BILL ANALYSIS



H.B. 2880
By: HOLZHEAUSER
4-3-95
Committee Report (Unamended)


BACKGROUND

In 1992, the Legislature authorized higher education institutions
to enter into performance contracts for energy conservation
measures to reduce energy consumption and operating costs at
institutional facilities.  These contracts provide a cost-effective
way to fund facilities' improvements without increasing the need
for state appropriations or relying on limited state funded loan
programs.  Energy performance contracts do not require the
institutions to cover initial costs; the contractor pays for all
project engineering, equipment and construction, and is paid back
from annual energy cost savings within a 10-year period.  Also, the
contractor guarantees that a certain level of energy savings will
be achieved; if not, the contractor must return the difference.  

PURPOSE

HB 2880 would allow a county, municipality, or other political
subdivision of this state to also enter into a contract for energy
conservation measures.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS


SECTION 1: Amends Subtitle C, Title 9, Local Government Code, by
adding Chapter 302 to read as follows:
     Sec. 302.001. Defines "local government" to mean a county,
municipality, or other   political subdivision of this state.

     Sec. 302.002. CONTRACT FOR ENERGY CONSERVATION MEASURES
     Subsection (a) states that a local government may enter into
an energy conservation   contract in accordance with this chapter.

     Subsection (b) states that the contract authorizes the
installation of:
           1) insulation of the building structures and systems;
           2) window or door modifications that reduce energy
consumption; 
           3) automatic energy control systems;
           4) heating, ventilating, or air-conditioning system
modifications or replacements;
           5) energy efficient lighting fixtures; or 
           6) energy recovery systems.

     Subsection (c) states that installation must be performed by
a person experienced in the   design, implementation, and
installation of energy conservation measures.

     Sec. 302.003. BOND. Requires the energy conservation provider
to file a performance    bond with the governing body prior to
entering into a contract for energy conservation  measures. The
amount of the bond shall be determined by the governing body and
must       cover the value of guaranteed savings.

     Sec. 302.004. LENGTH OF THE CONTRACT.

     Subsection (a) states that the governing body may enter into
a contract in excess of 1 year     if the amount spent will not
exceed the estimated energy conservation savings during a   10 year
period following the installation.

     Subsection (b) states that if the contract exceeds 1 year then
the government's obligation   in any year during the term of the
contract my not exceed the estimated savings for that  year. The
governing body is also required to consider all costs of the energy
conservation   measures.

     Sec. 302.005. states a contract may be a lease-purchase
contract with respect to existing  structures if the term does not
exceed 10 years and is tax-free municipal leasing or long-  term
financing

     Sec. 302.006. BIDDING PROCEDURES; AWARD OF A CONTRACT. 

     Subsection (a) states that contracts under this chapter may be
let under competitive    bidding procedures. Requires notice of
request to be published in a manner of competitive     bidding and
that such requests solicit quotations and specify the relative
importance of  certain evaluating factors.

     Subsection (b) states that following negotiations the contract
shall be awarded to the  offerer whose proposal is determined most
advantageous to the local government.

     Subsection (c) authorizes local government to conduct
discussion with offerors who  submit proposals and to allow
proposal revisions after submissions and before the award   of the
contract.  Requires that offerors be treated fairly and equally
with respect to     discussion and revision of proposals.

     Subsection (d) Requires proposals to be kept confidential
during negotiations.

     Subsection (e) Requires the board to give notice of intent to
award a contract to the  selected offeror on completion of all
negotiations published in the same manner as the  notice of request
for proposals.  Provides that following the publishing of the
notice of  intent to award all proposals be open for public
inspection with the exception of trade  secrets and proprietary
information. 

SECTION 2. Emergency Clause.
             Effective Date: Upon Passage.


SUMMARY OF COMMITTEE ACTION

H.B. 2880 was considered by the Energy Resources Committee in a
public hearing on April 3, 1995. No one testified concerning the
bill. The bill was left pending. The bill was later laid out as
pending business during the same public hearing. The bill was
reported favorably without amendment, with the recommendation that
it do pass and be printed, by a record vote of 6 ayes, 0 nays, 0
PNV, and 3 absent.