H.B. No. 4492

	AN ACT
	relating to financing certain costs associated with electric
	markets; granting authority to issue bonds; authorizing fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 404.0241, Government Code, is amended by
	adding Subsections (b-1), (b-2), (b-3), (b-4), and (b-5) to read as
	follows:
	(b-1)  Notwithstanding any other law, directly or indirectly
	through a separately managed account or other investment vehicle,
	the comptroller shall invest not more than $800 million of the
	economic stabilization fund balance to finance the default balance
	as defined by Section 39.602, Utilities Code, to be repaid by ERCOT
	market participants through default charges established by the
	Public Utility Commission of Texas. The interest rate charged in
	connection with the debt obligations must be calculated by adding
	the rate determined by the Municipal Market Data Municipal Electric
	Index, as published by Refinitiv TM3, based on the credit rating of
	the independent organization, as defined by Section 39.602,
	Utilities Code, plus 2.5 percent. The term of the debt obligations
	may not exceed 30 years.
	(b-2)  A person may not bring a civil action against this
	state, the Texas Treasury Safekeeping Trust Company, or an
	employee, independent contractor, or official of this state,
	including the comptroller, for any claim, including breach of
	fiduciary duty or violation of any constitutional, statutory, or
	regulatory requirement, in connection with any action, inaction,
	decision, divestment, investment, report, or other determination
	made or taken in connection with Subsections (b-1), (b-4), and
	(b-5).
	(b-3)  A person who brings an action described by Subsection
	(b-2) is liable to the defendant for the defendant's costs and
	attorney's fees resulting from the action.
	(b-4)  The comptroller shall manage the investments required
	by Subsection (b-1) as a separate investment portfolio. The
	comptroller shall provide separate accounting and reporting for the
	investments in that portfolio. The comptroller shall credit to that
	portfolio all payments, distributions, interest, and other
	earnings on the investments in that portfolio.
	(b-5)  The comptroller has any power necessary to accomplish
	the purposes of managing and investing the assets of the portfolio
	described by Subsection (b-4). In managing the assets of that
	portfolio, through procedures and subject to restrictions the
	comptroller considers appropriate, the comptroller may acquire,
	sell, transfer, or otherwise assign the investments as appropriate,
	taking into consideration the purposes, terms, distribution
	requirements, and other circumstances of that portfolio then
	prevailing.
	SECTION 2.  Section 39.002, Utilities Code, is amended to
	read as follows:
	Sec. 39.002.  APPLICABILITY. This chapter, other than
	Sections 39.151, 39.1516, 39.155, 39.157(e), 39.159, 39.203,
	39.904, 39.9051, 39.9052, and 39.914(e), and Subchapters M and N,
	does not apply to a municipally owned utility or an electric
	cooperative. Sections 39.157(e), 39.203, and 39.904, however,
	apply only to a municipally owned utility or an electric
	cooperative that is offering customer choice. If there is a
	conflict between the specific provisions of this chapter and any
	other provisions of this title, except for Chapters 40 and 41, the
	provisions of this chapter control.
	SECTION 3.  Section 39.151, Utilities Code, is amended by
	adding Subsection (j-1) to read as follows:
	(j-1)  Notwithstanding Subsection (j) of this section,
	Section 39.653(c), or any other law, the independent system
	operator in the ERCOT power region may not reduce payments to or
	uplift short-paid amounts to a municipally owned utility that
	becomes subject to the jurisdiction of that independent system
	operator on or after May 29, 2021, and before December 30, 2021,
	related to a default on a payment obligation by a market participant
	that occurred before May 29, 2021.
	SECTION 4.  Subchapter D, Chapter 39, Utilities Code, is
	amended by adding Section 39.159 to read as follows:
	Sec. 39.159.  AMOUNTS OWED TO INDEPENDENT ORGANIZATION BY
	MARKET PARTICIPANTS. (a) The commission shall require that all
	market participants fully and promptly pay to the independent
	organization certified under Section 39.151 for the ERCOT power
	region all amounts owed to the independent organization, or provide
	for the full and prompt payment of those amounts owed, which must
	be calculated solely according to the protocols of the independent
	organization in effect during the period of emergency and subject
	to the jurisdiction of the commission, to qualify, or to continue
	to qualify, as a market participant in the ERCOT power region.
	(b)  The independent organization shall report to the
	commission that a market participant is in default for the failure
	to pay, or provide for the full and prompt payment of, all amounts
	owed to the independent organization as calculated in accordance
	with this section. The commission may not allow the defaulting
	market participant to continue to be a market participant in the
	ERCOT power region for any purpose or allow the independent
	organization to accept the defaulting market participant's loads or
	generation for scheduling in the ERCOT power region until all
	amounts owed to the independent organization by the market
	participant as calculated in this section are fully paid.
	(c)  The commission and the independent organization shall
	pursue collection in full of amounts owed to the independent
	organization by any market participant to reduce the costs that
	would otherwise be borne by other market participants or their
	customers.
	SECTION 5.  Chapter 39, Utilities Code, is amended by adding
	Subchapters M and N to read as follows:
	SUBCHAPTER M. WINTER STORM URI DEFAULT BALANCE FINANCING
	Sec. 39.601.  PURPOSE. (a) The purpose of this subchapter is
	to address the Winter Storm Uri default balance, as defined by
	Section 39.602, in a manner that benefits the public interest by:
	(1)  enabling the independent organization to finance
	the payment of the default balance with debt obligations; and
	(2)  authorizing the commission to contract with the
	comptroller under Section 404.0241, Government Code, to finance the
	payment of the default balance with debt obligations.
	(b)  Financing the default balance in the manner provided by
	this subchapter will:
	(1)  allow wholesale market participants that are owed
	money to be paid in a more timely manner;
	(2)  replenish financial revenue auction receipts
	temporarily used by the independent organization to reduce the
	Winter Storm Uri-related amounts short-paid to the wholesale market
	participants; and
	(3)  allow the wholesale market to repay the default
	balance over time.
	(c)  The legislature finds that the financing authorized by
	this subchapter serves the public purpose of preserving the
	integrity of the electricity market in the ERCOT power region.
	(d)  The proceeds of debt obligations issued under this
	subchapter must be used solely for the purpose of financing default
	balances that otherwise would be or have been uplifted to the
	wholesale market.
	(e)  The commission shall ensure that the structuring and
	pricing of debt obligations issued under this subchapter result in
	the lowest financing costs consistent with market conditions and
	the terms of the commission's order. The present value calculation
	must use a discount rate equal to the proposed interest rate on the
	debt obligations.
	Sec. 39.602.  DEFINITIONS. In this subchapter:
	(1)  "Default balance" means an amount of money of not
	more than $800 million that includes only:
	(A)  amounts owed to the independent organization
	by competitive wholesale market participants from the period of
	emergency that otherwise would be or have been uplifted to other
	wholesale market participants;
	(B)  financial revenue auction receipts used by
	the independent organization to temporarily reduce amounts
	short-paid to wholesale market participants related to the period
	of emergency; and
	(C)  reasonable costs incurred by a state agency
	or the independent organization to implement a debt obligation
	order under Sections 39.603 and 39.604, including the cost of
	retiring or refunding existing debt.
	(2)  "Default charges" means charges assessed to
	wholesale market participants to repay amounts financed under this
	subchapter to pay the default balance.
	(3)  "Independent organization" means the independent
	organization certified under Section 39.151 for the ERCOT power
	region.
	(4)  "Period of emergency" means the period beginning
	12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20,
	2021.
	Sec. 39.603.  DEBT OBLIGATION ORDER. (a) On application by
	the independent organization, the commission by order may authorize
	the independent organization to establish a debt financing
	mechanism to finance the default balance if the commission finds
	that the debt obligations are needed to preserve the integrity of
	the wholesale market and the public interest, after considering:
	(1)  the need to timely replenish financial revenue
	auction receipts used by the independent organization to reduce
	amounts short-paid to wholesale market participants;
	(2)  the interests of wholesale market participants
	that are owed balances; and
	(3)  the potential effects of uplifting those balances
	to the wholesale market without a financing vehicle.
	(b)  The order must state:
	(1)  the default balance to be financed; and
	(2)  the period over which the default charges must be
	assessed to repay the debt obligations, which may not exceed 30
	years.
	(c)  The order must include an adjustment mechanism
	requiring the independent organization to adjust default charges to
	refund, over the remaining period of the default charges, any
	payments made by a market participant toward unpaid obligations
	from the period of emergency that were included in the financed
	default balance.
	(d)  The independent organization shall collect from and
	allocate among wholesale market participants the default charges
	using the same allocated pro rata share methodology under which the
	charges would otherwise be uplifted under the protocols in effect
	on March 1, 2021. The default charges must be assessed on all
	wholesale market participants, including market participants who
	are in default but still participating in the wholesale market and
	who enter the market after a debt obligation order is issued under
	this subchapter, and may be based on periodically updated
	transaction data to prevent market participants from engaging in
	behavior designed to avoid the default charges.
	(e)  Not later than the 30th day after the date the
	independent organization receives a default charge payment from a
	wholesale market participant, the independent organization shall
	remit the payment to the comptroller toward repayment of debt
	obligations in which the comptroller made an investment under
	Section 404.0241(b-1), Government Code, if applicable.
	(f)  Notwithstanding another provision of this subchapter,
	default charges may not be collected from or allocated to a market
	participant that:
	(1)  otherwise would be subject to a default charge
	solely as a result of acting as a central counterparty
	clearinghouse in wholesale market transactions in the ERCOT power
	region; and
	(2)  is regulated as a derivatives clearing
	organization, as defined by Section 1a, Commodity Exchange Act (7
	U.S.C. Section 1a).
	(g)  Not later than the 90th day after the date the
	independent organization files an application for an order under
	Subsection (a), the commission shall issue an order described by
	Subsection (a) or an order denying the application. The order
	becomes effective in accordance with its terms and the order,
	together with the default charges authorized in the order, shall be
	irrevocable and not subject to reduction, impairment, or adjustment
	by further action of the commission after the order takes effect.
	Notwithstanding this requirement, the commission may refinance any
	debt obligations created by an order issued under this subchapter
	if the commission determines that the refinancing is in the public
	interest, considering the interest of both the ERCOT market and the
	state's interest in the economic stabilization fund, and otherwise
	meets the requirements of this subchapter.
	(h)  An order described by Subsection (a) or (g) is not
	subject to rehearing by the commission. The order may be reviewed by
	appeal by a party to the proceeding to a Travis County district
	court that is filed not later than the 15th day after the date the
	order is signed by the commission. The judgment of the district
	court may be reviewed only by a direct appeal to the Supreme Court
	of Texas that is filed not later than the 15th day after the date of
	the entry of judgment. All appeals shall be heard and determined by
	the district court and the Supreme Court of Texas as expeditiously
	as possible with lawful precedence over other matters. Review on
	appeal shall be based solely on the record before the commission and
	briefs to the court and shall be limited to whether the order
	conforms to the constitution and laws of this state and the United
	States and is within the authority of the commission under this
	chapter.
	(i)  A debt obligation issued under this section is a
	nonrecourse debt secured solely by the default charges explicitly
	assessed to repay the obligation. The independent organization's
	obligations authorized under this section do not create personal
	liability for the independent organization.
	Sec. 39.604.  COMMISSION-AUTHORIZED FINANCING. (a) The
	commission may contract with another state agency with expertise in
	public financing to establish a debt financing mechanism for the
	payment of the default balance as defined in this subchapter, under
	an order that meets the requirements of Section 39.603. This
	section does not apply to a default balance securitized under
	Subchapter D, Chapter 41.
	(b)  The contracted state agency and any issuer, along with
	the independent organization, must be a party to the commission's
	proceedings that address the issuance of an order.
	(c)  In addition to the other applicable requirements of this
	subtitle, an order issued under this section must:
	(1)  require the sale, assignment, or other transfer to
	the contracted state agency of default charges created by the order
	and, following that sale, assignment, or transfer, require that
	default charges paid under any order be created, assessed, and
	collected as the property of the contracted state agency, subject
	to subsequent sale, assignment, or transfer by the contracted state
	agency as authorized under this subchapter;
	(2)  authorize:
	(A)  the issuance of debt obligations by the
	contracted state agency secured by a pledge of default charge
	revenue, and the application of the proceeds of those debt
	obligations, net of issuance costs, to the independent
	organization; or
	(B)  the acquisition of default charge revenue
	from the independent organization by the contracted state agency,
	financed:
	(i)  by a loan by an issuer to the contracted
	state agency of the proceeds of debt obligations, net of issuance
	costs; or
	(ii)  by the acquisition by an issuer from
	the contracted state agency of the default charge revenue and in
	each case the pledge of the revenue to the repayment of the loan or
	other debt obligation, as applicable; and
	(3)  authorize the independent organization to serve as
	collection agent to collect the default charges and transfer the
	collected default charges to the contracted state agency or the
	issuer, as appropriate.
	(d)  After issuance of the order, the contracted state agency
	shall arrange for the issuance of debt obligations, as specified by
	the order, by the contracted state agency or another issuer
	selected by the contracted state agency and approved by the
	commission.
	(e)  Debt obligations issued pursuant to an order issued
	under this section are secured only by the default charge revenue
	and any other funds pledged under the bond documents. No assets of
	the state or the independent organization are subject to claims by
	the holders of the debt obligations. Following assignment of the
	default charge revenue, the independent organization does not have
	any beneficial interest or claim of right in the revenue.
	(f)  Effective on the date the first debt obligations are
	issued under this subchapter, if any provision of this title or
	portion of this title is held to be invalid or is invalidated,
	superseded, replaced, or repealed, or expires for any reason, that
	occurrence does not affect the validity or continuation of this
	subchapter or any other provision of this title that is relevant to
	the issuance, administration, payment, retirement, or refunding of
	debt obligations authorized under this subchapter or to any actions
	of the independent organization, its successors, an assignee, a
	collection agent, the contracted state agency, or an issuer and
	those provisions shall remain in full force and effect.
	Sec. 39.605.  DEFAULT CHARGES NONBYPASSABLE. An order
	issued under Section 39.603 or 39.604 must:
	(1)  include terms ensuring that the imposition and
	collection of default charges authorized in the order shall be
	nonbypassable by wholesale market participants; and
	(2)  authorize the independent organization to
	establish appropriate fees and other methods for pursuing amounts
	owed from entities exiting the wholesale market.
	Sec. 39.606.  TRUE-UP MECHANISM. An order issued under
	Section 39.603 or 39.604 must include a mechanism requiring that
	default charges be reviewed and adjusted at least annually, not
	later than the 45th day after the anniversary date of the issuance
	of the order, to:
	(1)  correct over-collections or under-collections
	over the preceding 12 months; and
	(2)  ensure the expected recovery of amounts sufficient
	to timely provide all payments of debt service.
	Sec. 39.607.  TAX EXEMPTION. The transfer and receipt of
	default charges are exempt from state and local sales and use,
	franchise, and gross receipts taxes.
	Sec. 39.608.  PROPERTY RIGHTS. (a)  The rights and interests
	of the independent organization or its successor under a debt
	obligation order issued under this subchapter, including the right
	to impose, collect, and receive default charges, shall be only
	contract rights until they are first transferred to an assignee or
	pledged in connection with an investment agreement entered into
	under Section 404.0241, Government Code, or the issuance of debt
	obligations, at which time they will become default property, as
	described by Subsection (b).
	(b)  Default property shall constitute a present property
	right for purposes of contracts concerning the sale or pledge of
	property, even though the imposition and collection of default
	charges depends on further acts of the independent organization or
	others that have not yet occurred. A debt obligation order issued
	under this subchapter shall remain in effect and the property shall
	continue to exist for the same period as the pledge of the state
	described by Section 39.609.
	(c)  All revenues and collections resulting from default
	charges shall constitute proceeds only of the default property
	arising from the debt obligation order.
	Sec. 39.609.  PLEDGE OF STATE. Debt obligations issued
	pursuant to this subchapter, including any bonds, are not a debt or
	obligation of the state and are not a charge on its full faith and
	credit or taxing power. The state pledges, however, for the benefit
	and protection of financing parties and the independent
	organization that it will not take or permit any action that would
	impair the value of default property, or reduce, alter, or impair
	the default charges to be imposed, collected, and remitted to
	financing parties, until the principal, interest and premium, and
	any other charges incurred and contracts to be performed in
	connection with the related debt obligations have been paid and
	performed in full. Any party issuing a debt obligation under this
	subchapter is authorized to include this pledge in any
	documentation relating to the obligation.
	SUBCHAPTER N. WINTER STORM URI UPLIFT FINANCING
	Sec. 39.651.  PURPOSE; USE OF PROCEEDS. (a) The purpose of
	this subchapter is to address the Winter Storm Uri uplift balance
	by:
	(1)  enabling the independent organization certified
	under Section 39.151 for the ERCOT power region to finance the
	uplift balance on behalf of wholesale market participants through
	debt obligations; and
	(2)  authorizing the commission to contract with
	another state agency to finance the payment of the uplift balance
	with debt obligations or use any another financial mechanism
	consistent with this subchapter for that purpose.
	(b)  Financing the uplift balance in the manner provided by
	this subchapter will allow wholesale market participants who were
	assessed extraordinary uplift charges due to consumption during the
	period of emergency to pay those charges over a longer period of
	time, alleviating liquidity issues and reducing the risk of
	additional defaults in the wholesale market.
	(c)  The legislature finds that authorizing financing under
	this subchapter serves the public purpose of allowing the
	commission to stabilize the wholesale electricity market in the
	ERCOT power region.
	(d)  The proceeds of debt obligations issued under this
	subchapter must be used solely for the purpose of financing
	reliability deployment price adder charges and ancillary service
	costs that exceeded the commission's system-wide offer cap and were
	uplifted to load-serving entities based on consumption during the
	period of emergency. A load-serving entity that receives proceeds
	from the debt obligations may use the proceeds solely for the
	purposes of fulfilling payment obligations directly related to such
	costs and refunding such costs to retail customers who have paid or
	otherwise would be obligated to pay such costs.
	(e)  The commission shall ensure that the structuring and
	pricing of the debt obligations results in the lowest uplift
	charges consistent with market conditions and the terms of the
	order issued under this subchapter. The present value calculation
	must use a discount rate equal to the proposed interest rate on the
	debt obligations.
	Sec. 39.652.  DEFINITIONS. In this subchapter:
	(1)  "Independent organization" means the independent
	organization certified under Section 39.151 for the ERCOT power
	region.
	(2)  "Load-serving entity" means a municipally owned
	utility, an electric cooperative, or a retail electric provider.
	(3)  "Period of emergency" means the period beginning
	12:01 a.m., February 12, 2021, and ending 11:59 p.m., February 20,
	2021.
	(4)  "Uplift balance" means an amount of money of not
	more than $2.1 billion that was uplifted to load-serving entities
	on a load ratio share basis due to energy consumption during the
	period of emergency for reliability deployment price adder charges
	and ancillary services costs in excess of the commission's
	system-wide offer cap, excluding amounts securitized under
	Subchapter D, Chapter 41. The term does not include amounts that
	were part of the prevailing settlement point price during the
	period of emergency.
	(5)  "Uplift charges" means charges assessed to
	load-serving entities to repay amounts financed under this
	subchapter to pay the uplift balance and reasonable costs incurred
	by a state agency or the independent organization to implement a
	debt obligation order under Section 39.653, 39.654, or 39.655,
	including the cost of retiring or refunding existing debt.
	Sec. 39.653.  DEBT OBLIGATION ORDER. (a) The independent
	organization shall file an application with the commission to
	establish a debt financing mechanism for the payment of the uplift
	balance if the commission finds that such financing will support
	the financial integrity of the wholesale market and is necessary to
	protect the public interest, considering the impacts on both
	wholesale market participants and retail customers.
	(b)  An order issued under this section must:
	(1)  state the uplift balance to be financed;
	(2)  state the period over which the uplift charges
	must be assessed to repay the debt obligations, which may not exceed
	30 years; and
	(3)  provide the process for remitting the proceeds of
	the financing to load-serving entities who were exposed to the
	costs included in the uplift balance, including a requirement for
	the load-serving entities to submit documentation of their
	exposure.
	(c)  The independent organization shall assess uplift
	charges to all load-serving entities on a load ratio share basis,
	which may be translated to a kWh charge, including load serving
	entities who enter the market after an order has been issued under
	this subchapter, but excluding the load of entities that opt out
	under Subsection (d).
	(d)  The commission shall develop a one-time process that
	allows municipally owned utilities, electric cooperatives, river
	authorities, a retail electric provider that has the same corporate
	parent as each of the provider's customers, a retail electric
	provider that is an affiliate of each of the provider's customers,
	and transmission-voltage customers served by a retail electric
	provider to opt out of the uplift charges by paying in full all
	invoices owed for usage during the period of emergency.
	Load-serving entities and transmission-voltage customers that opt
	out under this subsection shall not receive any proceeds from the
	uplift financing.
	(e)  An order issued under this section must include a
	requirement that any load-serving entity that receives proceeds
	from the financing that exceed the entity's actual exposure to
	uplift charges from consumption during the period of emergency
	notify the independent organization and remit any excess receipts.
	Any payments received under this subsection must be credited
	against the uplift balance to reduce the remaining uplift charges.
	(f)  Not later than the 90th day after the date the
	independent organization files an application for an order under
	Subsection (a), the commission shall issue an order described by
	Subsection (a) or an order denying the application. The order
	becomes effective in accordance with its terms and the order,
	together with the uplift charges authorized in the order, shall be
	irrevocable and not subject to reduction, impairment, or adjustment
	by further action of the commission after it takes effect.
	Notwithstanding this requirement, the commission may refinance any
	debt obligations created by an order under this subchapter if the
	commission determines that the refinancing is in the public
	interest and otherwise meets the requirements of this subchapter.
	(g)  An order issued under this section is not subject to
	rehearing by the commission. An order may be reviewed by appeal by a
	party to the proceeding to a Travis County district court filed not
	later than the 15th day after the date the order is signed by the
	commission. The judgment of the district court may be reviewed only
	by direct appeal to the Supreme Court of Texas filed not later than
	the 15th day after the date of the entry of judgment. All appeals
	shall be heard and determined by the district court and the Supreme
	Court of Texas as expeditiously as possible with lawful precedence
	over other matters. Review on appeal shall be based solely on the
	record before the commission and briefs to the court and shall be
	limited to whether the order conforms to the constitution and laws
	of this state and the United States and is within the authority of
	the commission under this chapter.
	(h)  A debt obligation issued under this section is a
	nonrecourse debt secured solely by the uplift charges explicitly
	assessed to repay the obligation. The independent organization's
	obligations authorized under this section do not create personal
	liability for the independent organization.
	(i)  This section does not apply to any balance securitized
	under Subchapter D, Chapter 41.
	Sec. 39.654.  COMMISSION-AUTHORIZED FINANCING. (a) The
	commission may contract with another state agency with expertise in
	public financing to establish a debt financing mechanism to finance
	the payment of the uplift balance under an order that meets the
	requirements of Section 39.653.
	(b)  The contracted state agency and any issuer must be a
	party to the commission's proceedings that address the issuance of
	an order along with the independent organization.
	(c)  In addition to the other applicable requirements of this
	subtitle, an order issued under this section must:
	(1)  require the sale, assignment, or other transfer to
	the contracted state agency of uplift charges created by the order
	and, following that sale, assignment, or transfer, require that
	uplift charges paid under any order be created, assessed, and
	collected as the property of the contracted state agency, subject
	to subsequent sale, assignment, or transfer by the contracted state
	agency as authorized under this subchapter;
	(2)  authorize:
	(A)  the issuance of debt obligations by the
	contracted state agency secured by a pledge of uplift charge
	revenue, and the application of the proceeds of those debt
	obligations, net of issuance costs, to the independent
	organization; or
	(B)  the acquisition of uplift charge revenue from
	the independent organization by the contracted state agency,
	financed:
	(i)  by a loan by an issuer to the contracted
	state agency of the proceeds of debt obligations, net of issuance
	costs; or
	(ii)  by the acquisition by an issuer from
	the contracted state agency of the uplift charge revenue and in each
	case the pledge of the revenue to the repayment of the loan or debt
	obligations, as applicable; and
	(3)  authorize the independent organization to serve as
	collection agent to collect the uplift charges and transfer the
	collected uplift charges to the contracted state agency or the
	issuer, as appropriate.
	(d)  After issuance of the order, the contracted state agency
	shall arrange for the issuance of debt obligations, as specified by
	the order, by the contracted state agency or another issuer
	selected by the contracted state agency and approved by the
	commission.
	(e)  Debt obligations issued pursuant to an order issued
	under this section are secured only by the uplift charge revenue and
	any other funds pledged under the bond documents. No assets of the
	state or the independent organization are subject to claims by the
	holders of the debt obligations. Following assignment of the
	uplift charge revenue, the independent organization does not have
	any beneficial interest or claim of right in the revenue.
	Sec. 39.655.  OTHER FINANCIAL MECHANISM. The commission may
	use a financial mechanism other than the mechanisms described by
	Sections 39.653 and 39.654 that meets the requirements of this
	subchapter to accomplish the purposes of this subchapter.
	Sec. 39.656.  UPLIFT CHARGES NONBYPASSABLE. An order issued
	under Section 39.653, 39.654, or 39.655 must:
	(1)  include terms ensuring that the imposition and
	collection of uplift charges authorized in the order shall be
	nonbypassable, except for entities excluded under Section
	39.653(d); and
	(2)  authorize the independent organization to
	establish appropriate fees and other methods for pursuing amounts
	owed from entities exiting the wholesale market.
	Sec. 39.657.  TRUE-UP. An order shall include a mechanism
	requiring that uplift charges be reviewed and adjusted at least
	annually, not later than the 45th day after the anniversary date of
	the issuance of the debt obligations, to:
	(1)  correct over-collections or under-collections
	over the preceding 12 months; and
	(2)  ensure the expected recovery of amounts sufficient
	to timely provide all payments of debt service and other required
	amounts and charges in connection with the debt obligations.
	Sec. 39.658.  TAX EXEMPTION. Transactions involving the
	transfer and ownership of uplift property and the receipt of uplift
	charges are exempt from state and local income, sales, franchise,
	gross receipts, and other taxes or similar charges.
	Sec. 39.659.  SEVERABILITY. Effective on the date the first
	debt obligations are issued under this subchapter, if any provision
	in this title or portion of this title is held to be invalid or is
	invalidated, superseded, replaced, repealed, or expires for any
	reason, that occurrence does not affect the validity or
	continuation of this subchapter or any other provision of this
	title that is relevant to the issuance, administration, payment,
	retirement, or refunding of debt obligations or to any actions of
	the independent organization, its successors, an assignee, a
	collection agent, or a financing party, which shall remain in full
	force and effect.
	Sec. 39.660.  CUSTOMER CHARGES. All load-serving entities
	that receive offsets to specific uplift charges from the
	independent organization under this subchapter must adjust
	customer invoices to reflect the offsets for any charges that were
	or would otherwise be passed through to customers under the terms of
	service with the load-serving entity, including by providing a
	refund for any offset charges that were previously paid. An
	electric cooperative, including an electric cooperative that
	elects to receive offsets, shall not otherwise become subject to
	rate regulation by the commission and receipt of offsets does not
	affect the applicability of Chapter 41 to an electric cooperative.
	Sec. 39.661.  ENFORCEMENT. The commission may use any
	enforcement mechanism established by Chapter 15 or this chapter,
	including revocation of certification by the commission, against
	any entity that fails to remit excess receipts from the uplift
	balance financing under Section 39.653(e) or otherwise
	misappropriates or misuses amounts received from the uplift balance
	financing this subchapter.
	Sec. 39.662.  PROPERTY RIGHTS. (a) The rights and interests
	of the independent organization or its successor under a debt
	obligation order issued under this subchapter, including the right
	to impose, collect, and receive uplift charges authorized in a debt
	obligation order under this subchapter, shall be only contract
	rights until they are first transferred to an assignee or pledged in
	connection with the issuance of a financing agreement entered into
	under Section 39.654(a) or the issuance of debt obligations, at
	which time they will become uplift property, as described by
	Subsection (b).
	(b)  Uplift property shall constitute a present property
	right for purposes of contracts concerning the sale or pledge of
	property, even though the imposition and collection of uplift
	charges depends on further acts of the independent organization or
	others that have not yet occurred. A debt obligation order issued
	under this subchapter shall remain in effect and the property shall
	continue to exist for the same period as the pledge of the state
	described by Section 39.663.
	(c)  All revenues and collections resulting from uplift
	charges shall constitute proceeds only of the uplift property
	arising from the debt obligation order.
	Sec. 39.663.  PLEDGE OF STATE. Debt obligations issued
	pursuant to this subchapter, including any bonds, are not a debt or
	obligation of the state and are not a charge on its full faith and
	credit or taxing power. The state pledges, however, for the benefit
	and protection of financing parties and the independent
	organization that it will not take or permit any action that would
	impair the value of uplift property, or reduce, alter, or impair the
	uplift charges to be imposed, collected, and remitted to financing
	parties, until the principal, interest and premium, and any other
	charges incurred and contracts to be performed in connection with
	the related debt obligations have been paid and performed in full.
	Any party issuing a debt obligation under this subchapter is
	authorized to include this pledge in any documentation relating to
	the obligation.
	Sec. 39.664.  LEGAL ACTIONS INVOLVING PRICING OR UPLIFT
	ACTIONS. A load-serving entity that receives proceeds from the
	financing under this subchapter shall return an amount of the
	proceeds equal to any amount of money received by the entity due to
	litigation seeking judicial review of pricing or uplift actions
	taken by the commission or the independent organization in
	connection with the period of emergency.
	SECTION 6.  The independent organization to which Section
	39.653(a), Utilities Code, applies shall file the application
	required by that section not later than the 30th day after the
	effective date of this Act.
	SECTION 7.  Sections 404.0241(b-2) and (b-3), Government
	Code, as added by this Act, apply only to a cause of action that
	accrues on or after the effective date of this Act.
	SECTION 8.  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, 2021.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 4492 was passed by the House on May 6,
	2021, by the following vote:  Yeas 129, Nays 15, 1 present, not
	voting; that the House refused to concur in Senate amendments to
	H.B. No. 4492 on May 28, 2021, and requested the appointment of a
	conference committee to consider the differences between the two
	houses; and that the House adopted the conference committee report
	on H.B. No. 4492 on May 30, 2021, by the following vote:  Yeas 116,
	Nays 18, 2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 4492 was passed by the Senate, with
	amendments, on May 26, 2021, by the following vote:  Yeas 31, Nays
	0; at the request of the House, the Senate appointed a conference
	committee to consider the differences between the two houses; and
	that the Senate adopted the conference committee report on H.B. No.
	4492 on May 30, 2021, by the following vote:  Yeas 25, Nays 6.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor