Tex. Gov't Code Section 1232.1071
Issuance of Obligations for Financing Stranded Costs of Municipal Power Agency


(a)

The authority may, either directly or by means of a trust or trusts established by it, issue obligations or other evidences of indebtedness for financing stranded costs of a municipal power agency created by concurrent resolution by its member cities on or before November 1, 1979, pursuant to Chapter 163 (Joint Powers Agencies), Utilities Code, or a predecessor statute to that chapter. The stranded costs of the municipal power agency are set forth as allocated to the member cities in the “Potentially Strandable Investment (ECOM) Report: 1998 Update” issued by the Public Utility Commission of Texas.

(b)

At the request of any member city of a municipal power agency, the authority shall issue obligations or other evidences of indebtedness in the amount of the requesting member city’s stranded costs, plus the sum of the costs described in Subdivision (1) and the issuance costs, and shall make a grant of the proceeds of the obligations or evidences of indebtedness to the municipal power agency. A member city’s request under this subsection must include a statement of the payment terms for recovering stranded costs. A grant of the proceeds of obligations or evidences of indebtedness is subject to the following conditions:

(1)

the municipal power agency shall use the grant to reduce the outstanding principal of the agency’s debts allocable to stranded costs of the requesting member city for federal income tax purposes, whether by redemption, defeasance, or tender offer, together with any interest expenses, call premium, tender premium, or administrative expenses associated with the principal payment; and

(2)

the municipal power agency shall reduce the amount payable by the requesting member city under its power sales contract with the agency to reflect the reduced debt service on the agency’s debt as a result of the payments made under Subdivision (1).

(c)

Obligations or evidences of indebtedness issued by the authority under this section must be secured by nonbypassable charges imposed by the authority on retail customers receiving transmission and distribution services provided by the requesting member city, which must be consistent with the stranded cost recovery terms stated in the member city’s request unless otherwise approved by the member city. Obligations or evidences of indebtedness issued by the authority under this section are not a debt of this state, the municipal power agency, or any member of the municipal power agency.

(d)

The Public Utility Commission of Texas shall provide necessary assistance to the authority to ensure the collection and enforcement of the nonbypassable charges, whether directly or by using the assistance and powers of the requesting member city.

(e)

The authority and the Public Utility Commission of Texas have all powers necessary to perform the duties and responsibilities described by this section. This section shall be interpreted broadly in a manner consistent with the most cost-effective financing of stranded costs. To the extent possible, obligations or evidences of indebtedness issued by the authority under this section must be structured so that any interest on the obligations or evidences of indebtedness is excluded from gross income for federal income tax purposes. Any interest on the obligations or evidences of indebtedness is not subject to taxation by and may not be included as part of the measurement of a tax by this state or a political subdivision of this state.
Added by Acts 2001, 77th Leg., ch. 1420, Sec. 8.007(a), eff. Sept. 1, 2001.

Source: Section 1232.1071 — Issuance of Obligations for Financing Stranded Costs of Municipal Power Agency, https://statutes.­capitol.­texas.­gov/Docs/GV/htm/GV.­1232.­htm#1232.­1071 (accessed Jun. 5, 2024).

1232.001
Short Title
1232.002
Purpose
1232.003
Definitions
1232.004
State Lease Fund Account
1232.005
Application of State Funds Reform Act
1232.051
Texas Public Finance Authority
1232.052
Composition of Governing Board
1232.053
Terms
1232.054
Grounds for Removal
1232.055
Board Member Training
1232.056
Officers
1232.057
Public Testimony at Board Meetings
1232.058
Compensation and Expenses
1232.059
Staff
1232.060
Conflict of Interest
1232.061
Information on Responsibilities of Board Members and Employees
1232.062
Separation of Policymaking and Management Responsibilities
1232.063
Equal Employment Opportunity
1232.064
Career Ladder
1232.065
Compliance with Laws Relating to Accessibility
1232.066
Board Authority
1232.067
General Powers
1232.068
Eminent Domain
1232.070
Information on Complaints
1232.071
Relationship to Previous Board
1232.072
Sunset Provision
1232.073
Negotiated Rulemaking and Alternative Dispute Resolution
1232.101
Issuance of Bonds for Certain State Agencies
1232.102
Issuance of Bonds for State Office Buildings
1232.103
Issuance of Obligations for Equipment
1232.104
Issuance of Obligations for Alternative Fuel Projects
1232.105
Aggregate Limit on Issuance of Obligations for Alternative Fuel Projects
1232.106
Evaluation of Application for Assistance with Alternative Fuel Projects
1232.107
Purchase of Obligations for Alternative Fuel Projects
1232.108
Legislative Authorization Required
1232.109
Authorization to Purchase Certain Real Property
1232.110
Specific Projects
1232.111
Certain Projects by Texas Department of Transportation
1232.112
Bond Review Board Approval
1232.113
Obligation Issuance Orientation
1232.114
Project Analysis
1232.115
Expenses Included in Principal Amount
1232.116
Manner of Repayment
1232.117
State Debt Not Created
1232.118
Order or Resolution Authorizing Issuance of Obligations
1232.119
Adoption and Execution of Instruments
1232.120
Exemption from Taxation
1232.121
Certification and Deposit of Proceeds of Obligations
1232.122
Commencement of Construction, Purchase, or Lease
1232.123
Investment of Bond Proceeds
1232.124
Preference for Texas Businesses
1232.201
Rent and Fees
1232.202
Contracts Contingent on Legislative Appropriations
1232.203
Lease of Space for Child Care Facility
1232.204
Leasing Preference
1232.205
Lease of Space to Outside Entities
1232.206
Property Conveyance
1232.1025
Issuance of Bonds for Military Facilities
1232.1026
Issuance of Bonds for Texas Bullion Depository Buildings
1232.1071
Issuance of Obligations for Financing Stranded Costs of Municipal Power Agency
1232.1072
Issuance of Obligations for Financing Customer Rate Relief Property
1232.1115
Certain Construction and Repair Projects and Equipment Purchases
1232.1116
Certain Maintenance, Improvement, Repair, and Construction Projects
1232.1191
Delegation of Authority
1232.1221
Commencement of Certain Multiyear Cancer-related Projects

Accessed:
Jun. 5, 2024

§ 1232.1071’s source at texas​.gov