By Holzheauser H.B. No. 1243 Substitute the following for H.B. No. 1243: By Davis C.S.H.B. No. 1243 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to energy savings projects for local governments. 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 1-7 LOCAL GOVERNMENTS 1-8 Sec. 302.001. DEFINITION. In this chapter, "local 1-9 government" means a county, municipality, or other political 1-10 subdivision of this state. The term local government does not 1-11 include a school district authorized to enter into a contract for 1-12 energy conservation measures under Section 44.901, Education Code. 1-13 Sec. 302.002. ENERGY CONSERVATION MEASURES. (a) The 1-14 governing body of a local government may enter into a contract for 1-15 energy conservation measures to reduce energy consumption or 1-16 operating costs of governmental facilities in accordance with this 1-17 chapter. 1-18 (b) A contract authorized under this chapter includes a 1-19 contract for the installation of: 1-20 (1) insulation of the building structure and systems 1-21 within the building; 1-22 (2) storm windows or doors, caulking or weather 1-23 stripping, multiglazed windows or doors, heat absorbing or heat 1-24 reflective glazed and coated window or door systems, or other 2-1 window or door system modifications that reduce energy consumption; 2-2 (3) automatic energy control systems, including 2-3 computer software and technical data licenses; 2-4 (4) heating, ventilating, or air-conditioning system 2-5 modifications or replacements; 2-6 (5) lighting fixtures that increase energy efficiency; 2-7 (6) energy recovery systems; 2-8 (7) electric systems improvements; or 2-9 (8) other energy conservation-related improvements or 2-10 equipment (including improvements or equipment related to renewable 2-11 energy). 2-12 (c) All energy conservation measures must comply with 2-13 current local, state, and federal construction and environmental 2-14 codes and regulations. Notwithstanding anything to the contrary in 2-15 subsection (b), a contract for energy conservation measures shall 2-16 not include improvements or equipment that allow or cause water 2-17 from any condensing, cooling or industrial process or any system of 2-18 nonpotable usage over which public water supply system officials do 2-19 not have sanitary control to be returned to the potable water 2-20 supply. 2-21 Sec. 302.003. PAYMENT AND PERFORMANCE BOND. Notwithstanding 2-22 any other law to the contrary, before entering into a contract for 2-23 energy conservation measures, the governing body of the local 2-24 government may, at its option, (i) require the provider of the 2-25 energy conservation measures to file with the governing body a 2-26 payment and performance bond relating to the installation of energy 2-27 conservation measures that is in an amount the governing body finds 3-1 reasonable and necessary to protect the interests of the local 3-2 government and that may also cover the value of the guaranteed 3-3 savings on the contract and is conditioned on the faithful 3-4 execution of the terms of the contract, or (ii) choose not to 3-5 require a payment and performance bond in connection with the 3-6 contract. 3-7 Sec. 302.004. LEASE-PURCHASE CONTRACT AUTHORIZED. A 3-8 contract for energy conservation measures, with respect to existing 3-9 buildings or facilities, may be a lease/purchase contract beginning 3-10 after the final date of installation with a term not to exceed 10 3-11 years, that meets federal tax requirements for tax-free municipal 3-12 leasing or long-term financing. The contract shall contain 3-13 provisions pursuant to which the provider of the energy 3-14 conservation measures guarantees the amount of the savings to be 3-15 realized by the local government under the contract. If the term 3-16 of a contract for energy conservation measures exceeds one year, 3-17 the local government's contractual obligations in any one year 3-18 during the term of the contract may not exceed the total energy and 3-19 operating cost savings, including but not limited to electrical, 3-20 gas, or other utility cost savings and operating cost savings 3-21 resulting from automatic monitoring and control as determined by 3-22 the local government in this subsection, divided by the number of 3-23 years in the contract term beginning after the final date of 3-24 installation. 3-25 Sec. 302.005. BIDDING PROCEDURES; AWARD OF CONTRACT. (a) A 3-26 contract under this chapter may be let under competitive proposal 3-27 procedures. Notice of the request for proposals shall be published 4-1 in the manner provided for competitive bidding. Requests for 4-2 proposals must solicit quotations and must specify the relative 4-3 importance of guaranteed savings, price, return on investment, 4-4 financial performance and stability, quality, technical ability, 4-5 experience, and other evaluation factors. 4-6 (b) The contract shall be awarded to the responsible offeror 4-7 whose proposal, following negotiations, is determined to be the 4-8 most advantageous to the local government considering the 4-9 guaranteed savings and other evaluation factors set forth in the 4-10 request for proposals. 4-11 (c) The local government may conduct discussions with 4-12 offerors who submit proposals and who are determined to be 4-13 reasonably qualified for the award of the contract. Offerors shall 4-14 be treated fairly and equally with respect to any opportunity for 4-15 discussion and revision of proposals. 4-16 (d) If provided in a request for proposals, proposals shall 4-17 be opened in a manner that avoids disclosure of the contents to 4-18 competing offerors and keeps the proposals secret during 4-19 negotiations. All proposals are open for public inspection after a 4-20 contract is awarded unless the information is excepted from 4-21 disclosure under Chapter 552, Government Code. 4-22 (e) To obtain the best final offers, the local government 4-23 may allow proposal revisions after submissions and before the award 4-24 of the contract. 4-25 SECTION 2. The importance of this legislation and the 4-26 crowded condition of the calendars in both houses create an 4-27 emergency and an imperative public necessity that the 5-1 constitutional rule requiring bills to be read on three several 5-2 days in each house be suspended, and this rule is hereby suspended, 5-3 and that this Act take effect and be in force from and after its 5-4 passage, and it is so enacted.