BILL ANALYSIS C.S.S.B. 726 By: Sibley Finance 04-12-95 Committee Report (Substituted) BACKGROUND Institutions of higher education which implemented energy conservation measures and subsequently reduced their energy usage have seen a reduction in general revenue appropriations for energy costs equal to the resulting savings, despite increases in square footage and rate changes. There currently exists no incentive for these institutions to pursue energy performance contracts because they are not permitted to retain any portion of the savings realized through such contracts. PURPOSE As proposed, C.S.S.B. 726 would give higher education institutions an incentive to enter into energy performance contracts by allowing them to retain the estimated net savings resulting from these contracts. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 51.927, Education Code, by adding Subsection (j), to require the legislature to base an institution of higher education's (institution) appropriation for energy costs during a fiscal year on the sum of the institution's estimated energy costs for that fiscal year and the institution's estimated net savings resulting from the contract during the contract term, divided by the number of years in the contract term. SECTION 2. (a) Effective date: September 1, 1995. (b) Provides that this Act does not apply to an appropriation enacted before the effective date of this Act, without regard to the period for which the appropriation is made. SECTION 3. Emergency clause.