By Lewis of Orange                                    H.B. No. 1249
         76R3932 SMH-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to contracts by school districts, institutions of higher
 1-3     education, and state agencies for water conservation measures.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  The heading to Section 44.901, Education Code, is
 1-6     amended to read as follows:
 1-7           Sec. 44.901.  ENERGY OR WATER CONSERVATION MEASURES
 1-8           SECTION 2.  Sections 44.901(a)-(f), Education Code, are
 1-9     amended to read as follows:
1-10           (a)  The board of trustees of a school district may enter
1-11     into a contract for energy or water conservation measures to reduce
1-12     energy or water consumption or operating costs of school facilities
1-13     in accordance with this section.
1-14           (b)  A contract to which this section applies includes a
1-15     contract for the installation of:
1-16                 (1)  insulation of the building structures and systems
1-17     within the building;
1-18                 (2)  storm windows or doors, caulking or
1-19     weatherstripping, multiglazed windows or doors, heat absorbing or
1-20     heat reflective glazed and coated window or door systems, or other
1-21     window or door system modifications that reduce energy consumption;
1-22                 (3)  automatic energy control systems, including
1-23     computer software and technical data licenses;
1-24                 (4)  heating, ventilating, or air-conditioning system
 2-1     modifications or replacements that reduce energy or water
 2-2     consumption;
 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)  water-conserving landscape irrigation equipment;
 2-7                 (9)  water-saving plumbing fixtures, appliances, or
 2-8     equipment;
 2-9                 (10)  water reuse, rainwater harvesting, or other
2-10     alternative water source technologies for landscape irrigation,
2-11     toilet and urinal flushing, or other purposes;
2-12                 (11)  substitution of non-water-using fixtures,
2-13     appliances, equipment, or practices for water-using fixtures,
2-14     appliances, equipment, or practices, if feasible; or
2-15                 (12)  other energy or water conservation-related
2-16     improvements or equipment (including improvements or equipment
2-17     relating to renewable energy).
2-18           (c)  All energy or water conservation measures must comply
2-19     with current local, state, and federal construction and
2-20     environmental codes and regulations.  Notwithstanding anything to
2-21     the contrary in Subsection (b), a contract for energy or water
2-22     conservation measures shall not include improvements or equipment
2-23     that allow or cause water from any condensing, cooling, or
2-24     industrial process or any system of nonpotable usage over which the
2-25     public water supply system officials do not have sanitary
2-26     control[,] to be returned to the potable water supply.
2-27           (d)  The person with whom the board contracts must be
 3-1     experienced in the design, implementation, and installation of the
 3-2     energy or water conservation measures addressed by the contract.
 3-3           (e)  Before entering into a contract for energy or water
 3-4     conservation measures, the board shall require the provider of the
 3-5     energy or water conservation measures to file with the board a
 3-6     payment and performance bond relating to the installation of energy
 3-7     or water conservation measures that is in an amount the board finds
 3-8     reasonable and necessary to protect the interests of the school
 3-9     district and that may also cover the value of the guaranteed
3-10     savings on the contract and is conditioned on the faithful
3-11     execution of the terms of the contract.
3-12           (f)  A contract for energy or water conservation measures,
3-13     with respect to existing buildings or facilities, may be a
3-14     lease/purchase contract, with a term not to exceed 10 years, that
3-15     meets federal tax requirements for tax-free municipal leasing or
3-16     long-term financing.  The contract shall contain provisions
3-17     pursuant to which the provider of the energy or water conservation
3-18     measures guarantees the amount of the savings to be realized by the
3-19     school district under the contract.  If the term of a contract for
3-20     energy or water conservation measures exceeds one year, the school
3-21     district's contractual obligations in any one year during the term
3-22     of the contract may not exceed the total energy or water and
3-23     operating cost savings, including but not limited to electrical,
3-24     gas, water, or other utility cost savings and operating cost
3-25     savings resulting from automatic monitoring and control as
3-26     determined by the school district in this subsection, divided by
3-27     the number of years in the contract term.
 4-1           SECTION 3.  Section 51.927, Education Code, as amended by
 4-2     Chapters 627 and 1142, Acts of the 75th Legislature, Regular
 4-3     Session, 1997, is reenacted and amended to read as follows:
 4-4           Sec. 51.927.  ENERGY OR WATER CONSERVATION MEASURES.  (a)
 4-5     The governing board of an institution of higher education may enter
 4-6     into a contract for energy or water conservation measures to reduce
 4-7     energy or water consumption or operating costs of institutional
 4-8     facilities in accordance with this section.
 4-9           (b)  A contract to which this section applies includes a
4-10     contract for the installation of:
4-11                 (1)  insulation of a building structure and systems
4-12     within a building;
4-13                 (2)  storm windows of doors, caulking or weather
4-14     stripping, multiglazed windows or doors, heat-absorbing or
4-15     heat-reflective glazed and coated window or door systems, or other
4-16     window or door system modifications that reduce energy consumption;
4-17                 (3)  automatic energy control systems, including
4-18     computer software and technical data licenses;
4-19                 (4)  heating, ventilating, or air conditioning system
4-20     modifications or replacements that reduce energy or water
4-21     consumption;
4-22                 (5)  lighting fixtures that increase energy efficiency;
4-23                 (6)  energy recovery systems;
4-24                 (7)  electric systems improvements; [or]
4-25                 (8)  water-conserving landscape irrigation equipment;
4-26                 (9)  water-saving plumbing fixtures, appliances, or
4-27     equipment;
 5-1                 (10)  water reuse, rainwater harvesting, or other
 5-2     alternative water source technologies for landscape irrigation,
 5-3     toilet and urinal flushing, or other purposes;
 5-4                 (11)  substitution of non-water-using fixtures,
 5-5     appliances, equipment, or practices for water-using fixtures,
 5-6     appliances, equipment, or practices, if feasible; or
 5-7                 (12)  other energy or water conservation-related
 5-8     improvements or equipment (including improvements or equipment
 5-9     related to renewable energy).
5-10           (c)  All energy or water conservation measures must comply
5-11     with current local, state, and federal construction and
5-12     environmental codes and regulations.  Notwithstanding anything to
5-13     the contrary in Subsection (b), a contract for energy or water
5-14     conservation measures shall not include improvements or equipment
5-15     that allow or cause water from any condensing, cooling, or
5-16     industrial process or any system of nonpotable usage over which the
5-17     public water supply system officials do not have sanitary
5-18     control[,] to be returned to the potable water supply.
5-19           (d)  The entity with whom the board contracts must be
5-20     experienced in the design, implementation, and installation of the
5-21     energy or water conservation measures addressed by the contract.
5-22           (e)  Before entering into a contract for energy or water
5-23     conservation measures, the board shall require the provider of the
5-24     energy or water conservation measures to file with the board a
5-25     payment and performance bond that is in an amount the board finds
5-26     reasonable and necessary to protect the interests of the
5-27     institution and is conditioned on the faithful execution of the
 6-1     terms of the contract.
 6-2           (f)  The board may enter into a contract for a period of more
 6-3     than one year for energy or water conservation measures with an
 6-4     entity if the board finds that the amount the institution would
 6-5     spend on the energy or water conservation measures will not exceed
 6-6     the amount to be saved in energy or water and operating costs over
 6-7     10 years from the date of installation.  If the term of a contract
 6-8     for energy or water conservation measures exceeds one year, the
 6-9     board's contractual obligation in any year during the term of the
6-10     contract beginning after the final date of installation may not
6-11     exceed the total energy or water and operating cost savings,
6-12     including but not limited to electrical, gas, water, or other
6-13     utility cost savings and operating cost savings resulting from
6-14     automatic monitoring and control, as determined by the board in
6-15     this subsection, divided by the number of years in the contract
6-16     term beginning after the final date of installation.  The board
6-17     shall consider all costs of the energy or water conservation
6-18     measures, including costs of design, engineering, installation,
6-19     maintenance, repairs, and debt service.
6-20           (g)  A contract for energy or water conservation measures may
6-21     be a lease/purchase contract, with a term not to exceed 10 years
6-22     after the final date of installation, that meets federal tax
6-23     requirements for tax-free municipal leasing or long-term financing.
6-24     The contract shall contain provisions pursuant to which the
6-25     provider of the energy or water conservation measures guarantees
6-26     the amount of the savings to be realized by the institution of
6-27     higher education under the contract.  The Master Equipment Lease
 7-1     Purchase Program operated by the Texas Public Finance Authority may
 7-2     be utilized by an institution to fund a contract for energy or
 7-3     water conservation measures so long as the costs of the energy or
 7-4     water conservation measures, including costs of design,
 7-5     engineering, installation, maintenance, repairs, and anticipated
 7-6     debt service requirements of the Master Equipment Lease Purchase
 7-7     Program, do not exceed the total energy or water and operating cost
 7-8     savings, as described in Subsection (f) [(e)], beginning after the
 7-9     final date of installation.
7-10           (h)  A contract under this section may be let under
7-11     competitive sealed proposal procedures.  Notice of the  request for
7-12     proposals shall be given in the manner provided for in Chapter
7-13     2156, Government Code.  The Texas Higher Education Coordinating
7-14     Board, in consultation with the State Energy Conservation Office
7-15     and the Texas Energy Coordination Council with regard to energy
7-16     conservation measures, shall establish guidelines and an approval
7-17     process for contracts awarded under this section.  The State Energy
7-18     Conservation Office and the Texas Energy Coordination Council shall
7-19     review the selected proposal before a contract for energy
7-20     conservation measures is awarded.  The State Energy Conservation
7-21     Office may provide a cost-benefit analysis of the proposals for
7-22     energy conservation measures and analysis of the guaranteed savings
7-23     projected by offerors and may charge a fee for this service.   The
7-24     contract shall be awarded to the responsible offeror whose
7-25     proposal, following negotiations, is determined by the institution
7-26     to be the most advantageous to the institution considering the
7-27     guaranteed savings and other evaluation factors set forth in the
 8-1     request for proposals, except that if the institution finds that no
 8-2     offer is acceptable, it shall refuse all offers.
 8-3           (i)  In accordance with regulations adopted by the
 8-4     institution, the institution may conduct discussions with offerors
 8-5     who submit proposals and who are determined to be reasonably
 8-6     qualified for the award of the contract.  Offerors shall be treated
 8-7     fairly and equally with respect to any opportunity for discussion
 8-8     and revision of proposals.  To obtain the best final offers, the
 8-9     institution may allow proposal revisions after submissions and
8-10     before the award of the contract.
8-11           (j)  If provided in a request for proposals under Subsection
8-12     (h) [(g) of this section], proposals shall be opened in a manner
8-13     that avoids disclosure of the contents to competing offerors and
8-14     keeps the proposals secret during negotiations.  All proposals are
8-15     open for public inspection after a contract is awarded unless the
8-16     information is excepted from disclosure under Chapter 552,
8-17     Government Code.
8-18           (k)  The legislature shall base an institution's
8-19     appropriation for energy or water costs during a fiscal year on the
8-20     sum of:
8-21                 (1)  the institution's estimated energy or water costs
8-22     for that fiscal year; and
8-23                 (2)  if a contract under this section is in effect, the
8-24     institution's estimated net savings resulting from the contract
8-25     during the contract term, divided by the number of years in the
8-26     contract term.
8-27           SECTION 4.  The heading to Section 2166.406, Government Code,
 9-1     is amended to read as follows:
 9-2           Sec. 2166.406.  ENERGY OR WATER CONSERVATION MEASURES
 9-3           SECTION 5.  Sections 2166.406(a)-(h), (k), and (l),
 9-4     Government Code, are amended to read as follows:
 9-5           (a)  Notwithstanding any other provisions of this chapter,
 9-6     the governing body of a state agency, without the consent of the
 9-7     commission, may enter into a contract for energy or water
 9-8     conservation measures to reduce energy or water consumption or
 9-9     operating costs  of governmental facilities in accordance with this
9-10     section.
9-11           (b)  A contract authorized under this chapter includes a
9-12     contract for the installation of:
9-13                 (1)  insulation of the building structure and systems
9-14     within the building;
9-15                 (2)  storm windows or doors, caulking or weather
9-16     stripping, multiglazed windows or doors, heat absorbing or heat
9-17     reflective glazed and coated window or door systems, or other
9-18     window or door system modifications that reduce energy consumption;
9-19                 (3)  automatic energy control systems, including
9-20     computer software and technical data licenses;
9-21                 (4)  heating, ventilating, or air-conditioning system
9-22     modifications or replacements that reduce energy or water
9-23     consumption;
9-24                 (5)  lighting fixtures that increase energy efficiency;
9-25                 (6)  energy recovery systems;
9-26                 (7)  electric systems improvements; [or]
9-27                 (8)  water-conserving landscape irrigation equipment;
 10-1                (9)  water-saving plumbing fixtures, appliances, or
 10-2    equipment;
 10-3                (10)  water reuse, rainwater harvesting, or other
 10-4    alternative water source technologies for landscape irrigation,
 10-5    toilet and urinal flushing, or other purposes;
 10-6                (11)  substitution of non-water-using fixtures,
 10-7    appliances, equipment, or practices for water-using fixtures,
 10-8    appliances, equipment, or practices, if feasible; or
 10-9                (12)  other energy or water conservation-related
10-10    improvements or equipment (including improvements or equipment
10-11    related to renewable energy).
10-12          (c)  All energy or water conservation measures must comply
10-13    with current local, state, and federal construction and
10-14    environmental codes and regulations.  Notwithstanding anything to
10-15    the contrary in Subsection (b), a contract for energy or water
10-16    conservation measures shall not include improvements or equipment
10-17    that allow or cause water from any condensing, cooling, or
10-18    industrial process or any system of nonpotable usage over which the
10-19    public water supply system officials do not have sanitary control
10-20    to be returned to the potable water supply.
10-21          (d)  The entity with whom the board contracts must be
10-22    experienced in the design, implementation, and installation of the
10-23    energy or water conservation measures addressed by the contract.
10-24          (e)  Before entering into a contract for energy or water
10-25    conservation measures, the governing body of the state agency shall
10-26    require the provider of the energy or water conservation measures
10-27    to file with the governing body a payment and performance bond that
 11-1    is in an amount the governing body finds reasonable and necessary
 11-2    to protect the interests of the state agency and that is
 11-3    conditioned on the faithful execution of the terms of the contract.
 11-4          (f)  The state agency may enter into a contract for a period
 11-5    of more than one year for energy or water conservation measures
 11-6    with an entity if the state agency finds that the amount the state
 11-7    agency would spend on the energy or water conservation measures
 11-8    will not exceed the amount to be saved in energy or water and
 11-9    operating costs over 10 years from the date of installation.
11-10          (g)  A contract for energy or water conservation measures,
11-11    with respect to existing buildings or facilities, may be a
11-12    lease/purchase contract with a term not to exceed 10 years, that
11-13    meets federal tax requirements for tax-free municipal leasing or
11-14    long-term financing.  The contract shall contain provisions
11-15    pursuant to which the provider of the energy or water conservation
11-16    measures guarantees the amount of the savings to be realized by the
11-17    state agency under the contract.  If the term of a contract for
11-18    energy or water conservation measures exceeds one year, the
11-19    agency's contractual obligation in any year during the term of the
11-20    contract may not exceed the total energy or water and operating
11-21    cost savings, including but not limited to electrical, gas, water,
11-22    or other utility cost savings and operating cost savings resulting
11-23    from automatic monitoring and control, as determined by the state
11-24    agency in this subsection, divided by the number of years in the
11-25    contract term.
11-26          (h)  A contract under this chapter may be let under
11-27    competitive sealed proposal procedures.  Notice of the request for
 12-1    proposals shall be given in the manner provided for in Chapter
 12-2    2156, Government Code.  Before awarding a [the] contract for energy
 12-3    conservation measures, the state agency shall submit the selected
 12-4    proposal to the State Energy Conservation Office and the Texas
 12-5    Energy Coordination Council for review and comment before awarding
 12-6    the contract.  The State Energy Conservation Office and the Texas
 12-7    Energy Coordination Council will provide a cost-benefit analysis of
 12-8    the proposals for energy conservation measures and an analysis of
 12-9    the guaranteed savings projected by offerors and may charge a fee
12-10    for this service.  The contract shall be awarded to the responsible
12-11    offeror whose proposal, following negotiations, is determined to be
12-12    the most advantageous to the state agency considering the savings
12-13    and other evaluation factors set forth in the request for proposals
12-14    except that if the state agency finds that no offer is acceptable,
12-15    it shall refuse all offers.
12-16          (k)  To obtain the best final offers, the state agency may
12-17    allow proposal revisions after submissions and before the award of
12-18    the contract.  Final review and approval of a [the] contract for
12-19    energy conservation measures will be provided by the State Energy
12-20    Conservation Office.
12-21          (l)  The legislature shall base an agency's appropriation for
12-22    energy or water costs during a fiscal year on the sum of:
12-23                (1)  the agency's estimated energy or water costs for
12-24    that fiscal year; and
12-25                (2)  if a contract under this section is in effect, the
12-26    agency's estimated net savings resulting from the contract during
12-27    the contract term, divided by the number of years in the contract
 13-1    term.
 13-2          SECTION 6.  This Act takes effect September 1, 1999.
 13-3          SECTION 7.  The importance of this legislation and the
 13-4    crowded condition of the calendars in both houses create an
 13-5    emergency and an imperative public necessity that the
 13-6    constitutional rule requiring bills to be read on three several
 13-7    days in each house be suspended, and this rule is hereby suspended.