(1)iiLoving County Water Improvement District No. 1;

(2)iiPecos County Water Improvement District No. 2;

(3)iiPecos County Water Improvement District No. 3;

(4)iiReeves County Water Improvement District No. 2;

(5)iiWard County Irrigation District No. 1;

(6)iiWard County Irrigation District No. 3; and

(7)iiWard County Water Improvement District No. 2.

SECTIONi2.03.iiRED BLUFF DISTRICT BOARD OF DIRECTORS. (a) The Red Bluff District is governed by a board of seven directors.

(b)iiThe board of directors of each member district shall appoint one director to serve on the board of directors of the Red Bluff District. Each director represents the member district from which the director was appointed and serves at the pleasure of the directors of that member district.

(c)iiA person who is an elected director of a member district may be appointed to serve as a director of the Red Bluff District.

(d)iiIf a vacancy occurs on the board of directors of the Red Bluff District, the member district that appointed the director to the vacated position shall appoint a person to fill the vacancy.

3770 79th Legislature — Regular Session 79th Day

SECTIONi2.04.iiTERRITORY OF RED BLUFF DISTRICT; COUNTY NOTIFICATION. (a) The territory of the Red Bluff District is only that territory included in the combined territory of the member districts listed under Section 2.02(b) of this article.

(b)iiThe Red Bluff District shall notify the registrars of the counties named in Section 2.02(a) of this article of the change in district boundaries not later than the 30th day after the effective date of this article.

SECTIONi2.05.iiEFFECTIVE DATE OF ARTICLE. This article takes effect on the later of the effective date of this Act or the date on which this article is precleared under Section 5, Voting Rights Act of 1965 (42 U.S.C. Section 1973c).

ARTICLE 3. EFFECTIVE DATE

SECTIONi3.01.iiExcept as otherwise provided by this Act, this Act takes effect September 1, 2005.

Floor Amendment No. 1 on Third Reading

Amend CSSB 427 on third reading by striking Article 2 of the bill, as added by the Hardcastle amendment, and renumbering the remaining articles as appropriate.

The amendments were read.

Senator Van de Putte moved to concur in the House amendments to SBi427.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE ON HOUSE BILL 167

Senator Jackson called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi167 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi167 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Jackson, Chair; Brimer, Fraser, Madla, and Lucio.

CONFERENCE COMMITTEE ON HOUSE BILL 182

Senator Janek called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi182 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi182 before appointment.

There were no motions offered.

Thursday, May 26, 2005 SENATE JOURNAL 3771

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Janek, Chair; Wentworth, Williams, Eltife, and Duncan.

SENATE BILL 1828 WITH HOUSE AMENDMENT

Senator Estes called SBi1828 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1828 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the Smiley Road Water Control and Improvement District; providing authority to impose a tax and issue bonds.

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

SECTIONi1.iiSubtitle I, Title 6, Special District Local Laws Code, is amended by adding Chapter 9001 to read as follows:

CHAPTER 9001. SMILEY ROAD WATER CONTROL AND
IMPROVEMENT DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec.i9001.001.iiDEFINITIONS. In this chapter:

(1)ii"Board" means the board of directors of the district.

(2)ii"Director" means a member of the board.

(3)ii"District" means the Smiley Road Water Control and Improvement District.

Sec.i9001.002.iiNATURE OF DISTRICT. The district is a water control and improvement district in Denton County created under and essential to accomplish the purposes of Section 52, Article III, and Section 59, Article XVI, Texas Constitution. The district is created to serve a public use and benefit.

Sec.i9001.003.iiCONFIRMATION ELECTION REQUIRED. If the creation of the district is not confirmed at a confirmation election held under Section 9001.023 before September 1, 2007:

(1)iithe district is dissolved September 1, 2007, except that:

(A)iiany debts incurred shall be paid;

(B)iiany assets that remain after the payment of debts shall be transferred to Denton County; and

(C)iithe organization of the district shall be maintained until all debts are paid and remaining assets are transferred; and

(2)iithis chapter expires September 1, 2010.

Sec.i9001.004.iiINITIAL DISTRICT TERRITORY. (a) The district is initially composed of the territory described by Section 2 of the Act creating this chapter.

(b)iiThe boundaries and field notes contained in Section 2 of the Act creating this chapter form a closure. A mistake made in the field notes or in copying the field notes in the legislative process does not affect:

(1)iithe organization, existence, or validity of the district;

3772 79th Legislature — Regular Session 79th Day

(2)iithe right of the district to impose ad valorem taxes; or

(3)iithe legality or operation of the district or the board.

Sec.i9001.005.iiAPPLICABILITY OF OTHER LAW. Except as otherwise provided by this chapter, Chapters 49 and 51, Water Code, apply to the district.

[Sections 9001.006-9001.020 reserved for expansion]

SUBCHAPTER A1. TEMPORARY PROVISIONS

Sec.i9001.021.iiTEMPORARY DIRECTORS. (a) The temporary board consists of:

(1)iiBrett Blakey;

(2)iiMichael Cummings;

(3)iiShane Jordan;

(4)iiMike Miller; and

(5)iiMike Mollo.

(b)iiIf a temporary director fails to qualify for office, the Texas Commission on Environmental Quality shall appoint a person to fill the vacancy.

(c)iiTemporary directors serve until the earlier of:

(1)iithe date directors are elected under Section 9001.023; or

(2)iithe date this chapter expires under Section 9001.003.

Sec.i9001.022.iiORGANIZATIONAL MEETING OF TEMPORARY DIRECTORS. As soon as practicable after all the temporary directors have qualified under Section 49.055, Water Code, the temporary directors shall meet and elect officers from their membership.

Sec.i9001.023.iiCONFIRMATION AND INITIAL DIRECTORS' ELECTION. Before September 1, 2007, the temporary directors shall hold an election to confirm the creation of the district and to elect five directors as provided by Section 49.102, Water Code.

Sec.i9001.024.iiINITIAL ELECTED DIRECTORS; TERMS. The directors elected under Section 9001.023 shall draw lots to determine which two shall serve until the first regularly scheduled election of directors under Section 9001.052 and which three shall serve until the second regularly scheduled election of directors.

Sec.i9001.025.iiEXPIRATION OF SUBCHAPTER. This subchapter expires September 1, 2010.

[Sections 9001.026-9001.050 reserved for expansion]

SUBCHAPTER B. BOARD OF DIRECTORS

Sec.i9001.051.iiDIRECTORS; TERMS. (a) The district is governed by a board of five directors.

(b)iiDirectors serve staggered four-year terms.

Sec.i9001.052.iiELECTION OF DIRECTORS. On the uniform election date in May of each even-numbered year, the appropriate number of directors shall be elected.

[Sections 9001.053-9001.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec.i9001.101.iiGENERAL POWERS. (a) The district has:

Thursday, May 26, 2005 SENATE JOURNAL 3773

(1)iiall of the rights, powers, privileges, authority, functions, and duties provided by the general law of this state, including Chapters 49 and 51, Water Code, applicable to water control and improvement districts created under Section 59, Article XVI, Texas Constitution; and

(2)iisubject to Section 9001.105, the rights, authority, privileges, and functions of a road district operating under Section 52(b)(3), Article III, Texas Constitution, Chapter 257, Transportation Code, and other general laws of this state relating to road districts.

(b)iiThe district may provide water, sanitary sewer, drainage, and, subject to Section 9001.105, road services to each part of the district not receiving those services on the effective date of the Act creating this chapter.

Sec.i9001.102.iiAUTHORITY TO CONTRACT WITH OWNERS OF REAL PROPERTY IN DISTRICT. The district may enter into a contract with an owner of real property in the district for the construction, acquisition, financing, ownership, maintenance, and operation of a work or project described by Section 9001.101(b).

Sec.i9001.103.iiCONTRACTS WITH CITY OF CELINA. The district shall use its best efforts to acquire water, sewer, and other powers permitted by law and, if successful, to enter into a contract with the City of Celina to provide water, sewer, and other services to the city.

Sec.i9001.104.iiPROHIBITION ON DIVISION OF DISTRICT. The district may not divide into two or more districts in the manner specified by Section 51.748 or 53.029, Water Code.

Sec.i9001.105.iiVOTER APPROVED ROAD DISTRICT POWERS. (a) If a majority of the voters of the district vote in favor of the district's assumption of road district powers in the manner provided by Section 53.029, Water Code, at an election held for that purpose, the district shall assume the rights, authority, privileges, and functions of a road district as described by Section 9001.101(a)(2).

(b)iiIf the voters approve road district powers under Subsection (a), the district may provide for, or provide aid for, the construction, acquisition, financing, maintenance, and operation of macadamized, graveled, or paved roads inside the district. Road district powers under this section do not include any powers related to the construction, acquisition, financing, maintenance, or operation of a turnpike or toll road.

(c)iiA road project must meet or exceed all applicable construction standards, zoning and subdivision requirements, and regulatory ordinances of each municipality in whose corporate limits or extraterritorial jurisdiction the district is located. If the district is located outside the extraterritorial jurisdiction of a municipality, a road project must meet all applicable construction standards, zoning and subdivision requirements, and regulatory ordinances of each county in which the district is located.

(d)iiThe district may not undertake a road project unless each municipality in whose corporate limits or extraterritorial jurisdiction the district is located consents by ordinance or resolution. If the district is located outside the extraterritorial jurisdiction of a municipality, the district may not undertake a road project unless the county in which the district is located consents by ordinance or resolution.

3774 79th Legislature — Regular Session 79th Day

(e)iiIf the district assumes road district powers under this section, construction plans and specifications for all roads must be submitted to Denton County for approval.

(f)iiSection 49.182, Water Code, does not apply to a project undertaken by the district under this section.

Sec.i9001.106.iiADDITION OF LAND TO DISTRICT. The district may add land to the district in the manner provided by Section 49.301, Water Code, if the owner of the land submits a petition to the district for the addition of the land to the district and the land is adjacent to the territory of the district or is separated from the district only by public land or a right-of-way.

[Sections 9001.107-9001.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec.i9001.151.iiAD VALOREM PLAN OF TAXATION. The district shall use the ad valorem plan of taxation, subject to voter approval at an election held in the district for that purpose.

Sec.i9001.152.iiAD VALOREM TAX FOR ROAD PROJECTS. The district may impose an ad valorem tax to pay the principal of or interest on bonds issued under Section 9001.201(b) to finance projects under Section 9001.105.

Sec.i9001.153.iiUTILITY EXEMPTION FROM IMPACT FEES AND ASSESSMENTS. The district may not impose an impact fee or assessment on the property, equipment, rights-of-way, facilities, or improvements of:

(1)iian electric utility as defined by Section 31.002, Utilities Code;

(2)iia gas utility as defined by Section 101.003 or 121.001, Utilities Code;

(3)iia telecommunications provider as defined by Section 51.002, Utilities Code; or

(4)iia cable operator as defined by 47 U.S.C. Section 522.

[Sections 9001.154-9001.200 reserved for expansion]

SUBCHAPTER E. BONDS

Sec.i9001.201.iiAUTHORITY TO ISSUE BONDS. (a) The district may issue bonds as provided by Chapter 49 or 51, Water Code, or Section 53.029, Water Code, the general laws of this state, or this section.

(b)iiExcept as provided by Subsection (c) and Section 9001.202, the district may issue bonds, notes, or other obligations as provided by Section 53.029, Water Code, to finance, or assist in the financing of, projects under Section 9001.105.

(c)iiThe district may not issue bonds under Subsection (b) unless the issuance is authorized by two-thirds of the district's voters voting at an election called for that purpose.

(d)iiSection 49.181, Water Code, does not apply to a bond issued by the district under Section 53.029, Water Code.

Sec.i9001.202.iiLIMIT ON BONDS AND OTHER OBLIGATIONS. (a) Bonds, notes, or other obligations issued or incurred by the district under Section 53.029, Water Code, may not exceed one-fourth of the assessed value of the real property in the district.

(b)iiThe district may not issue bonds until a development agreement between the City of Celina and the district has been signed.

Thursday, May 26, 2005 SENATE JOURNAL 3775

Sec.i9001.203.iiUSE OF BOND PROCEEDS. The district may use proceeds from the sale of bonds to acquire improvements or facilities:

(1)iifrom a private water supply corporation to provide water or sanitary sewer services to territory in the district; or

(2)iito provide services described by Section 9001.101(b).

SECTIONi2.iiThe Smiley Road Water Control and Improvement District initially includes all the territory contained in the following described area:

All that certain tract or parcel of land lying and being situated in Denton County, Texas, a part of the ROBERT COWAN SURVEY, ABSTRACT NO. 211, and being comprised of the following:

1)iiAll of an 85.17 acre tract described in a Deed to Celina West 637, Ltd., recorded in Volume 5140, Page 827 of the Real Property Records of Denton County

2)iiAll of an 101.42 acre tract described in a Deed to Celina West 637, Ltd., recorded in Volume 5140, Page 821 of the Real Property Records of Denton County,

3)iiAll of a tract said to contain 252.905 acres as described under the caption "Second Tract" in a Deed to Celina West 637, Ltd., recorded in Volume 5120 page 2232 of the Real Property Records of Denton County.

4)iiAll of an 150.69 acre tract described in a Deed to Celina West 637, Ltd. Recorded in Volume 5167, Page 2788 of the Real Property Records of Denton County, and

5)iiAll of a tract said to contain 35.426 acres as described in a deed to Underwood Financial, L.P., et al, recorded under Clerk's File No. 04-0029789, said tract or parcel of land is herein described as follows; to wit:

BEGINNINGiiat point at the intersection of Carey Road (a county road running in an easterly and westerly direction) with Smiley Road (a county road running in a northerly and southerly direction) for the southwest corner of the premises herein described;

THENCEiialong Smiley Road North 00 degrees 30 minutes 10 seconds East, a distance of 2127.78 for the northwest corner of said 85.17 acre tract and an angle point of this tract;

THENCEiicontinuing along Smiley road North 00 degrees 47 minutes 09 seconds East 891.20 to a point in said road at the northwest corner of said called 35.426 acre tract for the most westerly northwest corner hereof:

THENCEiiSouth 89 degrees 02 minutes 45 seconds East 1742.21 feet to a point in the west line of said 150.69 acre tract for the northeast corner of said called 35.426 acre tract and a re-entrant corner hereof;

THENCEiialong the west line of said 150.69 acre tract, North 00 degrees 30 minutes 47 seconds East, a distance of 249.99 feet to a point for corner;

THENCEiiNorth 00 degrees 03 minutes 52 seconds West, a distance of 57.13 feet to a point at the southwest corner said record 252.905 acre tract;

THENCEiialong the west line of last named tract, North 00 degrees 46 minutes 57 seconds East, a distance of 393.91 feet to a point at the southeast corner of MEADOW VISTA PHASE 2, an addition to Denton County according to the Plat thereof recorded in Cabinet Q, page 271 of the Denton County Plat Records;

3776 79th Legislature — Regular Session 79th Day

THENCEiiNorth 00 degrees 36 minutes 12 seconds East, a distance of 2078.90 feet to a point for the most westerly northwest corner of said record 252.905 acre tract;

THENCEiiSouth 88 degrees 07 minutes 27 seconds East, a distance of 2457.17 feet to a point for corner;

THENCEiiNorth 00 degrees 15 minutes 45 seconds West, a distance of 862.00 feet to a point in the south line of F.M. Highway No. 428;

THENCEiiSouth 89 degrees 44 minutes 26 seconds East, along the south line of said FM. Highway No. 428, a distance of 834.25 feet to point in the easterly radius of the Extraterritorial Jurisdiction of the Town of Celina;

THENCEiideparting said south line, and said easterly radius, due South, a distance of 2620.43 feet to a point;

THENCEiiNorth 90 degrees 00 minutes 00 seconds East, a distance of 3347.18 feet to a point in the paved surface of said County Line Road;

THENCEiiSouth 00 degrees 27 minutes 20 seconds West, a distance of 662.33 feet to a point t in the paved surface of said County Line Road for the southeast corner of said 101.42 acre tract and an ell corner hereof:

THENCEiiNorth 89 degrees 46 minutes 54 seconds West, a distance of 2668.49 feet to a point for the southwest corner of said 101.42 acre tract, same being the southeast corner of said record 252.905 acre tract;

THENCEiialong the south line of last named tract, North 89 degrees 40 minutes 55 seconds West, a distance of 1999.64 feet to a point for the northeast corner of said 150.69 acre tract, said corner being a re-entrant corner hereof;

THENCEiiSouth 00 degrees 31 minutes 41 seconds West, a distance of 3304.39 feet to a point in Carey Road at the southeast corner of said 150.69 acre tract, said corner being the most southerly southeast corner hereof:

THENCEiiwith the south line of said Carey Road, North 89 degrees 43 minutes 05 seconds West, a distance of 3731.89 feet to the PLACE OF BEGINNING and containing 522.25 acres of land of which approximately 1.0 acre is subject to the 100 year flood per FEMA Maps and which 4.00 acres are subject to existing County Road rights-of-way leaving a net area of 517.25 acres of land.

SECTIONi3.ii(a) The legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished under Section 59, Article XVI, Texas Constitution, and Chapter 313, Government Code.

(b)iiThe governor, one of the required recipients, has submitted the notice and Act to the Texas Commission on Environmental Quality.

(c)iiThe Texas Commission on Environmental Quality has filed its recommendations relating to this Act with the governor, the lieutenant governor, and the speaker of the house of representatives within the required time.

(d)iiAll requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this Act are fulfilled and accomplished.

Thursday, May 26, 2005 SENATE JOURNAL 3777

SECTIONi4.iiThis Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.

The amendment was read.

Senator Estes moved to concur in the House amendment to SBi1828.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 1421 WITH HOUSE AMENDMENT

Senator Gallegos called SBi1421 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1421 (House committee printing) by adding the following appropriately numbered SECTION to the bill and renumbering subsequent SECTIONS of the bill appropriately:

SECTIONi____.iiSection 143.023(c), Local Government Code, is amended to read as follows:

(c)iiA person who is 45 years of age or older may not be certified for a beginning position in a police department. [A person who is 36 years of age or older and under 45 may not be certified as eligible for a beginning position in a police department unless the person has at least five years' experience as a peace officer or at least five years of military experience.]

The amendment was read.

Senator Gallegos moved to concur in the House amendment to SBi1421.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE ON HOUSE BILL 468

Senator Jackson called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi468 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi468 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Jackson, Chair; Estes, Staples, Madla, and Van de Putte.

SENATE BILL 408 WITH HOUSE AMENDMENTS

Senator Nelson called SBi408 from the President's table for consideration of the House amendments to the bill.

3778 79th Legislature — Regular Session 79th Day

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 408 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the continuation, administration, and operations of the Public Utility Commission of Texas.

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

SECTIONi1.iiThe heading to Subtitle A, Title 2, Utilities Code, is amended to read as follows:

SUBTITLE A. GENERALLY [PROVISIONS] APPLICABLE
PROVISIONS [TO ALL UTILITIES]

SECTIONi2.iiSections 11.002(a) and (b), Utilities Code, are amended to read as follows:

(a)iiThis title is enacted to protect the public interest inherent in the delivery of [rates and] services and deployment of networks by telecommunications providers [public utilities]. The purpose of this title is to establish an appropriate [a comprehensive and adequate] regulatory system for communications service [public utilities to assure rates, operations, and services that are just] and network providers for [reasonable to] the benefit of consumers [and to the utilities].

(b)iiElectric [Public] utilities traditionally are by definition monopolies in the areas they serve. As a result, the normal forces of competition that regulate prices in a free enterprise society do not operate. Public agencies regulate utility rates, operations, and services as a substitute for competition.

SECTIONi3.iiSections 11.003(1), (2), (3), (8), (10), (13), (16), (19), (20), and (21), Utilities Code, are amended to read as follows:

(1)ii"Affected person" means:

(A)iia public utility, provider, or electric cooperative affected by an action of a regulatory authority;

(B)iia person whose [utility] service or rates are affected by a proceeding before a regulatory authority; or

(C)iia person who:

(i)iiis a competitor of a public utility or provider with respect to a service delivered [performed] by the utility or provider; or

(ii)iiwants to enter into competition with a public utility or provider.

(2)ii"Affiliate" means:

(A)iia person who directly or indirectly owns or holds at least five percent of the voting securities of a public utility or provider;

(B)iia person in a chain of successive ownership of at least five percent of the voting securities of a public utility or provider;

(C)iia corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by a public utility or provider;

(D)iia corporation that has at least five percent of its voting securities owned or controlled, directly or indirectly, by:

Thursday, May 26, 2005 SENATE JOURNAL 3779

(i)iia person who directly or indirectly owns or controls at least five percent of the voting securities of a public utility or provider; or

(ii)iia person in a chain of successive ownership of at least five percent of the voting securities of a public utility or provider;

(E)iia person who is an officer or director of a public utility or provider or of a corporation in a chain of successive ownership of at least five percent of the voting securities of a public utility or provider; or

(F)iia person determined to be an affiliate under federal law or Section 11.006.

(3)ii"Allocation" means the division among municipalities or among municipalities and unincorporated areas of the plant, revenues, expenses, taxes, and reserves of an electric [a] utility used to provide electric [public utility] service in a municipality or for a municipality and unincorporated areas.

(8)ii"Counselor [Counsellor]" means the public utility counsel.

(10)ii"Facilities" means all of the plant and equipment of a public utility or provider, 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 public utility or provider.

(13)ii"Order" means all or a part of a final disposition by a regulatory authority in a matter other than rulemaking, without regard to whether the disposition is affirmative or negative or injunctive or declaratory. The term includes:

(A)iithe issuance of a certificate or registration [of convenience and necessity]; and

(B)iithe setting of a rate.

(16)ii"Rate" includes:

(A)iiany compensation, tariff, charge, fare, toll, rental, or classification that is directly or indirectly demanded, observed, charged, or collected by a public utility or provider for a service, product, or commodity described in the definition of utility in Section 31.002 or 51.002; and

(B)iia rule, practice, or contract affecting the compensation, tariff, charge, fare, toll, rental, or classification.

(19)ii"Service" includes:

(A)iibasic local telecommunications service as defined by Section 51.002;

(B)iiinterexchange telecommunications service as defined by Section 51.002;

(C)iilocal exchange telephone service as defined by Section 51.002;

(D)iitransmission service as defined by Section 31.002; and

(E)iia service provided by a utility or electric utility that is described in the definition of utility or electric utility in Section 31.002 or 51.002 [has its broadest and most inclusive meaning. The term includes any act performed, anything supplied, and any facilities used or supplied by a public utility in the performance of the utility's duties under this title to its patrons, employees, other public utilities, an electric cooperative, and the public. The term also includes the interchange of facilities between two or more public utilities. The term does not include the printing, distribution, or sale of advertising in a telephone directory].

3780 79th Legislature — Regular Session 79th Day

(20)ii"Test year" means the most recent 12 months, beginning on the first day of a calendar or fiscal year quarter, for which operating data for a public utility or provider are available.

(21)ii"Trade association" means a nonprofit, cooperative, and voluntarily joined association of business or professional persons who are employed by public utilities, [or] utility competitors, or providers to assist [the public utility industry, a utility competitor, or the industry's or competitor's employees] in dealing with mutual business or professional problems and in promoting their common interest.

SECTIONi4.iiChapter 11, Utilities Code, is amended by adding Sections 11.0042 and 11.0045 to read as follows:

Sec.i11.0042.iiDEFINITION OF AFFILIATE. (a) The term "person" or "corporation" as used in the definition of "affiliate" provided by Section 11.003(2) does not include:

(1)iia broker or dealer registered under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;

(2)iia bank or insurance company as defined under the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;

(3)iian investment adviser registered under state law or the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-20 et seq.);

(4)iian investment company registered under the Investment Company Act of 1940 (15 U.S.C. Section 80a-51 et seq.); or

(5)iian employee benefit plan, pension fund, endowment fund, or other similar entity that may, directly or indirectly, own, hold, or control five percent or more but not more than 15 percent of the voting securities of a public utility or the parent corporation of a public utility if the entity did not acquire the voting securities:

(A)iifor the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or

(B)iiin connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.

(b)iiFor the purpose of determining whether a person is an affiliate under Section 11.006(a)(3), the term "person" does not include an entity that may, directly or indirectly, own, hold, or control five percent or more but not more than 15 percent of the voting securities of a public utility or the parent corporation of a public utility if the entity did not acquire the voting securities:

(1)iifor the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or

(2)iiin connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.

(c)iiA report filed by an entity described by Subsection (a)(5) or (b) with the Securities and Exchange Commission is conclusive evidence of the entity's intent if the report confirms that the voting securities were not acquired:

(1)iifor the purpose of or with the effect of changing or influencing the control of the issuer of the securities; or

(2)iiin connection with or as a participant in any transaction that changes or influences the control of the issuer of the securities.

Sec.i11.0045.iiDEFINITION OF PROVIDER. In Subtitle A "provider" means:

Thursday, May 26, 2005 SENATE JOURNAL 3781

(1)iia service provider; and

(2)iia network provider.

SECTIONi5.iiSection 11.006, Utilities Code, is amended to read as follows:

Sec.i11.006.iiPERSON DETERMINED TO BE AFFILIATE. (a) The commission may determine that a person is an affiliate for purposes of this title if the commission after notice and hearing finds that the person:

(1)iiactually exercises substantial influence or control over the policies and actions of a public utility or provider;

(2)iiis a person over which a public utility or provider exercises the control described by Subdivision (1);

(3)iiis under common control with a public utility or provider; or

(4)iitogether with one or more persons with whom the person is related by ownership or blood relationship, or by action in concert, actually exercises substantial influence over the policies and actions of a public utility or provider even though neither person may qualify as an affiliate individually.

(b)iiFor purposes of Subsection (a)(3), "common control with a public utility or provider" means the direct or indirect possession of the power to direct or cause the direction of the management and policies of another, without regard to whether that power is established through ownership or voting of securities or by any other direct or indirect means.

SECTIONi6.iiChapter 11, Utilities Code, is amended by adding Section 11.010 to read as follows:

Sec.i11.010.iiREPRESENTATION. (a) Except as provided by Subsection (b), an individual who represents an entity in a contested proceeding before the commission must be an attorney licensed to practice law in this state or in another state.

(b)iiThe commission may make an exception to Subsection (a) based on the circumstances of a particular proceeding.

SECTIONi7.iiSection 12.004, Utilities Code, is amended to read as follows:

Sec.i12.004.iiREPRESENTATION BY [THE] ATTORNEY GENERAL. The attorney general shall represent the commission in a matter before a state court, a court of the United States, or a federal public utility or service regulatory commission.

SECTIONi8.iiSection 12.005, Utilities Code, is amended to read as follows:

Sec.i12.005.iiAPPLICATION OF SUNSET ACT. The Public Utility Commission of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter or by Chapter 39, the commission is abolished and this title expires September 1, 2011 [2005].

SECTIONi9.iiSection 12.051(a), Utilities Code, is amended to read as follows:

(a)iiThe commission is composed of five [three] commissioners appointed by the governor with the advice and consent of the senate.

SECTIONi10.iiSection 12.053(b), Utilities Code, is amended to read as follows:

(b)iiA person is not eligible for appointment as a commissioner if the person:

(1)iiat any time during the two years preceding appointment[:

[(A)]iipersonally served as an officer, director, owner, employee, partner, or legal representative of a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider; [or]

3782 79th Legislature — Regular Session 79th Day

(2)iiowns [(B) owned] or controls [controlled], directly or indirectly, stocks or bonds of any class with a value of $10,000 or more in a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider; or

(3)i[(2)]iiis not qualified to serve under Section 12.151, 12.152, or 12.153.

SECTIONi11.iiSection 12.054(a), Utilities Code, is amended to read as follows:

(a)iiIt is a ground for removal from the commission if a commissioner:

(1)iidoes not have at the time of appointment or maintain during service on the commission the qualifications required by Section 12.053;

(2)iiviolates a prohibition provided by Section 12.053 or by Subchapter D;

(3)iicannot discharge the commissioner's duties for a substantial part of the term for which the commissioner is appointed because of illness or disability; [or]

(4)iiis absent from more than half of the regularly scheduled commission meetings that the commissioner is eligible to attend during a calendar year unless the absence is excused by majority vote of the commission; or

(5)iipersonally serves as an officer, director, owner, employee, partner, or legal representative of a utility, provider, affiliate, or direct competitor of a utility or provider.

SECTIONi12.iiSection 12.059, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c)iiA person who is appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTIONi13.iiSection 12.102, Utilities Code, is amended to read as follows:

Sec.i12.102.iiDUTIES OF EMPLOYEES. The commission shall develop and implement policies that clearly separate [define] the policymaking [respective] responsibilities of the commission and the management responsibilities of the commission employees.

SECTIONi14.iiSection 12.152(a), Utilities Code, is amended to read as follows:

(a)iiA person is not eligible for appointment as a commissioner or executive director of the commission if:

(1)iithe person serves on the board of directors of a company that supplies fuel, utility-related services, or utility-related products to a utility or provider [regulated or unregulated electric or telecommunications utilities]; or

(2)iithe person or the person's spouse:

(A)iiis employed by or participates in the management of a business entity or other organization that is regulated by or receives funds from the commission;

(B)iidirectly or indirectly owns or controls more than a 10 percent interest or a pecuniary interest with a value exceeding $10,000 in:

(i)iia business entity or other organization that is regulated by or receives funds from the commission; or

(ii)iia utility, provider, affiliate, or direct competitor of a[,] utility [supplier,] or provider [other entity affected by a commission decision in a manner other than by the setting of rates for that class of customer];

Thursday, May 26, 2005 SENATE JOURNAL 3783

(C)iiuses or receives a substantial amount of tangible goods, services, or funds from the commission, other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses; or

(D)iinotwithstanding Paragraph (B), has an interest in a mutual fund or retirement fund in which more than 10 percent of the fund's holdings at the time of appointment is in a single utility, provider, affiliate, or direct [utility] competitor of a[, or] utility or provider [supplier] in this state and the person does not disclose this information to the governor, senate, commission, or other entity, as appropriate.

SECTIONi15.iiSection 12.153, Utilities Code, is amended to read as follows:

Sec.i12.153.iiRELATIONSHIP WITH TRADE ASSOCIATION. A person may not serve as a commissioner or be a commission employee who is employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), [exempt from the state's position classification plan or is compensated at or above the amount prescribed by the General Appropriations Act for step 1, salary group 17, of the position classification salary schedule] if the person is:

(1)iian officer, employee, or paid consultant of a trade association; or

(2)iithe spouse of an officer, manager, or paid consultant of a trade association.

SECTIONi16.iiSections 12.154(a), (b), (c), (d), (f), and (h), Utilities Code, are amended to read as follows:

(a)iiDuring the period of service with the commission, a commissioner or commission employee may not:

(1)iihave a pecuniary interest, including an interest as an officer, director, partner, owner, employee, attorney, or consultant, in:

(A)iia [public] utility, provider, [or] affiliate, or direct competitor of a utility or provider; or

(B)iia person a significant portion of whose business consists of furnishing goods or services to a utility, provider, affiliate, or direct competitor of a utility or provider [public utilities or affiliates];

(2)iidirectly or indirectly own or control securities in a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider; or

(3)iiaccept a gift, gratuity, or entertainment from:

(A)iia [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider;

(B)iia person a significant portion of whose business consists of furnishing goods or services to [public] utilities, providers, affiliates, or direct competitors of [public] utilities or providers; or

(C)iian agent, representative, attorney, employee, officer, owner, director, or partner of a person described by Paragraph (A) or (B).

(b)iiA commissioner or a commission employee may not directly or indirectly solicit, request from, or suggest or recommend to a [public] utility, provider, affiliate, or direct competitor of a utility or provider or an agent, representative, attorney, employee, officer, owner, director, or partner of a [public] utility, provider, affiliate, or

3784 79th Legislature — Regular Session 79th Day

(c)iiA person may not give or offer to give a gift, gratuity, employment, or entertainment to a commissioner or commission employee if that person is:

(1)iia [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider;

(2)iia person who furnishes goods or services to a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider; or

(3)iian agent, representative, attorney, employee, officer, owner, director, or partner of a person described by Subdivision (1) or (2).

(d)iiA [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider or a person furnishing goods or services to a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider may not aid, abet, or participate with a commissioner, commission employee, or former commission employee in conduct that violates Subsection (a)(3) or (c).

(f)iiIt is not a violation of this section if a commissioner or commission employee, on becoming the owner of stocks, bonds, or another pecuniary interest in a [public] utility, provider, affiliate, or direct competitor of a [public] utility or provider otherwise than voluntarily, informs the commission and the attorney general of the ownership and divests the ownership or interest within a reasonable time.

(h)iiThis section does not apply to a contract for a [public utility] product or service from [or equipment for use of] a [public] utility, provider, affiliate, or direct competitor of a utility or provider [product] when a commissioner or commission employee is acting as a consumer.

SECTIONi17.iiSections 12.155(a) and (c), Utilities Code, are amended to read as follows:

(a)iiA commissioner, a commission employee, or an employee of the State Office of Administrative Hearings involved in hearing utility or provider cases may not:

(1)iibe employed by a [public] utility or provider that was in the scope of the commissioner's or employee's official responsibility while the commissioner or employee was associated with the commission or the State Office of Administrative Hearings; or

(2)iirepresent a person before the commission or State Office of Administrative Hearings or a court in a matter:

(A)iiin which the commissioner or employee was personally involved while associated with the commission or State Office of Administrative Hearings; or

(B)iithat was within the commissioner's or employee's official responsibility while the commissioner or employee was associated with the commission or State Office of Administrative Hearings.

(c)iiThe prohibition of Subsection (a)(2) applies while a commissioner, commission employee, or employee of the State Office of Administrative Hearings involved in hearing utility or provider cases is associated with the commission or State Office of Administrative Hearings and at any time after.

SECTIONi18.iiSection 12.252, Utilities Code, is amended to read as follows:

Thursday, May 26, 2005 SENATE JOURNAL 3785

Sec.i12.252.iiCOMMISSION AUTHORITY. The commission, after notice and hearing, may require each utility or provider subject to regulation under this title to make an effort to overcome the underuse of historically underutilized businesses.

SECTIONi19.iiSection 12.253, Utilities Code, is amended to read as follows:

Sec.i12.253.iiREPORT REQUIRED. The commission shall require each utility or provider subject to regulation under this title to prepare and submit to the commission a comprehensive annual report detailing its use of historically underutilized businesses.

SECTIONi20.iiSection 14.001, Utilities Code, is amended to read as follows:

Sec.i14.001.iiPOWER TO REGULATE AND SUPERVISE. The commission has the general power to regulate and supervise the business of each [public] utility and provider within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction.

SECTIONi21.iiSubchapter A, Chapter 14, Utilities Code, is amended by adding Section 14.0025 to read as follows:

Sec.i14.0025.iiNEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION. (a) The commission shall develop and implement a policy to encourage the use of:

(1)iinegotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and

(2)iiappropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.

(b)iiThe commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.

(c)iiThe commission shall designate a trained person to:

(1)iicoordinate the implementation of the policy adopted under Subsection (a);

(2)iiserve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and

(3)iicollect data concerning the effectiveness of those procedures, as implemented by the commission.

SECTIONi22.iiSection 14.008(a), Utilities Code, is amended to read as follows:

(a)iiExcept as otherwise provided by this title, this [This] title does not restrict the rights and powers of a municipality to grant or refuse a franchise to use the streets and alleys in the municipality or to make a statutory charge for that use.

SECTIONi23.iiSection 14.058, Utilities Code, is amended to read as follows:

Sec.i14.058.iiFEES FOR ELECTRONIC ACCESS TO INFORMATION. The fees charged by the commission for electronic access to information that is stored in the system established by the commission using funds from the Texas Public Finance Authority and approved by the Department of Information Resources shall be established:

(1)iiby the commission in consultation with the Texas Building and Procurement [General Services] Commission; and

3786 79th Legislature — Regular Session 79th Day

(2)iiin an amount reasonable and necessary to retire the debt to the Texas Public Finance Authority associated with establishing the electronic access system.

SECTIONi24.iiSubchapter B, Chapter 14, Utilities Code, is amended by adding Section 14.059 to read as follows:

Sec.i14.059.iiTECHNOLOGY POLICY. The commission shall implement a policy requiring the commission to use appropriate technological solutions to improve the commission's ability to perform its functions. The policy must ensure that the public is able to interact with the commission on the Internet.

SECTIONi25.iiSection 14.101(d), Utilities Code, is amended to read as follows:

(d)iiThis section does not apply to:

(1)iithe purchase of a unit of property for replacement;

(2)iian addition to the facilities of a public utility by construction; [or]

(3)iitransactions that facilitate unbundling, asset valuation, minimization of ownership or control of generation assets, or other purposes consistent with Chapter 39;

(4)iitransactions of or relating to:

(A)iian electing company under Chapter 58 or 59; or

(B)iia company holding a certificate of operating authority or a service provider certificate of operating authority on August 31, 2005; or

(5)iitransactions that are reported to or reviewed by a federal agency, another state, or another state agency.

SECTIONi26.iiSubchapter B, Chapter 15, Utilities Code, is amended by adding Section 15.0205 to read as follows:

Sec.i15.0205.iiDEFINITION. In this subchapter, "person" includes a municipally owned utility and an electric cooperative for the purposes of enforcing compliance with and providing penalties for violations of Sections 39.151(j) and 39.157(a).

SECTIONi27.iiSection 15.023, Utilities Code, is amended by amending Subsections (b) and (c) and adding Subsections (d), (e), and (f) to read as follows:

(b)iiExcept as otherwise provided by this title, the [The] penalty for a violation may be in an amount not to exceed $10,000 [$5,000]. Each day a violation continues or occurs is not a separate violation for purposes of imposing a penalty, except as otherwise provided by this title. Each settlement interval in the wholesale electric market during which a violation continues or occurs is not a separate violation for purposes of imposing a penalty.

(c)iiThe commission by rule shall establish a classification system for violations that includes a range [The amount] of [an] administrative penalties that may be assessed for each class of violation [penalty shall be] based on:

(1)iithe seriousness of the violation, including:

(A)iithe nature, circumstances, extent, and gravity of a prohibited act; and

(B)iithe hazard or potential hazard created to the health, safety, or economic welfare of the public;

(2)iithe economic harm to property or the environment caused by the violation;

(3)iithe history of previous violations;

(4)iithe amount necessary to deter future violations;

Thursday, May 26, 2005 SENATE JOURNAL 3787

(5)iiefforts to correct the violation; and

(6)iiany other matter that justice may require, including the amount of a penalty imposed on a similarly situated person.

(d)iiThe classification system established under Subsection (c) shall provide that the penalty for a violation may exceed $10,000 only if the violation is included in the highest class of violations in the classification system.

(e)iiNotwithstanding the classification system established under Subsection (c), a person regulated under this title who wilfully and knowingly violates this title or a rule or order adopted under this title may be assessed a penalty included in the range of penalties that may be assessed for the highest class of violations in the classification system.

(f)iiThe commission may not initiate the process for assessing an administrative penalty after the second anniversary of the later of:

(1)iithe date on which the violation occurred; or

(2)iithe date on which the commission knew that the violation occurred.

SECTIONi28.iiSection 15.024, Utilities Code, as amended by Chapters 1212 and 1579, Acts of the 76th Legislature, Regular Session, 1999, is reenacted and amended to read as follows:

Sec.i15.024.iiADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE. (a) If the executive director contends [determines] that a violation has occurred, the executive director shall [may] issue to the commission a report that states the facts on which the contention [determination] is based, including whether service to an end-user consumer is the basis of the contention, and the executive director's recommendation on the imposition of an administrative penalty, including a recommendation on the amount of the penalty.

(b)iiNot later than the 14th day after the date the report is issued, the executive director shall give written notice of the report to the person against whom the penalty may be assessed. The notice shall be given by certified mail, return receipt requested. The notice must:

(1)iiinclude a brief summary of the alleged violation;

(2)iistate whether service to an end-user consumer is the basis of the alleged violation, including instruction or information on how to contact the end-user consumer;

(3)iistate the amount of the recommended penalty, including the reasons why that penalty is recommended, considering the classification system created under Section 15.023; and

(4)i[(3)]iiinform the person that the person has a right to a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty.

(c)iiA penalty may not be assessed under this section if the person against whom the penalty may be assessed remedies the violation before the 31st day after the date the person receives the notice under Subsection (b). A person who claims to have remedied an alleged violation has the burden of proving to the commission that the alleged violation was remedied and was accidental or inadvertent. This subsection does not apply to a violation of Chapter [17,] 55[,] or 64.

3788 79th Legislature — Regular Session 79th Day

(d)iiNot later than the 60th [20th] day after the date the person receives the notice, the person may accept or agree not to contest the contention [determination] and recommended penalty of the executive director in writing or may make a written request for a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty.

(e)iiIf the person accepts, agrees not to contest, or fails to timely respond to the notice of the executive director's contention [determination] and recommended penalty, the commission by order shall approve the contention [determination] and impose the recommended penalty.

(f)iiIf the person requests a hearing [or fails to timely respond to the notice], the executive director shall set a hearing and give notice of the hearing to the person. The hearing shall be held in accordance with Subchapter B, Chapter 14. If a hearing is conducted by [an administrative law judge of] the State Office of Administrative Hearings, the [. The] administrative law judge shall make findings of fact and conclusions of law and promptly issue to the commission a proposal for a decision about the occurrence of the violation and the amount of a proposed penalty. Based on the findings of fact, conclusions of law, and proposal for a decision, the commission by order may find that a violation has occurred and impose a penalty or may find that no violation occurred.

(g)iiThe notice of the commission's order shall be given to the person as provided by Chapter 2001, Government Code, and must include a statement of the right of the person to judicial review of the order.

SECTIONi29.iiSection 15.027(c), Utilities Code, is amended to read as follows:

(c)iiThe executive director may delegate any power or duty relating to an administrative penalty given the executive director by this subchapter to the deputy [a person designated by the] executive director.

SECTIONi30.iiSection 15.032, Utilities Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b)iiExcept as provided by Subsection (c), a [A] suit for the recovery of a penalty does not:

(1)iibar or affect the recovery of any other penalty; or

(2)iibar a criminal prosecution or an action for civil damages against any person.

(c)iiAn action for civil damages may not be brought against a person if the commission has acted under Section 39.151(j) or 39.157(a) to address the conduct that is the subject of the proposed action for civil damages.

SECTIONi31.iiSection 15.033, Utilities Code, is amended to read as follows:

Sec.i15.033.iiDISPOSITION OF CERTAIN AMOUNTS [FINES AND PENALTIES]. (a) A fine or penalty collected under this title, other than a [fine or penalty collected in a criminal proceeding or a] penalty collected under Section 15.027(a), shall be paid to the commission.

(b)iiNotwithstanding any other law, a disgorgement or refund amount collected under Section 39.151(j) or 39.157(a) shall be paid to the independent organization certified by the commission under Section 39.151 for distribution according to commission order.

Thursday, May 26, 2005 SENATE JOURNAL 3789

SECTIONi32.iiSections 15.051(a) and (b), Utilities Code, are amended to read as follows:

(a)iiAn affected person may complain to the regulatory authority in writing setting forth an act or omission by a [public] utility or provider in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority.

(b)iiThe commission shall keep for a reasonable period information about each complaint filed with the commission that the commission has authority to resolve. The information shall include:

(1)iithe date the complaint is received;

(2)iithe name of the complainant;

(3)iithe subject matter of the complaint;

(4)iia record of each person contacted in relation to the complaint;

(5)iia summary of the results of the review or investigation of the complaint; and

(6)iiif the commission took no action on the complaint, an explanation of the reason the complaint was closed without action.

SECTIONi33.iiThe heading to Subchapter A, Chapter 16, Utilities Code, is amended to read as follows:

SUBCHAPTER A. ASSESSMENT ON [PUBLIC] UTILITIES, RETAIL ELECTRIC PROVIDERS, ELECTRIC COOPERATIVES, AND PROVIDERS

SECTIONi34.iiSection 16.001, Utilities Code, is amended to read as follows:

Sec.i16.001.iiASSESSMENT ON [PUBLIC] UTILITIES, RETAIL ELECTRIC PROVIDERS, ELECTRIC COOPERATIVES, AND PROVIDERS. (a) To defray the expenses incurred in the administration of this title, an assessment is imposed on each [public] utility, retail electric provider, provider, and electric cooperative within the jurisdiction of the commission that serves the ultimate consumer[, including each interexchange telecommunications carrier].

(b)iiAn assessment under this section may not exceed [is equal to] one-sixth of one percent of the [public utility's, retail electric provider's, or electric cooperative's] gross receipts from services over which the commission has jurisdiction, including a service for which a provider receives interconnection under Chapter 60 [rates charged to the ultimate consumer in this state].

(c)iiEach utility and provider [An interexchange telecommunications carrier that does not provide local exchange telephone service] may collect the fee imposed under this section as an additional item separately stated on the customer bill as "public utility commission gross receipts assessment."

SECTIONi35.iiSection 16.002(b), Utilities Code, is amended to read as follows:

(b)iiA [public] utility, retail electric provider, provider, or electric cooperative may instead make quarterly payments due August 15, November 15, February 15, and May 15.

SECTIONi36.iiSection 39.262(c), Utilities Code, is amended to read as follows:

(c)iiAfter January 10, 2004, at a schedule and under procedures to be determined by the commission, each transmission and distribution utility, its affiliated retail electric provider, and its affiliated power generation company shall jointly file to finalize stranded costs under Subsections (h) and (i) and reconcile those costs with the

3790 79th Legislature — Regular Session 79th Day

SECTIONi37.iiSection 39.301, Utilities Code, is amended to read as follows:

Sec.i39.301.iiPURPOSE. The purpose of this subchapter is to enable utilities to use securitization financing to recover regulatory assets, all other amounts determined under Section 39.262, and any amounts being recovered under a competition transition charge determined as a result of a proceeding under Section 39.201 or 39.262. It is the policy of this state to encourage electric utilities and transmission and distribution utilities to use securitization financing [stranded costs,] because this type of debt will lower the carrying costs of the assets relative to the costs that would be incurred using conventional utility financing methods. The proceeds of the transition bonds shall be used solely for the purposes of reducing the amount of recoverable regulatory assets and other amounts [stranded costs], as determined by the commission in accordance with this chapter, through the refinancing or retirement of utility debt or equity. The commission shall ensure that securitization provides tangible and quantifiable benefits to ratepayers, greater than would have been achieved absent the issuance of transition bonds. The commission shall ensure that the structuring and pricing of the transition bonds result in the lowest transition bond charges consistent with market conditions and the terms of the financing order. The amount securitized may not exceed the present value of the revenue requirement over the life of the proposed transition bond associated with the regulatory assets or stranded costs sought to be securitized. The present value calculation shall use a discount rate equal to the proposed interest rate on the transition bonds.

SECTIONi38.iiSection 39.302(4), Utilities Code, is amended to read as follows:

(4)ii"Qualified costs" means 100 percent of an electric utility's regulatory assets and 75 percent of its recoverable costs determined by the commission under Section 39.201 and any remaining amounts [stranded costs] determined under Section 39.262 together with the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding the electric utility's existing debt and equity securities in connection with the issuance of transition bonds. The term includes the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under Section 39.201 and this subchapter.

SECTIONi39.iiSections 39.303(a) and (b), Utilities Code, are amended to read as follows:

(a)iiThe commission shall adopt a financing order, on application of a utility to recover the utility's regulatory assets and other amounts determined [eligible stranded costs] under Section 39.201 or 39.262, on making a finding that the total amount of revenues to be collected under the financing order is less than the revenue requirement that would be recovered over the remaining life of the stranded costs using conventional financing methods and that the financing order is consistent with the standards in Section 39.301.

Thursday, May 26, 2005 SENATE JOURNAL 3791

(b)iiThe financing order shall detail the amount of regulatory assets and other amounts [stranded costs] to be recovered and the period over which the nonbypassable transition charges shall be recovered, which period may not exceed 15 years.

SECTIONi40.iiSubtitle C, Title 2, Utilities Code, is amended by adding Chapter 65 to read as follows:

CHAPTER 65. STATEWIDE CABLE AND VIDEO FRANCHISE

Sec.i65.001.iiDEFINITIONS. In this chapter:

(1)ii"Cable service" is defined as set forth in 47 U.S.C. Section 522(6).

(2)ii"Cable service provider" means a person who provides cable service.

(3)ii"Certificated provider" means a person who has been issued a certificate under Chapter 54.

(4)ii"Communications facility" means the equipment and components of a communications network provider, and includes the property owned, operated, or controlled in connection with the provider's business operations.

(5)ii"Communications network" means a component or facility that is, in whole or in part, physically located within a public right-of-way and that is used to provide video programming, cable, voice, or data services.

(6)ii"Communications service" means the transmission, conveyance, or routing of a cable service or video programming as defined in this chapter, voice service, or data service by or through any communications network regardless of the protocol used for such transmission or conveyance.

(7)ii"Communications service provider" means a person or group of persons engaged in the provision of communications services, without regard to ownership of a communications network.

(8)ii"Franchise" means an initial authorization, or renewal of an authorization, issued by a franchising authority, regardless of whether the authorization is designated as a franchise, permit, license, resolution, contract, certificate, agreement, or otherwise, that authorizes the construction and operation of a communications network in the public rights-of-way.

(9)ii"Franchise fee" means the amount of compensation paid to a franchising authority by a franchisee under the terms of the franchise.

(10)ii"Franchisee" means a communications service provider that has been granted a franchise.

(11)ii"Public right-of-way" means the area on, below, or above a public roadway, highway, street, public sidewalk, alley, waterway, or utility easement in which a municipality has an interest.

(12)ii"Video programming" means programming provided by, or generally considered comparable to programming provided by, a television broadcast station, as set forth in 47 U.S.C. Section 522(20).

(13)ii"Video service" means video programming services provided through wireline facilities located at least in part in the public right-of-way without regard to delivery technology, including Internet protocol technology. This definition does not include any video service provided by a commercial mobile service provider as defined in 47 U.S.C. Section 332(d).

3792 79th Legislature — Regular Session 79th Day

(14)ii"Video service provider" means a video programming distributor that distributes video programming services through wireline facilities located at least in part in the public right-of-way without regard to delivery technology. This term does not include a cable service provider.

(15)ii"Voice service" means voice communications services provided through wireline facilities located at least in part in the public right-of-way, without regard to the delivery technology, including Internet protocol technology.

Sec.i65.002.iiSTATE AUTHORIZATION TO PROVIDE CABLE OR VIDEO SERVICE. (a) Any entity or person seeking to provide cable or video service in this state shall file an application for a state franchise with the commission as required by this section.

(b)iiThe commission shall issue and review a certificate of franchise authority to offer cable or video service within this state upon receiving from the applicant an affidavit signed by an officer or general partner of the applicant entity affirming the following representations and information:

(1)iithat, if applicable, the applicant has filed or will timely file with the Federal Communications Commission all forms required by that agency in advance of offering cable service;

(2)iithat the applicant agrees to comply with all applicable federal and state statutes and regulations;

(3)iia description of the geographic areas to be served by the applicant, which may include unincorporated areas, which description shall be promptly updated by the applicant if service is expanded to a previously undesignated geographic area; and

(4)iithe location of the principal place of business and the names of the principal executive officers of the applicant.

(c)iiThe certificate of franchise authority issued by the commission shall contain the following:

(1)iia grant of authority to provide cable or video service as requested in the application;

(2)iia grant of authority to use and occupy the public rights-of-way in the delivery of that service, subject to the laws of this state, including the police powers of the municipalities in which the service is delivered; and

(3)iia statement that the grant of authority is subject to lawful operation of the cable or video service by the applicant or its successor in interest.

(d)iiThe certificate of franchise authority issued by the commission is fully transferable to any successor in interest to the applicant to which it is initially granted. A notice of transfer shall be promptly filed with the commission upon the completion of such transfer.

Sec.i65.003.iiTERMINATION OF MUNICIPAL FRANCHISE BY CABLE SERVICE PROVIDER. (a) Beginning September 1, 2005, a cable service provider may elect to terminate any municipal franchise by providing written notice to the commission and the affected municipality. The termination shall be effective as of the date the commission receives the notice.

Thursday, May 26, 2005 SENATE JOURNAL 3793

(b)iiA cable service provider electing to terminate an existing municipal franchise shall be responsible for remitting to the affected municipality within 90 days of the effective date of termination any accrued but unpaid franchise fees due under the franchise being terminated. If the cable service provider has credit remaining from prepaid franchise fees, the provider may deduct the amount of the remaining credit from any future fees or taxes it must pay to the municipality, either directly or through the comptroller.

Sec.i65.004.iiREQUIREMENTS APPLICABLE TO CABLE SERVICE PROVIDERS AND VIDEO SERVICE PROVIDERS. (a) Not later than 120 days after a request by a municipality served by the cable or video service provider as specified in the certificate issued by the commission, entities, to extent required by 47 U.S.C. Section 531, shall provide the municipality, where technically capable, with capacity in its communications network to allow public, educational, and governmental (PEG) access channels for noncommercial programming as follows. If a municipality did not have any public, educational, and governmental access channels as of September 1, 2005, then the cable or video service provider shall furnish:

(1)iiup to three PEG channels for a municipality with a population of at least 50,000; and

(2)iiup to two PEG channels for a municipality with a population of less than 50,000.

(b)iiNotwithstanding Subsection (a), the number of PEG channels required to be provided by each cable or video service provider shall not be less than the number of PEG channels a municipality has activated under the terms of any franchise, contract, or other agreement, including any channels received as of September 1, 2005, in lieu of public, educational, or governmental channels, regardless of whether the municipal franchise is terminated under this chapter. The following conditions shall apply to the provision of any PEG channels carried in accordance with this subsection or Subsection (a):

(1)iithe cable or video service provider may, at its sole discretion, place any channel utilized by a municipality on any tier of service following September 1, 2005, except that the municipality may, at its sole discretion, designate up to three PEG channels (or, in the case of a municipality with a population of less than 50,000, up to two PEG channels) utilized by the municipality, which shall remain on the lowest service tier for which no equipment is required to receive the channel; provided, however, if service is provided only in digital format, the PEG channels shall be made available in that format;

(2)iiafter a cable or video service provider has commenced commercial delivery of cable or video services in a municipality and no later than 120 days after a written request from a municipality, a cable or video service provider shall, as applicable, either provide the initial access channel allowed in Subsection (a) if a municipality did not have any PEG channels as of September 1, 2005, or shall continue to provide the channels in service as of September 1, 2005, subject to the terms of this section. In the event a municipality has not utilized the minimum number of access channels as permitted in Subsection (a), access to the additional channel capacity allowed in Subsection (a) shall be provided upon 90 days' written notice if the municipality meets the following standard: if a municipality has one active PEG

3794 79th Legislature — Regular Session 79th Day

(3)iia municipality shall bear the cost of any construction required to establish a connection between a municipality's origination point and the cable or video service provider's communication network;

(4)iithe operation of any PEG channel provided pursuant to this section shall be the responsibility of the municipality receiving the benefit of such channel, and the cable or video service provider shall have no obligation to operate such channel other than the transmission of such channel; and

(5)iiany PEG channel provided pursuant to this section that is not utilized by the municipality for at least eight hours a day shall no longer be made available to the municipality, but may be programmed at the cable or video service provider's discretion. At such time as the municipality can certify to the cable or video service provider a schedule for at least eight hours of daily programming, the cable or video service provider shall restore the previously lost channel but shall be under no obligation to carry that channel on a basic or analog tier.

(6)iiThe commission shall oversee the requirements of this Section to ensure compliance with federal law.

(c)iiThe requirements of Subsections (a) and (b) shall apply equally to all cable or video service providers that own a communications network or lease or otherwise use a third-party communications network, including that of an affiliate, to deliver cable or video service within a municipality, subject to Subsection (e).

(d)iiOnly a municipality may seek enforcement of the requirements of Subsections (a), (b), and (c) by initiating a proceeding with the commission.

(e)iiIt is the sole responsibility of the municipality to ensure that any and all transmissions, content, or programming to be transmitted over a channel or facility are provided or submitted to the cable or video service provider in a manner or form that is capable of being accepted and transmitted by a provider, without requirement for additional alteration or change in content by the provider, over the particular network of the cable or video service provider, which is compatible with the technology or protocol utilized by the cable or video service provider to deliver services.

(f)iiPursuant to a franchise issued by the Commission, and to the extent required by 47 U.S.C. Section 541(a)(3), a cable or video service provider may not deny access to service to any group of potential residential subscribers because of the income of the residents of the local area in which such group resides. A provider may satisfy the requirements of this subsection through the use of an alternative technology notwithstanding differences in the specific content or functionality provided.

Thursday, May 26, 2005 SENATE JOURNAL 3795

(g)iiAn affected person may seek enforcement of the requirement described in Subsection (f) by initiating a proceeding with the commission. A municipality within which the potential residential cable or video subscribers referenced in Subsection (f) reside shall be an affected person for purposes of this section.

(h)iiPursuant to a franchise issued by the commission, a cable or video service provider shall comply with customer service requirements consistent with 47 C.F.R. Section 76.309(c) until there are more than two providers offering service including direct-to-home satellite service in the affected area.

(i)iiThis state, the commission, or a political subdivision shall not require a mandatory build out on either a cable or video service provider except as specifically required by federal law.

(j)iiShould a cable or video service provider be found by the commission to be in noncompliance with the requirements of this section, the commission shall order such provider, within a reasonable period of time, to cure such noncompliance. Failure to comply shall subject the provider to such penalties as the commission shall reasonably impose, up to and including revocation of any state franchise granted under this chapter. A municipality within which the provider offers cable or video service shall be an appropriate party in any such litigation.

(k)iiThe commission may not prefer or give advantage to any cable or video service provider operating under a state franchise or discriminate against any cable or video service provider operating under a state franchise in any manner in the requirements provided in this subsection. Any requirements shall be uniformly applied to all cable or video service providers operating under a state franchise within the municipality. A municipality's authority to regulate the activities of a cable or video service provider is limited to the requirements imposed on a cable or video service provider operating under a state franchise by this subsection. Specifically, the commission shall allow a municipality the authority to:

(1)iirequire that a communications service provider that is providing cable or video service within the municipality register with the municipality and maintain a point of contact;

(2)iiestablish reasonable guidelines regarding the use of the public, educational, and governmental access channels; and

(3)iisubmit reports within 30 days on the customer service standards referenced in Subsection (h) if the provider is subject to those standards and has continued and unresolved customer service complaints indicating a clear failure on the part of the provider to comply with the standards. If the reports are not provided or are incomplete, or if they verify noncompliance, then the municipality, after providing appropriate due process and a right to be heard, may file an appropriate proceeding in the municipal court.

(l)iiThe commission shall adopt a policy whereby it receives service quality complaints from customers of franchised cable and video providers. The commission shall post on its internet website each calendar quarter the number of complaints lodged against each franchise holder.

3796 79th Legislature — Regular Session 79th Day

(m)iiNothing in this section prohibits a municipality from exercising its nondiscriminatory police power with respect to a communications service provider's use of the public rights-of-way. The commission shall have jurisdiction to enforce and determine the lawfulness of any ordinance adopted by a municipality under this section.

(n)iiExcept as provided in this chapter, a municipality may not require any monetary compensation, nonmonetary compensation, facilities, value, in-kind support, free service, or other thing of value for the right or privilege of a cable provider or video service provider to provide service or to occupy or use a public right-of-way.

(o)iiUpon written notice to the Commission, a cable or video service provider electing to terminate an existing municipal franchise or initiating service after September 1, 2005, shall pay each municipality in which it provides service a fee equal to five percent of the provider's gross revenues.

(p)iiFor purposes of this section, "gross revenues" means:

(1)iiall consideration of any kind or nature, including without limitation cash, credits, property, and in-kind contributions (services or goods) derived by the provider from the operation of the provider's system to provide cable or video service within the municipality;

(2)iiall fees charged to subscribers for any and all cable or video service provided by the provider, and compensation received by the provider or its affiliates that is derived from the operation of the provider's system to provide cable or video service with respect to commissions that are paid to the provider as compensation for promotion or exhibition of any products or services on its system, such as a "home shopping" or a similar channel, subject to Subsection (p)(5); and

(3)iia pro rata portion of all revenue derived by the cable or video provider or its affiliates pursuant to compensation arrangements for advertising derived from the operation of the provider's system to provide cable or video service within the municipality, subject to Subsection (p)(3). The allocation shall be based on the number of subscribers in the municipality divided by the total number of subscribers in relation to the relevant regional or national compensation arrangement.

(q)iiFor purposes of this section, "gross revenues" does not include:

(1)iirevenues not actually received, even if billed, such as bad debt;

(2)iirevenues received by any affiliate or any other person in exchange for supplying goods or services used by the provider to provide cable or video service;

(3)iirefunds, rebates, or discounts made to subscribers, leased access providers, advertisers, or the municipality;

(4)iiany revenues from services classified as non-cable or non-video service under federal or state law, including without limitation revenue received from telecommunications services, revenue received from information services, and any other revenues attributed by the provider to non-cable or non-video service in accordance with commission or Federal Communications Commission rules, regulations, standards, or orders;

(5)iiany revenue paid by subscribers to home shopping programmers directly from the sale of merchandise through any home shopping channel offered as part of the cable or video service;

Thursday, May 26, 2005 SENATE JOURNAL 3797

(6)iithe sale of cable or video service for resale in which the purchaser is required to collect the five percent fee from the purchaser's customer;

(7)iiany tax of general applicability imposed upon the provider or upon subscribers by a city, state, federal, or any other governmental entity and required to be collected by the provider and remitted to the taxing entity, including, but not limited to, sales and use tax, gross receipts tax, excise tax, utility users tax, public service tax, and communication taxes;

(8)iithe provision of cable service to customers at no charge as required or allowed by a municipality, including without limitation the provision of cable service to public institutions, public schools, or governmental entities;

(9)iiany foregone revenue from the provider's provision of free or reduced-cost cable service to any person, including without limitation the municipality and other public institutions or other institutions;

(10)iisales of capital assets or sales of surplus equipment;

(11)iireimbursement by programmers of marketing costs incurred by the provider for the introduction of new programming; or

(12)iidirectory or Internet advertising revenue including, but not limited to, yellow page, white page, banner advertisement, and electronic publishing.

(r)iiThe fee payable under this section is to be paid to the municipality quarterly, 45 days after the end of the quarter. Each payment shall be accompanied by a summary as to the basis for the calculation of the fee. A municipality and the commission may review the business records of the cable provider or video service provider to the extent necessary to ensure compensation in accordance with this chapter. Each party shall bear the party's own costs of the examination. The municipality may, in the event of a dispute as to proper compensation under this chapter, bring an action in a court of competent jurisdiction.

(s)iiFor purposes of this section, a provider's system shall consist solely of the optical spectrum wavelength(s), bandwidth, or other current or future technological capacity used for the transmission of video programming over wireline directly to subscribers within the geographic area within the municipality as designated by the provider in its franchise.

(t)iiThe commission shall not permit a municipality to require a cable service provider or video service provider to pay the municipality any fee or assessment, including any application, permit, excavation, or inspection fee or any fee for the support of public, educational, or governmental access channels. This subsection does not preclude the assessment of generally applicable taxes or fees.

(u)iiThe commission shall permit a cable service provider or a video service provider may recover from the provider's customers the fee imposed by this chapter.

(v)iiNotwithstanding that a municipal cable franchise may be terminated pursuant to Section 65.003, the following services shall continue to be provided by the cable provider that was furnishing services pursuant to its terminated franchise until 2015 or until the term of the franchise was to expire, whichever is sooner:

3798 79th Legislature — Regular Session 79th Day

(1)iiinstitutional network capacity, however defined or referred to in the municipal cable franchise, but generally referring to a private line data network capacity for use by the municipality for noncommercial purposes, shall continue to be provided at the same capacity as was provided to the municipality prior to the date of the termination; and

(2)iicable services to community public buildings, such as municipal buildings and public schools, shall continue to be provided to the same extent provided immediately prior to the date of the termination. Such cable service generally refers to the existing cable drop connections to such facilities and the tier of cable service provided pursuant to the franchise at the time of the termination.

Sec.i65.005.iiAPPLICABILITY OF OTHER LAWS. Nothing herein shall be interpreted to prevent a voice provider, cable service provider or video service provider, or municipality from seeking clarification of its rights and obligations under federal law or to exercise any right or authority under federal or state law.

SECTIONi41.iiThe Public Utility Commission of Texas shall conduct a study and shall file a report with the legislature not later than September 1, 2006, containing the commission's revenue-neutral, technology-neutral, and competitive-neutral recommendations concerning compensation flowing to the cities from voice, video, and cable providers. The report shall identify the following:

(1)iiall sources of compensation that have been received by the cities historically from providers of voice, video, and cable;

(2)iithe providers of voice, video, and cable services available to consumers within municipalities without regard to the technology used to deliver such services;

(3)iialternative funding mechanisms, including an additional municipal sales tax or any other additional municipally imposed alternatives, which would be revenue-neutral to the municipalities, and technology-neutral and competitive-neutral in application to providers, their services, and their customers; and

(4)iithe payment mechanism of the fees, including all municipal fees and franchise fees.

SECTIONi42.ii(a) Promptly after this Act takes effect, the Public Utility Commission of Texas shall conduct a comprehensive review of the reporting requirements relating to telecommunications providers that are prescribed by statute or commission rules to determine the necessity for the required reports.

(b)iiIn conducting the review, the Public Utility Commission of Texas shall:

(1)iisolicit input and assistance from interested parties;

(2)iiestablish criteria for when and in what manner the information included in a report will be used;

(3)iiensure that information included in a report is not duplicative of information included in a different report;

(4)iieliminate a report required by rule that the commission determines is unnecessary; and

(5)iichange the requirements relating to a report the commission determines is necessary to make the reporting process more efficient.

Thursday, May 26, 2005 SENATE JOURNAL 3799

(c)iiThe Public Utility Commission of Texas shall conclude the review required by this section not later than September 1, 2006, and shall report to the legislature in the biennial report required by Section 52.006, Utilities Code, on the results of the review. The report must include:

(1)iithe results of the review and the actions the commission has taken to amend commission rules to reflect the results of the review; and

(2)iirecommendations on any legislation the commission determines is necessary or appropriate to eliminate or change reporting requirements prescribed by statute.

SECTIONi43.iiThe following provisions of the Utilities Code are repealed on the effective date of this Act:

(1)iiSection 11.008;

(2)iiSection 15.003(c);

(3)iiSection 15.028;

(4)iiSection 15.030;

(5)iiSection 15.052;

(6)iiChapter 17; and

(7)iiChapter 62.

SECTIONi44.iiPromptly after this Act takes effect, the governor shall appoint two additional members to the Public Utility Commission of Texas. Of those members, the governor shall designate one to serve a term expiring September 1, 2009, and one to serve a term expiring January 1, 2011. Until all appointees have taken office, a quorum of the commission is a majority of the number of members who are qualified.

SECTIONi45.iiThe repeal by this Act of Section 15.003(c), Utilities Code, does not apply to a suit commenced before the effective date of the repeal. A suit commenced before the effective date of the repeal is governed by the law as it existed immediately before the effective date of the repeal, and that law is continued in effect for that purpose.

SECTIONi46.iiThe repeal by this Act of Sections 15.028 and 15.030, Utilities Code, does not apply to a violation of those sections that occurs before the effective date of the repeal. A violation that occurs before the effective date of the repeal is governed by the law as it existed immediately before the effective date of the repeal, and that law is continued in effect for that purpose.

SECTIONi47.iiThe change in law made by this Act relating to qualifications and eligibility to serve as a commissioner or to be employed with the Public Utility Commission of Texas applies only to a commissioner or employee appointed or employed after the effective date of this Act. A commissioner or employee of the Public Utility Commission of Texas who is serving or employed on the effective date of this Act is governed by the law as it existed immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTIONi48.iiThe changes in law made by this Act to Sections 15.023 and 15.024, Utilities Code, apply only to a violation committed on or after the effective date of this Act. A violation committed before the effective date of this Act is governed by the law in effect when the violation was committed, and the former law is continued in effect for that purpose.

SECTIONi49.iiThis Act takes effect September 1, 2005.

3800 79th Legislature — Regular Session 79th Day

Floor Amendment No. 1

Amend CSSB 408 as follows:

(1)iiIn Section 11.0042(a)(5), Utilities Code, as added by SECTION 4 of the bill (page 6, lines 9-10), strike "but not more than 15 percent".

(2)iiIn Section 11.0042(b), Utilities Code, as added by SECTION 4 of the bill (page 6, line 22), strike "five percent or more but not more than 15 percent of".

(3)iiIn Section 11.010(a), Utilities Code, as added by SECTION 6 of the bill (page 8, line 17), strike "contested proceeding before" and substitute "contested proceeding hearing before".

(4)iiIn Section 11.010(a), Utilities Code, as added by SECTION 6 of the bill (page 8, line 20), insert the following after the period:

This subsection does not affect the ability of an entity to hire or contract for other persons to provide services, including professional services, to the entity in relation to a contested proceeding, including a hearing related to a contested proceeding.

(5)iiStrike SECTION 9 (page 9, lines 7-11) and SECTION 44 of the bill (page 46, lines 17-23).

(6)iiIn Section 14.101(d)(5), Utilities Code, as added by SECTION 25 of the bill (page 19, line 14), strike ", another state, or another state agency".

(7)iiIn the recital to SECTION 27 of the bill (page 19, lines 22 and 23), strike "Subsections (d), (e), and (f)" and substitute "Subsections (d) and (e)".

(8)iiIn Section 15.023(b), Utilities Code, as amended by SECTION 27 of the bill (page 19, line 25), strike "$10,000" and substitute "$25,000".

(9)iiStrike Subsection (f), Section 15.023, Utilities Code, as added by SECTION 27 of the bill (page 21, lines 5-10).

(10)iiIn Section 16.001(b), Utilities Code, as amended by SECTION 34 of the bill (page 26, lines 5 and 6), strike "[public utility's, retail electric provider's, or electric cooperative's]" and substitute "[public] utility's, retail electric provider's, provider's, or electric cooperative's".

(11)iiIn Section 39.301, Utilities Code, as amended by SECTION 37 of the bill (page 27, lines 14-17), strike "It is the policy of this state to encourage electric utilities and transmission and distribution utilities to use securitization financing [stranded costs,] because this" and substitute "This [stranded costs, because this]".

(12)iiInsert the following appropriately numbered SECTIONS to the bill and renumber following SECTIONS as appropriate:

SECTIONi__.iiSection 31.003, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c)iiThe commission may include with the report required by this section any other report required to be made to the legislature before January 15 of an odd-numbered year. A report included with the report required by this section must be clearly distinct from the report required by this section.

SECTIONi____.iiSection 32.001(b), Utilities Code, is amended to read as follows:

(b)iiThe commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction under this subtitle, including under Chapter 33.

Thursday, May 26, 2005 SENATE JOURNAL 3801

SECTIONi__.iiSection 39.151, Utilities Code, is amended by amending Subsections (b) through (e), (g), and (h) and adding Subsections (d-1) and (g-1) to read as follows:

(b)ii"Independent organization" means an independent system operator or other person that is sufficiently independent of any producer or seller of electricity that its decisions will not be unduly influenced by any producer or seller. [An entity will be deemed to be independent if it is governed by a board that has three representatives from each segment of the electric market, with the consumer segment being represented by one residential customer, one commercial customer, and one industrial retail customer.]

(c)iiThe commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission shall apply the provisions of this section and Sections 39.1511, 39.1512, and 39.1515 so as to avoid conflict with a ruling of a federal regulatory body.

(d)iiThe commission shall adopt and enforce rules [An independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules,] relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants, or may delegate to an independent organization responsibilities for establishing or enforcing such rules. Any such rules adopted by an independent organization and any enforcement actions taken by the organization are[. The procedures shall be] subject to commission oversight and review. An independent organization certified by the commission is directly responsible and accountable to the commission. The commission has complete authority to oversee and investigate the organization's finances, budget, and operations as necessary to ensure the organization's accountability and to ensure that the organization adequately performs the organization's functions and duties. The organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may take appropriate action against an organization that does not adequately perform the organization's functions or duties or does not comply with this section, including decertifying the organization or assessing an administrative penalty against the organization. The commission by rule shall adopt procedures governing decertification of an independent organization, selecting and certifying a successor organization, and transferring assets to the successor organization to ensure continuity of operations in the region. The commission may not implement, by order or by rule, a requirement that is contrary to an applicable federal law or rule.

(d-1)iiThe commission may:

(1)iirequire an independent organization to provide reports and information relating to the independent organization's performance of the functions prescribed by this section and relating to the organization's revenues, expenses, and other financial matters;

(2)iiprescribe a system of accounts for an independent organization;

3802 79th Legislature — Regular Session 79th Day

(3)iiconduct audits of an independent organization's performance of the functions prescribed by this section or relating to its revenues, expenses, and other financial matters and may require an independent organization to conduct such an audit;

(4)iiinspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;

(5)iiassess administrative penalties against an independent organization that violates this title or a rule or order adopted by the commission and, at the request of the commission, the attorney general may apply for a court order to require an independent organization to comply with commission rules and orders in the manner provided by Chapter 15; and

(6)iiresolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.

(e)iiThe commission may authorize an independent organization that is certified under this section to charge a reasonable and competitively neutral rate to wholesale buyers and sellers to cover the independent organization's costs. The commission shall investigate the organization's cost efficiencies, salaries and benefits, and use of debt financing and may require the organization to provide any information needed to effectively evaluate the organization's budget and the reasonableness and neutrality of a rate or proposed rate or to evaluate the effectiveness or efficiency of the organization. The commission shall work with the organization to establish the detail of information, both current and historical, and the time frames the commission needs to effectively evaluate a rate or a rate request.

(g)iiTo maintain certification as an independent organization under this section, an organization's [If it amends its governance rules to provide that its governing body is composed as prescribed by this subsection, the existing independent system operator in ERCOT will meet the criteria provided by Subsection (a) with respect to ensuring access to the transmission systems for all buyers and sellers of electricity in the ERCOT region and ensuring the reliability of the regional electrical network. To comply with this subsection, the] governing body must be composed of persons specified by this section and selected in accordance with formal bylaws or protocols of the organization. The bylaws or protocols must be approved by the commission and must reflect the input of the commission. The bylaws must specify the process by which appropriate stakeholders elect members and, for unaffiliated members, prescribe professional qualifications for selection as a member. The bylaws must require the use of a professional search firm to identify candidates for membership of unaffiliated members. The process must allow for commission input in identifying candidates. The governing body must be composed of:

(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [director] of the independent organization [system operator] as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

Thursday, May 26, 2005 SENATE JOURNAL 3803

(B)iione representing investor-owned utilities;

(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

(F)iione representing electric cooperatives [four representatives of the power generation sector as voting members];

(5)iione member representing industrial consumer interests and elected by the industrial consumer market segment to serve a one-year term [four representatives of the transmission and distribution sector as voting members];

(6)iione member representing large commercial consumer interests selected in accordance with the bylaws to serve a one-year term [four representatives of the power sales sector as voting members]; and

(7)iifive members unaffiliated with any market segment and selected by the other members of the governing body to serve three-year terms [the following people as voting members, appointed by the commission:

[(A)iione representative of residential customers;

[(B)iione representative of commercial customers; and

[(C)iione representative of industrial customers].

[The four representatives specified in each of Subdivisions (4), (5), and (6) shall be selected in a manner that ensures equitable representation for the various sectors of industry participants.]

(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

(h)iiThe ERCOT independent system operator may meet the criteria relating to the other functions of an independent organization provided by Subsection (a) by adopting procedures and acquiring resources needed to carry out those functions, consistent with any rules or orders of the commission.

SECTIONi__.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511 and 39.1512 to read as follows:

Sec.i39.1511.iiPUBLIC MEETINGS OF THE GOVERNING BODY OF AN INDEPENDENT ORGANIZATION. (a) Meetings of the governing body of an independent organization certified under Section 39.151 and meetings of a subcommittee that includes a member of the governing body must be open to the public. The bylaws of the independent organization and the rules of the commission may provide for the governing body or subcommittee to enter into executive session closed to the public to address sensitive matters such as confidential personnel information, contracts, lawsuits, competitively sensitive information, or other information related to the security of the regional electrical network.

(b)iiThe bylaws of the independent organization and rules of the commission must ensure that a person interested in the activities of the independent organization has an opportunity to obtain at least seven days' advance notice of meetings and the planned agendas of the meetings and an opportunity to comment on matters under discussion at the meetings. The bylaws and commission rules governing meetings of the governing body may provide for a shorter period of advance notice and for meetings by teleconference technology for governing body meetings to take action on

3804 79th Legislature — Regular Session 79th Day

Sec.i39.1512.iiDISCLOSURE OF INTEREST IN MATTER BEFORE INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN DECISION. (a)iiIf a matter comes before the governing body of an independent organization certified under Section 39.151 and a member has a direct interest in that matter or is employed by or has a substantial financial interest in a person who has a direct interest in that matter, that member shall publicly disclose the fact of that interest to the governing body at a public meeting of the body. The member shall recuse himself or herself from the governing body's deliberations and actions on the matter and may not vote on the matter or otherwise participate in a governing body decision on the matter.

(b)iiA disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.

(c)iiThe fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.

SECTIONi__.iiAn independent organization certified by the Public Utility Commission of Texas before September 1, 2005, shall modify the organization's governing body to comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act, not later than September 1, 2006. On or after September 1, 2006, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act.

SECTIONi__.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Section 39.1515 to read as follows:

Sec.i39.1515.iiWHOLESALE ELECTRIC MARKET MONITOR. (a) An independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's wholesale electric market monitor to detect and prevent market manipulation strategies and recommend measures to enhance the efficiency of the wholesale market.

(b)iiThe independent organization shall provide to the personnel of the market monitor:

(1)iifull access to the organization's main operations center and the organization's records that concern operations, settlement, and reliability; and

(2)iiother support and cooperation the commission determines is necessary for the market monitor to perform the market monitor's functions.

(c)iiThe independent organization shall use money from the rate authorized by Section 39.151(e) to pay for the market monitor's activities.

(d)iiThe commission is responsible for ensuring that the market monitor has the resources, expertise, and authority necessary to monitor the wholesale electric market effectively and shall adopt rules and perform oversight of the market monitor as necessary. The market monitor shall operate under the supervision and oversight of the commission. The commission shall retain all enforcement authority conferred

Thursday, May 26, 2005 SENATE JOURNAL 3805

(1)iithe market monitor's monitoring responsibilities, including reporting obligations and limitations;

(2)iithe standards for funding the market monitor, including staffing requirements;

(3)iiqualifications for personnel of the market monitor; and

(4)iiethical standards for the market monitor and the personnel of the market monitor.

(e)iiIn adopting rules governing the standards for funding the market monitor, the commission shall consult with a subcommittee of the independent organization's governing body to receive information on how money is or should be spent for monitoring functions. Rules governing ethical standards must include provisions designed to ensure that the personnel of the market monitor are professionally and financially independent from market participants. The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the monitoring, analysis, and reporting responsibilities of the market monitor.

(f)iiThe market monitor immediately shall report directly to the commission any potential market manipulations and any discovered or potential violations of commission rules or rules of the independent organization.

(g)iiThe personnel of the market monitor may communicate with commission staff on any matter without restriction.

(h)iiThe market monitor annually shall submit to the commission and the independent organization a report that identifies market design flaws and recommends methods to correct the flaws. The commission and the independent organization shall review the report and evaluate whether changes to rules of the commission or the independent organization should be made.

SECTIONi____.iiSection 39.205, Utilities Code, is amended to read as follows:

Sec.i39.205.iiREGULATION OF COSTS FOLLOWING FREEZE PERIOD. At the conclusion of the freeze period, any remaining costs associated with nuclear decommissioning obligations continue to be subject to cost of service rate regulation and shall be included as a nonbypassable charge to retail customers. The commission may adopt rules necessary to ensure that money for decommissioning is prudently collected, managed, and spent for its intended purpose and that money that remains unspent after decommissioning is completed is returned to retail customers.

SECTIONi__.iiChapter 51, Utilities Code, is amended by adding Section 51.011 to read as follows:

Sec.i51.011.iiRECOVERY OF TAXABLE TELECOM RECEIPT ASSESSMENT. (a) To the extent an annual assessment is imposed on each telecommunications provider, including each commercial mobile service provider, doing business in this state, a certificated telecommunications provider may, beginning June 1, 2005, recover from the provider's customers, an assessment imposed on the provider under this title.

3806 79th Legislature — Regular Session 79th Day

(b)iiA certificated telecommunications provider may recover only the amount of the assessment imposed and may recover the assessment through a monthly billing process.

SECTIONi__.iiSection 52.006, Utilities Code, is amended by adding Subsection (e) to read as follows:

(e)iiThe commission may include with the report required by this section any other report required to be made to the legislature before January 15 of an odd-numbered year. A report included with the report required by this section must be clearly distinct from the report required by this section.

Floor Amendment No. 2

Amend Floor Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 9, strike lines 12 through 31.

(2) Strike page 10.

(3) On page 11, strike lines 1 through 10.

(4) Add the following new SECTIONS and renumber accordingly:Add the following new SECTIONS and renumber accordingly:

SECTION _____. Subchapter D, Chapter 39, Utilities Code, is amended by adding Section 39.1515 to read as follows:

Sec.i39.1515.iiWHOLESALE ELECTRIC MARKET MONITOR. (a)iiAn independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's wholesale electric market monitor to detect and prevent market manipulation strategies and recommend measures to enhance the efficiency of the wholesale market.

(b)iiThe independent organization shall provide to the personnel of the market monitor:

(1)iifull access to the organization's main operations center and the organization's records that concern operations, settlement, and reliability; and

(2)iiother support and cooperation the commission determines is necessary for the market monitor to perform the market monitor's functions.

(c)iiThe independent organization shall use money from the rate authorized by Section 39.151(e) to pay for the market monitor's activities.

(d)iiThe commission is responsible for ensuring that the market monitor has the resources, expertise, and authority necessary to monitor the wholesale electric market effectively and shall adopt rules and perform oversight of the market monitor as necessary. The market monitor shall operate under the supervision and oversight of the commission. The commission shall retain all enforcement authority conferred under this title, and this section may not be construed to confer enforcement authority on the market monitor or to authorize the commission to delegate the commission's enforcement authority to the market monitor. The commission by rule shall define:

(1)iithe market monitor's monitoring responsibilities, including reporting obligations and limitations;

(2)iithe standards for funding the market monitor, including staffing requirements;

(3)iiqualifications for personnel of the market monitor; and

(4)iiethical standards for the market monitor and the personnel of the market monitor.

Thursday, May 26, 2005 SENATE JOURNAL 3807

(e)iiIn adopting rules governing the standards for funding the market monitor, the commission shall consult with a subcommittee of the independent organization's governing body to receive information on how money is or should be spent for monitoring functions. Rules governing ethical standards must include provisions designed to ensure that the personnel of the market monitor are professionally and financially independent from market participants. The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the monitoring, analysis, and reporting responsibilities of the market monitor.

(f)iiThe market monitor immediately shall report directly to the commission any potential market manipulations and any discovered or potential violations of commission rules or rules of the independent organization.

(g)iiThe personnel of the market monitor may communicate with commission staff on any matter without restriction.

(h)iiThe market monitor annually shall submit to the commission and the independent organization a report that identifies market design flaws and recommends methods to correct the flaws. The commission and the independent organization shall review the report and evaluate whether changes to rules of the commission or the independent organization should be made.

Floor Amendment No. 3

Amend Floor Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 2, strike lines 29 through 31.

(2) Strike pages 3 through 8.

(3) On page 9, strike lines 1 through 11.

(4) Add the following new SECTIONS and renumber accordingly:

SECTIONi_____.iiSection 39.151, Utilities Code, is amended by amending Subsections (b) through (e), (g), and (h) and adding Subsections (d-1) and (g-1) to read as follows:

(b)ii"Independent organization" means an independent system operator or other person that is sufficiently independent of any producer or seller of electricity that its decisions will not be unduly influenced by any producer or seller. [An entity will be deemed to be independent if it is governed by a board that has three representatives from each segment of the electric market, with the consumer segment being represented by one residential customer, one commercial customer, and one industrial retail customer.]

(c)iiThe commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission shall apply the provisions of this section and Sections 39.1511, 39.1512, and 39.1515 so as to avoid conflict with a ruling of a federal regulatory body.

(d)iiThe commission shall adopt and enforce rules [An independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules,] relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants, or may delegate to an independent organization responsibilities for establishing or enforcing such rules. Any such rules adopted by an independent organization and any enforcement actions taken

3808 79th Legislature — Regular Session 79th Day

(d-1)iiThe commission may:

(1)iirequire an independent organization to provide reports and information relating to the independent organization's performance of the functions prescribed by this section and relating to the organization's revenues, expenses, and other financial matters;

(2)iiprescribe a system of accounts for an independent organization;

(3)iiconduct audits of an independent organization's performance of the functions prescribed by this section or relating to its revenues, expenses, and other financial matters and may require an independent organization to conduct such an audit;

(4)iiinspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;

(5)iiassess administrative penalties against an independent organization that violates this title or a rule or order adopted by the commission and, at the request of the commission, the attorney general may apply for a court order to require an independent organization to comply with commission rules and orders in the manner provided by Chapter 15; and

(6)iiresolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.

(e)iiThe commission may authorize an independent organization that is certified under this section to charge a reasonable and competitively neutral rate to wholesale buyers and sellers to cover the independent organization's costs. The commission shall investigate the organization's cost efficiencies, salaries and benefits, and use of debt financing and may require the organization to provide any information needed to effectively evaluate the organization's budget and the reasonableness and neutrality of a rate or proposed rate or to evaluate the effectiveness or efficiency of the organization. The commission shall work with the organization to establish the detail of information, both current and historical, and the time frames the commission needs to effectively evaluate a rate or a rate request.

Thursday, May 26, 2005 SENATE JOURNAL 3809

(g)iiTo maintain certification as an independent organization under this section, an organization's [If it amends its governance rules to provide that its governing body is composed as prescribed by this subsection, the existing independent system operator in ERCOT will meet the criteria provided by Subsection (a) with respect to ensuring access to the transmission systems for all buyers and sellers of electricity in the ERCOT region and ensuring the reliability of the regional electrical network. To comply with this subsection, the] governing body must be composed of persons specified by this section and selected in accordance with formal bylaws or protocols of the organization. The bylaws or protocols must be approved by the commission and must reflect the input of the commission. The bylaws must specify the process by which appropriate stakeholders elect members and, for unaffiliated members, prescribe professional qualifications for selection as a member. The bylaws must require the use of a professional search firm to identify candidates for membership of unaffiliated members. The process must allow for commission input in identifying candidates. The governing body must be composed of:

(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [director] of the independent organization [system operator] as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

(B)iione representing investor-owned utilities;

(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

(F)iione representing electric cooperatives [four representatives of the power generation sector as voting members];

(5)iione member representing industrial consumer interests and elected by the industrial consumer market segment to serve a one-year term [four representatives of the transmission and distribution sector as voting members];

(6)iione member representing large commercial consumer interests selected in accordance with the bylaws to serve a one-year term [four representatives of the power sales sector as voting members]; and

(7)iifive members unaffiliated with any market segment and selected by the other members of the governing body to serve three-year terms [the following people as voting members, appointed by the commission:

[(A)iione representative of residential customers;

[(B)iione representative of commercial customers; and

[(C)iione representative of industrial customers].

[The four representatives specified in each of Subdivisions (4), (5), and (6) shall be selected in a manner that ensures equitable representation for the various sectors of industry participants.]

(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

3810 79th Legislature — Regular Session 79th Day

(h)iiThe ERCOT independent system operator may meet the criteria relating to the other functions of an independent organization provided by Subsection (a) by adopting procedures and acquiring resources needed to carry out those functions, consistent with any rules or orders of the commission.

SECTIONi_____.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511 and 39.1512, to read as follows:

Sec.i39.1511.iiPUBLIC MEETINGS OF THE GOVERNING BODY OF AN INDEPENDENT ORGANIZATION. (a)iiMeetings of the governing body of an independent organization certified under Section 39.151 and meetings of a subcommittee that includes a member of the governing body must be open to the public. The bylaws of the independent organization and the rules of the commission may provide for the governing body or subcommittee to enter into executive session closed to the public to address sensitive matters such as confidential personnel information, contracts, lawsuits, competitively sensitive information, or other information related to the security of the regional electrical network.

(b)iiThe bylaws of the independent organization and rules of the commission must ensure that a person interested in the activities of the independent organization has an opportunity to obtain at least seven days' advance notice of meetings and the planned agendas of the meetings and an opportunity to comment on matters under discussion at the meetings. The bylaws and commission rules governing meetings of the governing body may provide for a shorter period of advance notice and for meetings by teleconference technology for governing body meetings to take action on urgent matters. The bylaws and rules must require actions taken on short notice or at teleconference meetings to be ratified at the governing body's next regular meeting. The notice requirements may be met by a timely electronic posting on the Internet.

Sec.i39.1512.iiDISCLOSURE OF INTEREST IN MATTER BEFORE INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN DECISION. (a)iiIf a matter comes before the governing body of an independent organization certified under Section 39.151 and a member has a direct interest in that matter or is employed by or has a substantial financial interest in a person who has a direct interest in that matter, that member shall publicly disclose the fact of that interest to the governing body at a public meeting of the body. The member shall recuse himself or herself from the governing body's deliberations and actions on the matter and may not vote on the matter or otherwise participate in a governing body decision on the matter.

(b)iiA disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.

(c)iiThe fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.

SECTIONi_____.iiAn independent organization certified by the Public Utility Commission of Texas before September 1, 2005, shall modify the organization's governing body to comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act, not later than September 1, 2006. On or after September 1, 2006, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act.

Thursday, May 26, 2005 SENATE JOURNAL 3811

Floor Amendment No. 4

Amend Floor Amendment No. 1 by King to CSSB 408 as follows:

(1) In item (12) of the amendment, in the recital to the unnumbered SECTION that amends Section 39.151, Utilities Code (page 2, line 31), strike "Subsections (d-1) and (g-1)" and substitute "Subsection (g-1)".

(2) In item (12) of the amendment, strike Subsections (c), (d), (d-1), and (e), Section 39.151, Utilities Code, as amended by the unnumbered SECTION (page 3, line 9, through page 5, line 18), and substitute the following:

(c) The commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission has complete authority to oversee, require the commission's approval of, and order modifications of any part of the finances, budget, or operations of an independent organization certified under this section.

(d) An independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules, relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants. The procedures shall be subject to commission oversight and review. An independent organization certified by the commission is directly responsible and accountable to the commission. The organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may decertify an organization that does not adequately perform the organization's functions or duties or does not comply with this section.

(e) The commission by rule shall require an independent organization certified under this section to provide the commission with sufficiently detailed information to allow the commission to review and approve or disapprove the independent organization's budget for cost efficiencies and for the reasonableness and necessity of budget items. The rules must include a timetable for an independent organization to file its budget for review under the rules. The commission's budget review must include a review of salaries, employee benefits, and the independent organization's use of debt financing. After determining the overall reasonableness and necessity of an independent organization's budget, the [The] commission, in the same proceeding, may authorize the [an] independent organization [that is certified under this section] to charge [a reasonable and competitively neutral rate] to wholesale buyers and sellers a reasonable and competitively neutral rate determined by the commission to allow [cover] the independent organization a reasonable opportunity to take in a reasonable and necessary amount of revenue, as determined by the commission in the budget review process. The independent organization may change the rate established by the commission in the budget review process only with the commission's approval. On the commission's own initiative or on receiving a complaint, the commission may inquire into the reasonableness of an independent organization's budget or rate [costs].

Floor Amendment No. 5

Amend Floor Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 1, strike lines 27 through 29 and insert the following:

3812 79th Legislature — Regular Session 79th Day

(8) In Section 15.023(b), Utilities Code, as amended by SECTION 27 of the bill, strike lines 24 through 27 on page 19 and lines 1 through 4 on page 20, and insert the following:

(b) The penalty for a violation may be in an amount not to exceed $25,000 [$5,000]. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.".

Floor Amendment No. 6

Amend Floor Amendment No. 1 by King to CSSBi408 by adding the following appropriately numbered item to read as follows:

(__) Insert the following appropriately numbered SECTION to read as follows and renumber subsequent SECTIONS accordingly:

SECTION __. (a) The Public Utility Commission of Texas, as part of the commission's continuing analysis of reserve margins and capacity needs for the ERCOT system, shall consider creating and may establish a new alternative market mechanism to allow a potential interruptible industrial load that is greater than one megawatt and that is not participating in the ERCOT market as a load acting as a resource to provide the benefits of interruptible load to the system and to be compensated for that service.

(b) The legislature finds that businesses in this state that are able to participate in an alternative interruptible service compete in interstate and global markets and that the opportunity for the businesses to be compensated for their interruptible loads is essential to the businesses' ability to remain competitive and to provide significant benefits to the economy of this state. The Public Utility Commission of Texas shall consider these economic benefits in analyzing the potential of interruptible service.

(c) Not later than January 1, 2006, The Public Utility Commission of Texas shall report any actions taken regarding interruptible service and the results of its analysis of interruptible service to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each legislative committee with jurisdiction over electric services.

Floor Amendment No. 9

Amend CSSB 408 as follows:

(1) In SECTION 4 of the bill (page 6, lines 13-14), by striking "but not more than 15 percent"; and

(2) In SECTION 4 of the bill (page 6, line 26), by striking "five percent or more but not more than 15 percent of".

Floor Amendment No. 16

Amend CSSB 408 (House committee printing) in SECTION 40 of the bill, as follows:

(1)iiStrike added Subsection (b), Section 65.003, Utilities Code (page 33, lines 4-12), and substitute the following:

(b)iiA cable service provider electing to terminate an existing municipal franchise shall be responsible for continuing to remit to the affected municipality any franchise fees otherwise due under the franchise being terminated until the date the term of the franchise was to expire.

Thursday, May 26, 2005 SENATE JOURNAL 3813

(2)iiStrike Subsection (o), Section 65.004, Utilities Code (page 39, line 26 through page 40, line 3), and substitute the following:

(o)iiOn written notice to the commission, a cable or video service provider shall pay to each municipality in which it provides service a fee equal to five percent of the provider's gross revenues. This subsection does not apply to a cable service provider required to pay a fee under Section 65.003(b) until the date the provider is no longer required to pay that fee.

Floor Amendment No. 17

Amend CSSB 408 (House committee printing) in SECTION 40 of the bill, in added Subdivision (3), Subsection (b), Section 65.004, Utilities Code (page 35, line 25), between "network" and the semicolon, by inserting ", provided that the cable or video service provider may credit that amount against any fee the provider is required to pay a municipality under this chapter".

Floor Amendment No. 23

Amend CSSB 408 by adding the following appropriately numbered SECTION to the bill and renumbering subsequent SECTIONS as appropriate:

SECTION . Section 32.001(b), Utilities Code, is amended to read as follows:

(b) The commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction under this subtitle, included but not limited to Chapter 33.

Floor Amendment No. 24

Amend CSSB 408 by adding the following appropriately numbered SECTION to the bill and renumbering subsequent SECTIONS of the bill accordingly:

SECTION . Chapter 39, Subchapter E, Utilities Code, is amended to read as follows:

Section 39.2025 DEFAULT SERVICE STUDY. (a) It is the policy of this state to ensure that all electric customers in ERCOT, including low-income customers and customers in rural and other high-cost areas, have access to electric energy service at reasonable rates.

(b) The Public Utility Commission of Texas shall conduct a study to determine methods or mechanisms to ensure that residential customers who are currently being served by an affiliated retail electric provider at the "price-to-beat" rate will continue to have default electric service available at reasonable rates. On September 1, 2005, the commission shall begin the review required by this subsection. The review must include the methods other competitive regions, including Ohio, Maine, Maryland, Massachusetts, and New Jersey, use to provide default services to residential customer classes at reasonable rates.

(c) The study required by Subsection (b) of this section must:

(1) evaluate:

(A) competitive procurement load auctions; and

(B) local governmental aggregation, including municipal "opt-out" mechanisms; and

(2) compare, regarding various mechanisms or methods considered:

(A) resulting prices for service at wholesale;

3814 79th Legislature — Regular Session 79th Day

(B) resulting prices for service at retail;

(C) key features of each mechanism or method and key differences between the mechanisms or methods;

(D) the level of wholesale supplier competition under each mechanism or method, measured by factors such as:

(i) numbers of participants;

(ii) volumes bid; or

(iii) other relevant factors; and

(E) any other factors or variables the commission considers necessary to arrive at a conclusion and to make recommendations under this section.

(d) The Public Utility Commission of Texas shall conclude the study under this section not later than February 1, 2006, and shall determine at that time a mechanism by which residential customers served by an affiliated retail electric provider will be able to receive the lowest cost default electric service on and after January 1, 2007.

(e) The Public Utility Commission of Texas shall present a report of the study and the recommendations made as a result of the study to the Joint Electric Utility Restructuring Legislative Oversight Committee on or before March 1, 2006.

(f) The Joint Electric Utility Restructuring Legislative Oversight Committee shall hold hearings on the study and recommendations in each region of the state served by an affiliated retail electric provider and, following the hearings, shall make recommendations to the 80th Legislature on the best means to provide residential customers default electric service at the lowest cost.

Floor Amendment No. 29

Amend CSSB 408 by adding a new section, numbered appropriately, to read as follows:

SECTION __. Subchapter C, Chapter 57, Utilities Code, is repealed.

Floor Amendment No. 30

Amend CSSB 408 by adding the following appropriately numbered SECTIONS to the bill and renumbering subsequent SECTIONS as appropriate:

SECTIONi____.iiSection 56.021, Utilities Code, is amended to read as follows:

Sec.i56.021.iiUNIVERSAL SERVICE FUND ESTABLISHED. The commission shall adopt and enforce rules requiring local exchange companies to establish a universal service fund to:

(1)iiassist telecommunications providers in providing basic local telecommunications service at reasonable rates in high cost rural areas;

(2)iireimburse the telecommunications carrier that provides the statewide telecommunications relay access service under Subchapter D;

(3)iifinance the specialized telecommunications assistance program established under Subchapter E;

(4)iireimburse the department, the Texas Commission for the Deaf and Hard of Hearing, and the commission for costs incurred in implementing this chapter and Chapter 57;

(5)iireimburse a telecommunications carrier providing lifeline service as provided by 47 C.F.R. Part 54, Subpart E, as amended;

Thursday, May 26, 2005 SENATE JOURNAL 3815

(6)iifinance the implementation and administration of an integrated eligibility process created under Section 17.007 for customer service discounts relating to telecommunications services, including outreach expenses the commission determines are reasonable and necessary;

(7)iireimburse a designated provider under Subchapter F; [and]

(8)iireimburse a successor utility under Subchapter G; and

(9)iifinance the program established under Subchapter H.

SECTIONi____.iiChapter 56, Utilities Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. AUDIO NEWSPAPER PROGRAM

Sec.i56.301.iiAUDIO NEWSPAPER ASSISTANCE PROGRAM. The commission by rule shall establish a program to provide from the universal service fund financial assistance for a free telephone service for blind and visually impaired persons that offers the text of newspapers using synthetic speech. The commission may adopt rules to implement the program.

Floor Amendment No. 31

Amend CSSB 408 by adding the following appropriately numbered SECTION:

SECTIONi__.iiSubchapter E, Chapter 36, Utilities Code, is amended by adding Section 36.209 to read as follows:

Sec.i36.209. RESEARCH AND DEVELOPMENT COST RECOVERY. (a) The commission by rule shall adopt a mechanism for an electric utility to recover research and development costs incurred regarding technologies and business practices related to:

(1)iiproducing, transmitting, distributing, storing, metering, and using electricity;

(2)iimitigating risks in competitive energy markets;

(3)iiminimizing environmental impacts of production and delivery of electricity; and

(4)iideveloping uniform commercial standards for the energy industry.

(b)iiThe rules must be designed to encourage electric utilities to take advantage of research and development resources in this state, including state institutions, to:

(1)iicontribute to economic development and the production of employment opportunities; and

(2)iiprovide this state and state residents with:

(A)iithe benefits of advanced technologies, systems, and processes;

(B)iiincreased efficiency and reliability in electricity production, delivery, and use;

(C)iireduced costs for providing electricity; and

(D)iireduced environmental impacts from electricity production and delivery.

Floor Amendment No. 35

Amend CSSB 408 on page , line , to add a new section as follows and renumber the remaining sections:

SECTION . Section 39.107(g), Utilities Code, is struck to read as follows:

3816 79th Legislature — Regular Session 79th Day

(g) Metered electric service sold to residential customers on a prepaid basis may not be sold at a price that is higher than the price charged by the provider of last resort.

Floor Amendment No. 1 on Third Reading

Amend CSSB 408 on third reading in Section 65.003(b), Utilities Code, as added by Amendment No. 16 by Dutton, by inserting the following between "provider" and "electing":

, other than a cable service provider serving fewer than 35 percent of the total cable customers in a municipality,

The amendments were read.

Senator Nelson moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi408 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Nelson, Chair; Fraser, Carona, Whitmire, and VanideiPutte.

CONFERENCE COMMITTEE ON HOUSE BILL 2481

Senator Harris called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi2481 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi2481 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Harris, Chair; Armbrister, Shapiro, Jackson, and Ellis.

SENATE BILL 1137 WITH HOUSE AMENDMENTS

Senator Madla called SBi1137 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Floor Amendment No. 1

Amend SB 1137 by striking SECTION 3 of the bill (page 6, line 21, through page 7, line 7, house committee report) and renumbering SECTIONS of the bill appropriately.

Thursday, May 26, 2005 SENATE JOURNAL 3817

Floor Amendment No. 2

Amend SB 1137 as follows:

Add the following appropriately numbered Section:

SECTION _. Subsection (c), Section 45.03, Alcoholic Beverage Code, is amended to read as follows:

(c) Except as provided by this subsection, a [A] storage permit may not be issued for a location outside the county in which the permittee's business is located. Subject to Section 45.04, the holder of a winery permit may obtain a storage permit for a location inside or outside the county in which the permit holder's business is located.

The amendments were read.

Senator Madla moved to concur in the House amendments to SBi1137.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

(Senator Eltife in Chair)

SENATE BILL 1850 WITH HOUSE AMENDMENT

Senator Gallegos called SBi1850 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1850 (House committee report) as follows:

(1)iiIn SECTION 1 of the bill, in added Section 11.13(b), Alcoholic Beverage Code (page 1, line 19), between "permittee" and "may", insert ", as determined under Chapter 573, Government Code,".

(2)iiIn SECTION 1 of the bill, in added Section 11.13(b), Alcoholic Beverage Code (page 1, lines 22 and 23), strike "whose current licensee or permittee is charged with a violation of this code", and substitute "against whose current licensee or permittee a charge of a violation of this code is pending".

(3)iiIn SECTION 1 of the bill, in added Section 11.13(c), Alcoholic Beverage Code (page 2, line 2), strike "licensee or permittee whose license was canceled", and substitute "licensee or permittee, as determined under Chapter 573, Government Code, whose license or permit was canceled".

(4)iiIn SECTION 2 of the bill, in added Section 11.321, Alcoholic Beverage Code (page 2, line 19), strike "a permittee that makes" and substitute "a licensee or permittee who makes".

(5)iiIn SECTION 3 of the bill, in added Section 11.61(b-1), Alcoholic Beverage Code (page 3, line 14), strike "Before the suspended license may be reinstated" and substitute "Before the suspended license or permit may be reinstated".

(6)iiIn SECTION 3 of the bill, in added Section 11.61(b-1), Alcoholic Beverage Code (page 3, lines 19 and 20), strike "Before the suspended license may be reinstated" and substitute "Before the suspended license or permit may be reinstated".

(7)iiIn SECTION 3 of the bill, in added Section 11.61(i), Alcoholic Beverage Code (page 4, line 5), after the period, insert the following:

3818 79th Legislature — Regular Session 79th Day

This subsection applies only to a hearing in connection with a wine and beer retailer's permit, other than a permit held with a food and beverage certificate, for premises located in a county with a population of 1.4 million or more.

(8)iiIn SECTION 8 of the bill (page 5, line 15), strike "as added by this Act, applies" and substitute "and Subsection (k), Section 61.71, Alcoholic Beverage Code, as added by this Act, apply".

(9)iiInsert the following appropriately numbered SECTIONS and renumber SECTIONS of the bill appropriately:

SECTIONi___.iiSubchapter A, Chapter 61, Alcoholic Beverage Code, is amended by adding Section 61.15 to read as follows:

Sec.i61.15.iiCERTAIN APPLICATIONS PROHIBITED. Section 11.13 applies to an application for a license under this subtitle.

SECTION ___. Subchapter B, Chapter 61, Alcoholic Beverage Code, is amended by adding Section 61.52 to read as follows:

Sec.i61.52.iiADMINISTRATIVE PENALTY IN CERTAIN COUNTIES. Section 11.321 applies to an original or renewal application for a retail dealer's on-premise license, other than a license with a food and beverage certificate, for an establishment located in a county with a population of 1.4 million or more.

SECTIONi___.iiSection 61.71, Alcoholic Beverage Code, is amended by adding Subsections (j) and (k) to read as follows:

(j)iiSection 11.61(b-1) applies to a retail dealer's on-premise license, other than a license held with a food and beverage certificate, for premises located in a county with a population of 1.4 million or more.

(k)iiA hearing under Subsection (a) must be concluded not later than the 60th day after the date notice is provided under that subsection. The provisions of this subsection may not be waived by the license holder or the commission. This subsection applies only to a hearing in connection with a retail dealer's on-premise license, other than a license held with a food and beverage certificate, for premises located in a county with a population of 1.4 million or more.

The amendment was read.

Senator Gallegos moved to concur in the House amendment to SBi1850.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE ON HOUSE BILL 1358

Senator Armbrister called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi1358 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi1358 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Armbrister, Chair; Hinojosa, Jackson, Seliger, and Madla.

Thursday, May 26, 2005 SENATE JOURNAL 3819

SENATE BILL 810 WITH HOUSE AMENDMENTS

Senator Averitt called SBi810 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 810 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of the sale and inspection of real estate.

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

SECTIONi1.iiSubsection (b), Section 1101.152, Occupations Code, is amended to read as follows:

(b)iiThe commission may set and collect reasonable fees to implement the continuing education requirements for license holders, including the following fees:

(1)iifor an application for approval of a continuing education provider, not more than $400;

(2)iifor an application for approval of a continuing education course of study, not more than $100; [and]

(3)iifor an application for approval of an instructor of continuing education courses, not more than $40; and

(4)iifor attendance at a program to train instructors of a continuing education course prescribed under Section 1101.455, not more than $100.

SECTIONi2.iiSubsection (c), Section 1101.204, Occupations Code, is amended to read as follows:

(c)iiThe commission may not conduct an investigation of a person licensed under this chapter or Chapter 1102 [license holder] in connection with a complaint submitted later than the fourth anniversary of the date of the incident that is the subject of the complaint.

SECTIONi3.iiSection 1101.353, Occupations Code, is amended by adding Subsection (d) to read as follows:

(d)iiThe commission may issue a provisional moral character determination. The commission by rule shall adopt reasonable terms for issuing a provisional moral character determination.

SECTIONi4.iiSubsection (a), Section 1101.358, Occupations Code, is amended to read as follows:

(a)iiAn applicant for a salesperson license must provide to the commission satisfactory evidence that the applicant has completed at least 14 [12] semester hours, or equivalent classroom hours, of postsecondary education, including:

(1)iiat least four semester hours of core real estate courses on principles of real estate;

(2)iiat least two semester hours of each of the following core real estate courses:

(A)iiagency law; [and]

(B)iicontract law; and

3820 79th Legislature — Regular Session 79th Day

(C)iione additional core real estate course; and

(3)iiat least four semester hours of core real estate courses or related courses.

SECTIONi5.iiSubsection (a), Section 1101.454, Occupations Code, is amended to read as follows:

(a)iiAn applicant applying for the first renewal of a salesperson license must provide to the commission satisfactory evidence of completion of at least 18 [14] semester hours, or equivalent classroom hours, of postsecondary education, including 14 [10] hours of core real estate courses.

SECTIONi6.iiSubsections (e) and (h), Section 1101.455, Occupations Code, are amended to read as follows:

(e)iiAt least six of the continuing education hours required by Subsection (b) must cover the following legal topics:

(1)iicommission rules;

(2)iifair housing laws;

(3)iiProperty Code issues, including landlord-tenant law;

(4)iiagency law;

(5)iiantitrust laws;

(6)iiSubchapter E, Chapter 17, Business & Commerce Code;

(7)iidisclosures to buyers, landlords, tenants, and sellers;

(8)iicurrent contract and addendum forms;

(9)iiunauthorized practice of law;

(10)iicase studies involving violations of laws and regulations;

(11)iicurrent Federal Housing Administration and Department of Veterans Affairs regulations;

(12)iitax laws;

(13)iiproperty tax consulting laws and legal issues; or

(14)iiother legal topics approved by the commission.

(h)iiThe commission shall automatically approve the following courses as courses that satisfy the mandatory continuing education requirements of Subsection (f) [courses]:

(1)iicore real estate courses; and

(2)iireal estate-related courses approved by the State Bar of Texas for minimum continuing legal education participatory credit.

SECTIONi7.iiSection 1101.557, Occupations Code, is amended to read as follows:

Sec.i1101.557.iiACTING AS AGENT. A broker [license holder] who represents a party in a real estate transaction is [acts as] that party's agent.

SECTIONi8.iiSection 1101.561, Occupations Code, is amended to read as follows:

Sec.i1101.561.iiDUTIES OF INTERMEDIARY PREVAIL. (a)iiThe duties of a license holder acting as an intermediary under this subchapter supersede the duties of a license holder established under any other law, including common law.

(b)iiA broker must agree to act as an intermediary under this subchapter if the broker agrees to represent in a transaction:

(1)iia buyer or tenant; and

(2)iia seller or landlord.

Thursday, May 26, 2005 SENATE JOURNAL 3821

SECTIONi9.iiSubsection (a), Section 1101.652, Occupations Code, is amended to read as follows:

(a)iiThe commission may suspend or revoke a license issued under this chapter or take other disciplinary action authorized by this chapter if the license holder:

(1)iienters a plea of guilty or nolo contendere to or is convicted of a felony in which fraud is an essential element, and the time for appeal has elapsed or the judgment or conviction has been affirmed on appeal, without regard to an order granting community supervision that suspends the imposition of the sentence;

(2)iiprocures or attempts to procure a license under this chapter for the license holder or a salesperson by fraud, misrepresentation, or deceit or by making a material misstatement of fact in an application for a license;

(3)iiengages in misrepresentation, dishonesty, or fraud when selling, buying, trading, or leasing real property in the [license holder's own] name of:

(A)iithe license holder;

(B)iithe license holder's spouse; or

(C)iia person related to the license holder within the first degree by consanguinity;

(4)iifails to honor, within a reasonable time, a check issued to the commission after the commission has sent by certified mail a request for payment to the license holder's last known business address according to commission records;

(5)iifails or refuses to produce on request, for inspection by the commission or a commission representative, a document, book, or record that is in the license holder's possession and relates to a real estate transaction conducted by the license holder;

(6)iifails to provide, within a reasonable time, information requested by the commission that relates to a formal or informal complaint to the commission that would indicate a violation of this chapter;

(7)iifails to surrender to the owner, without just cause, a document or instrument that is requested by the owner and that is in the license holder's possession;

(8)iifails to use a contract form required by the commission under Section 1101.155; [or]

(9)iifails to notify the commission, not later than the 30th day after the date of a final conviction or the entry of a plea of nolo contendere, that the person has been convicted of or entered a plea of nolo contendere to a felony or a criminal offense involving fraud; or

(10)iidisregards or violates this chapter.

SECTIONi10.iiSubsection (c), Section 1101.655, Occupations Code, is amended to read as follows:

(c)iiA person [whose license or certificate is revoked under this section] is not eligible for a [new] license or certificate until the person has repaid in full the amount paid from the account for the person, plus interest at the legal rate.

SECTIONi11.iiSubchapter C, Chapter 1102, Occupations Code, is amended by adding Section 1102.1035 to read as follows:

3822 79th Legislature — Regular Session 79th Day

Sec.i1102.1035.iiADDITIONAL GENERAL ELIGIBILITY REQUIREMENTS FOR CERTAIN BUSINESS ENTITIES. (a)iiTo be eligible for a professional inspector license under this chapter:

(1)iia corporation must designate one of its officers as its agent for purposes of this chapter; and

(2)iia limited liability company must designate one of its managers as its agent for purposes of this chapter.

(b)iiA corporation or limited liability company may not act as a professional inspector unless the entity's designated agent is a licensed professional inspector according to the commission's records.

SECTIONi12.iiSubsection (b), Section 1102.205, Occupations Code, is amended to read as follows:

(b)iiAs a prerequisite for renewal of a real estate inspector license, [or] professional inspector license, or apprentice inspector license, the inspector must participate in the continuing education program and submit evidence satisfactory to the commission of successful completion of at least 16 [the following number of] classroom hours of core real estate inspection courses for each year of the license period [during the year] preceding the renewal[:

[(1)iieight hours for a real estate inspector license renewal; or

[(2)ii16 hours for a professional inspector license renewal].

SECTIONi13.iiSubchapter E, Chapter 1102, Occupations Code, is amended by adding Section 1102.2051 to read as follows:

Sec.i1102.2051.iiADDITIONAL RENEWAL REQUIREMENTS FOR CERTAIN BUSINESS ENTITIES. (a)iiTo renew a professional inspector license under this chapter:

(1)iia corporation must designate one of its officers or employees as its agent for purposes of this chapter; and

(2)iia limited liability company must designate one of its managers or employees as its agent for purposes of this chapter.

(b)iiA corporation or limited liability company may not renew a professional inspector license unless the entity's designated agent is a licensed professional inspector according to the commission's records.

SECTIONi14.iiSubsections (b) and (c), Section 1101.454, Occupations Code, are repealed.

SECTIONi15.ii(a)iiThe Texas Real Estate Commission shall adopt rules necessary to administer the changes in law made by this Act not later than January 1, 2006.

(b)iiThe change in law made by this Act to Section 1101.358, Occupations Code, applies only to an application for a salesperson license filed on or after January 1, 2006. An application for a salesperson license filed before January 1, 2006, is covered by the law in effect at the time the application was filed, and the former law is continued in effect for that purpose.

Thursday, May 26, 2005 SENATE JOURNAL 3823

(c)iiThe change in law made by this Act to Section 1101.454, Occupations Code, applies only to the first renewal of a salesperson license that expires on or after January 1, 2006. The first renewal of a salesperson license that expires before Januaryi1, 2006, is covered by the law in effect on the date the license expires, and the former law is continued in effect for that purpose.

(d)iiThe change in law made by this Act to Section 1101.652, Occupations Code, applies only to conduct that occurs on or after the effective date of this Act. Conduct that occurs before the effective date of this Act is covered by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

(e)iiThe change in law made by this Act to Section 1102.205, Occupations Code, applies only to an application for renewal of a real estate inspector license, professional inspector license, or apprentice inspector license that expires on or after January 1, 2006. A real estate inspector license, professional inspector license, or apprentice inspector license that expires before January 1, 2006, is covered by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTIONi16.iiThis Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 810 (House committee printing) as follows:

(1)iiStrike SECTION 7 of the bill (page 4, lines 5-9) and substitute the following:

SECTIONi7.iiSection 1101.557, Occupations Code, is amended to read as follows:

Sec.i1101.557.iiACTING AS AGENT; REGULATION OF CERTAIN TRANSACTIONS. (a) A broker [license holder] who represents a party in a real estate transaction or who lists real estate for sale under an exclusive agreement for a party is [acts as] that party's agent.

(b)iiA broker described by Subsection (a):

(1)iimay not instruct another broker to directly or indirectly violate Section 1101.652(b)(22); and

(2)iimust inform the party if the broker receives material information related to a transaction to list, buy, sell, or lease the party's real estate, including the receipt of an offer by the broker.

(c)iiFor the purposes of this section:

(1)iia license holder who has the authority to bind a party to a lease or sale under a power of attorney or a property management agreement is also a party to the lease or sale;

(2)iian inquiry to a person described by Section 1101.005(6) about contract terms or forms required by the person's employer does not violate Section 1101.652(b)(22) if the person does not have the authority to bind the employer to the contract; and

(3)iithe sole delivery of an offer to a party does not violate Section 1101.652(b)(22) if:

(A)iithe party's broker consents to the delivery;

(B)iia copy of the offer is sent to the party's broker, unless a governmental agency using a sealed bid process does not allow a copy to be sent; and

3824 79th Legislature — Regular Session 79th Day

(C)iithe person delivering the offer does not engage in another activity that directly or indirectly violates Section 1101.652(b)(22).

(2)iiIn SECTION 11 of the bill, in added Section 1102.1035, Occupations Code (page 6, line 22), immediately after "officers", insert "or employees".

(3)iiIn SECTION 11 of the bill, in added Section 1102.1035, Occupations Code (page 6, line 25), immediately after "managers", insert "or employees".

Floor Amendment No. 2

Amend CSSB 810 (House committee printing) by adding the following appropriately numbered SECTIONS to the bill and renumbering existing SECTIONS of the bill appropriately:

SECTION . Subchapter A, Chapter 5, Property Code, is amended by adding Section 5.014 to read as follows:

Sec. 5.014. PROHIBITED FEES. A person who has a right of first refusal in real property may not charge a fee for declining to exercise that right, such as a fee for providing written evidence of the declination.

SECTION . Except as provided by a contract entered into before the effective date of this Act, Section 5.014, Property Code, as added by this Act, applies only to a fee that is solicited on or after the effective date of this Act for declining the exercise of a right of first refusal.

Amendment No. 1 on Third Reading

Amend Floor Amendment No. 1 by Pickett to CSSB 810 (House committee printing) on third reading as follows:

(1) page 1, line 12, strike "and".

(2) page 1, line 16, before the "." add "; and (3) shall, at a minimum, answer the party's questions and present any offer to or from the party".

Floor Amendment No. 2 on Third Reading

Amend CSSB 810 on third reading in SECTION 5.014, Property Code, as added by second reading amendment No. 2 (page 1, line 6 of amendment), by striking "real property" and substituting "real property that is a condominium subject to Chapter 81 or Chapter 82".

The amendments were read.

Senator Averitt moved to concur in the House amendments to SBi810.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE ON HOUSE BILL 905

Senator Williams called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi905 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi905 before appointment.

There were no motions offered.

Thursday, May 26, 2005 SENATE JOURNAL 3825

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Williams, Chair; Janek, West, Eltife, and Zaffirini.

SENATE BILL 495 WITH HOUSE AMENDMENT

Senator Williams called SBi495 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 495 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the fee paid to the attorney general for examining the record of proceedings authorizing the issuance of a public security or related credit agreement.

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

SECTIONi1.iiSection 1202.001, Government Code, is amended by amending Subdivision (4) and adding Subdivision (5) to read as follows:

(4)ii"Record of proceedings" means the record of an issuer's proceedings relating to the authorization of a public security or a credit agreement relating to a public security.

(5)ii"Credit agreement" means a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitment to purchase a public security, purchase or sale agreement, interest rate swap agreement, or commitment or other agreement authorized by an issuer in connection with the authorization, issuance, sale, resale, security, exchange, payment, purchase, remarketing, or redemption of a public security, interest on a public security, or both.

SECTIONi2.iiSection 1202.004, Government Code, is amended to read as follows:

Sec.i1202.004.iiFEE FOR EXAMINATION [OF PUBLIC SECURITY] BY ATTORNEY GENERAL. (a) When [Except as provided by this section, when] an issuer submits a record of proceedings [public security] to the attorney general for examination and approval as provided by law, the issuer shall pay a nonrefundable examination fee to the attorney general in accordance with this section. [, in an amount computed according to the principal amount of the public security, as follows:

[Principal Amount Fee

[not more than $500,000 $500

[more than $500,000 but not more than $5 million $750

[more than $5 million but not more than $20 million $1,000

[more than $20 million $1,250]

(b)ii[If a nonprofit corporation or governmental entity issuing the public security for the benefit of nongovernmental entities submits the public security to the attorney general as required by law, the fee is $1,250.

3826 79th Legislature — Regular Session 79th Day

[(c)]iiIf the issuer is issuing multiple series of a single public security issue, the issuer shall pay the fee prescribed by this section [Subsection (a) or (b)] for each series[, not to exceed $2,500 for one issue in which all series are issued simultaneously].

(c)iiExcept as provided by Subsection (d), the nonrefundable examination fee required by this section is equal to the lesser of:

(1)iione-tenth of one percent of the principal amount of the public security to which the record of proceedings relates; or

(2)ii$9,500.

(d)iiThe minimum examination fee required by this section is $750.

(e)iiThe attorney general may adopt rules necessary to administer this section.

SECTIONi3.iiThe examination fee prescribed by Section 1202.004, Government Code, as amended by this Act, applies only to a record of proceedings submitted to the office of the attorney general on or after the effective date of this Act. The examination fee for a record of proceedings submitted to the office of the attorney general before the effective date of this Act is governed by the law as it existed immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTIONi4.iiThis Act takes effect September 1, 2005.

The amendment was read.

Senator Williams moved to concur in the House amendment to SBi495.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

HOUSE CONCURRENT RESOLUTION 215

The Presiding Officer laid before the Senate the following resolution:

WHEREAS, HBi1544 has been adopted by the house of representatives and the senate; and

WHEREAS, The bill contains technical and typographical errors that should be corrected; now, therefore, be it

RESOLVED by the 79th Legislature of the State of Texas, That the enrolling clerk of the house of representatives be instructed to correct House Bill No. 1544 in SECTION 3 of the bill, by striking "Subchapter B, Section 521.405" and substituting "Section 521.405".

ELLIS

HCR 215 was read.

On motion of Senator Ellis and by unanimous consent, the resolution was considered immediately and was adopted by a viva voce vote.

All Members are deemed to have voted "Yea" on the adoption of the resolution.

SENATE BILL 293 WITH HOUSE AMENDMENT

Senator Shapleigh, on behalf of Senator Zaffirini, called SBi293 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Thursday, May 26, 2005 SENATE JOURNAL 3827

Amendment

Amend SB 293 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to meetings between representatives of the Department of Public Safety of the State of Texas and Mexican states on transportation and truck inspection issues.

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

SECTIONi1.iiSubchapter A, Chapter 411, Government Code, is amended by adding Section 411.0097 to read as follows:

Sec.i411.0097.iiTRANSPORTATION AND INSPECTIONS MEETING WITH REPRESENTATIVES OF MEXICAN STATES. (a)iiThe department shall initiate efforts to meet at least quarterly with the department's counterparts in the Mexican states bordering this state to discuss issues relating to truck inspections and transportation and infrastructure involved in truck inspections and transportation.

(b)iiTo assist the department in carrying out this section, the department shall contact the border commerce coordinator designated under Section 772.010 and the mayors of each municipality in this state in which a port of entry for land traffic is located.

(c)iiAt least one department representative participating in a meeting under Subsection (a) must be proficient in Spanish.

(d)iiThe department, in conjunction with the border commerce coordinator, shall develop short-range and long-range plans, including recommendations to increase bilateral relations with Mexico and expedite trade by mitigating delays in border crossing inspections for northbound truck traffic. In developing the plans, the department and coordinator shall consider information obtained from any meetings under Subsection (a). The department shall update the plan biennially and submit the updated plan to the lieutenant governor, the speaker of the house of representatives, and each other member of the legislature on or before December 1 of each even-numbered year.

SECTIONi2.iiThis Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.

The amendment was read.

Senator Shapleigh, on behalf of Senator Zaffirini, moved to concur in the House amendment to SBi293.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 569 WITH HOUSE AMENDMENT

Senator Shapleigh, on behalf of Senator Zaffirini, called SBi569 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 569 by substituting in lieu thereof the following:

3828 79th Legislature — Regular Session 79th Day

A BILL TO BE ENTITLED

AN ACT

relating to meetings between representatives of the Texas Department of Transportation and Mexican states on transportation and truck inspection issues.

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

SECTIONi1.iiSection 201.207, Transportation Code, is amended to read as follows:

Sec.i201.207.iiCROSS-BORDER TRANSPORTATION AND INFRASTRUCTURE MEETINGS. (a)iiThe department shall initiate efforts to meet at least quarterly [semiannually] with the department's counterparts in those states of the United Mexican States that border this state to discuss issues relating to truck inspections and transportation and infrastructure involved in truck inspections and transportation [issues. To the extent practicable, the department shall meet at least semiannually with its counterparts in those bordering states to discuss transportation and infrastructure issues].

(b)iiTo assist the department in carrying out this section, the department shall contact the border commerce coordinator designated under Section 772.010, Government Code, and the mayors of each municipality in this state in which a port of entry for land traffic is located.

(c)iiAt least one department representative participating in a meeting under Subsection (a) must be proficient in Spanish.

(d)iiThe department, in conjunction with the border commerce coordinator, shall develop short-range and long-range plans, including recommendations to increase bilateral relations with Mexico and expedite trade by mitigating delays in border crossing inspections for northbound truck traffic. In developing the plans, the department and coordinator shall consider information obtained from any meetings under Subsection (a). The department shall update the plan biennially and submit the updated plan to the lieutenant governor, the speaker of the house of representatives, and each other member of the legislature on or before December 1 of each even-numbered year.

SECTIONi2.iiThis Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.

The amendment was read.

Senator Shapleigh, on behalf of Senator Zaffirini, moved to concur in the House amendment to SBi569.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 1189 WITH HOUSE AMENDMENTS

Senator Wentworth called SBi1189 from the President's table for consideration of the House amendments to the bill.

Thursday, May 26, 2005 SENATE JOURNAL 3829

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 1189 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the creation, composition, jurisdiction, and procedure of certain judicial districts, to the selection of a local administrative district judge for certain counties, to the juvenile board in certain counties, and to the district courts in certain counties.

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

SECTIONi1.ii(a)iiSection 24.194, Government Code, is amended by adding Subsection (d) to read as follows:

(d)iiAll civil cases in the 92nd District Court shall be assigned and docketed at random by the district clerk using an automated system.

(b)iiSection 24.195, Government Code, is amended by adding Subsection (d) to read as follows:

(d)iiAll civil cases in the 93rd District Court shall be assigned and docketed at random by the district clerk using an automated system.

(c)iiSection 24.241, Government Code, is amended by adding Subsection (d) to read as follows:

(d)iiAll civil cases in the 139th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(d)iiSection 24.385, Government Code, is amended to read as follows:

Sec.i24.385.ii206TH JUDICIAL DISTRICT (HIDALGO COUNTY). (a)iiThe 206th Judicial District is composed of Hidalgo County.

(b)iiAll civil cases in the 206th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(e)iiSection 24.452, Government Code, is amended to read as follows:

Sec.i24.452.ii275TH JUDICIAL DISTRICT (HIDALGO COUNTY). (a)iiThe 275th Judicial District is composed of Hidalgo County.

(b)iiAll civil cases in the 275th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(f)iiSection 24.478, Government Code, is amended to read as follows:

Sec.i24.478.ii332ND JUDICIAL DISTRICT (HIDALGO COUNTY). (a)iiThe 332nd Judicial District is composed of Hidalgo County.

(b)iiAll civil cases in the 332nd District Court shall be assigned and docketed at random by the district clerk using an automated system.

(g)iiSection 24.515, Government Code, is amended to read as follows:

Sec.i24.515.ii370TH JUDICIAL DISTRICT (HIDALGO COUNTY). (a)iiThe 370th Judicial District is composed of Hidalgo County.

(b)iiAll civil cases in the 370th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(h)iiSection 24.534, Government Code, is amended by adding Subsection (c) to read as follows:

(c)iiAll civil cases in the 389th District Court shall be assigned and docketed at random by the district clerk using an automated system.

3830 79th Legislature — Regular Session 79th Day

(i)iiSection 24.543, Government Code, is amended by adding Subsection (c) to read as follows:

(c)iiAll civil cases in the 398th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(j)iiThe changes in law made by this section apply to a civil case filed with the district clerk of Hidalgo County on or after the effective date of this section. A civil case filed with the district clerk of Hidalgo County before the effective date of this section is governed by the law in effect on the date the case was filed, and the former law is continued in effect for that purpose.

SECTIONi2.ii(a)iiSubsection (d), Section 24.386, Government Code, is amended to read as follows:

(d)iiThe terms of the 207th District Court begin:

(1)iiin Hays County on the first Mondays in February and[, May,] August[, and November];

(2)iiin Caldwell County on the first Mondays in March and[, June,] September[, and December]; and

(3)iiin Comal County on the first Mondays in January and[, April,] July[, and October].

(b)iiSection 53.002, Government Code, is amended by adding Subsection (i) to read as follows:

(i)iiThe judge of the 207th District Court may appoint a bailiff to serve the court in Comal County, subject to the approval of the local administrative judge.

SECTIONi3.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.574 to read as follows:

Sec.i24.574.ii430TH JUDICIAL DISTRICT (HIDALGO COUNTY). (a)iiThe 430th Judicial District is composed of Hidalgo County.

(b)iiThe 430th District Court shall give preference to family violence and criminal matters.

(c)iiAll civil cases in the 430th District Court shall be assigned and docketed at random by the district clerk using an automated system.

(b)iiSubsection (b), Section 24.534, and Subsection (b), Section 24.543, Government Code, are repealed.

(c)iiThe 430th Judicial District is created January 1, 2007.

(d)iiSubsection (b) of this section takes effect January 1, 2007.

SECTIONi4.ii(a)iiSection 24.205, Government Code, is amended to read as follows:

Sec.i24.205.ii103RD JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). (a)iiThe 103rd Judicial District is composed of Cameron County [and Willacy counties]. The court shall give preference to civil cases.

(b)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County.

(c)iiThe terms of the 103rd District Court begin[:

[(1)iiin Cameron County] on the first Mondays in February and July[; and

[(2)iiin Willacy County on the first Mondays in January and June].

(d)iiThe judge [judges] of the 103rd District Court [and 107th district courts] need not impanel grand juries except in cases of emergency.

Thursday, May 26, 2005 SENATE JOURNAL 3831

(b)iiSection 24.209, Government Code, is amended by amending Subsection (c) and adding Subsection (d) to read as follows:

(c)iiThe judge of [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and] the 107th District Court need not impanel grand juries except in cases of emergency.

(d)i The 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County. The 107th and 138th district courts have concurrent jurisdiction in Willacy County.

(c)iiSubsection (d), Section 24.240, Government Code, is amended to read as follows:

(d)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County. The 107th and 138th district courts have concurrent jurisdiction in Willacy County [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and the 138th District Court].

(d)iiSection 24.503, Government Code, is amended to read as follows:

Sec.i24.503.ii357TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 357th Judicial District is composed of Cameron County [and Willacy counties].

(e)iiSection 24.549, Government Code, is amended to read as follows:

Sec.i24.549.ii404TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 404th Judicial District is composed of Cameron County [and Willacy counties].

(f)iiThe local administrative district judge shall transfer all cases from Willacy County that are pending in the 103rd, 357th, and 404th district courts on September 1, 2005, to the 107th, 138th, and 197th district courts.

(g)iiWhen a case is transferred as provided by Subsection (f) of this section, all processes, writs, bonds, recognizances, or other obligations issued from the 103rd, 357th, and 404th district courts are returnable to the 107th, 138th, or 197th district court as if originally issued by that court. The obligees on all bonds and recognizances taken in and for the 103rd, 357th, and 404th district courts and all witnesses summoned to appear in those courts are required to appear before the 107th, 138th, or 197th district court as if originally required to appear before that court.

SECTIONi5.ii(a) Effective September 1, 2005, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.556 to read as follows:

Sec.i24.556.ii412TH JUDICIAL DISTRICT (BRAZORIA COUNTY). The 412th Judicial District is composed of Brazoria County.

(b)iiThe 412th Judicial District is created September 1, 2005.

SECTIONi6.ii(a) Effective September 1, 2005, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.567 to read as follows:

Sec.i24.567.ii423RD JUDICIAL DISTRICT (KENEDY AND KLEBERG COUNTIES). (a) The 423rd Judicial District is composed of Kenedy and Kleberg Counties.

(b)iiThe 423rd District Court shall give preference to criminal cases.

(c)iiIn addition to other jurisdiction provided by law, the 423rd District Court has concurrent jurisdiction with the county courts in Kenedy and Kleberg Counties and the statutory county court in Kleberg County over all matters of civil and criminal

3832 79th Legislature — Regular Session 79th Day

(b)iiSection 24.207, Government Code, is amended to read as follows:

Sec.i24.207.ii105TH JUDICIAL DISTRICT ([KENEDY, KLEBERG, AND] NUECES COUNTY [COUNTIES]). (a) The 105th Judicial District is composed of [Kenedy, Kleberg, and] Nueces County [counties]. The court shall give preference to criminal cases.

(b)iiThe terms of the 105th District Court begin[:

[(1)iiin Kenedy County on the first Mondays in June and December;

[(2)iiin Kleberg County on the first Mondays in April and October; and

[(3)iiin Nueces County] on the first Mondays in February and August.

(c)iiThe judge, with the approval of the commissioners court, may appoint an official interpreter of the court [in Nueces County] who serves at the will of the judge. The official interpreter shall take both the constitutional oath of office and an oath that he will faithfully interpret all testimony in the district court as official interpreter. The oath is sufficient for his service as official interpreter in all cases in the court [in Nueces County] during the interpreter's term of office. The judge may also assign the official interpreter to assist the court's probation officer in the discharge of the probation officer's duties.

(c)iiThe heading to Section 43.148, Government Code, is amended to read as follows:

Sec.i43.148.iiKENEDY, KLEBERG, AND NUECES COUNTIES [105TH JUDICIAL DISTRICT].

(d)iiSubsections (a) and (c), Section 43.148, Government Code, are amended to read as follows:

(a)iiThe voters of Kenedy, Kleberg, and Nueces counties [the 105th Judicial District] elect a district attorney. The district attorney has the same powers and duties as other district attorneys and serves all the district, county, and justice courts of Nueces County and the district courts of Kleberg and Kenedy counties.

(c)iiThe commissioners courts of Kenedy, Kleberg, and Nueces [the] counties [comprising the district] may supplement the state salary of the district attorney. The amount of the supplement may not exceed $12,000 a year. The supplemental salary must be paid proportionately by the commissioners court of each county according to the population of the county. The supplemental salary may be paid from the officers' salary fund of a county. If that fund is inadequate, the commissioners court may transfer the necessary funds from the general fund of the county.

(e)iiThe local administrative district judge shall transfer all cases from Kenedy and Kleberg Counties that are pending in the 105th District Court on September 1, 2005, to the 423rd District Court.

Thursday, May 26, 2005 SENATE JOURNAL 3833

(f)iiWhen a case is transferred as provided by Subsection (e) of this section, all processes, writs, bonds, recognizances, or other obligations issued from the 105th District Court are returnable to the 423rd District Court as if originally issued by that court. The obligees on all bonds and recognizances taken in and for the 105th District Court and all witnesses summoned to appear in the 105th District Court are required to appear before the 423rd District Court as if originally required to appear before that court.

(g)iiThe 423rd Judicial District is created September 1, 2005.

SECTIONi7.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.569 to read as follows:

Sec.i24.569.ii425TH JUDICIAL DISTRICT (WILLIAMSON COUNTY). The 425th Judicial District is composed of Williamson County.

(b)iiThe 425th Judicial District is created January 1, 2007.

SECTIONi8.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.570 to read as follows:

Sec.i24.570.ii426TH JUDICIAL DISTRICT (BELL COUNTY). (a)iiThe 426th Judicial District is composed of Bell County.

(b)iiThe terms of the 426th District Court begin on the first Mondays in January, April, July, and October.

(c)iiSection 24.129, relating to the 27th District Court, contains provisions applicable to both that court and the 426th District Court.

(b)iiEffective September 1, 2005, Subsection (b), Section 24.129, Government Code, is amended to read as follows:

(b)iiThe 27th, 146th, [and] 169th, and 264th judicial districts have concurrent jurisdiction in Bell County.

(c)iiEffective January 1, 2007, Subsection (b), Section 24.129, Government Code, is amended to read as follows:

(b)iiThe 27th, 146th, [and] 169th, 264th, and 426th judicial districts have concurrent jurisdiction in Bell County.

(d)iiThe 426th Judicial District is created January 1, 2007.

SECTIONi9.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.571 to read as follows:

Sec.i24.571.ii427TH JUDICIAL DISTRICT (TRAVIS COUNTY). (a)iiThe 427th Judicial District is composed of Travis County.

(b)iiThe 427th Judicial District shall give preference to criminal matters.

(b)iiThe 427th Judicial District is created January 1, 2007.

SECTIONi10.ii(a)iiEffective September 1, 2005, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.572 to read as follows:

Sec.i24.572.ii428TH JUDICIAL DISTRICT (HAYS COUNTY). The 428th Judicial District is composed of Hays County.

(b)iiThe 428th Judicial District is created September 1, 2005.

SECTIONi11.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.577 to read as follows:

Sec.i24.577.ii433RD JUDICIAL DISTRICT (COMAL COUNTY). The 433rd Judicial District is composed of Comal County.

(b)iiThe 433rd Judicial District is created January 1, 2007.

3834 79th Legislature — Regular Session 79th Day

SECTIONi12.ii(a)iiEffective January 1, 2007, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.578 to read as follows:

Sec.i24.578.ii434TH JUDICIAL DISTRICT (FORT BEND COUNTY). The 434th Judicial District is composed of Fort Bend County.

(b)iiThe 434th Judicial District is created January 1, 2007.

SECTIONi13.ii(a) Section 24.115(c), Government Code, is amended to read as follows:

(c)iiExcept for Subsection (b), which applies only to the 14th District Court, this section applies to the 14th, 44th, 68th, 95th, 101st, 116th, 134th, 160th, and 162nd district courts, the Criminal Judicial District of Dallas County, and the Criminal Judicial Districts Nos. 2, 3, 4, [and] 5, 6, and 7 of Dallas County.

(b)iiEffective September 1, 2005, Subchapter E, Chapter 24, Government Code, is amended by adding Sections 24.906 and 24.907 to read as follows:

Sec.i24.906.iiDALLAS COUNTY CRIMINAL JUDICIAL DISTRICT NO. 6. (a) The Dallas County Criminal Judicial District No. 6 is composed of Dallas County.

(b)iiThe terms of the criminal district court no. 6 begin on the first Mondays in January, April, July, and October.

(c)iiSection 24.901, relating to the Criminal District Court of Dallas County, contains provisions applicable to both that court and the Dallas County Criminal District Court No. 6.

(d)iiSection 24.115, relating to the 14th District Court, contains provisions applicable to both that court and the Dallas County Criminal District Court No. 6.

Sec.i24.907.iiDALLAS COUNTY CRIMINAL JUDICIAL DISTRICT NO. 7. (a) The Dallas County Criminal Judicial District No. 7 is composed of Dallas County.

(b)iiThe terms of the criminal district court no. 7 begin on the first Mondays in January, April, July, and October.

(c)iiSection 24.901, relating to the Criminal District Court of Dallas County, contains provisions applicable to both that court and the Dallas County Criminal District Court No. 7.

(d)iiSection 24.115, relating to the 14th District Court, contains provisions applicable to both that court and the Dallas County Criminal District Court No. 7.

(c)iiThe Dallas County Criminal Judicial Districts Nos. 6 and 7 are created September 1, 2005.

SECTIONi14.iiSection 24.135, Government Code, is amended by adding Subsections (c) and (d) to read as follows:

(c)iiThe judge of the 33rd District Court may select jury commissioners and impanel grand juries in each county. The judge of the 33rd District Court may alternate the drawing of grand juries with the judge of any other district court in each county within the 33rd Judicial District and may order grand and petit juries to be drawn for any term of the court as the judge determines is necessary, by an order entered in the minutes of the court. Indictments within each county may be returned to either court within that county.

(d)iiThe 33rd District Court may hear and determine, in any county in the district convenient for the court, all preliminary or interlocutory matters in which a jury may not be demanded, in any case pending in any county in the district regardless of whether the case was filed in the county in which the hearing is held. Unless an

Thursday, May 26, 2005 SENATE JOURNAL 3835

SECTIONi15.ii(a)iiEffective September 1, 2005, Subchapter C, Chapter 24, Government Code, is amended by adding Section 24.568 to read as follows:

Sec.i24.568.ii424TH JUDICIAL DISTRICT (BLANCO, BURNET, LLANO, AND SAN SABA COUNTIES). (a)iiThe 424th Judicial District is composed of Blanco, Burnet, Llano, and San Saba Counties.

(b)iiThe jurisdiction of the 424th District Court is concurrent with the jurisdiction of the 33rd District Court.

(c)iiThe 424th District Court has the same terms of court as the 33rd District Court.

(d)iiThe judge of the 424th District Court may select jury commissioners and impanel grand juries in each county. The judge of the 424th District Court may alternate the drawing of grand juries with the judge of any other district court in each county within the 424th Judicial District and may order grand and petit juries to be drawn for any term of the court as the judge determines is necessary, by an order entered in the minutes of the court. Indictments within each county may be returned to either court within that county.

(e)iiThe 424th District Court may hear and determine, in any county in the district convenient for the court, all preliminary or interlocutory matters in which a jury may not be demanded, in any case pending in any county in the district regardless of whether the case was filed in the county in which the hearing is held. Unless an objection is filed by a party to the suit, the 424th District Court may hear, in any county in the district convenient for the court, any nonjury case pending in any county in the district, including divorces, adoptions, default judgments, and matters in which citation was by publication, regardless of whether the case was filed in the county in which the hearing is held.

(b)iiThe 424th Judicial District is created September 1, 2005.

SECTIONi16.iiSubchapter D, Chapter 74, Government Code, is amended by adding Section 74.097 to read as follows:

Sec.i74.097.iiLOCAL ADMINISTRATIVE DISTRICT JUDGE FOR BLANCO, BURNET, LLANO, AND SAN SABA COUNTIES. Notwithstanding Section 74.091(b), the local administrative district judge for Blanco, Burnet, Llano, and San Saba Counties is selected on the basis of seniority from the district judges of the 33rd Judicial District and the 424th Judicial District.

SECTIONi17.iiSubsection (b), Section 152.0221, Human Resources Code, is amended to read as follows:

(b)iiThe [juvenile court] judge of the 33rd District Court is the chairman of the board and its chief administrative officer.

SECTIONi18.iiSubsection (b), Section 152.0331, Human Resources Code, is amended to read as follows:

(b)iiThe [juvenile court] judge of the 33rd District Court is the chairman of the board and its chief administrative officer.

3836 79th Legislature — Regular Session 79th Day

SECTIONi19.iiSubsection (a), Section 152.0521, Human Resources Code, is amended to read as follows:

(a)iiThe Comal County Juvenile Board is composed of:

(1)iithe county judge;

(2)iithe [local administrative statutory county] judge of each county court at law in the county;

(3)iithe judge of the 207th District Court;

(4)iian additional judge of the district courts having jurisdiction in Comal County, to be appointed biennially by the local administrative district judge; and

(5)iithe criminal district attorney of Comal County.

SECTIONi20.iiSubsection (b), Section 152.1561, Human Resources Code, is amended to read as follows:

(b)iiThe [juvenile court] judge of the 33rd District Court is the chairman of the board and its chief administrative officer.

SECTIONi21.iiSubsection (b), Section 152.2121, Human Resources Code, is amended to read as follows:

(b)iiThe [juvenile court] judge of the 33rd District Court is the chairman of the board and its chief administrative officer.

SECTIONi22.iiSubsection (h), Section 152.2261, Human Resources Code, is amended to read as follows:

(h)iiSections 152.0002, [152.0003,] 152.0004, 152.0005, 152.0006, 152.0007, and 152.0008(a) do not apply to the juvenile board of Tarrant County.

SECTIONi23.iiSubsection (a), Section 152.2461, Human Resources Code, is amended to read as follows:

(a)iiThe Webb County Juvenile Board is composed of the county judge, the district judges in the county, and the judge of each county court at law. The county judge may designate any member of the commissioners court to represent the judge on the board. A reference in this section to a juvenile court judge of a juvenile board member includes a person designated by the county judge under this subsection.

SECTIONi24.iiSubsection (a), Section 152.1511, Human Resources Code, is amended to read as follows:

(a)iiThe juvenile board of Leon County is composed of the county judge and the judges of the 12th, 87th, and 278th Judicial Districts.

SECTIONi25.iiExcept as otherwise provided by this Act, this Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 1189 by striking SECTION 4 of the bill (House committee printing, page 4, line 18, through page 6, line 20) and substitute the following:

SECTIONi4.ii(a)iiSubsections (b) and (d), Section 24.205, Government Code, are amended to read as follows:

(b)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County. The 103rd and 138th district courts have concurrent jurisdiction in Willacy County.

(d)iiThe judge [judges] of the 103rd District Court [and 107th district courts] need not impanel grand juries except in cases of emergency.

Thursday, May 26, 2005 SENATE JOURNAL 3837

(b)iiThe heading to Section 24.209, Government Code, is amended to read as follows:

Sec.i24.209.ii107TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]).

(c)iiSection 24.209, Government Code, is amended by amending Subsections (a) and (c) and adding Subsection (d) to read as follows:

(a)iiThe 107th Judicial District is composed of Cameron County [and Willacy counties]. The court shall give preference to criminal cases.

(c)iiThe judge of [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and] the 107th District Court need not impanel grand juries except in cases of emergency.

(d)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County. The 103rd and 138th district courts have concurrent jurisdiction in Willacy County.

(d)iiSection 24.240(d), Government Code, is amended to read as follows:

(d)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County. The 103rd and 138th district courts have concurrent jurisdiction in Willacy County [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and the 138th District Court].

(e)iiSection 24.503, Government Code, is amended to read as follows:

Sec.i24.503.ii357TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 357th Judicial District is composed of Cameron County [and Willacy counties].

(f)iiSection 24.549, Government Code, is amended to read as follows:

Sec.i24.549.ii404TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 404th Judicial District is composed of Cameron County [and Willacy counties].

(g)iiThe local administrative district judge shall transfer all cases from Willacy County that are pending in the 107th, 357th, and 404th district courts on September 1, 2005, to the 103rd, 138th, and 197th district courts.

(h)iiWhen a case is transferred as provided by Subsection (g) of this section, all processes, writs, bonds, recognizances, or other obligations issued from the 107th, 357th, and 404th district courts are returnable to the 103rd, 138th, or 197th district court as if originally issued by that court. The obligees on all bonds and recognizances taken in and for the 107th, 357th, and 404th district courts and all witnesses summoned to appear in those courts are required to appear before the 103rd, 138th, or 197th district court as if originally required to appear before that court.

Floor Amendment No. 2

Amend CSSB 1189 (House committee printing) by adding the following appropriately numbered SECTION and renumbering subsequent SECTIONS of the bill accordingly:

SECTION __. Section 75.014, Government Code, is amended by adding Subsection (h) to read as follows:

3838 79th Legislature — Regular Session 79th Day

(h) A district judge in El Paso County or a judge of a statutory county court in El Paso County may serve as the local administrative judge for the council of judges. The council of judges shall elect a judge as local administrative judge for a term of not more than two years. The local administrative judge may not be elected on the basis of rotation or seniority.

Floor Amendment No. 3

Amend CSSB 1189 (House committee printing) by adding the following appropriately numbered SECTION and renumbering subsequent SECTIONS of the bill accordingly:

SECTION __. Subchapter D, Chapter 152, Human Resources Code, is amended by adding Section 152.2264 to read as follows:

Sec. 152.2264. TARRANT COUNTY CRIMINAL COURT ADMINISTRATOR AND COURT SERVICES DEPARTMENT. (a) The judges of the district and county courts in Tarrant County that give preference to criminal matters shall, on a majority vote, appoint the criminal courts administrator. The administrator serves at the will of those judges.

(b) The commissioners court shall pay the salary and expenses of the criminal court administrator and of the court services department employees as determined by the department budget:

(1) submitted by the judges of the district and county courts that give preference to criminal cases; and

(2) approved by the commissioners court.

(c) A judge may not be subjected to a suit for, and is immune from liability for damages arising from, an act or omission committed while performing a duty under this section unless the act or omission is:

(1) committed intentionally, wilfully, or wantonly; or

(2) committed with:

(A) gross negligence; or

(B) conscious indifference or reckless disregard for the safety of others.

Floor Amendment No. 4

Amend CSSB 1189 (House committee printing) by adding the following appropriately numbered SECTIONS and renumbering subsequent SECTIONS of the bill accordingly:

SECTIONi__.iiSection 24.151(d), Government Code, is amended to read as follows:

(d)iiA criminal complaint may be presented to the grand jury of any district court [Indictments returned to the 49th District Court] in Webb County, and a resulting indictment may [also] be returned to any other district court in Webb County with the appropriate criminal jurisdiction.

SECTIONi__.iiSection 24.487, Government Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b)iiThe judge of the 341st District Court may select jury commissioners and impanel grand juries in Webb County. The judge of the 341st District Court may alternate the drawing of grand juries with the judge of any other district court in the county. By order entered on the minutes, for any term that the judge considers it

Thursday, May 26, 2005 SENATE JOURNAL 3839

(d)iiA criminal complaint may be presented to the grand jury of any district court in Webb County, and a resulting indictment may be returned to any other district court in Webb County with the appropriate criminal jurisdiction.

SECTIONi__.iiSection 24.551, Government Code, is amended by adding Subsections (c), (d), (e), and (f) to read as follows:

(c)iiThe 406th District Court has concurrent jurisdiction with the other district courts in Webb County.

(d)iiIn addition to other jurisdiction provided by law, the 406th District Court has the:

(1)iicriminal jurisdiction of a county court; and

(2)iicivil jurisdiction of a county court in all cases under the Family Code or the Health and Safety Code.

(e)iiThe terms of the 406th District Court begin on the first Mondays in January, April, July, and October. Each term continues until the court disposes of its business.

(f)iiA criminal complaint may be presented to the grand jury of any district court in Webb County, and a resulting indictment may be returned to any other district court in Webb County with the appropriate criminal jurisdiction.

SECTIONi__.iiSection 53.001, Government Code, is amended by adding Subsection (i) to read as follows:

(i)iiThe judge of the 406th District Court shall appoint a bailiff.

SECTIONi__.iiSection 53.004, Government Code, is amended by adding Subsection (f) to read as follows:

(f)iiTo be eligible to be appointed bailiff in the 406th District Court, a person must be:

(1)iiat least 21 years of age; and

(2)iia citizen of the United States.

Floor Amendment No. 1 on Third Reading

Amend CSSB 1189 on third reading by striking the SECTION of the bill that amends Sections 24.205, 24.209, 24.240, 24.503, and 24.549, Government Code, and substituting the following appropriately numbered SECTION:

SECTIONi__.ii Section 24.205, Government Code, is amended to read as follows:

Sec.i24.205.ii103RD JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). (a) The 103rd Judicial District is composed of Cameron County [and Willacy counties]. The court shall give preference to civil cases.

(b)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County.

(c)iiThe terms of the 103rd District Court begin[:

(1)iiin Cameron County] on the first Mondays in February and July[; and

(2)iiin Willacy County on the first Mondays in January and June].

(d)iiThe judge [judges] of the 103rd District Court [and 107th district courts] need not impanel grand juries except in cases of emergency.

3840 79th Legislature — Regular Session 79th Day

(b)iiThe heading to Section 24.209, Government Code, is amended to read as follows:

Sec.i24.209.ii107TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]).

(c)iiSection 24.209, Government Code, is amended by amending Subsections (a) and (c) and adding Subsection (d) to read as follows:

(a)iiThe 107th Judicial District is composed of Cameron County [and Willacy counties]. The court shall give preference to criminal cases.

(c)iiThe judge of [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and] the 107th District Court need not impanel grand juries except in cases of emergency.

(d)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County.

(d)iiSection 24.240(d), Government Code, is amended to read as follows:

(d)iiThe 103rd, 107th, and 138th district courts have concurrent jurisdiction in Cameron County [Section 24.205, relating to the 103rd District Court, contains provisions applicable to both that court and the 138th District Court].

(e)iiSection 24.503, Government Code, is amended to read as follows:

Sec.i24.503.ii357TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 357th Judicial District is composed of Cameron County [and Willacy counties].

(f)iiSection 24.549, Government Code, is amended to read as follows:

Sec.i24.549.ii404TH JUDICIAL DISTRICT (CAMERON COUNTY [AND WILLACY COUNTIES]). The 404th Judicial District is composed of Cameron County [and Willacy counties].

(g)iiThe local administrative district judge shall transfer all cases from Willacy County that are pending in the 103rd, 107th, 357th, and 404th district courts on September 1, 2005, to the 138th and 197th district courts.

(h)iiWhen a case is transferred as provided by Subsection (g) of this section, all processes, writs, bonds, recognizances, or other obligations issued from the 103rd, 107th, 357th, and 404th district courts are returnable to the 138th or 197th district court as if originally issued by that court. The obligees on all bonds and recognizances taken in and for the 103rd, 107th, 357th, and 404th district courts and all witnesses summoned to appear in those courts are required to appear before the 138th or 197th district court as if originally required to appear before that court.

Floor Amendment No. 2 on Third Reading

Amend CSSB 1189 on third reading by striking Section 152.2264, Human Resources Code, as added by the bill, and substituting the following:

Sec. 152.2264. TARRANT COUNTY CRIMINAL COURT ADMINISTRATOR AND COURT SERVICES DEPARTMENT. (a) Subject to the approval of the commissioners court, the judges of the district and county courts in Tarrant County that give preference to criminal matters may use the services of a criminal courts administrator.

(b) A judge may not be subjected to a suit for, and is immune from liability for damages arising from, an act or omission committed while performing a duty under this section unless the act or omission is:

Thursday, May 26, 2005 SENATE JOURNAL 3841

(1) committed intentionally, wilfully, or wantonly; or

(2) committed with:

(A) gross negligence; or

(B) conscious indifference or reckless disregard for the safety of others.

The amendments were read.

Senator Wentworth moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi1189 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Wentworth, Chair; Duncan, Averitt, Harris, and West.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 261 ADOPTED

Senator Wentworth called from the President's table the Conference Committee Report on HBi261. The Conference Committee Report was filed with the Senate on Monday, Mayi23, 2005.

On motion of Senator Wentworth, the Conference Committee Report was adopted by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE REPORT ON

HOUSE BILL 1077 ADOPTED

Senator Wentworth called from the President's table the Conference Committee Report on HBi1077. The Conference Committee Report was filed with the Senate on Monday, Mayi23, 2005.

On motion of Senator Wentworth, the Conference Committee Report was adopted by the following vote:iiYeasi31, Naysi0.

CONFERENCE COMMITTEE ON HOUSE BILL 1048

Senator Seliger called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi1048 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer, Senator Eltife in Chair, asked if there were any motions to instruct the conference committee on HBi1048 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Seliger, Chair; Whitmire, Hinojosa, VanideiPutte, and Duncan.

3842 79th Legislature — Regular Session 79th Day

SENATE BILL 1458 WITH HOUSE AMENDMENTS

Senator Wentworth called SBi1458 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 1458 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the adoption of a uniform commercial building code for use in municipalities in the state.

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

SECTIONi1.iiSection 214.211, Local Government Code, is amended by adding Subdivisions (4) and (5) to read as follows:

(4)ii"International Building Code" means the International Building Code promulgated by the International Code Council.

(5)ii"Commercial" means a building for the use or occupation of people for:

(A)iia public purpose or economic gain; or

(B)iia residence if the building is a multifamily residence that is not defined as residential by this section.

SECTIONi2.iiSection 214.213, Local Government Code, is amended to read as follows:

Sec.i214.213.iiEXCEPTIONS. (a) The International Residential Code and the International Building Code do [does] not apply to the installation and maintenance of electrical wiring and related components.

(b)iiA municipality is not required to review and consider adoption of amendments to the International Residential Code or the International Building Code regarding electrical provisions.

SECTIONi3.iiSection 214.214, Local Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a)iiExcept as provided by Subsection (c), the [The] National Electrical Code, as it existed on May 1, 2001, is adopted as the municipal [residential] electrical construction code in this state and applies to all residential and commercial electrical construction applications.

(c)iiThe National Electrical Code applies to all commercial buildings in a municipality for which construction begins on or after January 1, 2006, and to any alteration, remodeling, enlargement, or repair of those commercial buildings.

SECTIONi4.iiSubchapter G, Chapter 214, Local Government Code, is amended by adding Section 214.216 to read as follows:

Sec.i214.216.iiINTERNATIONAL BUILDING CODE.ii(a)iiTo protect the public health, safety, and welfare, the International Building Code, as it existed on May 1, 2003, is adopted as a municipal commercial building code in this state.

(b)iiThe International Building Code applies to all commercial buildings in a municipality for which construction begins on or after January 1, 2006, and to any alteration, remodeling, enlargement, or repair of those commercial buildings.

Thursday, May 26, 2005 SENATE JOURNAL 3843

(c)iiA municipality may establish procedures:

(1)iito adopt local amendments to the International Building Code; and

(2)iifor the administration and enforcement of the International Building Code.

(d)iiA municipality may review and consider amendments made by the International Code Council to the International Building Code after May 1, 2003.

SECTIONi5.iiBefore January 1, 2006, rules shall be established and other actions taken as necessary by municipalities to implement Section 214.216, Local Government Code, as added by this Act.

SECTIONi6.ii(a) Except as provided by Subsection (b) of this section, this Act takes effect January 1, 2006.

(b)iiThis section and Section 5 of this Act take effect September 1, 2005.

Floor Amendment No. 1 on Third Reading

Amend CSSB 1458, on third reading, in SECTION 4 of the bill, in added Section 214.216, Local Government Code (House committee report, page 3, between lines 2 and 3) by adding Subsection (e) to read as follows:

(e) A municipality that has adopted a more stringent commercial building code before January 1, 2006, is not required to repeal that code and may adopt future editions of that code.

The amendments were read.

Senator Wentworth moved to concur in the House amendments to SBi1458.

The motion prevailed by the following vote:iiYeasi30, Naysi1.

Nays:iiZaffirini.

(Senator Seliger in Chair)

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1103 ADOPTED

Senator Eltife called from the President's table the Conference Committee Report on SBi1103. The Conference Committee Report was filed with the Senate on Monday, May 23, 2005.

On motion of Senator Eltife, the Conference Committee Report was adopted by the following vote:iiYeasi31, Naysi0.

RECESS

On motion of Senator Nelson, the Senate at 3:11 p.m. recessed until 5:00 p.m. today.

AFTER RECESS

The Senate met at 5:36 p.m. and was called to order by Senator Armbrister.

SENATE BILL 150 WITH HOUSE AMENDMENT

Senator Wentworth called SBi150 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

3844 79th Legislature — Regular Session 79th Day

Floor Amendment No. 1

Amend SB 150 (Senate engrossed version) as follows:

(1)iiOn page 1, line 14, between "," and "the", strike "or".

(2)iiOn page 1, line 16, between "l'Automobile" and the period, insert ", the Champ Car organization, or the American Le Mans Series organization".

(3)iiOn page 2, line 27, strike "UNITED STATES GRAND PRIX" and substitute "MOTOR SPORTS RACING".

(4)iiOn page 3, line 16, between "Prix" and the period, insert ", or a specific automobile racing event that is part of the Champ Car World Series or the American Le Mans Series".

(5)iiOn page 5, lines 20-21, strike "United States Grand Prix trust fund" and substitute "Motor Sports Racing trust fund for the particular racing event".

(6)iiOn page 6, line 13, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(7)iiOn page 6, lines 18-19, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(8)iiOn page 7, lines 10-11, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(9)iiOn page 7, line 15, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(10)iiOn page 8, lines 15-16, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(11)iiOn page 8, lines 25-26, strike "United States Grand Prix" and substitute "Motor Sports Racing".

(12)iiOn page 9, lines 7-8, strike "United States Grand Prix" and substitute "Motor Sports Racing".

The amendment was read.

Senator Wentworth moved to concur in the House amendment to SBi150.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 26, 2005

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

HCR 216, Honoring U.S. Marine Corps Captain Van Taylor of Dallas for his service to his country.

Thursday, May 26, 2005 SENATE JOURNAL 3845

HCR 223, Honoring the sesquicentennial of Sulphur Springs.

HCR 224, Congratulating Eddie Almond on his retirement as director of the Regional Controlled Substance Apprehension Program Drug Task Force.

THE HOUSE HAS CONCURRED IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES:

HB 126 (140 Yeas, 0 Nays, 2 Present, not voting)

HB 129 (144 Yeas, 0 Nays, 2 Present, not voting)

HB 160 (141 Yeas, 0 Nays, 2 Present, not voting)

HB 308 (140 Yeas, 0 Nays, 2 Present, not voting)

HB 495 (non-record vote)

HB 629 (non-record vote)

HB 646 (non-record vote)

HB 754 (non-record vote)

HB 914 (131 Yeas, 0 Nays, 1 Present, not voting)

HB 984 (144 Yeas, 0 Nays, 2 Present, not voting)

HB 988 (non-record vote)

HB 989 (138 Yeas, 6 Nays, 2 Present, not voting)

HB 1208 (143 Yeas, 0 Nays, 2 Present, not voting)

HB 1209 (140 Yeas, 1 Nays, 2 Present, not voting)

HB 1252 (non-record vote)

HB 1516 (non-record vote)

HB 1567 (141 Yeas, 0 Nays, 2 Present, not voting)

HB 1588 (138 Yeas, 0 Nays, 2 Present, not voting)

HB 1622 (non-record vote)

HB 1644 (140 Yeas, 4 Nays, 2 Present, not voting)

HB 1813 (non-record vote)

HB 2243 (non-record vote)

HB 2337 (non-record vote)

HB 2382 (137 Yeas, 0 Nays, 2 Present, not voting)

HB 2466 (non-record vote)

HB 2518 (144 Yeas, 0 Nays, 2 Present, not voting)

HB 2569 (non-record vote)

HB 2653 (142 Yeas, 0 Nays, 2 Present, not voting)

HB 2680 (140 Yeas, 0 Nays, 3 Present, not voting)

3846 79th Legislature — Regular Session 79th Day

THE HOUSE HAS REFUSED TO CONCUR IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES AND REQUESTS THE APPOINTMENT OF A CONFERENCE COMMITTEE TO ADJUST THE DIFFERENCES BETWEEN THE TWO HOUSES:

HB 265 (non-record vote)

House Conferees:iiSmith, Wayne - Chair/Howard/McReynolds/Pickett/West, George "Buddy"

HB 664 (non-record vote)

House Conferees:iiIsett - Chair/Frost/Hamilton/Hopson/Swinford

HB 789 (non-record vote)

House Conferees:iiKing, Phil - Chair/Baxter/Cook, Robby/Crabb/Hartnett

HB 843 (non-record vote)

House Conferees:iiTruitt - Chair/Cook, Robby/Gattis/King, Phil/Riddle

HB 873 (non-record vote)

House Conferees:iiDukes - Chair/Elkins/Giddings/Solomons/Zedler

HB 1690 (non-record vote)

House Conferees:iiKeel - Chair/Hill/Hodge/Nixon/Rose

HB 1830 (non-record vote)

House Conferees:iiWong - Chair/Nixon/Talton/Van Arsdale/Vo

HB 1855 (non-record vote)

House Conferees:iiGiddings - Chair/Bohac/Elkins/Martinez/Zedler

HB 2048 (non-record vote)

House Conferees:iiUresti - Chair/Davis, John/Gattis/Hupp/Noriega, Melissa

HB 2423 (non-record vote)

House Conferees:iiPuente - Chair/Geren/Hardcastle/Hope/King, Tracy

HB 2510 (non-record vote)

House Conferees:iiBonnen - Chair/Crownover/Howard/King, Tracy/Ritter

HB 2604 (non-record vote)

House Conferees:iiGuillen - Chair/Berman/Corte/Hughes/Pena

HB 3526 (non-record vote)

House Conferees:iiHochberg - Chair/Allen, Alma/Madden/Talton/Wong

Respectfully,

/s/Robert Haney, Chief Clerk

House of Representatives

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 1050 ADOPTED

Senator Van de Putte called from the President's table the Conference Committee Report on SBi1050. The Conference Committee Report was filed with the Senate on Tuesday, Mayi24, 2005.

Thursday, May 26, 2005 SENATE JOURNAL 3847

On motion of Senator VanideiPutte, the Conference Committee Report was adopted by the following vote:iiYeasi31, Naysi0.

HOUSE CONCURRENT RESOLUTION 166

On motion of Senator Staples and by unanimous consent, Senate Rule 8.02 and all necessary rules were suspended to take up for consideration HCR 166 at this time.

The Presiding Officer, Senator Armbrister in Chair, laid before the Senate the following resolution:

HCR 166, Memorializing congress to increase funding to the fully authorized level and include advance funds for the Low Income Home Energy Assistance Program and to pursue a more equitable funding allocation formula for the program.

The resolution was read.

On motion of Senator Staples and by unanimous consent, the resolution was considered immediately and was adopted by a viva voce vote.

All Members are deemed to have voted "Yea" on the adoption of the resolution.

CONFERENCE COMMITTEE ON HOUSE BILL 2702

Senator Staples called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi2702 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi2702 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Staples, Chair; Ellis, Eltife, Fraser, and Shapleigh.

HOUSE CONCURRENT RESOLUTION 193

On motion of Senator Staples and by unanimous consent, Senate Rule 8.02 and all necessary rules were suspended to take up for consideration HCR 193 at this time.

The Presiding Officer laid before the Senate the following resolution:

HCR 193, Supporting Texas' application for a Mental Health Transformation State Incentive Grant from the U.S. Department of Health and Human Services.

The resolution was read.

On motion of Senator Staples and by unanimous consent, the resolution was considered immediately and was adopted by a viva voce vote.

All Members are deemed to have voted "Yea" on the adoption of the resolution.

SENATE BILL 563 WITH HOUSE AMENDMENTS

Senator Janek called SBi563 from the President's table for consideration of the House amendments to the bill.

3848 79th Legislature — Regular Session 79th Day

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 563 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the prevention of Medicaid fraud; providing penalties.

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

SECTIONi1.iiSubdivision (9), Section 36.001, Human Resources Code, is amended to read as follows:

(9)ii"Provider" means a person who participates in or who has applied to participate in the Medicaid program as a supplier of a product or service and includes:

(A)iia management company that manages, operates, or controls another provider;

(B)iia person, including a medical vendor, that provides a product or service to a provider or to a fiscal agent;

(C)iian employee of a provider; [and]

(D)iia managed care organization; and

(E)iia manufacturer or distributor of a product for which the Medicaid program provides reimbursement.

SECTIONi2.iiSubchapter A, Chapter 36, Human Resources Code, is amended by adding Section 36.0011 to read as follows:

Sec.i36.0011.iiCULPABLE MENTAL STATE. (a) For purposes of this chapter, a person acts "knowingly" with respect to information if the person:

(1)iihas knowledge of the information;

(2)iiacts with conscious indifference to the truth or falsity of the information; or

(3)iiacts in reckless disregard of the truth or falsity of the information.

(b)iiProof of the person's specific intent to defraud is not required in a civil or administrative proceeding to show that a person acted "knowingly" with respect to information under this chapter.

SECTIONi3.iiSection 36.002, Human Resources Code, is amended to read as follows:

Sec.i36.002.iiUNLAWFUL ACTS. A person commits an unlawful act if the person:

(1)iiknowingly [or intentionally] makes or causes to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized[:

[(A)iion an application for a contract, benefit, or payment under the Medicaid program; or

[(B)iithat is intended to be used to determine a person's eligibility for a benefit or payment under the Medicaid program];

(2)iiknowingly [or intentionally] conceals or fails to disclose information that permits [an event:

Thursday, May 26, 2005 SENATE JOURNAL 3849

[(A)iithat the person knows affects the initial or continued right to a benefit or payment under the Medicaid program of:

[(i)iithe person; or

[(ii)iianother person on whose behalf the person has applied for a benefit or payment or is receiving a benefit or payment; and

[(B)iito permit] a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment [or benefit] that is authorized;

(3)iiknowingly [or intentionally] applies for and receives a benefit or payment on behalf of another person under the Medicaid program and converts any part of the benefit or payment to a use other than for the benefit of the person on whose behalf it was received;

(4)iiknowingly [or intentionally] makes, causes to be made, induces, or seeks to induce the making of a false statement or misrepresentation of material fact concerning:

(A)iithe conditions or operation of a facility in order that the facility may qualify for certification or recertification required by the Medicaid program, including certification or recertification as:

(i)iia hospital;

(ii)iia nursing facility or skilled nursing facility;

(iii)iia hospice;

(iv)iian intermediate care facility for the mentally retarded;

(v)iian assisted living facility; or

(vi)iia home health agency; or

(B)iiinformation required to be provided by a federal or state law, rule, regulation, or provider agreement pertaining to the Medicaid program;

(5)iiexcept as authorized under the Medicaid program, knowingly pays, [or intentionally] charges, solicits, accepts, or receives, in addition to an amount paid under the Medicaid program, a gift, money, a donation, or other consideration as a condition to the provision of a service or product or the continued provision of a service or product [to a Medicaid recipient] if the cost of the service or product [provided to the Medicaid recipient] is paid for, in whole or in part, under the Medicaid program;

(6)iiknowingly [or intentionally] presents or causes to be presented a claim for payment under the Medicaid program for a product provided or a service rendered by a person who:

(A)iiis not licensed to provide the product or render the service, if a license is required; or

(B)iiis not licensed in the manner claimed;

(7)iiknowingly [or intentionally] makes a claim under the Medicaid program for:

(A)iia service or product that has not been approved or acquiesced in by a treating physician or health care practitioner;

(B)iia service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry; or

3850 79th Legislature — Regular Session 79th Day

(C)iia product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate;

(8)iimakes a claim under the Medicaid program and knowingly [or intentionally] fails to indicate the type of license and the identification number of the licensed health care provider who actually provided the service;

(9)iiknowingly [or intentionally] enters into an agreement, combination, or conspiracy to defraud the state by obtaining or aiding another person in obtaining an unauthorized payment or benefit from the Medicaid program or a fiscal agent; [or]

(10)iiis a managed care organization that contracts with the Health and Human Services Commission or other state agency to provide or arrange to provide health care benefits or services to individuals eligible under the Medicaid program and knowingly [or intentionally]:

(A)iifails to provide to an individual a health care benefit or service that the organization is required to provide under the contract;

(B)iifails to provide to the commission or appropriate state agency information required to be provided by law, commission or agency rule, or contractual provision; or

(C)iiengages in a fraudulent activity in connection with the enrollment of an individual eligible under the Medicaid program in the organization's managed care plan or in connection with marketing the organization's services to an individual eligible under the Medicaid program; [or]

(11)iiknowinglyi[(D)]iiobstructs an investigation by the attorney general of an alleged unlawful act under this section; or

(12)iiknowingly makes, uses, or causes the making or use of, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to this state under the Medicaid program.

SECTIONi4.iiSubsection (b), Section 36.003, Human Resources Code, is amended to read as follows:

(b)iiExcept as ordered by a court for good cause shown, the office of the attorney general may not produce for inspection or copying or otherwise disclose the contents of documentary material obtained under this section to a person other than:

(1)iian [authorized] employee of the attorney general;

(2)iian agency of this state, the United States, or another state;

(3)iia criminal district attorney, district attorney, or county attorney of this state;

(4)iithe United States attorney general; [or]

(5)iia state or federal grand jury;

(6)iia political subdivision of this state; or

(7)iia person authorized by the attorney general to receive the information.

SECTIONi5.iiSection 36.004, Human Resources Code, is amended to read as follows:

Sec.i36.004.iiIMMUNITY. Notwithstanding any other law, a person is not civilly or criminally liable for providing access to documentary material under this chapter to:

(1)iian [authorized] employee of the attorney general;

(2)iian agency of this state, the United States, or another state;

Thursday, May 26, 2005 SENATE JOURNAL 3851

(3)iia criminal district attorney, district attorney, or county attorney of this state;

(4)iithe United States attorney general; [or]

(5)iia state or federal grand jury;

(6)iia political subdivision of this state; or

(7)iia person authorized by the attorney general to receive the information.

SECTIONi6.iiSection 36.005, Human Resources Code, is amended by amending Subsections (a) and (b) and adding Subsections (b-1) and (b-2) to read as follows:

(a)iiA health and human services agency, as defined by Section 531.001, Government Code [The commissioner of human services, the commissioner of public health, the commissioner of mental health and mental retardation, the executive director of the Department of Protective and Regulatory Services, or the executive director of another state health care regulatory agency]:

(1)iishall suspend or revoke:

(A)iia provider agreement between the [department or] agency and a person, other than a person who operates a nursing facility or an ICF-MR facility, found liable under Section 36.052; and

(B)iia permit, license, or certification granted by the [department or] agency to a person, other than a person who operates a nursing facility or an ICF-MR facility, found liable under Section 36.052; and

(2)iimay suspend or revoke:

(A)iia provider agreement between the [department or] agency and a person who operates a nursing facility or an ICF-MR facility and who is found liable under Section 36.052; or

(B)iia permit, license, or certification granted by the [department or] agency to a person who operates a nursing facility or an ICF-MR facility and who is found liable under Section 36.052.

(b)iiA provider [person] found liable under Section 36.052 for an unlawful act may not, for a period of 10 years, provide or arrange to provide health care services under the Medicaid program or supply or sell, directly or indirectly, a product to or under the Medicaid program [for a period of 10 years]. The executive commissioner of the Health and Human Services Commission [board of a state agency that operates part of the Medicaid program] may by rule:

(1)iiprovide for a period of ineligibility longer than 10 years; or

(2)iigrant a provider a full or partial exemption from the period of ineligibility required by this subsection if the executive commissioner finds that enforcement of the full period of ineligibility is harmful to the Medicaid program or a beneficiary of the program.

(b-1)iiThe period of ineligibility begins on the date on which the determination that the provider [person] is liable becomes final.

(b-2)iiSubsections (b) and (b-1) do [This subsection does] not apply to a provider [person] who operates a nursing facility or an ICF-MR facility.

SECTIONi7.iiSubsections (a) and (c), Section 36.052, Human Resources Code, are amended to read as follows:

(a)iiExcept as provided by Subsection (c), a person who commits an unlawful act is liable to the state for:

3852 79th Legislature — Regular Session 79th Day

(1)ii[restitution of] the amount [value] of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the unlawful act, including any payment made to a third party;

(2)iiinterest on the amount [value] of the payment or the value of the benefit described by Subdivision (1) at the prejudgment interest rate in effect on the day the payment or benefit was received or paid, for the period from the date the benefit was received or paid to the date that [restitution is paid to] the state recovers the amount of the payment or value of the benefit;

(3)iia civil penalty of:

(A)iinot less than $5,000 or more than $15,000 for each unlawful act committed by the person that results in injury to an elderly person, as defined by Section 48.002(a)(1) [48.002(1)], a disabled person, as defined by Section 48.002(a)(8)(A) [48.002(8)(A)], or a person younger than 18 years of age; or

(B)iinot less than $1,000 or more than $10,000 for each unlawful act committed by the person that does not result in injury to a person described by Paragraph (A); and

(4)iitwo times the amount [value] of the payment or the value of the benefit described by Subdivision (1).

(c)iiThe trier of fact may assess a total of not more than two times the amount [value] of a payment or the value of a benefit described by Subsection (a)(1) if the trier of fact finds that:

(1)iithe person furnished the attorney general with all information known to the person about the unlawful act not later than the 30th day after the date on which the person first obtained the information; and

(2)iiat the time the person furnished all the information to the attorney general, the attorney general had not yet begun an investigation under this chapter.

SECTIONi8.iiSection 36.053, Human Resources Code, is amended by adding Subsections (c) through (f) to read as follows:

(c)iiThe office of the attorney general may not release or disclose information that is obtained under Subsection (b)(1) or (2) or any documentary material or other record derived from the information except:

(1)iiby court order for good cause shown;

(2)iiwith the consent of the person who provided the information;

(3)iito an employee of the attorney general;

(4)iito an agency of this state, the United States, or another state;

(5)iito any attorney representing the state under Section 36.055 or in a civil action brought under Subchapter C;

(6)iito a political subdivision of this state; or

(7)iito a person authorized by the attorney general to receive the information.

(d)iiThe attorney general may use documentary material derived from information obtained under Subsection (b)(1) or (2), or copies of that material, as the attorney general determines necessary in the enforcement of this chapter, including presentation before a court.

(e)iiIf a person fails to file a statement as required by Subsection (b)(1) or fails to submit to an examination as required by Subsection (b)(2), the attorney general may file in a district court of Travis County a petition for an order to compel the person to

Thursday, May 26, 2005 SENATE JOURNAL 3853

(f)iiAn order issued by a district court under this section is subject to appeal to the supreme court.

SECTIONi9.iiSection 36.054, Human Resources Code, is amended by amending Subsection (e) and adding Subsection (e-1) to read as follows:

(e)iiThe [Except as ordered by a court for good cause shown, the] office of the attorney general may not produce for inspection or copying or otherwise disclose the contents of documentary material obtained under this section except:

(1)iiby court order for good cause shown;

(2)iiwith the consent of the person who produced the information;

(3)iito an employee of the attorney general;

(4)iito an agency of this state, the United States, or another state;

(5)iito any attorney representing the state under Section 36.055 or in a civil action brought under Subchapter C;

(6)iito a political subdivision of this state; or

(7)iito a person authorized by the attorney general to receive the information [to a person other than an authorized employee of the attorney general without the consent of the person who produced the documentary material].

(e-1)iiThe attorney general shall prescribe reasonable terms and conditions allowing the documentary material to be available for inspection and copying by the person who produced the material or by an authorized representative of that person. The attorney general may use the documentary material or copies of it as the attorney general determines necessary in the enforcement of this chapter, including presentation before a court.

SECTIONi10.iiSection 36.102, Human Resources Code, is amended by amending Subsections (b) through (e) and adding Subsection (c-1) to read as follows:

(b)iiThe petition shall be filed in camera and, except as provided by Subsection (c-1) or (d), shall remain under seal until at least the 180th [60th] day after the date the petition is filed or the date on which the state elects to intervene, whichever is earlier. The petition may not be served on the defendant until the court orders service on the defendant.

(c)iiThe state may elect to intervene and proceed with the action not later than the 180th [60th] day after the date the attorney general receives the petition and the material evidence and information.

(c-1)iiAt the time the state intervenes, the attorney general may file a motion with the court requesting that the petition remain under seal for an extended period.

(d)iiThe state may, for good cause shown, move the court to extend the 180-day deadline [time during which the petition remains under seal] under Subsection (b) or (c). A motion under this subsection may be supported by affidavits or other submissions in camera.

3854 79th Legislature — Regular Session 79th Day

(e)iiAn action under this subchapter may be dismissed before the end of the period during which the petition remains under seal [prescribed by Subsection (b), as extended as provided by Subsection (d), if applicable,] only if the court and the attorney general consent in writing to the dismissal and state their reasons for consenting.

SECTIONi11.iiSection 36.103, Human Resources Code, is amended to read as follows:

Sec.i36.103.iiANSWER BY DEFENDANT. A defendant is not required to file in accordance with the Texas Rules of Civil Procedure an answer to a petition filed under this subchapter until [the 20th day after the date] the petition is unsealed and served on the defendant [in compliance with the Texas Rules of Civil Procedure].

SECTIONi12.iiSubsection (a), Section 36.104, Human Resources Code, is amended to read as follows:

(a)iiNot later than the last day of the period prescribed by Section 36.102(c) or an extension of that period as provided by Section 36.102(d), the state shall:

(1)iiproceed with the action; or

(2)iinotify the court that the state declines to take over the action.

SECTIONi13.iiSubsection (c), Section 36.110, Human Resources Code, is amended to read as follows:

(c)iiA payment to a person under this section shall be made from the proceeds of the action. A person receiving a payment under this section is also entitled to receive from the defendant an amount for reasonable expenses, reasonable attorney's fees, and costs that the court finds to have been necessarily incurred. The court's determination of expenses, fees, and costs to be awarded under this subsection shall be made only after the defendant has been found liable in the action[, plus reasonable attorney's fees and costs. Expenses, fees, and costs shall be awarded against the defendant].

SECTIONi14.iiThe heading of Subchapter D, Chapter 36, Human Resources Code, is amended to read as follows:

SUBCHAPTER D.ii[CRIMINAL PENALTIES AND] REVOCATION OF
CERTAIN OCCUPATIONAL LICENSES

SECTIONi15.iiSubsection (b), Section 36.132, Human Resources Code, is amended to read as follows:

(b)iiA licensing authority shall revoke a license issued by the authority to a person if the person is convicted of a felony under Section 35A.02, Penal Code [36.131]. In revoking the license, the licensing authority shall comply with all procedures generally applicable to the licensing authority in revoking licenses.

SECTIONi16.iiTitle 7, Penal Code, is amended by adding Chapter 35A to read as follows:

CHAPTER 35A.iiMEDICAID FRAUD

Sec.i35A.01.iiDEFINITIONS. In this chapter:

(1)ii"Claim" has the meaning assigned by Section 36.001, Human Resources Code.

(2)ii"Fiscal agent" has the meaning assigned by Section 36.001, Human Resources Code.

(3)ii"Health care practitioner" has the meaning assigned by Section 36.001, Human Resources Code.

Thursday, May 26, 2005 SENATE JOURNAL 3855

(4)ii"Managed care organization" has the meaning assigned by Section 36.001, Human Resources Code.

(5)ii"Medicaid program" has the meaning assigned by Section 36.001, Human Resources Code.

(6)ii"Medicaid recipient" has the meaning assigned by Section 36.001, Human Resources Code.

(7)ii"Physician" has the meaning assigned by Section 36.001, Human Resources Code.

(8)ii"Provider" has the meaning assigned by Section 36.001, Human Resources Code.

(9)ii"Service" has the meaning assigned by Section 36.001, Human Resources Code.

Sec. 35A.02.iiMEDICAID FRAUD. (a)iiA person commits an offense if the person:

(1)iiknowingly makes or causes to be made a false statement or misrepresentation of a material fact to permit a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;

(2)iiknowingly conceals or fails to disclose information that permits a person to receive a benefit or payment under the Medicaid program that is not authorized or that is greater than the benefit or payment that is authorized;

(3)iiknowingly applies for and receives a benefit or payment on behalf of another person under the Medicaid program and converts any part of the benefit or payment to a use other than for the benefit of the person on whose behalf it was received;

(4)iiknowingly makes, causes to be made, induces, or seeks to induce the making of a false statement or misrepresentation of material fact concerning:

(A)iithe conditions or operation of a facility in order that the facility may qualify for certification or recertification required by the Medicaid program, including certification or recertification as:

(i)iia hospital;

(ii)iia nursing facility or skilled nursing facility;

(iii)iia hospice;

(iv)iian intermediate care facility for the mentally retarded;

(v)iian assisted living facility; or

(vi)iia home health agency; or

(B)iiinformation required to be provided by a federal or state law, rule, regulation, or provider agreement pertaining to the Medicaid program;

(5)iiexcept as authorized under the Medicaid program, knowingly pays, charges, solicits, accepts, or receives, in addition to an amount paid under the Medicaid program, a gift, money, a donation, or other consideration as a condition to the provision of a service or product or the continued provision of a service or product if the cost of the service or product is paid for, in whole or in part, under the Medicaid program;

(6)iiknowingly presents or causes to be presented a claim for payment under the Medicaid program for a product provided or a service rendered by a person who:

3856 79th Legislature — Regular Session 79th Day

(A)iiis not licensed to provide the product or render the service, if a license is required; or

(B)iiis not licensed in the manner claimed;

(7)iiknowingly makes a claim under the Medicaid program for:

(A)iia service or product that has not been approved or acquiesced in by a treating physician or health care practitioner;

(B)iia service or product that is substantially inadequate or inappropriate when compared to generally recognized standards within the particular discipline or within the health care industry; or

(C)iia product that has been adulterated, debased, mislabeled, or that is otherwise inappropriate;

(8)iimakes a claim under the Medicaid program and knowingly fails to indicate the type of license and the identification number of the licensed health care provider who actually provided the service;

(9)iiknowingly enters into an agreement, combination, or conspiracy to defraud the state by obtaining or aiding another person in obtaining an unauthorized payment or benefit from the Medicaid program or a fiscal agent;

(10)iiis a managed care organization that contracts with the Health and Human Services Commission or other state agency to provide or arrange to provide health care benefits or services to individuals eligible under the Medicaid program and knowingly:

(A)iifails to provide to an individual a health care benefit or service that the organization is required to provide under the contract;

(B)iifails to provide to the commission or appropriate state agency information required to be provided by law, commission or agency rule, or contractual provision; or

(C)iiengages in a fraudulent activity in connection with the enrollment of an individual eligible under the Medicaid program in the organization's managed care plan or in connection with marketing the organization's services to an individual eligible under the Medicaid program;

(11)iiknowingly obstructs an investigation by the attorney general of an alleged unlawful act under Section 36.002, Human Resources Code; or

(12)iiknowingly makes, uses, or causes the making or use of, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to this state under the Medicaid program.

(b)iiAn offense under this section is:

(1)iia Class C misdemeanor if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is less than $50;

(2)iia Class B misdemeanor if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $50 or more but less than $500;

(3)iia Class A misdemeanor if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $500 or more but less than $1,500;

Thursday, May 26, 2005 SENATE JOURNAL 3857

(4)iia state jail felony if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $1,500 or more but less than $20,000;

(5)iia felony of the third degree if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $20,000 or more but less than $100,000;

(6)iia felony of the second degree if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $100,000 or more but less than $200,000; or

(7)iia felony of the first degree if the amount of any payment or the value of any monetary or in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of the conduct is $200,000 or more.

(c)iiIf conduct constituting an offense under this section also constitutes an offense under another section of this code or another provision of law, the actor may be prosecuted under either this section or the other section or provision.

(d)iiWhen multiple payments or monetary or in-kind benefits are provided under the Medicaid program as a result of one scheme or continuing course of conduct, the conduct may be considered as one offense and the amounts of the payments or monetary or in-kind benefits aggregated in determining the grade of the offense.

SECTIONi17.iiSubsection (d), Section 41.002, Civil Practice and Remedies Code, is amended to read as follows:

(d)iiNotwithstanding any provision to the contrary, this chapter does not apply to:

(1)iiSection 15.21, Business & Commerce Code (Texas Free Enterprise and Antitrust Act of 1983);

(2)ii[,] an action brought under the Deceptive Trade Practices-Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code) except as specifically provided in Section 17.50 of that Act;

(3)iian action brought under Chapter 36, Human Resources Code;[,] or

(4)iian action brought under Chapter 21, Insurance Code.

SECTIONi18.iiSection 36.131, Human Resources Code, is repealed.

SECTIONi19.ii(a) This Act applies only to conduct that occurs on or after the effective date of this Act. Conduct that occurs before the effective date of this Act is governed by the law in effect at the time the conduct occurred, and that law is continued in effect for that purpose.

(b)iiFor purposes of this section, conduct constituting an offense under the penal law of this state occurred before the effective date of this Act if any element of the offense occurred before that date.

SECTIONi20.iiThis Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 563 in SECTION 2 of the bill, in added Section 36.0011(b), Human Resources Code (House committee printing, page 2, line 3), by striking "the person's specific intent to defraud" and substituting "the person's specific intent to commit an unlawful act under Section 36.002".

3858 79th Legislature — Regular Session 79th Day

Floor Amendment No. 2

Amend CSSB 563 (House committee printing) by adding the following appropriately numbered section to read as follows and renumbering subsequent sections accordingly:

SECTIONi___. (a) Section 531.1063, Government Code, is amended by amending Subsection (g) and adding Subsections (h) and (i) to read as follows:

(g)iiThe commission shall implement [may extend] the program statewide as provided by Subsection (h) [to additional counties] if the commission determines that statewide implementation [expansion] would be cost-effective.

(h)iiThe commission shall adopt a plan to implement the program statewide in phases and shall terminate the statewide implementation at any stage of the process if the commission determines that statewide implementation would not be cost-effective. The plan must include for each phase:

(1)iia description of the policies and procedures to be tested concerning the handling of lost, forgotten, or stolen cards carrying a fingerprint image or situations in which a fingerprint match cannot be confirmed;

(2)iia determination of whether the commission will require children or persons who are elderly or disabled to participate in the phase and the reason or reasons for including children or persons who are elderly or disabled in the phase; and

(3)iia description of the manner and location in which the fingerprint images will be initially collected.

(i)iiIn developing the plan required by Subsection (h), the commission shall seek comments from recipients, providers, and other stakeholders in the state Medicaid program.

(b)iiThe Health and Human Services Commission, before implementing a phase of the Medicaid fraud reduction pilot program required by Section 531.1063, Government Code, as amended by this section, that requires mandatory participation by Medicaid recipients or health care providers, shall submit a report regarding the phase to the governor, lieutenant governor, speaker of the house of representatives, and presiding officer of each standing committee of the senate and house of representatives having jurisdiction over the state Medicaid program. The report must include a description of each component of the plan for that phase, as required by Subsection (h), Section 531.1063, Government Code, as added by this section.

(c)iiIn addition to the report required by Subsection (c), Section 2.23, Chapter 198, Acts of the 78th Legislature, Regular Session, 2003, the Health and Human Services Commission shall report, not later than December 1, 2006, on the status and progress of the Medicaid fraud reduction pilot program required by Section 531.1063, Government Code, as amended by this section, to the governor, lieutenant governor, speaker of the house of representatives, and presiding officer of each standing committee of the senate and house of representatives having jurisdiction over the state Medicaid program. The report must include:

(1)iia continued evaluation of the benefits of the program;

(2)iian evaluation of the strengths and weaknesses of the policies and procedures tested in each phase required by Subsection (h), Section 531.1063, Government Code, as added by this section;

(3)iiinformation concerning the cost-effectiveness of the program;

Thursday, May 26, 2005 SENATE JOURNAL 3859

(4)iiif the program has been implemented statewide, any significant problems encountered; and

(5)iiif the Health and Human Services Commission requires participation by children or persons who are elderly or disabled, the reason or reasons for including children or persons who are elderly or disabled in the program.

(d)iiIf before implementing any provision of this section a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision shall request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.

The amendments were read.

Senator Janek moved to concur in the House amendments to SBi563.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 907 WITH HOUSE AMENDMENT

Senator Whitmire called SBi907 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer, Senator Armbrister in Chair, laid the bill and the House amendment before the Senate.

Amendment

Amend SB 907 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to authority of a peace officer to make an arrest outside of the officer's jurisdiction or to seize property while making the arrest.

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

SECTIONi1.iiArticle 14.03(g), Code of Criminal Procedure, is amended to read as follows:

(g)(1)iiA peace officer listed in Subdivision (1), (2), [(3), (4),] or (5), Article 2.12, who is licensed under Chapter 1701 [415], Occupations [Government] Code, and is outside of the officer's jurisdiction may arrest without a warrant a person who commits any offense within the officer's presence or view, other than [except that an officer who is outside the officer's jurisdiction may arrest a person for] a violation of Subtitle C, Title 7, Transportation Code[, only if the officer is listed in Subdivision (4), Article 2.12].

(2)iiA peace officer listed in Subdivision (3), Article 2.12, who is licensed under Chapter 1701, Occupations Code, and is outside of the officer's jurisdiction may arrest without a warrant a person who commits any offense within the officer's presence or view, except that an officer described in this subdivision who is outside of that officer's jurisdiction may arrest a person for a violation of Subtitle C, Title 7, Transportation Code, only if the offense is committed in the county or counties in which the municipality employing the peace officer is located.

3860 79th Legislature — Regular Session 79th Day

(3)iiA peace officer making an arrest under this subsection shall as soon as practicable after making the arrest notify a law enforcement agency having jurisdiction where the arrest was made. The law enforcement agency shall then take custody of:

(A)iithe person committing the offense and take the person before a magistrate in compliance with Article 14.06; and

(B)iiany property seized during or after the arrest as if the property had been seized by a peace officer of that law enforcement agency.

SECTIONi2.iiThis Act takes effect September 1, 2005.

The amendment was read.

Senator Whitmire moved to concur in the House amendment to SBi907.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 1205 WITH HOUSE AMENDMENT

Senator Madla called SBi1205 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1205 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to allowing the creation of multi-jurisdictional library districts; authorizing taxes and bonds.

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

SECTIONi1.iiFINDINGS. The legislature finds that:

(1)iithe quality of life and general literacy of children and other residents of this state are enhanced by convenient access to a public library and the valuable resources a public library provides; and

(2)iithe creation of library districts in this state would allow for the efficient operation and most equitable use of available public money and therefore make valuable educational, information, and literacy resources more readily available to the entire region of the district.

SECTIONi2.iiMULTI-JURISDICTIONAL LIBRARY DISTRICTS. Subtitle C, Title 10, Local Government Code, is amended by adding Chapter 336 to read as follows:

CHAPTER 336. MULTI-JURISDICTIONAL LIBRARY DISTRICTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec.i336.001.iiDEFINITIONS. In this chapter:

(1)ii"Board" means the district's board of trustees.

(2)ii"District" means a multi-jurisdictional library district created under this chapter.

(3)ii"Executive director" means an executive director employed under Section 336.103.

Thursday, May 26, 2005 SENATE JOURNAL 3861

(4)ii"Lead governmental entity" means the county or municipality that proposes to create a district under this chapter.

Sec.i336.002.iiNATURE OF DISTRICT. A district created under this chapter is a special district and a political subdivision of this state.

Sec.i336.003.iiMULTI-JURISDICTIONAL PUBLIC LIBRARY. (a) A district created under this chapter shall establish, equip, support, operate, and maintain one or more public libraries for the dissemination of educational programs and general information relating to the arts, sciences, literature, and other subject areas of interest to the public.

(b)iiEach public library created under this chapter must be accredited by and meet the standards for basic public library services established by the Texas State Library and Archives Commission.

(c)iiA library created under this chapter must be open to all members of the public under identical conditions.

[Sections 336.004-336.020 reserved for expansion]

SUBCHAPTER B. CREATION OF DISTRICT

Sec.i336.021.iiROLE OF LEAD GOVERNMENTAL ENTITY. (a) A district may be created by a county or municipality that, by resolution, assumes the role of a lead governmental entity under this chapter and proposes the creation of a district for specific contiguous counties and municipalities that by resolution agree to have their territory in the district.

(b)iiThe governing body of a county or municipality may adopt a resolution under Subsection (a) on its own motion or after a hearing held on a petition requesting the creation of a district.

(c)iiThe lead governmental entity shall provide over 50 percent of the initial assets to the district.

Sec.i336.022.iiTERRITORY INCLUDED IN DISTRICT. (a) The lead governmental entity shall describe the initial district territory, which must include all territory of each municipality or county that agrees to have its territory in the district under Section 336.021.

(b)iiThe district may include incorporated or unincorporated territory and may include any contiguous territory in one or more counties that agree to have the counties' territory in the district under Section 336.021.

(c)iiIf the boundaries of the proposed district include any territory that, on the date on which an election is ordered on the question of creating the district, is part of a municipality that operates a municipal public library, the governing body of that municipality must consent by resolution to allow the inclusion of that municipal territory in the proposed district.

Sec.i336.023.iiCONFIRMATION ELECTION. A district created under this chapter may call an election for the purpose of approving a sales tax or an ad valorem tax, or both, on property in the district.

Sec.i336.024.iiPAYMENT OF CONFIRMATION ELECTION COSTS. The lead governmental entity may not order the confirmation election until the entity deposits with the county clerk an amount of money equal to the cost of conducting the confirmation election, as computed by the county clerk.

3862 79th Legislature — Regular Session 79th Day

Sec.i336.025.iiORDERING CONFIRMATION ELECTION. (a) At a regular or special meeting of the governing body of the lead governmental entity held to discuss the creation of a district, the governing body shall determine whether the district will be supported by a sales tax or by an ad valorem tax, or both, on property located in the proposed district.

(b)iiThe governing body may order a confirmation election to confirm the imposition of a sales tax or of an ad valorem tax on property located in the proposed district.

(c)iiThe election ordered shall be held on an authorized uniform election date under Chapter 41, Election Code, that occurs on or after the 45th day after the date the election is ordered.

(d)iiIn addition to the elements required to be included by the Election Code, the election order must state:

(1)iithe ballot proposition stating the measure to be voted on;

(2)iithe hours that the polls will be open; and

(3)iithe location of each polling place.

Sec.i336.026.iiNOTICE OF CONFIRMATION ELECTION. (a) The lead governmental entity shall give notice of the election by publishing a substantial copy of the election order once a week for two consecutive weeks in a newspaper with general circulation in the county in which the proposed district is located.

(b)iiThe notice must be published not earlier than the 30th day and not later than the 10th day before election day.

Sec.i336.027.iiBALLOT PROPOSITION. (a) If the governing body of the lead governmental entity determines under Section 336.025 that the district should be supported by a sales tax, the ballot for the election shall be printed to permit voting for or against the proposition: "The creation of a multi-jurisdictional library district to be known as the __________ (name of district) and adoption of a sales tax in the __________ (name of district) at the rate of _______ (rate of tax) percent."

(b)iiIf the governing body of the lead governmental entity determines under Section 336.025 that the district should be supported by an ad valorem tax, the ballot for the election shall be printed to permit voting for or against the proposition: "The creation of a multi-jurisdictional library district to be known as the __________ (name of district) and adoption of an ad valorem tax in the __________ (name of district) at a rate up to _______ (rate of tax) cents per $100 valuation of property to provide revenue for the district."

Sec.i336.028.iiRESULTS OF CONFIRMATION ELECTION. (a) If a majority of the voters voting in the election favor the creation of the district and the adoption of a sales tax or of an ad valorem tax, the lead governmental entity shall by resolution or order declare that the district is created and shall declare the rate of the sales tax or the amount of the ad valorem tax adopted and enter the result in its minutes.

(b)iiIf a majority of the voters voting in the election are against the creation of the district, the lead governmental entity shall declare the measure defeated and enter the result in its minutes.

(c)iiAn order under Subsection (a) must:

(1)iicontain a description of the district's boundaries and a map of the district;

Thursday, May 26, 2005 SENATE JOURNAL 3863

(2)iistate the election date; and

(3)iistate the total number of votes cast for and against the ballot proposition.

(d)iiThe lead governmental entity must file in the deed records of the county in which the district is located a resolution or order issued under Subsection (a).

Sec.i336.029.iiINITIAL BOARD AND PRESIDING OFFICER. (a) Appointments to the initial board are made as provided by Subchapter C, except that the initial trustees shall agree to stagger their terms, with four members' terms expiring in two years and three members' terms expiring in one year. If the trustees cannot agree on the initial staggering, the trustees shall draw lots to determine the staggering.

(b)iiThe lead governmental entity shall appoint the board's initial presiding officer to serve a two-year term in that capacity. The requirement of Section 336.056 that the board of trustees elect the presiding officer does not apply to the presiding officer appointed under this subsection.

Sec.i336.030.iiREPAYMENT OF ORGANIZATIONAL EXPENSES. (a) The district may:

(1)iipay all costs and expenses necessarily incurred in the creation and organization of the district; and

(2)iireimburse any person for money advanced for the costs and expenses described by Subdivision (1).

(b)iiPayments under this section may be made from money obtained from taxes or other district revenue.

[Sections 336.031-336.050 reserved for expansion]

SUBCHAPTER C. BOARD OF TRUSTEES

Sec.i336.051.iiGOVERNING BODY. A district is governed by a seven-member board of trustees. The board has control over and shall manage the affairs of the district.

Sec.i336.052.iiAPPOINTMENT. (a) The lead governmental entity shall appoint four trustees to the board.

(b)iiThe most populous county in which the district is located shall appoint three trustees to the board, unless the county is the lead governmental entity. If the county is the lead governmental entity, the most populous municipality in the county shall appoint three trustees.

Sec.i336.053.iiELIGIBILITY FOR APPOINTMENT. A person is eligible for appointment to the board if the person:

(1)iiresides in the district;

(2)iiis registered to vote in a county in which the district is located; and

(3)iihas recognized expertise in:

(A)iilibrary services;

(B)iieducation;

(C)iiinformation technology;

(D)iilocal or Texas history; or

(E)iibusiness management.

Sec.i336.054.iiTERMS. (a) Trustees serve staggered two–year terms.

(b)iiA trustee may not serve more than two consecutive terms or more than four terms.

3864 79th Legislature — Regular Session 79th Day

(c)iiA trustee who has served two consecutive terms but fewer than four terms is eligible for appointment to a new term on the date one year after the date on which the trustee's former term ended.

Sec.i336.055.iiVACANCY. A vacancy on the board shall be filled by appointment for the remainder of the unexpired term by the governmental entity that appointed the vacating member.

Sec.i336.056.iiOFFICERS. (a) The board shall elect a trustee to serve as the board's presiding officer. The presiding officer presides at all board meetings and is the chief executive officer of the district.

(b)iiThe board shall elect from among its members a vice presiding officer, a secretary, and any other officers the board considers necessary.

(c)iiThe vice presiding officer acts as the presiding officer if the presiding officer is incapacitated or absent from a meeting.

(d)iiThe secretary acts as the presiding officer if both the presiding officer and vice presiding officer are incapacitated or absent from a meeting.

Sec.i336.057.iiMEETINGS AND NOTICE. (a) The board may establish regular meetings to conduct district business and may hold special meetings at other times as the business of the district requires.

(b)iiThe board shall hold its meetings at a designated meeting place.

Sec.i336.058.iiCONFLICT OF INTEREST IN CONTRACT. (a) For purposes of this section, a trustee who is an employee of, or a trustee related within the second degree by affinity or consanguinity as determined under Subchapter B, Chapter 573, Government Code, to, a person who is financially interested in a contract is considered to be financially interested in the contract.

(b)iiA trustee who is financially interested in a contract may not vote on the acceptance of the contract or participate in the discussion on the contract.

(c)iiA trustee who is financially interested in a contract with the district shall disclose that fact to the other trustees. The disclosure shall be entered into the minutes of the meeting.

(d)iiThe failure of a trustee to disclose the trustee's financial interest in a contract and to have the disclosure entered in the minutes invalidates the contract.

[Sections 336.059-336.100 reserved for expansion]

SUBCHAPTER D. OTHER ADMINISTRATIVE PROVISIONS

Sec.i336.101.iiBYLAWS. The board may adopt bylaws to govern:

(1)iithe time, place, and manner of conducting board meetings;

(2)iithe powers, duties, and responsibilities of the board's officers and employees;

(3)iithe disbursement of money by a check, draft, or warrant;

(4)iithe appointment and authority of board committees;

(5)iithe keeping of accounts and other records; and

(6)iiany other matter the board considers appropriate.

Sec.i336.102.iiEMPLOYEES. (a) The board may employ any person the board considers necessary for conducting the district's affairs.

(b)iiThe board may remove any employee.

Thursday, May 26, 2005 SENATE JOURNAL 3865

Sec.i336.103.iiEXECUTIVE DIRECTOR. (a) The board may employ an executive director to administer the affairs of the district under policies and requirements established by the board.

(b)iiThe board shall set the compensation of the executive director.

(c)iiThe board may delegate to the executive director the board's authority to hire, establish the compensation of, review the performance of, discipline, or remove a district employee.

Sec.i336.104.iiQUALIFICATIONS OF EXECUTIVE DIRECTOR OR LIBRARY DIRECTOR. The board shall ensure that the executive director or a subordinate library director has all necessary qualifications to oversee library services in the district. The board shall require the executive director or a subordinate library director to meet the qualification requirements for a county librarian under Section 441.007, Government Code, and under any rules adopted by the Texas State Library and Archives Commission under that section.

Sec.i336.105.iiBOND. The board may require an officer or employee to execute a bond payable to the district and conditioned on the faithful performance of the person's duties.

Sec.i336.106.iiEMPLOYEE PLANS. (a) The board may provide for and administer a workers' compensation, health benefit, retirement, disability, or death compensation plan for district employees.

(b)iiThe board may adopt a plan to accomplish the purpose of this section.

(c)iiThe board, after notice and a hearing, may change any plan or rule adopted under this section.

Sec.i336.107.iiRECORDS; SECRETARY. (a) The secretary is responsible for ensuring that all district books and other records are properly maintained.

(b)iiThe board may appoint the executive director or an employee as assistant or deputy secretary to assist the secretary in performing the secretary's duties under this section. The assistant or deputy secretary may certify the authenticity of any district record.

[Sections 336.108-336.150 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES

Sec.i336.151.iiGENERAL POWERS OF DISTRICT. A district has all authority necessary to accomplish district purposes.

Sec.i336.152.iiRULES; VIOLATION OF RULES. (a) The board may adopt reasonable rules to accomplish district purposes.

(b)iiThe board may set monetary charges in reasonable amounts for the violation of a district rule.

(c)iiThe board may exclude from the use of a public library a person who intentionally violates a rule adopted by the board under this section.

Sec.i336.153.iiLOCATION OF PUBLIC LIBRARY FACILITIES. A district may locate a public library facility at any place in the district, including the territory of a political subdivision within the district.

Sec.i336.154.iiCONTRACTS. A district may contract with any person for any district purpose.

3866 79th Legislature — Regular Session 79th Day

Sec.i336.155.iiAGREEMENTS WITH OTHER POLITICAL SUBDIVISIONS. (a) A district may contract with a municipality, county, or other political subdivision for the district to provide public library services outside the district.

(b)iiA district may enter into one or more agreements with any municipality included in the area of the district for the acquisition or operation of the municipality's library facilities.

Sec.i336.156.iiPROPERTY AND EQUIPMENT. (a) A district may construct, acquire, own, lease, operate, maintain, repair, or improve any land, works, materials, supplies, improvements, facilities, equipment, vehicles, machinery, appliances, or other property as necessary.

(b)iiIf a district acquires property of any kind related to the operation of a public library, the district may assume the contracts and obligations of the previous owner.

(c)iiA district may hold, use, sell, lease, dispose of, and acquire, by any means, property and licenses, patents, rights, and other interests necessary, convenient, or useful to the exercise of any district power.

Sec.i336.157.iiSURPLUS PROPERTY. A district may sell, lease, or dispose of in any other manner and at any time:

(1)iiany right, interest, or property of the district that is not needed for, or, if a lease, is inconsistent with, the efficient operation and maintenance of a public library; or

(2)iisurplus materials or other property that is not needed for a district purpose.

Sec.i336.158.iiSUITS. (a) A district may sue and be sued in any court of this state in the name of the district.

(b)iiA court of this state shall take judicial notice of the establishment of a district.

(c)iiA district is not required to give security for costs in a suit or to give a supersedeas or cost bond in an appeal of a judgment.

Sec.i336.159.iiEXPANSION OF DISTRICT. (a) The district may expand to include additional territory if the commissioners court of the county in which the district is located holds an election for that purpose in the territory to be added to the district.

(b)iiIf a majority of the voters voting at the expansion election approve the expansion of the district, the territory of the district is expanded.

[Sections 336.160-336.200 reserved for expansion]

SUBCHAPTER F. GENERAL FINANCIAL PROVISIONS

Sec.i336.201.iiBORROWING. A district may borrow money.

Sec.i336.202.iiFEES; GENERAL. (a) A district may impose any necessary charges or fee for providing a district service.

(b)iiA district may discontinue a service to enforce payment of an unpaid charge or fee that is owed to the district.

Sec.i336.203.iiLIBRARY FEES. A library created under this chapter may charge reasonable fees to remove certain materials from the library or for other services provided by the library.

Sec.i336.204.iiDEPOSITORY. (a) The board shall designate one or more banks inside or outside of the district to serve as the depository for district money.

Thursday, May 26, 2005 SENATE JOURNAL 3867

(b)iiThe district shall deposit district tax revenue in a depository bank.

Sec.i336.205.iiEXPENDITURES. A district may disburse district money only by check, draft, money order, or another instrument that must be signed by one or more officers or employees of the district as designated by the board.

Sec.i336.206.iiACCOUNTS AND RECORDS; AUDITS. (a) A district shall keep a complete system of accounts.

(b)iiThe district shall have an annual audit of the district affairs performed by an independent certified public accountant.

(c)iiA signed copy of the audit report shall be delivered to each trustee not later than the 120th day after the closing date of each fiscal year.

(d)iiA copy of the audit report shall be kept on file at the district office and shall be made available for inspection by any interested person during regular business hours.

Sec.i336.207.iiFISCAL YEAR. The fiscal year of the district is from October 1 to September 30, unless the board adopts another fiscal year.

Sec.i336.208.iiGRANTS AND DONATIONS. A district may accept and administer a grant or donation from any source for any district purpose.

[Sections 336.209-336.250 reserved for expansion]

SUBCHAPTER G. TAXES

Sec.i336.251.iiAD VALOREM TAX ASSESSMENT AND COLLECTION. (a) A district may impose an ad valorem tax.

(b)iiIf the district imposes an ad valorem tax, the board shall have the taxable property in its district assessed for ad valorem taxation and the ad valorem taxes in the district collected, in accordance with any one of the methods set forth in this section, and any method adopted remains in effect until changed by the board.

(c)iiThe board may have the taxable property in its district assessed or its taxes collected, wholly or partly, by the tax assessors or tax collectors of any county, municipality, taxing district, or other governmental entity in which all or any part of the district is located. The tax assessors or tax collectors of a governmental entity, on the request of the board, shall assess and collect the taxes of the district in the manner prescribed in the Property Tax Code. Tax assessors and tax collectors shall receive compensation in an amount agreed on between the appropriate parties, but not to exceed two percent of the ad valorem taxes assessed.

Sec.i336.252.iiIMPOSITION, COMPUTATION, ADMINISTRATION, AND GOVERNANCE OF SALES TAX. (a) A district may impose a sales and use tax.

(b)iiChapter 323, Tax Code, to the extent not inconsistent with this chapter, governs the imposition, computation, administration, and governance of the sales and use tax under this subchapter, except that Sections 323.101, 323.105, 323.404, and 323.406-323.408, Tax Code, do not apply.

(c)iiChapter 323, Tax Code, does not apply to the use and allocation of revenue under this chapter.

(d)iiIn applying the procedures under Chapter 323, Tax Code, to the district, the district's name shall be substituted for "the county," and "board of trustees" is substituted for "commissioners court."

3868 79th Legislature — Regular Session 79th Day

Sec.i336.253.iiSALES AND USE TAX RATES. The permissible rates for a sales and use tax imposed under this chapter are one-eighth of one percent, one-fourth of one percent, three-eighths of one percent, and one-half of one percent.

Sec.i336.254.iiABOLITION OF OR CHANGE IN AD VALOREM TAX RATE. (a) The board by order may decrease or abolish the ad valorem tax rate or may call an election to increase, decrease, or abolish the ad valorem tax rate.

(b)iiAt the election, the ballot shall be printed to permit voting for or against the proposition: "The increase (decrease) in the ad valorem tax rate of _________ (name of district) to a rate up to ___________ (rate of tax) cents per $100 valuation of taxable property to be used for district purposes" or "The abolition of the district ad valorem tax." The increase or decrease in the tax rate, or the abolition of the tax, is effective if it is approved by a majority of the votes cast.

(c)iiIn calling and holding the election, the board shall use the procedure for the confirmation and tax election in Subchapter B.

Sec.i336.255.iiUSE OF TAX. A tax collected under this subchapter may be used only for a district purpose and may be pledged as collateral for borrowing money to further those purposes.

[Sections 336.256-336.300 reserved for expansion]

SUBCHAPTER H. BONDS

Sec.i336.301.iiDEFINITION. In this subchapter, "bond" includes a note.

Sec.i336.302.iiGENERAL POWER TO ISSUE BONDS. (a) A district may issue bonds at any time and for any amount it considers necessary or appropriate to acquire, construct, equip, or improve district facilities.

(b)iiThe board by resolution may authorize the issuance of bonds payable solely from revenue.

Sec.i336.303.iiLEAD GOVERNMENTAL ENTITY'S CONSENT REQUIRED. The district may not issue bonds under this subchapter unless the lead governmental entity's governing body by resolution consents to the issuance.

Sec.i336.304.iiSHORT-TERM BONDS. (a) The board by resolution may issue bonds that are secured by revenue or taxes of the district if the bonds:

(1)iihave a term of not more than 12 months; and

(2)iiare payable only from revenue or taxes received on or after the date of their issuance and before the end of the fiscal year following the fiscal year in which the bonds are issued.

(b)iiApproval by the attorney general or registration with the comptroller is not required for a bond issued under this section.

(c)iiAn election is not required to issue bonds under this section.

Sec.i336.305.iiELECTION REQUIRED FOR CERTAIN BONDS SECURED BY TAXES. Except for short-term bonds issued under Section 336.304, bonds payable wholly or partly from taxes may not be issued unless authorized by a majority of the votes received in an election held for that purpose.

Sec.i336.306.iiSECURITY PLEDGED. (a) To secure the payment of a district's bonds, the district may:

(1)iipledge all or part of revenue realized from any tax that the district may impose;

(2)iipledge all or part of revenue from library facilities; or

Thursday, May 26, 2005 SENATE JOURNAL 3869

(3)iimortgage all or part of the district's facilities, including any part of the facilities subsequently acquired.

(b)iiA district may, subject to the terms of the bond indenture or the resolution authorizing the issuance of the bonds, secure payment of district bonds by encumbering a separate item of the district facilities and may acquire, use, hold, or contract for the property by lease, chattel mortgage, or other conditional sale.

(c)iiThis subchapter does not prohibit a district from encumbering one or more library facilities to purchase, construct, or improve one or more other district facilities.

Sec.i336.307.iiLIEN ON REVENUE. The expense of operation and maintenance of library facilities, including salaries, labor, materials, and repairs necessary to provide efficient service, and every other proper item of expense are a first lien and charge against the revenue of a district encumbered under this chapter.

Sec.i336.308.iiEXCHANGE OF BONDS FOR EXISTING LIBRARY FACILITIES. A district's revenue bonds may be exchanged, in lieu of cash, for the property of all or part of existing library facilities to be acquired by the district.

Sec.i336.309.iiGOVERNMENTAL ENTITIES NOT RESPONSIBLE FOR DISTRICT OBLIGATIONS. A governmental entity, other than the district, is not required to pay a bond or other district obligation.

[Sections 336.310-336.350 reserved for expansion]

SUBCHAPTER I. DISSOLUTION

Sec.i336.351.iiNO DISSOLUTION. A district created under this chapter may not be dissolved.

SECTIONi3.iiEFFECTIVE DATE. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.

The amendment was read.

Senator Madla moved to concur in the House amendment to SBi1205.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

SENATE BILL 1339 WITH HOUSE AMENDMENT

Senator Madla called SBi1339 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Floor Amendment No. 1

Amend SB 1339 in SECTION 1 of the bill, as follows:

(1) In amended Subsection (a), Section 451.705, Transportation Code strike "voters of a municipality" (page 1, line 9, house committee printing) and substitute "voters of another municipality".

(2) In amended Subsection (a), Section 451.705, Transportation Code, strike "the governing body of the municipality" (page 1, lines 11-12, house committee printing) and substitute "the governing body of the other municipality".

The amendment was read.

Senator Madla moved to concur in the House amendment to SBi1339.

The motion prevailed by the following vote:iiYeasi31, Naysi0.

3870 79th Legislature — Regular Session 79th Day

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 26, 2005

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

HCR 217, Congratulating Carol Rhodes on earning the 2005 Texas Crime Victim Clearinghouse Award.

HCR 219, Honoring Detective Deanna Tofte of the Wichita Falls Police Department on her receipt of the 2005 America's Most Wanted All Star Hero award.

HCR 221, Congratulating Jacksonville native and Longview resident Neal McCoy on winning the 2005 Humanitarian Award at the 40th Annual Academy of Country Music Awards and designating October 1, 2005, as Neal McCoy Day in Texas.

THE HOUSE HAS CONCURRED IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES:

HB 1601 (non-record vote)

HB 1823 (non-record vote)

HB 2218 (non-record vote)

HB 2579 (non-record vote)

HB 2753 (non-record vote)

HB 2806 (non-record vote)

HB 2958 (143 Yeas, 0 Nays, 2 Present, not voting)

HB 3434 (141 Yeas, 0 Nays, 2 Present, not voting)

THE HOUSE HAS REFUSED TO CONCUR IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES AND REQUESTS THE APPOINTMENT OF A CONFERENCE COMMITTEE TO ADJUST THE DIFFERENCES BETWEEN THE TWO HOUSES:

HB 2129 (non-record vote)

House Conferees:iiBonnen - Chair/Hamric/Geren/Ritter/West, George "Buddy"

HB 2421 (non-record vote)

House Conferees:iiChavez - Chair/Cook, Byron/Morrison/Ritter/Seaman

HB 3540 (non-record vote)

House Conferees:iiPitts - Chair/Berman/Isett/McClendon/Pena

Thursday, May 26, 2005 SENATE JOURNAL 3871

THE HOUSE HAS DISCHARGED ITS CONFEREES AND CONCURRED IN SENATE AMENDMENTS TO THE FOLLOWING MEASURES:

HB 2614 (non-record vote)

Respectfully,

/s/Robert Haney, Chief Clerk

House of Representatives

SESSION TO CONSIDER EXECUTIVE APPOINTMENTS

The Presiding Officer announced the time had arrived to consider executive appointments to agencies, boards, and commissions.iiNotice of submission of these names for consideration was given Tuesday, May 24, 2005, by Senator Lindsay.

Senator Lindsay moved confirmation of the nominees reported Tuesday by the Committee on Nominations.

The Presiding Officer asked if there were requests to sever nominees.

Senator West requested the following nominees be severed:

Members, Texas Residential Construction Commission:iiLewis Brown, Montgomery County; John R. Krugh, Harris County; Scott M. Porter, Kerr County.

The request was granted.

NOMINEES CONFIRMED

The following nominees, not severed and reported Tuesday by the Committee on Nominations, were confirmed by the following vote:iiYeasi31, Naysi0.

Member, State Commission on Judicial Conduct:iiRex G. Baker III, Hays County.

Members, Texas Transportation Commission:iiEsperanza "Hope" Andrade, Bexar County; Ted Houghton, Jr., El Paso County; Robert Lee Nichols, Cherokee County.

NOMINEES CONFIRMED

The following severed nominees were confirmed by the following votes:

Member, Texas Residential Construction Commission:iiLewis Brown, Montgomery County:iiYeasi24, Naysi5.

Yeas:iiArmbrister, Averitt, Brimer, Carona, Deuell, Duncan, Ellis, Eltife, Estes, Fraser, Harris, Jackson, Janek, Lindsay, Lucio, Madla, Nelson, Seliger, Shapiro, Shapleigh, Staples, Whitmire, Williams, Zaffirini.

Nays:iiBarrientos, Gallegos, Van de Putte, Wentworth, West.

Absent:iiHinojosa, Ogden.

Member, Texas Residential Construction Commission:iiJohn R. Krugh, Harris County:iiYeasi25, Naysi6.

3872 79th Legislature — Regular Session 79th Day

Yeas:iiArmbrister, Averitt, Brimer, Carona, Deuell, Ellis, Eltife, Estes, Fraser, Gallegos, Harris, Hinojosa, Jackson, Janek, Lindsay, Lucio, Madla, Nelson, Ogden, Seliger, Shapiro, Staples, Whitmire, Williams, Zaffirini.

Nays:iiBarrientos, Duncan, Shapleigh, Van de Putte, Wentworth, West.

Member, Texas Residential Construction Commission:iiScott M. Porter, Kerr County:iiYeasi30, Naysi1.

Nays:iiWest.

CONFERENCE COMMITTEE ON

SENATE BILL 419 DISCHARGED

On motion of Senator Nelson and by unanimous consent, the Senate conferees on SBi419 were discharged.

Question — Shall the Senate concur in the House amendments to SBi419?

On motion of Senator Nelson and by unanimous consent, the Senate concurred in the House amendments to SBi419 by the following vote:iiYeasi23, Naysi7.

Yeas:iiArmbrister, Averitt, Brimer, Carona, Deuell, Duncan, Eltife, Estes, Fraser, Harris, Hinojosa, Jackson, Janek, Lindsay, Lucio, Madla, Nelson, Ogden, Shapiro, Staples, Van de Putte, West, Williams.

Nays:iiBarrientos, Ellis, Gallegos, Shapleigh, Wentworth, Whitmire, Zaffirini.

Absent:iiSeliger.

REASON FOR VOTE

Senator Zaffirini submitted the following reason for vote for SB 419:

I cast a "No" vote on the motion to discharge the conferees and to concur with House amendments to SBi419, the Sunset bill relating to the continuation and functions of the Texas State Board of Medical Examiners, Texas State Board of Physician Assistant Examiners, and Texas State Board of Acupuncture Examiners and the regulation of health care professions regulated by those state agencies. I did so because this motion was in conflict with long-established rules for Sunset legislation that preclude adopting amendments that were not considered by the Sunset Commission.

ZAFFIRINI

CONFERENCE COMMITTEE REPORT ON

SENATE BILL 122 ADOPTED

Senator Hinojosa called from the President's table the Conference Committee Report on SBi122. The Conference Committee Report was filed with the Senate on Friday, May 20, 2005.

On motion of Senator Hinojosa, the Conference Committee Report was adopted by the following vote:iiYeasi31, Naysi0.

Thursday, May 26, 2005 SENATE JOURNAL 3873

CONFERENCE COMMITTEE ON HOUSE BILL 268

Senator Hinojosa called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi268 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi268 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Hinojosa, Chair; Duncan, Ellis, Seliger, and Harris.

SENATE BILL 330 WITH HOUSE AMENDMENTS

Senator Deuell called SBi330 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer, Senator Armbrister in Chair, laid the bill and the House amendments before the Senate.

Amendment

Amend SB 330 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the creation of a stroke committee and the development of a statewide stroke emergency transport plan.

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

SECTIONi1.iiSection 773.001, Health and Safety Code, is amended to read as follows:

Sec.i773.001.iiSHORT TITLE. This chapter may be cited as the Emergency Health Care [Medical Services] Act.

SECTIONi2.iiSection 773.003, Health and Safety Code, is amended by amending Subdivision (7) to read as follows:

(7)ii"Department" means the [Texas] Department of State Health Services.

SECTIONi3.iiChapter 773, Health and Safety Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. EMERGENCY STROKE SERVICES

Sec.i773.201.iiLEGISLATIVE INTENT. The legislature finds that a strong system for stroke survival is needed in the state's communities in order to treat stroke victims in a timely manner and to improve the overall treatment of stroke victims. Therefore, the legislature intends to construct an emergency treatment system in this state so that stroke victims may be quickly identified and transported to and treated in appropriate stroke treatment facilities.

Sec.i773.202.iiDEFINITIONS. In this subchapter:

(1)ii"Advisory council" means the advisory council established under Section 773.012.

3874 79th Legislature — Regular Session 79th Day

(2)ii"Stroke committee" means the committee appointed under Section 773.203.

(3)ii"Stroke facility" means a health care facility that:

(A)iiis capable of primary or comprehensive treatment of stroke victims;

(B)iiis part of an emergency medical services and trauma system;

(C)iihas a health care professional available 24 hours a day, seven days a week who is knowledgeable about stroke care and capable of carrying out acute stroke therapy; and

(D)iirecords patient treatment and outcomes.

Sec.i773.203.iiSTROKE COMMITTEE. (a) The advisory council shall appoint a stroke committee to assist the advisory council in the development of a statewide stroke emergency transport plan.

(b)iiThe stroke committee must include the following members:

(1)iia licensed physician appointed from a list of physicians eligible for accreditation from the Accreditation Council for Graduate Medical Education, recommended by a statewide organization of neurologists;

(2)iia licensed interventional neuroradiologist appointed from a list of neuroradiologists recommended by a statewide organization of radiologists;

(3)iia neurosurgeon with stroke expertise;

(4)iia member of the Texas Council on Cardiovascular Disease and Stroke who has expertise in stroke care;

(5)iia licensed physician appointed from a list of physicians recommended by a statewide organization of emergency physicians;

(6)iia neuroscience registered nurse with stroke expertise; and

(7)iia volunteer member of a nonprofit organization specializing in stroke treatment, prevention, and education.

(c)iiChapter 2110, Government Code, does not apply to the stroke committee.

Sec.i773.204.iiDUTIES OF STROKE COMMITTEE; DEVELOPMENT OF STROKE EMERGENCY TRANSPORT PLAN. (a) The advisory council, with the assistance of the stroke committee and in collaboration with the Texas Council on Cardiovascular Disease and Stroke, shall develop a statewide stroke emergency transport plan.

(b)iiThe stroke emergency transport plan must include:

(1)iitraining requirements on stroke recognition and treatment, including emergency screening procedures;

(2)iia list of appropriate early treatments to stabilize patients;

(3)iiprotocols for rapid transport to a designated facility when rapid transport is appropriate; and

(4)iiplans for coordination with statewide agencies or committees on programs for stroke prevention and community education regarding stroke and stroke emergency transport.

(c)iiIn developing the stroke emergency transport plan, the stroke committee shall consult the criteria for stroke facilities established by national medical organizations such as the Joint Commission on Accreditation of Healthcare Organizations.

Thursday, May 26, 2005 SENATE JOURNAL 3875

SECTIONi4.ii(a)iiNot later than January 1, 2006, the advisory council established under Section 773.012, Health and Safety Code, shall establish a stroke committee as required by Section 773.203, Health and Safety Code, as added by this Act.

(b)iiNot later than January 1, 2007, the advisory council established under Section 773.012, Health and Safety Code, shall develop a statewide stroke emergency transport plan as required by Section 773.204, Health and Safety Code, as added by this Act.

(c)iiNot later than January 1, 2007, the advisory council shall submit a report of the statewide stroke emergency transport plan to the governor, lieutenant governor, speaker of the house of representatives, and executive commissioner of the Health and Human Services Commission.

SECTIONi5.iiThis Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 330 (House committee printing) as follows:

(1)iiIn SECTION 3 of the bill, in added Section 773.201, Health and Safety Code (page 1, lines 20-21) strike "to construct an emergency treatment system in" and substitute "that a statewide stroke emergency transport plan be developed for".

(2)iiIn SECTION 3 of the bill, in added Section 773.202(3)(B), Health and Safety Code, (page 2, line 10) strike "trauma system" and substitute "trauma care system, as defined by Section 773.003".

(3)iiIn SECTION 3 of the bill, in added Section 773.203(b)(1), Health and Safety Code (page 2, line 21) between "for accreditation" and "from" insert "in Vascular Neurology".

(4)iiIn SECTION 3 of the bill, in added Section 773.204(b)(3), Health and Safety Code (page 3, lines 22-23) strike "designated facility when rapid transport is appropriate" and substitute "stroke facility when rapid transport is appropriate and it is safe to bypass another health care facility".

(5)iiIn SECTION 4 of the bill (page 4, lines 8-11) strike Subsection (b) of that SECTION and reletter the subsequent subsection.

The amendments were read.

Senator Deuell moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi330 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Deuell, Chair; VanideiPutte, Lindsay, West, and Averitt.

3876 79th Legislature — Regular Session 79th Day

CONFERENCE COMMITTEE ON HOUSE BILL 585

Senator Wentworth called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi585 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi585 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Wentworth, Chair; Madla, Brimer, Deuell, and Whitmire.

CONFERENCE COMMITTEE ON HOUSE BILL 1225

Senator Duncan called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi1225 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi1225 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Duncan, Chair; Armbrister, Seliger, Staples, and Madla.

SENATE BILL 1604 WITH HOUSE AMENDMENT

Senator Staples called SBi1604 from the President's table for consideration of the House amendment to the bill.

The Presiding Officer laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1604 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the Neches and Trinity Valleys Groundwater Conservation District.

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

SECTIONi1.iiSection 5, Chapter 1387, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Subsection (g) to read as follows:

(g)iiThe district may not assess a fee of any type on a well if the well's production is used only for domestic, agricultural, or wildlife purposes within the district.

SECTIONi2.iiSection 6, Chapter 1387, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Subsections (j) and (k) to read as follows:

Thursday, May 26, 2005 SENATE JOURNAL 3877

(j)iiA director may be removed from office in the same manner as provided for the removal of a county officer by Subchapter B, Chapter 87, Local Government Code.

(k)iiThe validity of an action of the board of directors is not affected by the fact that the action is taken when a ground for removal of a director exists.

SECTIONi3.iiThis Act takes effect September 1, 2005.

The amendment was read.

Senator Staples moved that the Senate do not concur in the House amendment, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi1604 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Staples, Chair; Madla, Eltife, Seliger, and Brimer.

SENATE BILL 771 WITH HOUSE AMENDMENTS

Senator West called SBi771 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 771 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to tax increment financing.

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

SECTIONi1.iiSubsection (a), Section 311.005, Tax Code, is amended to read as follows:

(a)iiTo be designated as a reinvestment zone, an area must:

(1)iisubstantially arrest or impair the sound growth of the municipality creating the zone, retard the provision of housing accommodations, or constitute an economic or social liability and be a menace to the public health, safety, morals, or welfare in its present condition and use because of the presence of:

(A)iia substantial number of substandard, slum, deteriorated, or deteriorating structures;

(B)iithe predominance of defective or inadequate sidewalk or street layout;

(C)iifaulty lot layout in relation to size, adequacy, accessibility, or usefulness;

(D)iiunsanitary or unsafe conditions;

(E)iithe deterioration of site or other improvements;

3878 79th Legislature — Regular Session 79th Day

(F)iitax or special assessment delinquency exceeding the fair value of the land;

(G)iidefective or unusual conditions of title; [or]

(H)iiconditions that endanger life or property by fire or other cause; or

(I)iistructures, other than single-family residential structures, that have been substantially vacant for at least five years;

(2)iibe predominantly open and, because of obsolete platting, deterioration of structures or site improvements, or other factors, substantially impair or arrest the sound growth of the municipality; [or]

(3)iibe in a federally assisted new community located in the municipality or in an area immediately adjacent to a federally assisted new community; or

(5)iibe an area described in a petition requesting that the area be designated as a reinvestment zone, if the petition is submitted to the governing body of the municipality by the owners of property constituting at least 50 percent of the appraised value of the property in the area according to the most recent certified appraisal roll for the county in which the area is located.

SECTIONi2.iiSection 311.008, Tax Code, is amended by adding Subsection (e) to read as follows:

(e)iiThe implementation of a project plan to alleviate a condition described by Section 311.005(a)(1), (2), or (3) and to promote development or redevelopment of a reinvestment zone in accordance with this chapter serves a public purpose.

SECTIONi3.iiSection 311.010, Tax Code, is amended by adding Subsection (g) to read as follows:

(g)iiChapter 252, Local Government Code, does not apply to a dedication, pledge, or other use of revenue in the tax increment fund for a reinvestment zone by the board of directors of the zone in carrying out its powers under Subsection (b).

SECTIONi4.iiThis Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 771 (House committee printing) by inserting the following appropriately numbered section and renumbering the subsequent sections of the bill accordingly:

SECTION . Chapter 311, Tax Code, is amended by adding Section 311.0087 to read as follows:

Sec. 311.0087. RESTRICTION ON POWERS OF CERTAIN MUNICIPALITIES. (a) this section applies only to a proposed reinvestment zone:

(1) the designation of which is requested in a petition submitted under Section 311.005(a) (5) before July 31, 2004, to the governing body of a home rule municipality that:

(A) has a population of more than 1.1 million; and

(B) is located primarily in a county with a population of 1.5 million or less; and

(C) as created at least 20 reinvestment zones under this chapter; and

Thursday, May 26, 2005 SENATE JOURNAL 3879

(2) that this is the subject of a resolution of intent that was adopted before October 31, 2004 by the governing body of the municipality.

(b) If the municipality imposes a fee of more than $25,000 for processing the petition, the municipality may not require a property owner who submitted the petition, as a condition of designating the reinvestment zone or approving a development agreement, interlocal agreement, or project plan for the proposed reinvestment zone:

(1) to waive any rights of the owner under Chapter 245, Local Government Code, or under any agreed order or settlement agreement to which the municipality is a party;

(2) to dedicate more than 20 percent of the owner's land in the area described in the petition as open-space land; or

(3) to use a nonconventional use pattern for a development to be located within the proposed reinvestment zone.

Floor Amendment No. 2

Amend CSSB 771 (House committee printing) as follows:

(1)iiIn the recital to SECTION 3 of the bill (page 2, line 26), strike "Subsection (g)" and substitute "Subsections (g), (h), and (i)".

(2)iiIn SECTION 3 of the bill, immediately following proposed Section 311.010(g), Tax Code (page 3, between lines 3 and 4), insert the following:

(h)iiSubject to the approval of the governing body of the municipality that created the zone, the board of directors of a reinvestment zone, as necessary or convenient to implement the project plan and reinvestment zone financing plan and achieve their purposes, may establish and provide for the administration of one or more programs for the public purposes of developing and diversifying the economy of the zone, eliminating unemployment and underemployment in the zone, and developing or expanding transportation, business, and commercial activity in the zone, including programs to make grants and loans from the tax increment fund of the zone in an aggregate amount not to exceed the amount of the tax increment produced by the municipality and paid into the tax increment fund for the zone for activities that benefit the zone and stimulate business and commercial activity in the zone. For purposes of this subsection, on approval of the municipality, the board of directors of the zone has all the powers of a municipality under Chapter 380, Local Government Code.

(i)iiThe board of directors of a reinvestment zone or a local government corporation administering a reinvestment zone may contract with the municipality that created the zone to allocate from the tax increment fund for the zone an amount equal to the tax increment produced by the municipality and paid into the tax increment fund for the zone to pay the incremental costs of providing municipal services incurred as a result of the creation of the zone or the development or redevelopment of the land in the zone, regardless of whether the costs of those services are identified in the project plan or reinvestment zone financing plan for the zone.

(3)iiInsert the following appropriately numbered section of the bill and renumber the subsequent sections of the bill accordingly:

SECTION __.iiSection 311.013, Tax Code, is amended by amending Subsection (b) and adding Subsections (l) and (m) to read as follows:

3880 79th Legislature — Regular Session 79th Day

(b)iiEach taxing unit shall pay into the tax increment fund for the zone an amount equal to the tax increment produced by the unit, less the sum of:

(1)iiproperty taxes produced from the tax increments that are, by contract executed before the designation of the area as a reinvestment zone, required to be paid by the unit to another political subdivision; and

(2)iifor a taxing unit other than the municipality that created the zone, a portion, not to exceed 15 percent, of the tax increment produced by the unit as provided by the reinvestment zone financing plan or a larger portion as provided by Subsection (f).

(l)iiThe governing body of a municipality that designates an area as a reinvestment zone may determine in the designating ordinance adopted under Section 311.003 or in the ordinance adopted under Section 311.011 approving the reinvestment zone financing plan for the zone the portion of the tax increment produced by the municipality that the municipality is required to pay into the tax increment fund for the zone. If a municipality does not determine the portion of the tax increment produced by the municipality that the municipality is required to pay into the tax increment fund for a reinvestment zone, the municipality is required to pay into the fund for the zone the entire tax increment produced by the municipality, except as provided by Subsection (b)(1).

(m)iiThe governing body of a municipality that is located in a county with a population of more than 1.4 million but less than 2.1 million or in a county with a population of 3.3 million or more by ordinance may reduce the portion of the tax increment produced by the municipality that the municipality is required to pay into the tax increment fund for the zone. The municipality may not reduce under this subsection the portion of the tax increment produced by the municipality that the municipality is required to pay into the tax increment fund for the zone unless the municipality provides each county that has entered into an agreement with the municipality to pay all or a portion of the county's tax increment into the fund an opportunity to enter into an agreement with the municipality to reduce the portion of the tax increment produced by the county that the county is required to pay into the tax increment fund for the zone by the same proportion that the portion of the municipality's tax increment that the municipality is required to pay into the fund is reduced. The portion of the tax increment produced by a municipality that the municipality is required to pay into the tax increment fund for a reinvestment zone, as reduced by the ordinance adopted under this subsection, together with all other revenues required to be paid into the fund, must be sufficient to complete and pay for the estimated costs of projects listed in the reinvestment zone financing plan and pay any tax increment bonds or notes issued for the zone, and any other obligations of the zone.

Floor Amendment No. 1 on Third Reading

Amend CSSB 771 on third reading in SECTION 1 of the bill by striking proposed Section 311.005(a)(1)(I), Tax Code, and substituting the following:

(I) structures, other than single-family residential structures, less than 10 percent of the square footage of which has been used for commercial, industrial, or residential purposes during the preceding 12 years, if the municipality has a population of 100,000 or more;

Thursday, May 26, 2005 SENATE JOURNAL 3881

Floor Amendment No. 2 on Third Reading

Amend Floor Amendment No. 1 by Menendez to CSSB 771 on third reading as follows:

Sec. 311.0087 (1)(C) by replacing the word as with the word has before the word created on line 16 page 1.

Floor Amendment No. 3 on Third Reading

Amend CSSB 771 on third reading in SECTION 1 of the bill, in Section 311.005(a)(2), Tax Code, by striking "be predominantly open and," and substituting "[be predominantly open and,]".

The amendments were read.

Senator West moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi771 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators West, Chair; Brimer, Ellis, Gallegos, and Deuell.

SENATE BILL 982 WITH HOUSE AMENDMENTS

Senator Van de Putte called SBi982 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Floor Amendment No. 1

Amend SB 982 (House committee printing) as follows:

(1)iiStrike the recital to Section 1 of the bill (page 1, lines 5 and 6) and substitute the following:

Section 447.004, Government Code, is amended by amending Subsection (e) and adding Subsection (f) to read as follows:

(2)iiIn Section 1 of the bill, in amended Subsection (e), Section 447.004, Government Code (page 1, line 7), strike "or an institution of higher education" and substitute "[or an institution of higher education]".

(3)iiIn Section 1 of the bill, immediately following amended Subsection (e), Section 447.004, Government Code (page 2, between lines 2 and 3), insert the following:

(f)iiAn institution of higher education may not begin construction of a new state building or a major renovation project before the design architect or engineer for the construction or renovation has:

(1)iicertified to the institution of higher education that the construction or renovation complies with the standards established under this section; and

3882 79th Legislature — Regular Session 79th Day

(2)iiprovided to the state energy conservation office a copy of that certification.

Floor Amendment No. 2

Amend SB 982 (House committee printing) as follows:

(1)iiIn the recital to Section 4 of the bill (page 3, lines 11 and 12), strike "Subsections (b-1) and (b-2)" and substitute "Subsections (b-1), (b-2), (c-1), and (c-2)".

(2)iiIn Section 4 of the bill, in amended Subsection (b), Section 2166.403, Government Code (page 3, line 13), strike "During" and substitute "Except as provided by Subsection (c-1), during [During]".

(3)iiIn Section 4 of the bill, in amended Subsection (b), Section 2166.403, Government Code (page 3, lines 14 and 15), strike "or institution" and substitute "[or institution]".

(4)iiIn Section 4 of the bill, immediately following amended Subsection (c), Section 2166.403, Government Code (page 4, between lines 21 and 22), insert the following:

(c-1)iiFor a project constructed by and for a state institution of higher education, the governing body of the institution shall, during the planning phase of the proposed construction for the project, verify in an open meeting the economic feasibility of incorporating into the building's design and proposed energy system alternative energy devices for space heating and cooling functions, water heating functions, electrical load functions, and interior lighting functions. The governing body of the institution shall determine the economic feasibility of each function listed in this subsection by comparing the estimated cost of providing energy for the function, based on the use of conventional design practices and energy systems, with the estimated cost of providing energy for the function, based on the use of alternative energy devices, during the economic life of the building.

(c-2)iiIf the use of alternative energy devices for a specific function is determined to be economically feasible under Subsection (c-1), the governing body shall include the use of alternative energy devices for that function in the construction plans for the project.

Floor Amendment No. 3

Amend SB 982 (House committee printing) by adding the following appropriately numbered Sections to the bill and renumbering subsequent Sections as appropriate:

SECTIONi__.iiSubchapter B, Chapter 2165, Government Code, is amended by adding Section 2165.058 to read as follows:

Sec.i2165.058.iiVENDING MACHINES; ENERGY-SAVING DEVICE REQUIRED. (a) The commission shall require the use of an energy-saving device for each vending machine located in a building owned or leased by the state except a vending machine that contains a perishable food product, as defined by Section 96.001, Civil Practice and Remedies Code.

(b)iiNotwithstanding Subsection (a), the commission may not require the acquisition or installation of an energy-saving device for a vending machine that is owned or operated by an entity that owns or operates a total of 20 or fewer vending

Thursday, May 26, 2005 SENATE JOURNAL 3883

(c)iiAn entity that owns or operates a vending machine subject to this section is responsible for any expenses associated with the acquisition, installation, or maintenance of an energy-saving device required by this section.

(d)iiThe commission may impose an administrative fine on an entity that operates a vending machine subject to this section in an amount not to exceed $250 a year for each machine found to be in violation of this section or related rules adopted by the commission.

(e)iiThe commission shall adopt rules relating to the specifications for and regulation of energy-saving devices required by this section.

SECTIONi__.ii(a) An entity that owns or operates a vending machine subject to Section 2165.058, Government Code, as added by this Act, is not required to comply with that section or a related rule of the Texas Building and Procurement Commission until September 1, 2006.

(b)iiNotwithstanding Section 2165.058(d), Government Code, as added by this Act, the Texas Building and Procurement Commission may impose a fine only in relation to a vending machine that is found to be operating in violation of Section 2165.058, Government Code, as added by this Act, or a related rule of the commission, on or after September 1, 2006.

The amendments were read.

Senator VanideiPutte moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi982 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators VanideiPutte, Chair; Ellis, Armbrister, Eltife, and Harris.

SENATE BILL 34 WITH HOUSE AMENDMENTS

Senator Zaffirini called SBi34 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer, Senator Armbrister in Chair, laid the bill and the House amendments before the Senate.

Floor Amendment No. 1

Amend SB 34 by adding the following SECTIONS to the bill and renumbering subsequent SECTIONS of the bill appropriately:

SECTIONi____.iiSection 51.351(1), Education Code, is amended to read as follows:

3884 79th Legislature — Regular Session 79th Day

(1)ii"General academic teaching institution," "governing board," "institution of higher education," "medical and dental unit," "public junior college," and "university system" have the meanings assigned by Section 61.003 [of this code].

SECTIONi____.iiSubchapter G, Chapter 51, Education Code, is amended by adding Sections 51.355 and 51.356 to read as follows:

Sec.i51.355.iiNONVOTING STUDENT REGENT; UNIVERSITY SYSTEM BOARD OF REGENTS. (a) In this section, "student government" means the representative student organization directly elected by the student body of a general academic teaching institution or medical and dental unit.

(b)iiThe chancellor of each university system shall develop a uniform application form to be used by each general academic teaching institution and medical and dental unit in the university system to solicit applicants for the position of student regent.

(c)iiExcept as provided by Subsection (f), not later than September 1 of each year, the student government of each general academic teaching institution and medical and dental unit in a university system shall solicit applicants for the position of student regent. Not later than November 1, from among the applications received by the student government, the student government shall select five applicants as the student government's recommendations for the position of student regent and send the applications of those applicants, with the name of each applicant and the name of the institution or unit in which the applicant is enrolled removed, to the chancellor of the university system. From among those applicants, the chancellor shall select two or more applicants as the university system's recommendations for the position of student regent and shall send the applications of those applicants to the governor not later than December 1. The governor may request to review all applications for the position of student regent received by the student governments and may request to review information required to be removed from an application by a student government under this subsection. On February 1, or as soon thereafter as practicable, the governor shall appoint one of the applicants to serve as the student regent for the system for a one-year term expiring on the next February 1. The governor is not required to appoint an applicant recommended by the chancellor.

(d)iiA student regent must be enrolled as an undergraduate or graduate student in a general academic teaching institution or medical and dental unit in the university system at the time of appointment and throughout the student regent's term. For purposes of this subsection, a person is considered to be enrolled in an institution or unit for a summer term if the person was enrolled in the institution or unit for the preceding semester and:

(1)iiis registered or preregistered at the institution or unit for the following fall semester;

(2)iiif the person has not completed the person's degree program, is eligible to continue the degree program at the institution or unit in the following fall semester; or

(3)iiif the person completed a degree program in the preceding semester, is admitted to another degree program at the institution or unit for the following fall semester.

Thursday, May 26, 2005 SENATE JOURNAL 3885

(e)iiA student regent is not a member of the board of regents of the system for which the student regent is appointed. A student regent has the same powers and duties as the members of the board of regents of the system, including the right to attend and participate in meetings of the board of regents, except that the student regent:

(1)iimay not vote on any matter before the board or make or second any motion before the board; and

(2)iiis not counted in determining whether a quorum exists for a meeting of the board or in determining the outcome of any vote of the board.

(f)iiThe student government of the general academic teaching institution or medical and dental unit at which a current student regent was enrolled at the time of the student regent's appointment may not solicit applicants for the position of student regent for the next regular term of the position.

(g)iiA vacancy in the position of student regent for a university system shall be filled for the unexpired term by appointment by the governor in consultation with the chancellor of the system.

Sec.i51.356.iiNONVOTING STUDENT REGENT; INSTITUTION BOARD OF REGENTS. (a) This section applies only to a general academic teaching institution that is not a part of a university system.

(b)iiIn this section, "student government" means the representative student organization directly elected by the student body of a general academic teaching institution.

(c)iiThe president of a general academic teaching institution shall develop a uniform application form to be used to solicit applicants for the position of student regent.

(d)iiNot later than September 1 of each year, the student government of the general academic teaching institution shall solicit applicants for the position of student regent. Not later than November 1, from among the applications received by the student government, the student government shall select five applicants as the student government's recommendations for the position of student regent and send the applications of those applicants, with the name of each applicant removed, to the president of the institution. From among those applicants, the president shall select two or more applicants as the institution's recommendations for the position of student regent and shall send the applications of those applicants to the governor not later than December 1. The governor may request to review all applications for the position of student regent received by the student government and may request to review information required to be removed from an application by the student government under this subsection. On February 1, or as soon thereafter as practicable, the governor shall appoint one of the applicants to serve as the student regent for the institution for a one-year term expiring on the next February 1. The governor is not required to appoint an applicant recommended by the president.

(e)iiA student regent must be enrolled as an undergraduate or graduate student in the general academic teaching institution at the time of appointment and throughout the student regent's term. For purposes of this subsection, a person is considered to be enrolled in an institution for a summer term if the person was enrolled in the institution for the preceding semester and:

3886 79th Legislature — Regular Session 79th Day

(1)iiis registered or preregistered at the institution for the following fall semester;

(2)iiif the person has not completed the person's degree program, is eligible to continue the degree program at the institution in the following fall semester; or

(3)iiif the person completed a degree program in the preceding semester, is admitted to another degree program at the institution for the following fall semester.

(f)iiA student regent is not a member of the board of regents of the institution for which the student regent is appointed. A student regent has the same powers and duties as the members of the board of regents of the institution, including the right to attend and participate in meetings of the board of regents, except that the student regent:

(1)iimay not vote on any matter before the board or make or second any motion before the board; and

(2)iiis not counted in determining whether a quorum exists for a meeting of the board or in determining the outcome of any vote of the board.

(g)iiA vacancy in the position of student regent for an institution shall be filled for the unexpired term by appointment by the governor in consultation with the president of the institution.

SECTIONi____.iiThe initial term of a student regent appointed for a state university system under Section 51.355, Education Code, as added by this Act, or for a state university under Section 51.356, Education Code, as added by this Act, expires February 1, 2007. The appropriate student governments, the chancellor of each state university system, the president of each state university that is not a part of a university system, and the governor shall take the actions required by Sections 51.355 and 51.356, Education Code, as added by this Act, as soon as practicable after this Act takes effect to select a student regent for each state university or state university system for that initial term.

Floor Amendment No. 2

Amend SB 34 by adding the following new SECTIONS, appropriately numbered, and renumbering subsequent SECTIONS of the bill accordingly:

SECTION __. Subchapter M, Chapter 56, Education Code, is amended by adding Section 56.3012 to read as follows:

Sec. 56.3012. PILOT PROJECT TO PROVIDE INCENTIVES FOR ATTENDANCE AT UNDERUTILIZED PUBLIC INSTITUTIONS. (a) In addition to incentives described by Section 54.0065, the coordinating board shall establish a tuition grant incentive pilot project as provided by this section to encourage students to attend eligible public institutions of higher education that offer extensive baccalaureate degree program options and that have sufficient facilities, administrative infrastructure, and faculty to serve additional students in order to reduce the need fo this state to construct additional facilities or hire additional faculty at other institutions of higher education.

(b) From money available under Section 56.310 for purposes of this subchapter and money available under Section 54.464 for purposes of Subchapter Q, the coordinating board shall set aside sufficient money to provide tuition grant incentives,

Thursday, May 26, 2005 SENATE JOURNAL 3887

(1) for not more than 400 additional students in excess of the total of fall 2004 awards at Angelo State University; and

(2) for not more than 200 additional students in excess of the total of fall 2004 awards at Sul Ross State University

(c) To the extent money set aside under Subsection (b) is available for the purpose, a person awarded a grant as provided by Subsection (b) who continues to be eligible for a grant under Section 56.305 may receive a grant from the money set aside. If money set aside under Subsection (b) is not available to pay for a grant for a person awarded a grant as provided by Subsection (b) who continues to be eligible for a grant under Section 56.305, the person may receive a grant from the money available under Section 56.310 on the same basis as other Texas grant applicants.

(d) The coordinating board shall reallocate for grants under this subchapter or for loans under Subchapter Q, as applicable , any money set aside for purposes of the TEXAS grant pilot project that is not used in the academic year for which the money is set aside. Money reallocated under this subsection may be used at any eligible institution under this subchapter or Subchapter Q.

(e) Except as otherwise specifically provided by this section, this subchapter applies to a TEXAS grant awarded under this section.

(f) The coordinating board shall develop criteria for evaluating the pilot project and, based on that evaluation, not later than January 1, 2007, shall report to the 80th Legislature the coordinating board's recommendations concerning whether to continue, expand to other underutilized eligible public institutions of higher education, or discontinue the pilot project.

SECTION __. The Texas Higher Education Coordinating Board shall adopt rules to administer Section 56.3012, Education Code, as added by this Act, as soon as practicable after the date this Act takes effect. For that purpose, the board may adopt the initial rules in the manner provided by law for adoption of emergency rules.

The amendments were read.

Senator Zaffirini moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi34 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Zaffirini, Chair; Shapiro, West, Seliger, and VanideiPutte.

3888 79th Legislature — Regular Session 79th Day

CONFERENCE COMMITTEE ON HOUSE BILL 283

Senator Zaffirini called from the President's table, for consideration at this time, the request of the House for a conference committee to adjust the differences between the two Houses on HBi283 and moved that the request be granted.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on HBi283 before appointment.

There were no motions offered.

Accordingly, the Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Zaffirini, Chair; Van de Putte, Shapiro, Averitt, and Hinojosa.

SENATE BILL 743 WITH HOUSE AMENDMENTS

Senator Fraser called SBi743 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SB 743 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to independent organizations in ERCOT and their regulation and certification by the Public Utility Commission of Texas; providing an administrative penalty.

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

SECTIONi1.iiSection 39.151, Utilities Code, is amended by amending Subsections (b), (c), (d), (e), (g), and (j) and adding Subsections (g-1), (g-2), and (n) to read as follows:

(b)ii"Independent organization" means an independent system operator or other person that is sufficiently independent of any producer or seller of electricity that its decisions will not be unduly influenced by any producer or seller. [An entity will be deemed to be independent if it is governed by a board that has three representatives from each segment of the electric market, with the consumer segment being represented by one residential customer, one commercial customer, and one industrial retail customer.]

(c)iiThe commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission has complete authority to oversee, require the commission's approval of, and order modifications of any part of the finances, budget, or administration of an independent organization certified under this section.

(d)iiAn independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules, relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants. The procedures shall be subject to commission oversight and review. An

Thursday, May 26, 2005 SENATE JOURNAL 3889

(e)iiThe commission by rule shall require an independent organization certified under this section to provide the commission with sufficiently detailed information to allow the commission to review and approve or disapprove the independent organization's budget for cost efficiencies and for the reasonableness and necessity of budget items. The rules must include a timetable for an independent organization to file its budget for review under the rules. The commission's budget review must include a review of salaries, employee benefits, and the independent organization's use of debt financing. After determining the overall reasonableness and necessity of an independent organization's budget, the [The] commission, in the same proceeding, may authorize the [an] independent organization [that is certified under this section] to charge [a reasonable and competitively neutral rate] to wholesale buyers and sellers a reasonable and competitively neutral rate determined by the commission to allow [cover] the independent organization a reasonable opportunity to take in a reasonable and necessary amount of revenue, as determined by the commission in the budget review process. The independent organization may change the rate established by the commission in the budget review process only with the commission's approval. On the commission's own initiative or on receiving a complaint, the commission may inquire into the reasonableness of an independent organization's budget or rate [costs].

(g)iiTo maintain certification as an independent organization under this section, an organization's [If it amends its governance rules to provide that its governing body is composed as prescribed by this subsection, the existing independent system operator in ERCOT will meet the criteria provided by Subsection (a) with respect to ensuring access to the transmission systems for all buyers and sellers of electricity in the ERCOT region and ensuring the reliability of the regional electrical network. To comply with this subsection, the] governing body must be composed of persons specified by this section and selected in accordance with formal bylaws or protocols of the organization. The process must allow for commission input in identifying candidates. The governing body must be composed of:

(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [director] of the independent system operator as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

(B)iione representing investor-owned utilities;

(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

3890 79th Legislature — Regular Session 79th Day

(F)iione representing electric cooperatives [four representatives of the power generation sector as voting members];

(5)iione member representing industrial consumer interests and elected by the industrial consumer market segment to serve a one-year term [four representatives of the transmission and distribution sector as voting members];

(6)iione member representing large commercial consumer interests selected by the outgoing large commercial consumer representative to serve a one-year term [four representatives of the power sales sector as voting members]; and

(7)iifive members unaffiliated with any market segment and selected by the other members of the governing body to serve three-year terms [the following people as voting members, appointed by the commission:

[(A)iione representative of residential customers;

[(B)iione representative of commercial customers; and

[(C)iione representative of industrial customers].

[The four representatives specified in each of Subdivisions (4), (5), and (6) shall be selected in a manner that ensures equitable representation for the various sectors of industry participants.]

(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

(g-2)iiThe governing body and its members are subject to Chapter 551, Government Code, in the same manner as that chapter applies to a governmental body and the members of a governmental body, except that the requirements pertaining to executive sessions of the governing body, to advance notice of meetings and planned agendas of the meetings, and the opportunity to comment on matters under discussion at the meetings contained in the independent organization's bylaws apply in lieu of conflicting requirements of that chapter.

(j)iiA retail electric provider, municipally owned utility, electric cooperative, power marketer, transmission and distribution utility, or power generation company, or any other person who participates in a market operated by the independent system operator in ERCOT, shall observe all scheduling, operating, planning, reliability, and settlement policies, rules, guidelines, and procedures established by the independent system operator in ERCOT. A violation by any person of [Failure to comply with] this subsection may result in the revocation, suspension, or amendment of that person's [a] certificate or registration as provided by Section 39.356 or in the imposition against that person of an administrative penalty [as provided by Section 39.357]. The commission may require the refunding or disgorgement of unjust profits that accrue as a result of a violation of this subsection.

(n)iiSubsections (a), (b), (f), (k), (l), and (m) apply to an independent organization established to serve areas located outside of the ERCOT power region. Subsections (c), (d), (e), (g), (h), (i), and (j) do not apply to an independent organization established to serve areas located outside of the ERCOT power region. The commission, however, may certify an independent organization or organizations outside of ERCOT to perform the functions described by Subsection (a).

SECTIONi2.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511, 39.1512, and 39.1515 to read as follows:

Thursday, May 26, 2005 SENATE JOURNAL 3891

Sec.i39.1511.iiPUBLIC MEETINGS OF GOVERNING BODY OF INDEPENDENT ORGANIZATION. (a) The bylaws of the independent organization and the rules of the commission shall provide for the governing body or subcommittee to enter into executive session closed to the public to address sensitive matters such as confidential personnel information, contracts, lawsuits, competitively sensitive information, customer proprietary information, or other information that by law is privileged or confidential or that is related to security of the regional electrical network.

(b)iiThe bylaws of the independent organization and rules of the commission must ensure that a person interested in the activities of the independent organization has an opportunity to obtain at least seven days' advance notice of meetings of the governing body and the planned agendas of the meetings and an opportunity to comment on matters under discussion at the meetings.

(c)iiIn an emergency or if there is an urgent public necessity, the notice of a meeting or the supplemental notice of a subject added as an item to the agenda for a meeting for which notice has been posted in accordance with Subsection (b) is sufficient if the notice is posted for at least two hours before the meeting is convened and if the notice or supplemental notice clearly identifies the emergency or urgent public necessity. An emergency or an urgent public necessity is considered to exist only if immediate action is required of the governing body because of an imminent threat to public health and safety or a reasonably unforeseeable situation.

(d)iiThis section does not apply to an independent organization established to serve areas located outside of ERCOT.

Sec.i39.1512.iiDISCLOSURE OF INTEREST IN MATTER BEFORE INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN DECISION. (a) If a matter comes before the governing body of an independent organization certified under Section 39.151 and a member or a person that member represents has a direct interest in that matter, the member shall publicly disclose the fact of that interest to the governing body at a public meeting of the body. The member shall recuse himself or herself from the governing body's deliberations and actions on the matter and may not vote on the matter or otherwise participate in a governing body decision on the matter.

(b)iiA disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.

(c)iiThe fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.

(d)iiThis section does not apply to an independent organization established to serve areas located outside ERCOT.

Sec.i39.1515.iiWHOLESALE ELECTRIC MARKET MONITOR. (a) An independent organization certified under Section 39.151 shall contract with a private person selected by the commission to act as the wholesale electric market monitor and to detect and prevent market power abuses, potential market power abuses, and other violations of this subchapter.

(b)iiThe independent organization shall provide to the personnel of the market monitor:

(1)iifull access to the organization's main operations center; and

3892 79th Legislature — Regular Session 79th Day

(2)iiother support and cooperation necessary for the market monitor to perform the market monitor's functions.

(c)iiThe independent organization shall use money from the rate authorized by Section 39.151(e) to pay for the market monitor's activities.

(d)iiThe commission is responsible for ensuring that the market monitor has the resources, expertise, and access to information necessary to monitor effectively the wholesale electric market administered by the independent organization and shall adopt rules and perform oversight of the market monitor as necessary. The market monitor shall operate under the supervision and oversight of the commission. The commission shall retain all enforcement authority conferred under this title and this section may not be construed to confer enforcement authority on the market monitor or to authorize the commission to delegate the commission's enforcement authority to the market monitor. The commission by rule shall define:

(1)iithe market monitor's monitoring responsibilities;

(2)iithe standards for funding the market monitor, including staffing requirements;

(3)iiqualifications for personnel of the market monitor;

(4)iiethical standards for the market monitor and the personnel of the market monitor;

(5)iiprocedures and standards for communications between the market monitor and both the commission and the independent organization;

(6)iithe nature and timing of reports the commission determines the market monitor shall provide to the commission, market participants, and the independent organization; and

(7)iiprocedures for the market monitor to observe in complying with Subsection (i).

(e)iiIn adopting rules governing the standards for funding the market monitor, the commission shall consult with a subcommittee of the independent organization's governing body to receive information on how money is or should be spent for monitoring functions. Rules governing ethical standards must include provisions designed to ensure that the personnel of the market monitor are professionally and financially independent from market participants and consumer market segments described by Section 39.151(g). The commission shall develop and implement policies that clearly separate the policy-making responsibilities of the commission and the operational responsibilities of the market monitor.

(f)iiThe market monitor immediately shall confidentially report directly to the commission and to a market participant that is the subject of the report any potential market power abuses and any discovered or potential violations of commission rules or rules of the independent organization that involve markets administered by the independent organization.

(g)iiThe personnel of the market monitor may communicate with any person, including the commission, in accordance with commission rules and with independent organization procedures.

(h)iiThe market monitor annually shall submit to the commission and the independent organization a report that identifies market design flaws and recommends methods to correct the flaws. The commission and the independent organization shall

Thursday, May 26, 2005 SENATE JOURNAL 3893

(i)iiThe market monitor shall comply with this title, commission rules and orders, and bylaws of the independent organization. The market monitor shall perform the monitor's functions in a manner that ensures the confidentiality of information that is customer proprietary information, competitively sensitive, or otherwise confidential or privileged under this title, commission rules or orders, procedures or bylaws of the independent organization, or other law.

(j)iiThis section does not apply to an independent organization established to serve areas located outside of ERCOT.

SECTIONi3.iiAn independent organization certified by the Public Utility Commission of Texas before September 1, 2005, shall modify the organization's governing body to comply with Section 39.151(g), Utilities Code, as amended by this Act, not later than January 1, 2006. On or after January 1, 2006, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Section 39.151(g), Utilities Code, as amended by this Act.

SECTIONi4.iiThis Act takes effect September 1, 2005.

Floor Amendment No. 1

Amend CSSB 743 (House committee printing) by adding the following sections, numbered appropriately, and renumbering the sections of the bill accordingly:

SECTION __. Section 36.053, Utilities Code, is amended by adding Subsection (d) to read as follows:

(d)iiIf the commission issues a certificate of convenience and necessity or, acting under Section 39.203(e), orders an electric utility or a transmission and distribution utility to construct or enlarge transmission or transmission-related facilities to facilitate meeting the goal for generating capacity from renewable energy technologies under Section 39.904(a), the commission shall find that the facilities are used and useful to the utility in providing service for purposes of this section and are prudent and includable in the rate base, regardless of the extent of the utility's actual use of the facilities.

SECTION __. Subsection (e), Section 39.203, Utilities Code, is amended to read as follows:

(e)iiThe commission may require an electric utility or a transmission and distribution utility to construct or enlarge facilities to ensure safe and reliable service for the state's electric markets and to reduce transmission constraints within ERCOT in a cost-effective manner where the constraints are such that they are not being resolved through Chapter 37 or the ERCOT transmission planning process. The commission shall require an electric utility or a transmission and distribution utility to construct or enlarge transmission or transmission-related facilities for the purpose of meeting the goal for generating capacity from renewable energy technologies under Section 39.904(a). In any proceeding brought under Chapter 37, an electric utility or transmission and distribution utility ordered to construct or enlarge facilities under this subchapter need not prove that the construction ordered is necessary for the service, accommodation, convenience, or safety of the public and need not address the factors listed in Sections 37.056(c)(1)-(3) and (4)(E). Notwithstanding any other law,

3894 79th Legislature — Regular Session 79th Day

SECTION __. Section 39.904, Utilities Code, is amended by amending Subsection (a) and adding Subsections (a-1) and (g)- (n) to read as follows:

(a)iiIt is the intent of the legislature that by January 1, 2015 [2009], an additional 5,000 [2,000] megawatts of generating capacity from renewable energy technologies will have been installed in this state. The cumulative installed renewable capacity in this state shall total 5,880 [1,280] megawatts by January 1, 2015. The cumulative installed renewable capacity in this state shall total 2,280 megawatts by January 1, 2007, 3,272 megawatts by January 1, 2009, 4,264 megawatts by January 1, 2011, 5,256 megawatts by January 1, 2013, and 5,880 megawatts by January 1, 2015 [2003, 1,730 megawatts by January 1, 2005, 2,280 megawatts by January 1, 2007, and 2,880 megawatts by January 1, 2009].

(a-1) The commission shall establish a target of 10,000 megawatts of installed renewable capacity by January 1, 2025. The commission shall also establish a target of 500 megawatts of generating capacity from non-wind renewable technologies or emerging ultra-clean distributed generation technologies including generation from industrial waste heat and fuel cells, installed in this state after September 1, 2005. Non-renewable ultra-clean distributed generation projects as defined in this section, shall not exceed 200 megawatts of the 500 megawatt target and individual projects shall not exceed 10 megawatts capacity.

(g)iiThe commission, after consultation with each appropriate independent organization, electric reliability council, or regional transmission organization:

(1)iishall designate competitive renewable energy zones throughout this state in areas in which renewable energy resources and suitable land areas are sufficient to develop generating capacity from renewable energy technologies;

(2)iishall develop a plan to construct transmission capacity necessary to deliver to electric customers, in a manner that is most beneficial and cost-effective to the customers, the electric output from renewable energy technologies in the competitive renewable energy zones; and

(3)iishall consider the level of financial commitment by generators for each competitive renewable energy zone in determining whether to designate an area as a competitive renewable energy zone and whether to grant a certificate of convenience and necessity.

(h)iiIn considering an application for a certificate of convenience and necessity for a transmission project intended to serve a competitive renewable energy zone, the commission is not required to consider the factors provided by Sections 37.056(c)(1) and (2).

(i)iiTransmission service to a competitive renewable energy zone must be provided in a manner consistent with Subchapter A, Chapter 35.

Thursday, May 26, 2005 SENATE JOURNAL 3895

(j)iiThe commission, after consultation with each appropriate independent organization, electric reliability council, or regional transmission organization, shall file a report with the legislature not later than December 31 of each even-numbered year. The report must include:

(1)iian evaluation of the commission's implementation of competitive renewable energy zones;

(2)iithe estimated cost of transmission service improvements needed for each competitive renewable energy zone; and

(3)iian evaluation of the effects that additional renewable generation has on system reliability and on the cost of alternatives to mitigate the effects.

(k)iiThe commission and the independent organization certified for ERCOT shall study the need for increased transmission and generation capacity throughout this state and report to the legislature the results of the study and any recommendations for legislation. The report must be filed with the legislature not later than December 31 of each even-numbered year and may be filed as a part of the report required by Subsection (j).

(l)iiThe commission may adopt rules requiring renewable power facilities to have reactive power control capabilities or any other feasible technology designed to reduce the facilities' effects on system reliability.

(m)iiNotwithstanding any other provision of law, the commission shall ensure that all renewable capacity installed in this state and all renewable energy credits awarded, produced, procured, or sold in this state are counted toward the goal in Subsection (a).

(n)iiNotwithstanding any other provision of law, the commission may cap the price of renewable energy credits and may suspend the goal contained in Subsection (a) if that suspension is necessary to protect the reliability and operation of the grid.

SECTION __. (a) The Public Utility Commission of Texas, in cooperation with the appropriate independent organizations certified under Section 39.151, Utilities Code, electric reliability councils, and regional transmission organizations, shall study cost-effective options for meeting this state's long-term transmission system needs to accommodate renewable energy requirements and targets under section 39.904, Utilities Code, as amended by this Act, and any additional electric generation capacity or other infrastructure necessary to meet the state's projected growth in demand for electric energy for the period ending January 1, 2005. This study is not intended to delay commission action in meeting near-term renewable energy needs of the state.

(b)iiThe commission shall present to the legislature not later than December 31, 2006, a report of the results of the study and detailed recommendations regarding the most cost-effective measures to meet reliably this state's electricity requirements. The report may be included in the report required by Section 39.904(j) or (k), Utilities Code, as added by this Act.

Floor Amendment No. 2

Amend CSSB 743 by adding the following appropriately numbered SECTIONS to read as follows:

SECTION __. Section 36.053, Utilities Code, is amended by adding Subsection (d) to read as follows:

3896 79th Legislature — Regular Session 79th Day

(d)iiIf the commission issues a certificate of convenience and necessity or, acting under Section 39.203(e), orders an electric utility or a transmission and distribution utility to construct or enlarge transmission or transmission-related facilities to facilitate meeting the goal for generating capacity from renewable energy technologies under Section 39.904(a), the commission shall find that the facilities are used and useful to the utility in providing service for purposes of this section and are prudent and includable in the rate base, regardless of the extent of the utility's actual use of the facilities.

SECTIONi__.iiSection 39.203(e), Utilities Code, is amended to read as follows:

(e)iiThe commission may require an electric utility or a transmission and distribution utility to construct or enlarge facilities to ensure safe and reliable service for the state's electric markets and to reduce transmission constraints within ERCOT in a cost-effective manner where the constraints are such that they are not being resolved through Chapter 37 or the ERCOT transmission planning process. The commission shall require an electric utility or a transmission and distribution utility to construct or enlarge transmission or transmission-related facilities for the purpose of meeting the goal for generating capacity from renewable energy technologies under Section 39.904(a). In any proceeding brought under Chapter 37, an electric utility or transmission and distribution utility ordered to construct or enlarge facilities under this subchapter need not prove that the construction ordered is necessary for the service, accommodation, convenience, or safety of the public and need not address the factors listed in Sections 37.056(c)(1)-(3) and (4)(E). Notwithstanding any other law, including Section 37.057, in any proceeding brought under Chapter 37 by an electric utility or a transmission and distribution utility related to an application for a certificate of public convenience and necessity to construct or enlarge transmission or transmission-related facilities under this subsection, the commission shall issue a final order before the 181st day after the date the application is filed with the commission. If the commission does not issue a final order before that date, the application is approved.

SECTION ___. Section 39.904, Utilities Code, is amended by amending Subsection (a) and adding Subsections (g)-(m) to read as follows:

(a) It is the intent of the legislature that by January 1, 2017 [2009], an additional 7,000 [2,000] megawatts of generating capacity from renewable energy technologies will have been installed in this state. The cumulative installed renewable capacity in this state shall total 7,880 [1,280] megawatts by January 1, 2017, and the commission shall establish a target of 10,000 megawatts of installed renewable capacity by January 1, 2025. The cumulative installed renewable capacity in this state shall total 3,113 megawatts by January 1, 2007, 3,946 megawatts by January 1, 2009, 4,779 megawatts by January 1, 2011, 5,612 megawatts by January 1, 2013, 6,445 megawatts by January 1, 2015, and 7,880 megawatts by January 1, 2017. Of the renewable energy technology generating capacity installed to meet the goal of this subsection after September 1, 2005, the commission shall establish a target of having at least 500 megawatts of that capacity from a renewable energy technology other than a source using wind energy [2003, 1,730 megawatts by January 1, 2005, 2,280 megawatts by January 1, 2007, and 2,880 megawatts by January 1, 2009].

Thursday, May 26, 2005 SENATE JOURNAL 3897

(g)iiThe commission, after consultation with each appropriate independent organization, electric reliability council, or regional transmission organization:

(1)iishall designate competitive renewable energy zones throughout this state in areas in which renewable energy resources and suitable land areas are sufficient to develop generating capacity from renewable energy technologies;

(2)iishall develop a plan to construct transmission capacity necessary to deliver to electric customers, in a manner that is most beneficial and cost-effective to the customers, the electric output from renewable energy technologies in the competitive renewable energy zones;

(3)iishall consider the level of financial commitment by generators for each competitive renewable energy zone in determining whether to designate an area as a competitive renewable energy zone and whether to grant a certificate of convenience and necessity.

(h)iiIn considering an application for a certificate of public convenience and necessity for a transmission project intended to serve a competitive renewable energy zone, the commission is not required to consider the factors provided by Sections 37.056(c)(1) and (2).

(i)iiTransmission service to a competitive renewable energy zone must be provided in a manner consistent with Subchapter A, Chapter 35.

(j)iiThe commission, after consultation with the comptroller, the Texas Commission on Environmental Quality, the State Energy Conservation Office, the Office of Rural Community Affairs, and each appropriate independent organization, electric reliability council, or regional transmission organization, shall file a report with the legislature not later than December 31 of each even-numbered year. The report must include:

(1)iian evaluation of the commission's implementation of competitive renewable energy zones;

(2)iithe estimated cost of transmission service improvements needed for each competitive renewable energy zone; and

(3)iian evaluation of the effects that additional renewable generation has on system reliability and on the cost of alternatives to mitigate the effects;

(4)iian assessment of the net impact of renewable energy generation on statewide fuel use, fuel cost savings, and wholesale energy costs;

(5)iian evaluation of the impact that historical and additional renewable generation has on air quality, water resources, environmental impact mitigation costs, and how renewable energy use by electric customers may qualify for any credits stemming from emission reductions; and

(6)iian assessment of the economic development and tax revenue impacts of historical and additional renewable energy generation.

(k)iiThe commission and the independent organization certified for ERCOT shall study the need for increased transmission and generation capacity throughout this state and report to the legislature the results of the study and any recommendations for legislation. The report must be filed with the legislature not later than December 31 of each even-numbered year and may be filed as a part of the report required by Subsection (j).

3898 79th Legislature — Regular Session 79th Day

(l)iiThe commission may adopt rules requiring renewable power facilities to have reactive power control capabilities or any other feasible technology designed to reduce the facilities' effects on system reliability.

(m)iiNotwithstanding any other provision of law, the commission may cap the price of renewable energy credits and may suspend the goal contained in Subsection (a) if that suspension is necessary to protect the reliability and operation of the grid.

Floor Amendment No. 3

Amend CSSB 743 (House committee printing) by adding the following appropriately numbered SECTION to read as follows and renumbering subsequent SECTIONS accordingly:

SECTION . (a) The Public Utility Commission of Texas, as part of the commission's continuing analysis of reserve margins and capacity needs for the ERCOT system, shall consider creating and may establish a new alternative market mechanism to allow a potential interruptible industrial load that is greater than one megawatt and that is not participating in the ERCOT market as a load acting as a resource to provide the benefits of interruptible load to the system and to be compensated for that service.

(b) The legislature finds that businesses in this state that are able to participate in an alternative interruptible service compete in interstate and global markets and that the opportunity for the businesses to be compensated for their interruptible loads is essential to the businesses' ability to remain competitive and to provide significant benefits to the economy of this state. The Public Utility Commission of Texas shall consider these economic benefits in analyzing the potential of interruptible service.

(c) Not later than January 1, 2006, the Public Utility Commission of Texas shall report any actions taken regarding interruptible service and the results of its analysis of interruptible service to the governor, the lieutenant governor, the speaker of the house of representative, and the presiding officer of each legislative committee with jurisdiction over electric services.

Floor Amendment No. 4

Amend CSSB 743 by inserting the following appropriately numbered new SECTION in the bill and renumbering the subsequent SECTIONS accordingly:

"SECTION . Before implementing a new wholesale transmission and distribution market design, the Public Utility Commission of Texas shall provide to the Senate Committee on business and Commerce and the House Committee on Regulated Industries a report that contains:

(1) an executive summary and detailed description of the changes in the wholesale transmission and distribution market that the commission has ordered, including the effect the new market design is anticipated to have on local congestions costs:

(2) a list of entities, associations and groups that have submitted comments to the commission on the new market design, classified by whether the comments indicated support for or opposition to the new market design:

(3) a comparison of the new market design to any similar market design adopted in any other state:

Thursday, May 26, 2005 SENATE JOURNAL 3899

(4) a time line for the implementation of the new market design, including estimated costs of implementation;

(5) the estimated increases in wholesale and retail electricity prices that will be caused in each county in this state by the new market design, projected over the first five years after the date the new design will be implemented; and

(6) the names, business addresses, and the telephone number of the Texas Nodal Team and any other quasi-official working group that recommends to the commission the adoption of the new market design."

Amendment No. 5

Amend Floor Amendment No. 4 by Flores to CSSBi743 by adding the following section, appropriately numbered:

SECTION . (a) It is the policy of this state to ensure that all electric customers in ERCOT, including low-income customers and customers in rural and other high-cost areas, have access to electric energy service at reasonable rates.

(b) The Public Utility Commission of Texas shall conduct a study to determine methods or mechanisms to ensure that residential customers who are currently being served by an affiliated retail electric provider at the "price-to-beat" rate will continue to have default electric service available at reasonable rates. On September 1, 2005, the commission shall begin the review required by this subsection. The review must include the methods other competitive regions, including Ohio, Maine, Maryland, Massachusetts, and New Jersey, use to provide default services to residential customer classes at reasonable rates.

(c) The study required by Subsection (b) of this section must

(1) evaluate:

(A) extending or modifying the "price-to-beat;"

(B) local governmental aggregation, including municipal "opt-out" mechanisms; and

(C) competetive procurement load auctions; and

(2) compare, regarding various mechanisms or methods considered:

(A) resulting prices for service at wholesale;

(B) resulting prices for service at retail;

(C) key features of each mechanism or method and key differences between the mechanisms or methods;

(D) the level of wholesale supplier competition under each mechanism or method, measured by factors such as:

(i) numbers of participants;

(ii) volumes bid; or

(iii) other relevant factors; and

(E) any other factors or variables the commission considers necessary to arrive at a conclusion and to make recommendations under this section.

(d) The Public Utility Commission of Texas shall conclude the study under this section not later than February 1, 2006, and shall determine at that time a mechanism by which residential customers served by an affiliated retail electric provider will be able to receive the lowest cost default electric service on and after January 1, 2007.

3900 79th Legislature — Regular Session 79th Day

(e) The Public Utility Commission of Texas shall present a report of the study and the recommendations made as a result of the study to the joint electric utility restructuring legislative oversight committee on or before March 1, 2006.

(f) The joint electric utility restructuring legislative oversight committee shall hold hearings on the study and recommendations in each region of the state served by an affiliated retail electric provider and following the hearings shall make recommendations to the 80th Legislature on the best means to provide residential customers default electric service at the lowest cost.

Floor Amendment No. 6

Amend CSSB 743 by adding the following appropriately numbered section:

SECTIONi____.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Section 39.1519 to read as follows:

Sec.i39.1519.iiERCOT ACCOUNTABILITY TASK FORCE. (a) The ERCOT accountability task force consists of:

(1)iia former commissioner of the commission who resides in this state, or a current or former chairman of the Federal Energy Regulatory Commission who resides in this state, appointed by the governor, who serves as the presiding officer of the task force;

(2)iithe comptroller;

(3)iia representative of the attorney general, if the attorney general chooses to designate a representative; and

(4)iirepresentatives of:

(A)iithe comptroller's office;

(B)iithe Department of Public Safety of the State of Texas;

(C)iithe commission;

(D)iithe office; and

(E)iithe office of the state auditor.

(b)iiThe task force shall oversee the implementation of best management practices for the independent organization certified under Section 39.151 for ERCOT. The task force may contract with independent fraud investigators or other experts as the task force determines is appropriate. ERCOT shall pay the costs of task force contractors under this subsection.

(c)iiThe task force shall present a report to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each legislative standing committee with jurisdiction over electric services not later than January 1, 2007.

(d)iiThis section expires September 1, 2007.

Floor Amendment No. 7

Amend CSSB 743 as follows:

(1)iiIn the introductory language to Section 1 of the bill (House committee printing, page 1, line 8), strike "and (n)" and substitute "(n), (o), and (p)".

(2)iiIn Section 1 of the bill, following proposed Subsection (n), Section 39.151, Utilities Code (House committee printing, page 6, between lines 11 and 12), insert:

(o)iiAn independent organization certified under this section is subject to Chapter 552, Government Code, as if it were a governmental body under that chapter.

Thursday, May 26, 2005 SENATE JOURNAL 3901

(p)iiInformation is excepted from the requirements of Section 552.021, Government Code, if the information is collected, assembled, or maintained by or for the independent organization:

(1)iias part of the duty of the organization to support wholesale and retail electric markets and the information is competitively sensitive information of a third party that provides electric service within the transmission system managed by the independent organization that if disclosed, would give advantage to competitors or prospective competitors of the third party;

(2)iifor the purpose of maintaining the reliability of an electric transmission system that if disclosed, could provide information about security measures of the independent organization or information about the transmission system or a related control or communication system that could aid acts of terrorism or other criminal activity against the independent organization or the electric transmission system; or

(3)iiin relation to the development or construction of a system used by the independent organization to maintain the security and reliability of the transmission grid or in support of market systems or processes of the independent organization.

Floor Amendment No. 3 on Third Reading

Amend CSSB 743 on third reading by striking the section of the bill amending Section 39.904, Utilities Code, as added on second reading by Amendment No. 1 by Hunter amendment and by Amendment No. 2 Swinford amendment and substituting:

SECTION . Section 39.904, Utilities Code, is amended by amending Subsections (a) and (d) and adding Subsections (a-1) and (g)-(o) to read as follows:

(a) It is the intent of the legislature that by January 1, 2017 [2009], an additional 7,000 [2,000] megawatts of generating capacity from renewable energy technologies will have been installed in this state. The cumulative installed renewable capacity in this state shall total 7,880 [1,280] megawatts by January 1, 2017. The cumulative installed renewable capacity in this state shall total 3,113 megawatts by January 1, 2007, 3,946 megawatts by January 1, 2009, 4,779 megawatts by January 1, 2011, 5,612 megawatts by January 1, 2013, 6,445 megawatts by January 1, 2015, and 7,880 megawatts by January 1, 2017 [2003, 1,730 megawatts by January 1, 2005, 2,280 megawatts by January 1, 2007, and 2,880 megawatts by January 1, 2009].

(a-1) The commission shall establish a target of 10,000 megawatts of installed renewable capacity by January 1, 2025. The commission shall also establish a target of 500 megawatts of generating capacity from non-wind renewable technologies or emerging ultra-clean distributed generation technologies including generation from industrial waste heat and fuel cells, installed in this state after September 1, 2005. Non-renewable utlra-clean distributed generation projects as defined in this section, shall not exceed 200 megawatts of the 500 megawatt target and individual projects shall not exceed 10 megawatts capacity.

(d) In this section, "renewable energy technology" means any technology that exclusively relies on an energy source that is naturally regenerated over a short time and derived directly from the sun, indirectly from the sun, or from moving water or other natural movements and mechanisms of the environment. Renewable energy technologies include those that rely on energy derived directly from the sun, on wind, geothermal, hydroelectric, wave, or tidal energy, [or] on biomass or biomass-based waste products, including landfill gas, or on gasification of municipal solid waste. In

3902 79th Legislature — Regular Session 79th Day

(g) The commission, after consultation with each appropriate independent organization, electric reliability council, or regional transmission organization:

(1) shall designate competitive renewable energy zones throughout this state in areas in which renewable energy resources and suitable land areas are sufficient to develop generating capacity from renewable energy technologies;

(2) shall develop a plan to construct transmission capacity necessary to deliver to electric customers, in a manner that is most beneficial and cost-effective to the customers, the electric output from renewable energy technologies in the competitive renewable energy zones; and

(3) shall consider the level of financial commitment by generators for each competitive renewable energy zone in determining whether to designate an area as a competitive renewable energy zone and whether to grant a certificate of convenience and necessity.

(h) In considering an application for a certificate of convenience and necessity for a transmission project intended to serve a competitive renewable energy zone, the commission is not required to consider the factors provided by Sections 37.056(c)(1) and (2).

(i) Transmission service to a competitive renewable energy zone must be provided in a manner consistent with Subchapter A, Chapter 35.

(j) The commission, after consultation with the comptroller, the Texas Commission on Environmental Quality, the State Energy Conservation Office, the Office of Rural Community Affairs, and each appropriate independent organization, electric reliability council, or regional transmission organization, shall file a report with the legislature not later than December 31 of each even-numbered year. The report must include:

(1) an evaluation of the commission's implementation of competitive renewable energy zones;

(2) the estimated cost of transmission service improvements needed for each competitive renewable energy zone;

(3) an evaluation of the effects that additional renewable generation has on system reliability and on the cost of alternatives to mitigate the effects;

(4) an assessment of the net impact of renewable energy generation on statewide fuel use, fuel cost savings, and wholesale energy costs; and

(5) an assessment of the economic development and tax revenue impacts of historical and additional renewable energy generation.

(k) The commission and the independent organization certified for ERCOT shall study the need for increased transmission and generation capacity throughout this state and report to the legislature the results of the study and any recommendations for

Thursday, May 26, 2005 SENATE JOURNAL 3903

(1) The commission may adopt rules requiring renewable power facilities to have reactive power control capabilities or any other feasible technology designed to reduce the facilities' effects on system reliability.

(m) Notwithstanding any other provision of law, the commission shall ensure that all renewable capacity installed in this state and all renewable energy credits awarded, produced, procured, or sold in this state are counted toward the goal in Subsection (a).

(n) Notwithstanding any other provision of law, the commission may cap the price of renewable energy credits and may suspend the goal contained in Subsection (a) if that suspension is necessary to protect the reliability and operation of the grid.

(o) The commission, after consultation with the comptroller, the Texas Commission on Environmental Quality, the State Energy Conservation Office, the Office of Rural Community Affairs, and with each appropriate independent organization, electric reliability council, or regional transmission organization, shall file a report with the legislature not later than December 31, 2006, detailing the costs and benefits of additional renewable energy use in this state. The report must include the projected net effects throughout this state on fuel costs, transmission costs, wholesale energy costs, environmental impacts, tax revenues, and economic development of achieving renewable energy use of up to 10 percent of electric energy consumption in this state on or before January 1, 2020.

Floor Amendment No. 4 on Third Reading

Amend CSSB 743 on third reading by inserting the following appropriately numbered new SECTION in the bill and renumbering the subsequent SECTIONS accordingly:

"SECTION . Before implementing a new wholesale transmission and distribution market design, the Public Utility Commission of Texas shall provide to the Senate Committee on business and Commerce and the House Committee on Regulated Industries a report that contains:

(1) an executive summary and detailed description of the changes in the wholesale transmission and distribution market that the commission has ordered, including the effect the new market design is anticipated to have on local congestions costs:

(2) a list of entities, associations and groups that have submitted comments to the commission on the new market design, classified by whether the comments indicated support for or opposition to the new market design:

(3) a comparison of the new market design to any similar market design adopted in any other state:

(4) a time line for the implementation of the new market design, including estimated costs of implementation;

(5) the estimated increases in wholesale and retail electricity prices that will be caused in each county in this state by the new market design, projected over the first five years after the date the new design will be implemented; and

3904 79th Legislature — Regular Session 79th Day

(6) the names, business addresses, and the telephone number of the Texas Nodal Team and any other quasi-official working group that recommends to the commission the adoption of the new market design."

Floor Amendment No. 5 on Third Reading

Amend CSSB 743 on third reading by adding the following new appropriately numbered SECTION and renumbering the remaining SECTIONS:

SECTION . Subsection (c), Section 39.051, Utilities Code, is amended as follows:

(c) An electric utility may accomplish the separation required by Subsection (b) either through the creation of separate nonaffiliated companies or separate affiliated companies owned by a common holding company or through the sale of assets to a third party. An electric utility may create separate transmission and distribution utilities. Notwithstanding any other provision of this Chapter, an electric utility that does not have stranded costs described by Section 39.254 and that on September 1, 2005 has not finalized unbundling pursuant to a commission order approving an unbundling plan may also meet the requirements of Subsection (b) for generation facilities existing on September 1, 2005 in the Electric Reliability Council of Texas if it meets and maintains compliance with the following requirements:

(1) the electric utility has no more than 400 megawatts of Texas jurisdictional capacity from generating units within the Electric Reliability Council of Texas that have not been mothballed or retired;

(2) the electric utility has a contract or contracts with separate nonaffiliated companies or separate affiliated companies for the sale of all of the output from its generating units that have not been mothballed or retired with a contract term that is no shorter than twenty years or the life of the generating units, whichever is shorter; and

(3) the electric utility has a separate division within the electric utility for its generation business activities.

(c-1) A separate division described by Subsection (c)(3) is subject to subsection (d) and, for the purposed of this Chapter, is considered a separate affiliated power generation company and a competitive affiliate.

The amendments were read.

Senator Fraser moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed without objection.

The Presiding Officer asked if there were any motions to instruct the conference committee on SBi743 before appointment.

There were no motions offered.

The Presiding Officer announced the appointment of the following conferees on the part of the Senate:iiSenators Fraser, Chair; Estes, Averitt, Janek, and West.

Thursday, May 26, 2005 SENATE JOURNAL 3905

SENATE BILL 1863 WITH HOUSE AMENDMENTS

Senator Ogden called SBi1863 from the President's table for consideration of the House amendments to the bill.

The Presiding Officer laid the bill and the House amendments before the Senate.

Amendment

Amend SBi1863 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to certain fiscal matters affecting governmental entities.

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

ARTICLE 1. REGISTRATION FEE FOR CERTAIN LOBBYISTS

SECTIONi1.01.iiSubsection (c), Section 305.005, Government Code, is amended to read as follows:

(c)iiThe registration fee and registration renewal fee are:

(1)ii$100 for a registrant employed by an organization exempt from federal income tax under Section 501(c)(3) or 501(c)(4), Internal Revenue Code of 1986; or

(2)ii$1,000 [$300] for any other registrant.

SECTIONi1.02.iiThis article takes effect December 1, 2005.

ARTICLE 2. FEES FOR CERTAIN INSPECTIONS CONDUCTED

BY THE COMMISSION ON JAIL STANDARDS

SECTIONi2.01.iiSection 511.0091, Government Code, is amended by adding Subsection (c-1) and amending Subsection (d) to read as follows:

(c-1)iiIn addition to the other fees authorized by this section, the commission may set and collect a reasonable fee to cover the cost of performing any reinspection of a municipal or county jail that is conducted by the commission:

(1)iifollowing a determination by the commission that the jail is not in compliance with minimum standards;

(2)iiin response to a request by the operator of the jail; and

(3)iibefore the operator of the jail has taken actions as necessary to ensure that the jail is in compliance with minimum standards.

(d)iiAll money paid to the commission under this chapter is subject to Subchapter F, Chapter 404. Fees collected under Subsection (c-1) shall be deposited to the credit of a special account in the general revenue fund to be appropriated only to pay costs incurred by the commission in performing services under this section.

SECTIONi2.02.iiThis article takes effect September 1, 2005.

ARTICLE 3. CERTAIN AUDITS OF STATE AGENCY EXPENDITURES

SECTIONi3.01.iiSubtitle C, Title 10, Government Code, is amended by adding Chapter 2115 to read as follows:

CHAPTER 2115. RECOVERY OF CERTAIN
STATE AGENCY OVERPAYMENTS

Sec.i2115.001.iiDEFINITIONS. In this chapter:

(1)ii"Overpayment" includes a duplicate payment made to a vendor for a single invoice and a payment made to a vendor:

(A)iiwhen an available discount from the vendor was not applied;

3906 79th Legislature — Regular Session 79th Day

(B)iifor a late payment penalty that was improperly applied by the vendor;

(C)iifor shipping costs that were computed incorrectly or incorrectly included in an invoice;

(D)iifor state sales tax; or

(E)iifor a good or service the vendor did not provide.

(2)ii"State agency" means a department, commission, board, office, or other agency, including a university system or an institution of higher education other than a public junior college, that:

(A)iiis in the executive branch of state government;

(B)iiis created by statute; and

(C)iidoes not have statutory geographical boundaries limited to a part of the state.

Sec.i2115.002.iiCONTRACT CONSULTANTS FOR RECOVERY AUDITS FOR CERTAIN OVERPAYMENTS. (a)iiThe comptroller shall contract with one or more consultants to conduct recovery audits of payments made by state agencies to vendors. The audits must be designed to detect and recover overpayments to the vendors and to recommend improved state agency accounting operations.

(b)iiA contract under this section:

(1)iimay provide for reasonable compensation for services provided under the contract, including compensation determined by the application of a specified percentage of the total amount recovered because of the consultant's audit activities or recommendations as a fee for services;

(2)iimay permit or require the consultant to pursue a judicial action in a court inside or outside this state to recover an overpaid amount; and

(3)iito allow time for the performance of existing state payment auditing procedures, may not allow a recovery audit of a payment during the 180-day period after the date the payment was made.

(c)iiThe comptroller or a state agency whose payments are being audited may provide a person acting under a contract authorized by this section with any confidential information in the custody of the comptroller or state agency that is necessary for the performance of the audit or the recovery of an overpayment, to the extent the comptroller and state agency are not prohibited from sharing the information under an agreement with another state or the federal government. A person acting under a contract authorized by this section, and each employee or agent of the person, is subject to all prohibitions against the disclosure of confidential information obtained from the state in connection with the contract that apply to the comptroller or applicable state agency or an employee of the comptroller or applicable state agency. A person acting under a contract authorized by this section or an employee or agent of the person who discloses confidential information in violation of a prohibition made applicable to the person under this subsection is subject to the same sanctions and penalties that would apply to the comptroller or applicable state agency or an employee of the comptroller or applicable state agency for that disclosure.

Thursday, May 26, 2005 SENATE JOURNAL 3907

Sec.i2115.003.iiSTATE AGENCIES SUBJECT TO MANDATORY RECOVERY AUDITS. (a)iiThe comptroller shall require that recovery audits be performed on the payments to vendors made by each state agency that has total expenditures during a state fiscal biennium in an amount that exceeds $100 million. Each state agency described by this subsection shall provide the recovery audit consultant with all information necessary for the audit.

(b)iiThe comptroller may exempt from the mandatory recovery audit process a state agency that has a low proportion of its expenditures made to vendors, according to criteria the comptroller adopts by rule after consideration of the likely costs and benefits of performing recovery audits for agencies that make relatively few or small payments to vendors.

Sec.i2115.004.iiPAYMENT TO CONTRACTORS. (a)iiA state agency shall pay, from recovered money appropriated for the purpose, the recovery audit consultant responsible for obtaining for the agency a reimbursement from a vendor.

(b)iiA state agency shall expend or return to the federal government any federal money that is recovered through a recovery audit conducted under this chapter. The state agency shall expend or return the federal money in accordance with the rules of the federal program through which the agency received the federal money.

Sec.i2115.005.iiFORWARDING REPORTS. (a)iiThe comptroller shall provide copies, including electronic form copies, of any reports received from a consultant contracting under Section 2115.002 to:

(1)iithe governor;

(2)iithe state auditor's office; and

(3)iithe Legislative Budget Board.

(b)iiThe comptroller shall provide the copies required by Subsection (a) not later than the seventh day after the date the comptroller receives the consultant's report.

(c)iiNot later than January 1 of each odd-numbered year, the comptroller shall issue a report to the legislature summarizing the contents of all reports received under this chapter during the state fiscal biennium ending August 31 of the previous year.

SECTIONi3.02.iiThe comptroller of public accounts shall adopt rules under Chapter 2115, Government Code, as added by this article, in a timely manner so that the comptroller may begin contracting with a consultant under that chapter not later than January 1, 2006.

ARTICLE 4. COLLECTION OF MOTOR FUELS TAXES

SECTIONi4.01.iiSubdivisions (20) and (43), Section 162.001, Tax Code, are amended to read as follows:

(20)ii"Distributor" means a person who acquires motor fuel from a licensed supplier, permissive supplier, or another licensed distributor and who makes sales at wholesale and whose activities may also include sales at retail. The term includes a person engaged in the tax-free sale of dyed diesel fuel to marine vessels.

(43)ii"Motor fuel transporter" means a person who transports gasoline, diesel fuel, or gasoline blended fuel for hire outside the bulk transfer/terminal system by means of a transport vehicle, a railroad tank car, or a marine vessel.

SECTIONi4.02.iiSubsection (b), Section 162.004, Tax Code, is amended to read as follows:

3908 79th Legislature — Regular Session 79th Day

(b)iiThe shipping document issued by the terminal operator or operator of a bulk plant shall contain the following information and any other information required by the comptroller:

(1)iithe terminal control number of the terminal or physical address of the bulk plant from which the motor fuel was received;

(2)iithe name [and license number] of the purchaser;

(3)iithe date the motor fuel was loaded;

(4)iithe net gallons loaded, or the gross gallons loaded if the fuel was purchased from a bulk plant;