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.