S.B. No. 744 AN ACT 1-1 relating to guaranteed energy savings projects for local 1-2 governments and certain retail utility fees. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subtitle C, Title 9, Local Government Code, is 1-5 amended by adding Chapter 302 to read as follows: 1-6 CHAPTER 302. ENERGY CONSERVATION MEASURES FOR LOCAL GOVERNMENTS 1-7 Sec. 302.001. DEFINITION. In this chapter, "local 1-8 government" means a county, municipality, or other political 1-9 subdivision of this state. 1-10 Sec. 302.002. CONTRACT FOR ENERGY CONSERVATION MEASURES. 1-11 (a) The governing body of a local government may enter into a 1-12 contract for energy conservation measures to reduce energy 1-13 consumption or operating costs of governmental facilities in 1-14 accordance with this chapter. 1-15 (b) A contract authorized under this chapter includes a 1-16 contract for the installation of: 1-17 (1) insulation of the building structure and systems 1-18 within the building; 1-19 (2) storm windows or doors, caulking or weather 1-20 stripping, multiglazed windows or doors, heat absorbing or heat 1-21 reflective glazed and coated window or door systems, or other 1-22 window or door system modifications that reduce energy consumption; 1-23 (3) automatic energy control systems, including 1-24 computer software and technical data licenses; 2-1 (4) heating, ventilating, or air-conditioning system 2-2 modifications or replacements; 2-3 (5) lighting fixtures that increase energy efficiency; 2-4 (6) energy recovery systems; 2-5 (7) electric systems improvements; or 2-6 (8) other energy conservation-related equipment. 2-7 (c) The person with whom the governing body contracts must 2-8 be experienced in the design, implementation, and installation of 2-9 energy conservation measures. 2-10 Sec. 302.003. BOND. Before entering into a contract for 2-11 energy conservation measures, the provider of the energy 2-12 conservation measures must file with the local government a 2-13 performance bond that is in an amount the governing body finds 2-14 reasonable and necessary to protect the interests of the local 2-15 government and that covers the value of the guaranteed savings on 2-16 the contract and is conditioned on the faithful execution of the 2-17 terms of the contract. 2-18 Sec. 302.004. LENGTH OF CONTRACT. (a) The governing body 2-19 may enter into a contract for a period of more than one year for 2-20 energy conservation measures with a person if the governing body 2-21 finds that the amount the local government would spend on the 2-22 energy conservation measures will not exceed the amount estimated 2-23 to be saved in energy and operating costs during the 10-year period 2-24 beginning on the date the installation is complete. 2-25 (b) If the term of a contract for energy conservation 2-26 measures exceeds one year, the local government's contractual 2-27 obligation in any year during the term of the contract may not 3-1 exceed the total estimated energy and operating cost savings, 3-2 including electrical, gas, or other utility cost savings and 3-3 operating cost savings resulting from automatic monitoring and 3-4 control, as determined by the governing body, divided by the number 3-5 of years in the contract term. The governing body shall consider 3-6 all costs of the energy conservation measures, including costs of 3-7 design, engineering, installation, maintenance, repairs, and debt 3-8 service. 3-9 Sec. 302.005. LEASE-PURCHASE CONTRACT AUTHORIZED. A 3-10 contract for energy conservation measures, with respect to existing 3-11 buildings or facilities, may be a lease-purchase contract, with a 3-12 term not to exceed 10 years, that meets federal tax requirements 3-13 for tax-free municipal leasing or long-term financing. 3-14 Sec. 302.006. BIDDING PROCEDURES; AWARD OF CONTRACT. (a) A 3-15 contract under this chapter may be let under competitive proposal 3-16 procedures. Notice of the request for proposals shall be published 3-17 in the manner provided for competitive bidding. Requests for 3-18 proposals must solicit quotations and must specify the relative 3-19 importance of guaranteed savings, price, financial performance and 3-20 stability, quality, technical ability, experience, and other 3-21 evaluation factors. 3-22 (b) The contract shall be awarded to the responsible offeror 3-23 whose proposal, following negotiations, is determined to be the 3-24 most advantageous to the local government considering the 3-25 guaranteed savings and other evaluation factors set forth in the 3-26 request for proposals. 3-27 (c) In accordance with the terms of a request for proposals 4-1 under Subsection (a) and with regulations adopted by the governing 4-2 body, the local government may conduct discussions with offerors 4-3 who submit proposals and whom the local government determines to be 4-4 reasonably qualified for the award of the contract. Offerors shall 4-5 be treated fairly and equally with respect to any opportunity for 4-6 discussion and revision of proposals. To obtain the best final 4-7 offers, the local government may allow proposal revisions after 4-8 submissions and before the award of the contract. 4-9 (d) If provided in a request for proposals under Subsection 4-10 (a), proposals shall be opened in a manner that avoids disclosure 4-11 of the contents to competing offerors and keeps the proposals 4-12 secret during negotiations. 4-13 (e) On completion of all negotiations, the board shall give 4-14 notice of intent to award a contract to the selected offeror. The 4-15 notice of intent shall be published in the same manner as the 4-16 notice of request for proposals. All proposals are open for public 4-17 inspection after the notice of intent to award is published, but 4-18 trade secrets and proprietary information clearly identified in the 4-19 proposals are not open for public inspection. 4-20 Sec. 302.007. NONCONSUMPTIVE WATER SERVICE FEE. (a) A 4-21 retail public utility may provide nonconsumptive water service for 4-22 the operation of a geothermal heat pump that circulates the water 4-23 in a closed loop and returns it to the water main. 4-24 (b) A retail public utility that provides water service 4-25 under this section must: 4-26 (1) retain total control over access to the water; 4-27 (2) not allow the water to enter any building; and 5-1 (3) locate the heat exchanger in contact with the 5-2 water to be returned to the water main: 5-3 (A) in a locked utility box; 5-4 (B) under the control of the utility; and 5-5 (C) in the public utility easement. 5-6 (c) A retail public utility that provides water service may: 5-7 (1) adopt additional rules and procedures for the 5-8 installation, operation, and removal of a geothermal heat pump; and 5-9 (2) charge a reasonable fee for the installation, 5-10 inspection, and operation of the heat pump. 5-11 (d) A retail public utility providing nonconsumptive water 5-12 service for a geothermal heat pump is immune from any civil 5-13 liability arising from the installation or use of the geothermal 5-14 heat pump. 5-15 SECTION 2. The importance of this legislation and the 5-16 crowded condition of the calendars in both houses create an 5-17 emergency and an imperative public necessity that the 5-18 constitutional rule requiring bills to be read on three several 5-19 days in each house be suspended, and this rule is hereby suspended, 5-20 and that this Act take effect and be in force from and after its 5-21 passage, and it is so enacted.