1-1 AN ACT
1-2 relating to contracts for and the financing of energy conservation
1-3 measures taken by state agencies and political subdivisions.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 44.901, Education Code, is amended by
1-6 amending Subsections (f)-(h) and adding Subsection (i) to read as
1-7 follows:
1-8 (f) Energy [A contract for energy] conservation measures[,]
1-9 with respect to existing buildings or facilities[,] may be
1-10 financed:
1-11 (1) under a lease/purchase contract that has[, with] a
1-12 term not to exceed 15 [10] years from the final date of
1-13 installation and[,] that meets federal tax requirements for
1-14 tax-free municipal leasing or long-term financing;
1-15 (2) with the proceeds of bonds; or
1-16 (3) under a contract with the provider of the energy
1-17 conservation measures that has a term not to exceed 15 years from
1-18 the final date of installation.
1-19 (g) A [The] contract for energy conservation measures shall
1-20 contain provisions pursuant to which the provider of the energy
1-21 conservation measures guarantees the amount of the savings to be
1-22 realized by the school district under the contract. If the term of
1-23 a contract for energy conservation measures exceeds one year, the
1-24 school district's contractual obligations in any one year during
2-1 the term of the contract beginning after the final date of
2-2 installation may not exceed the total energy and operating cost
2-3 savings, including but not limited to electrical, gas, or other
2-4 utility cost savings and operating cost savings resulting from
2-5 automatic monitoring and control as determined by the school
2-6 district in this subsection, divided by the number of years in the
2-7 contract term.
2-8 (h) [(g)] A contract under this section may be let under
2-9 competitive proposal procedures. Notice of the request for
2-10 proposals shall be published in the manner provided for
2-11 competitive bidding. Requests for proposals must solicit
2-12 quotations and must specify the relative importance of guaranteed
2-13 savings, price, return on investment, financial performance and
2-14 stability, quality, technical ability, experience, and other
2-15 evaluation factors. The contract shall be awarded to the
2-16 responsible offeror whose proposal, following negotiations, is
2-17 determined to be the most advantageous to the school district
2-18 considering the guaranteed savings and other evaluation factors set
2-19 forth in the request for proposals.
2-20 (i) [(h)] To obtain the best final offers, the school
2-21 district may allow proposal revisions after submissions and before
2-22 the award of the contract.
2-23 SECTION 2. Section 51.927, Education Code, as amended by
2-24 Chapters 627 and 1142, Acts of the 75th Legislature, Regular
2-25 Session, 1997, is amended by reenacting and amending Subsections
2-26 (f)-(k) and adding Subsection (l) to read as follows:
2-27 (f) The board may enter into a contract for a period of more
3-1 than one year for energy conservation measures with an entity if
3-2 the board finds that the amount the institution would spend on the
3-3 energy conservation measures will not exceed the amount to be saved
3-4 in energy and operating costs over 15 [10] years from the date of
3-5 installation. If the term of a contract for energy conservation
3-6 measures exceeds one year, the board's contractual obligation in
3-7 any year during the term of the contract beginning after the final
3-8 date of installation may not exceed the total energy and operating
3-9 cost savings, including but not limited to electrical, gas, or
3-10 other utility cost savings and operating cost savings resulting
3-11 from automatic monitoring and control, as determined by the board
3-12 in this subsection, divided by the number of years in the contract
3-13 term beginning after the final date of installation. The board
3-14 shall consider all costs of the energy conservation measures,
3-15 including costs of design, engineering, installation, maintenance,
3-16 repairs, and debt service.
3-17 (g) Energy [A contract for energy] conservation measures may
3-18 be financed:
3-19 (1) under a lease/purchase contract that has [, with]
3-20 a term not to exceed 15 [10] years from [after] the final date of
3-21 installation and[,] that meets federal tax requirements for
3-22 tax-free municipal leasing or long-term financing;
3-23 (2) with the proceeds of bonds; or
3-24 (3) under a contract with the provider of the energy
3-25 conservation measures that has a term not to exceed 15 years from
3-26 the final date of installation.
3-27 (h) A [The] contract for energy conservation measures shall
4-1 contain provisions pursuant to which the provider of the energy
4-2 conservation measures guarantees the amount of the savings to be
4-3 realized by the institution of higher education under the contract.
4-4 The Master Equipment Lease Purchase Program operated by the Texas
4-5 Public Finance Authority may be utilized by an institution to fund
4-6 a contract for energy conservation measures so long as the costs of
4-7 the energy conservation measures, including costs of design,
4-8 engineering, installation, maintenance, repairs, and anticipated
4-9 debt service requirements of the Master Equipment Lease Purchase
4-10 Program, do not exceed the total energy and operating cost savings,
4-11 as described in Subsection (f) [(e)], beginning after the final
4-12 date of installation.
4-13 (i) [(h)] A contract under this section may be let under
4-14 competitive sealed proposal procedures. Notice of the request for
4-15 proposals shall be given in the manner provided for in Chapter
4-16 2156, Government Code. The Texas Higher Education Coordinating
4-17 Board, in consultation with the State Energy Conservation Office
4-18 and the Texas Energy Coordination Council, shall establish
4-19 guidelines and an approval process for contracts awarded under this
4-20 section. The State Energy Conservation Office and the Texas Energy
4-21 Coordination Council shall review the selected proposal before a
4-22 contract is awarded. The State Energy Conservation Office may
4-23 provide a cost-benefit analysis of the proposals and analysis of
4-24 the guaranteed savings projected by offerors and may charge a fee
4-25 for this service. The contract shall be awarded to the
4-26 responsible offeror whose proposal, following negotiations, is
4-27 determined by the institution to be the most advantageous to the
5-1 institution considering the guaranteed savings and other evaluation
5-2 factors set forth in the request for proposals, except that if the
5-3 institution finds that no offer is acceptable, it shall refuse all
5-4 offers.
5-5 (j) [(i)] In accordance with regulations adopted by the
5-6 institution, the institution may conduct discussions with offerors
5-7 who submit proposals and who are determined to be reasonably
5-8 qualified for the award of the contract. Offerors shall be treated
5-9 fairly and equally with respect to any opportunity for discussion
5-10 and revision of proposals. To obtain the best final offers, the
5-11 institution may allow proposal revisions after submissions and
5-12 before the award of the contract.
5-13 (k) [(j)] If provided in a request for proposals under
5-14 Subsection (i) [(g) of this section], proposals shall be opened in
5-15 a manner that avoids disclosure of the contents to competing
5-16 offerors and keeps the proposals secret during negotiations. All
5-17 proposals are open for public inspection after a contract is
5-18 awarded unless the information is excepted from disclosure under
5-19 Chapter 552, Government Code.
5-20 (l) [(k)] The legislature shall base an institution's
5-21 appropriation for energy costs during a fiscal year on the sum of:
5-22 (1) the institution's estimated energy costs for that
5-23 fiscal year; and
5-24 (2) if a contract under this section is in effect, the
5-25 institution's estimated net savings resulting from the contract
5-26 during the contract term, divided by the number of years in the
5-27 contract term.
6-1 SECTION 3. Section 2166.406, Government Code, is amended by
6-2 amending Subsections (b) and (f)-(l) and adding Subsection (m) to
6-3 read as follows:
6-4 (b) A contract authorized under this section [chapter]
6-5 includes a contract for the installation of:
6-6 (1) insulation of the building structure and systems
6-7 within the building;
6-8 (2) storm windows or doors, caulking or weather
6-9 stripping, multiglazed windows or doors, heat absorbing or heat
6-10 reflective glazed and coated window or door systems, or other
6-11 window or door system modifications that reduce energy consumption;
6-12 (3) automatic energy control systems, including
6-13 computer software and technical data licenses;
6-14 (4) heating, ventilating, or air-conditioning system
6-15 modifications or replacements;
6-16 (5) lighting fixtures that increase energy efficiency;
6-17 (6) energy recovery systems;
6-18 (7) electric systems improvements; or
6-19 (8) other energy conservation-related improvements or
6-20 equipment (including improvements or equipment related to renewable
6-21 energy).
6-22 (f) The state agency may enter into a contract for a period
6-23 of more than one year for energy conservation measures with an
6-24 entity if the state agency finds that the amount the state agency
6-25 would spend on the energy conservation measures will not exceed the
6-26 amount to be saved in energy and operating costs over 15 [10] years
6-27 from the date of installation.
7-1 (g) Energy [A contract for energy] conservation measures[,]
7-2 with respect to existing buildings or facilities[,] may be
7-3 financed:
7-4 (1) under a lease/purchase contract that has [with] a
7-5 term not to exceed 15 [10] years from the final date of
7-6 installation and[,] that meets federal tax requirements for
7-7 tax-free municipal leasing or long-term financing;
7-8 (2) with the proceeds of bonds; or
7-9 (3) under a contract with the provider of the energy
7-10 conservation measures that has a term not to exceed 15 years from
7-11 the final date of installation.
7-12 (h) A [The] contract for energy conservation measures shall
7-13 contain provisions pursuant to which the provider of the energy
7-14 conservation measures guarantees the amount of the savings to be
7-15 realized by the state agency under the contract. If the term of a
7-16 contract for energy conservation measures exceeds one year, the
7-17 agency's contractual obligation in any year during the term of the
7-18 contract beginning after the final date of installation may not
7-19 exceed the total energy and operating cost savings, including but
7-20 not limited to electrical, gas, or other utility cost savings and
7-21 operating cost savings resulting from automatic monitoring and
7-22 control, as determined by the state agency in this subsection,
7-23 divided by the number of years in the contract term.
7-24 (i) [(h)] A contract under this section [chapter] may be let
7-25 under competitive sealed proposal procedures. Notice of the
7-26 request for proposals shall be given in the manner provided for in
7-27 Chapter 2156[, Government Code]. Before awarding the contract, the
8-1 state agency shall submit the selected proposal to the State Energy
8-2 Conservation Office and the Texas Energy Coordination Council for
8-3 review and comment before awarding the contract. The State Energy
8-4 Conservation Office and the Texas Energy Coordination Council will
8-5 provide a cost-benefit analysis of the proposals and an analysis of
8-6 the guaranteed savings projected by offerors and may charge a fee
8-7 for this service. The contract shall be awarded to the responsible
8-8 offeror whose proposal, following negotiations, is determined to be
8-9 the most advantageous to the state agency considering the savings
8-10 and other evaluation factors set forth in the request for proposals
8-11 except that if the state agency finds that no offer is acceptable,
8-12 it shall refuse all offers.
8-13 (j) [(i)] In accordance with regulations adopted by the
8-14 state agency, the state agency may conduct discussions with
8-15 offerors who submit proposals and who are determined to be
8-16 reasonably qualified for the award of the contract. Offerors shall
8-17 be treated fairly and equally with respect to any opportunity for
8-18 discussion and revision of proposals.
8-19 (k) [(j)] If provided in a request for proposals, proposals
8-20 shall be opened in a manner that avoids disclosure of the contents
8-21 to competing offerors and keeps the proposals secret during
8-22 negotiations. All proposals are open for public inspection after a
8-23 contract is awarded unless the information is excepted from
8-24 disclosure under Chapter 552[, Government Code].
8-25 (l) [(k)] To obtain the best final offers, the state agency
8-26 may allow proposal revisions after submissions and before the award
8-27 of the contract. Final review and approval of the contract will be
9-1 provided by the State Energy Conservation Office.
9-2 (m) [(l)] The legislature shall base an agency's
9-3 appropriation for energy costs during a fiscal year on the sum of:
9-4 (1) the agency's estimated energy costs for that
9-5 fiscal year; and
9-6 (2) if a contract under this section is in effect, the
9-7 agency's estimated net savings resulting from the contract during
9-8 the contract term, divided by the number of years in the contract
9-9 term.
9-10 SECTION 4. Section 302.004, Local Government Code, is
9-11 amended to read as follows:
9-12 Sec. 302.004. METHOD OF FINANCING; TERMS OF [LEASE-PURCHASE]
9-13 CONTRACT [AUTHORIZED]. (a) Energy [A contract for energy]
9-14 conservation measures[,] with respect to existing buildings or
9-15 facilities[,] may be financed:
9-16 (1) under a lease-purchase contract that has [with] a
9-17 term not to exceed 15 [10] years from the final date of
9-18 installation and that meets federal tax requirements for tax-free
9-19 municipal leasing or long-term financing;
9-20 (2) with the proceeds of bonds; or
9-21 (3) under a contract with the provider of the energy
9-22 conservation measures that has a term not to exceed 15 years from
9-23 the final date of installation.
9-24 (b) The contract shall contain provisions pursuant to which
9-25 the provider of the energy conservation measures guarantees the
9-26 amount of the savings to be realized by the local government under
9-27 the contract. If the term of a contract for energy conservation
10-1 measures exceeds one year, the local government's contractual
10-2 obligations in any one year during the term of the contract
10-3 beginning after the final date of installation may not exceed the
10-4 total energy and operating cost savings, including but not limited
10-5 to electrical, gas, or other utility cost savings and operating
10-6 cost savings resulting from automatic monitoring and control as
10-7 determined by the local government in this subsection, divided by
10-8 the number of years in the contract term.
10-9 SECTION 5. To the extent of any conflict, this Act prevails
10-10 over another Act of the 76th Legislature, Regular Session, 1999,
10-11 relating to nonsubstantive additions and corrections in enacted
10-12 codes, including H.B. No. 3156 or S.B. No. 1368.
10-13 SECTION 6. This Act takes effect September 1, 1999.
10-14 SECTION 7. The importance of this legislation and the
10-15 crowded condition of the calendars in both houses create an
10-16 emergency and an imperative public necessity that the
10-17 constitutional rule requiring bills to be read on three several
10-18 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2492 was passed by the House on April
16, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2492 was passed by the Senate on May
17, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor