By:  Brown                                             S.B. No. 305
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to contracts by school districts, institutions of higher
 1-2     education, and state agencies for water conservation measures.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  The heading to Section 44.901, Education Code, is
 1-5     amended to read as follows:
 1-6           Sec. 44.901.  ENERGY OR WATER CONSERVATION MEASURES.
 1-7           SECTION 2.  Subsections (a) through (f), Section 44.901,
 1-8     Education Code, are amended to read as follows:
 1-9           (a)  The board of trustees of a school district may enter
1-10     into a contract for energy or water conservation measures to reduce
1-11     energy or water consumption or operating costs of school facilities
1-12     in accordance with this section.
1-13           (b)  A contract to which this section applies includes a
1-14     contract for the installation of:
1-15                 (1)  insulation of the building structures and systems
1-16     within the building;
1-17                 (2)  storm windows or doors, caulking or
1-18     weatherstripping, multiglazed windows or doors, heat absorbing or
1-19     heat reflective glazed and coated window or door systems, or other
1-20     window or door system modifications that reduce energy consumption;
1-21                 (3)  automatic energy control systems, including
1-22     computer software and technical data licenses;
1-23                 (4)  heating, ventilating, or air-conditioning system
1-24     modifications or replacements that reduce energy or water
 2-1     consumption;
 2-2                 (5)  lighting fixtures that increase energy efficiency;
 2-3                 (6)  energy recovery systems;
 2-4                 (7)  electric systems improvements; [or]
 2-5                 (8)  water-conserving landscape irrigation equipment;
 2-6                 (9)  water-saving plumbing fixtures, appliances, or
 2-7     equipment;
 2-8                 (10)  water reuse, rainwater harvesting, or other
 2-9     alternative water source technologies for landscape irrigation,
2-10     toilet and urinal flushing, or other purposes;
2-11                 (11)  substitution of non-water-using fixtures,
2-12     appliances, equipment, or practices for water-using fixtures,
2-13     appliances, equipment, or practices, if feasible; or
2-14                 (12)  other energy or water conservation-related
2-15     improvements or equipment (including improvements or equipment
2-16     relating to renewable energy).
2-17           (c)  All energy or water conservation measures must comply
2-18     with current local, state, and federal construction and
2-19     environmental codes and regulations.  Notwithstanding anything to
2-20     the contrary in Subsection (b), a contract for energy or water
2-21     conservation measures shall not include improvements or equipment
2-22     that allow or cause water from any condensing, cooling, or
2-23     industrial process or any system of nonpotable usage over which the
2-24     public water supply system officials do not have sanitary
2-25     control[,] to be returned to the potable water supply.
2-26           (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
 4-1     the number of years in the contract term.
 4-2           SECTION 3.  Section 51.927, Education Code, as amended by
 4-3     Chapters 627 and 1142, Acts of the 75th Legislature, Regular
 4-4     Session, 1997, is reenacted and amended to read as follows:
 4-5           Sec. 51.927.  ENERGY OR WATER CONSERVATION MEASURES.
 4-6     (a)  The governing board of an institution of higher education may
 4-7     enter into a contract for energy or water conservation measures to
 4-8     reduce energy or water consumption or operating costs of
 4-9     institutional facilities in accordance with this section.
4-10           (b)  A contract to which this section applies includes a
4-11     contract for the installation of:
4-12                 (1)  insulation of a building structure and systems
4-13     within a building;
4-14                 (2)  storm windows of doors, caulking or weather
4-15     stripping, multiglazed windows or doors, heat-absorbing or
4-16     heat-reflective glazed and coated window or door systems, or other
4-17     window or door system modifications that reduce energy consumption;
4-18                 (3)  automatic energy control systems, including
4-19     computer software and technical data licenses;
4-20                 (4)  heating, ventilating, or air conditioning system
4-21     modifications or replacements that reduce energy or water
4-22     consumption;
4-23                 (5)  lighting fixtures that increase energy efficiency;
4-24                 (6)  energy recovery systems;
4-25                 (7)  electric systems improvements; [or]
4-26                 (8)  water-conserving landscape irrigation equipment;
 5-1                 (9)  water-saving plumbing fixtures, appliances, or
 5-2     equipment;
 5-3                 (10)  water reuse, rainwater harvesting, or other
 5-4     alternative water source technologies for landscape irrigation,
 5-5     toilet and urinal flushing, or other purposes;
 5-6                 (11)  substitution of non-water-using fixtures,
 5-7     appliances, equipment, or practices for water-using fixtures,
 5-8     appliances, equipment, or practices, if feasible; or
 5-9                 (12)  other energy or water conservation-related
5-10     improvements or equipment (including improvements or equipment
5-11     related to renewable energy).
5-12           (c)  All energy or water conservation measures must comply
5-13     with current local, state, and federal construction and
5-14     environmental codes and regulations.  Notwithstanding anything to
5-15     the contrary in Subsection (b), a contract for energy or water
5-16     conservation measures shall not include improvements or equipment
5-17     that allow or cause water from any condensing, cooling, or
5-18     industrial process or any system of nonpotable usage over which the
5-19     public water supply system officials do not have sanitary
5-20     control[,] to be returned to the potable water supply.
5-21           (d)  The entity with whom the board contracts must be
5-22     experienced in the design, implementation, and installation of the
5-23     energy or water conservation measures addressed by the contract.
5-24           (e)  Before entering into a contract for energy or water
5-25     conservation measures, the board shall require the provider of the
5-26     energy or water conservation measures to file with the board a
 6-1     payment and performance bond that is in an amount the board finds
 6-2     reasonable and necessary to protect the interests of the
 6-3     institution and is conditioned on the faithful execution of the
 6-4     terms of the contract.
 6-5           (f)  The board may enter into a contract for a period of more
 6-6     than one year for energy or water conservation measures with an
 6-7     entity if the board finds that the amount the institution would
 6-8     spend on the energy or water conservation measures will not exceed
 6-9     the amount to be saved in energy or water and operating costs over
6-10     10 years from the date of installation.  If the term of a contract
6-11     for energy or water conservation measures exceeds one year, the
6-12     board's contractual obligation in any year during the term of the
6-13     contract beginning after the final date of installation may not
6-14     exceed the total energy or water and operating cost savings,
6-15     including but not limited to electrical, gas, water, or other
6-16     utility cost savings and operating cost savings resulting from
6-17     automatic monitoring and control, as determined by the board in
6-18     this subsection, divided by the number of years in the contract
6-19     term beginning after the final date of installation.  The board
6-20     shall consider all costs of the energy or water conservation
6-21     measures, including costs of design, engineering, installation,
6-22     maintenance, repairs, and debt service.
6-23           (g)  A contract for energy or water conservation measures may
6-24     be a lease/purchase contract, with a term not to exceed 10 years
6-25     after the final date of installation, that meets federal tax
6-26     requirements for tax-free municipal leasing or long-term financing.
 7-1     The contract shall contain provisions pursuant to which the
 7-2     provider of the energy or water conservation measures guarantees
 7-3     the amount of the savings to be realized by the institution of
 7-4     higher education under the contract.  The Master Equipment Lease
 7-5     Purchase Program operated by the Texas Public Finance Authority may
 7-6     be utilized by an institution to fund a contract for energy or
 7-7     water conservation measures so long as the costs of the energy or
 7-8     water conservation measures, including costs of design,
 7-9     engineering, installation, maintenance, repairs, and anticipated
7-10     debt service requirements of the Master Equipment Lease Purchase
7-11     Program, do not exceed the total energy or water and operating cost
7-12     savings, as described in Subsection (f) [(e)], beginning after the
7-13     final date of installation.
7-14           (h)  A contract under this section may be let under
7-15     competitive sealed proposal procedures.  Notice of the request for
7-16     proposals shall be given in the manner provided for in Chapter
7-17     2156, Government Code.  The Texas Higher Education Coordinating
7-18     Board, in consultation with the State Energy Conservation Office
7-19     and the Texas Energy Coordination Council with regard to energy
7-20     conservation measures, shall establish guidelines and an approval
7-21     process for contracts awarded under this section.  The State Energy
7-22     Conservation Office and the Texas Energy Coordination Council shall
7-23     review the selected proposal before a contract for energy
7-24     conservation measures is awarded.  The State Energy Conservation
7-25     Office may provide a cost-benefit analysis of the proposals for
7-26     energy conservation measures and analysis of the guaranteed savings
 8-1     projected by offerors and may charge a fee for this service.   The
 8-2     contract shall be awarded to the responsible offeror whose
 8-3     proposal, following negotiations, is determined by the institution
 8-4     to be the most advantageous to the institution considering the
 8-5     guaranteed savings and other evaluation factors set forth in the
 8-6     request for proposals, except that if the institution finds that no
 8-7     offer is acceptable, it shall refuse all offers.
 8-8           (i)  In accordance with regulations adopted by the
 8-9     institution, the institution may conduct discussions with offerors
8-10     who submit proposals and who are determined to be reasonably
8-11     qualified for the award of the contract.  Offerors shall be treated
8-12     fairly and equally with respect to any opportunity for discussion
8-13     and revision of proposals.  To obtain the best final offers, the
8-14     institution may allow proposal revisions after submissions and
8-15     before the award of the contract.
8-16           (j)  If provided in a request for proposals under Subsection
8-17     (h) [(g) of this section], proposals shall be opened in a manner
8-18     that avoids disclosure of the contents to competing offerors and
8-19     keeps the proposals secret during negotiations.  All proposals are
8-20     open for public inspection after a contract is awarded unless the
8-21     information is excepted from disclosure under Chapter 552,
8-22     Government Code.
8-23           (k)  The legislature shall base an institution's
8-24     appropriation for energy or water costs during a fiscal year on the
8-25     sum of:
8-26                 (1)  the institution's estimated energy or water costs
 9-1     for that fiscal year; and
 9-2                 (2)  if a contract under this section is in effect, the
 9-3     institution's estimated net savings resulting from the contract
 9-4     during the contract term, divided by the number of years in the
 9-5     contract term.
 9-6           SECTION 4.  The heading to Section 2166.406, Government Code,
 9-7     is amended to read as follows:
 9-8           Sec. 2166.406.  ENERGY OR WATER CONSERVATION MEASURES.
 9-9           SECTION 5.  Subsections (a) through (h), (k), and (l),
9-10     Section 2166.406, Government Code, are amended to read as follows:
9-11           (a)  Notwithstanding any other provisions of this chapter,
9-12     the governing body of a state agency, without the consent of the
9-13     commission, may enter into a contract for energy or water
9-14     conservation measures to reduce energy or water consumption or
9-15     operating costs of governmental facilities in accordance with this
9-16     section.
9-17           (b)  A contract authorized under this chapter includes a
9-18     contract for the installation of:
9-19                 (1)  insulation of the building structure and systems
9-20     within the building;
9-21                 (2)  storm windows or doors, caulking or weather
9-22     stripping, multiglazed windows or doors, heat absorbing or heat
9-23     reflective glazed and coated window or door systems, or other
9-24     window or door system modifications that reduce energy consumption;
9-25                 (3)  automatic energy control systems, including
9-26     computer software and technical data licenses;
 10-1                (4)  heating, ventilating, or air-conditioning system
 10-2    modifications or replacements that reduce energy or water
 10-3    consumption;
 10-4                (5)  lighting fixtures that increase energy efficiency;
 10-5                (6)  energy recovery systems;
 10-6                (7)  electric systems improvements; [or]
 10-7                (8)  water-conserving landscape irrigation equipment;
 10-8                (9)  water-saving plumbing fixtures, appliances, or
 10-9    equipment;
10-10                (10)  water reuse, rainwater harvesting, or other
10-11    alternative water source technologies for landscape irrigation,
10-12    toilet and urinal flushing, or other purposes;
10-13                (11)  substitution of non-water-using fixtures,
10-14    appliances, equipment, or practices for water-using fixtures,
10-15    appliances, equipment, or practices, if feasible; or
10-16                (12)  other energy or water conservation-related
10-17    improvements or equipment (including improvements or equipment
10-18    related to renewable energy).
10-19          (c)  All energy or water conservation measures must comply
10-20    with current local, state, and federal construction and
10-21    environmental codes and regulations.  Notwithstanding anything to
10-22    the contrary in Subsection (b), a contract for energy or water
10-23    conservation measures shall not include improvements or equipment
10-24    that allow or cause water from any condensing, cooling, or
10-25    industrial process or any system of nonpotable usage over which the
10-26    public water supply system officials do not have sanitary control
 11-1    to be returned to the potable water supply.
 11-2          (d)  The entity with whom the board contracts must be
 11-3    experienced in the design, implementation, and installation of the
 11-4    energy or water conservation measures addressed by the contract.
 11-5          (e)  Before entering into a contract for energy or water
 11-6    conservation measures, the governing body of the state agency shall
 11-7    require the provider of the energy or water conservation measures
 11-8    to file with the governing body a payment and performance bond that
 11-9    is in an amount the governing body finds reasonable and necessary
11-10    to protect the interests of the state agency and that is
11-11    conditioned on the faithful execution of the terms of the contract.
11-12          (f)  The state agency may enter into a contract for a period
11-13    of more than one year for energy or water conservation measures
11-14    with an entity if the state agency finds that the amount the state
11-15    agency would spend on the energy or water conservation measures
11-16    will not exceed the amount to be saved in energy or water and
11-17    operating costs over 10 years from the date of installation.
11-18          (g)  A contract for energy or water conservation measures,
11-19    with respect to existing buildings or facilities, may be a
11-20    lease/purchase contract with a term not to exceed 10 years, that
11-21    meets federal tax requirements for tax-free municipal leasing or
11-22    long-term financing.  The contract shall contain provisions
11-23    pursuant to which the provider of the energy or water conservation
11-24    measures guarantees the amount of the savings to be realized by the
11-25    state agency under the contract.  If the term of a contract for
11-26    energy or water conservation measures exceeds one year, the
 12-1    agency's contractual obligation in any year during the term of the
 12-2    contract may not exceed the total energy or water and operating
 12-3    cost savings, including but not limited to electrical, gas, water,
 12-4    or other utility cost savings and operating cost savings resulting
 12-5    from automatic monitoring and control, as determined by the state
 12-6    agency in this subsection, divided by the number of years in the
 12-7    contract term.
 12-8          (h)  A contract under this chapter may be let under
 12-9    competitive sealed proposal procedures.  Notice of the request for
12-10    proposals shall be given in the manner provided for in Chapter
12-11    2156, Government Code.  Before awarding a [the] contract for energy
12-12    conservation measures, the state agency shall submit the selected
12-13    proposal to the State Energy Conservation Office and the Texas
12-14    Energy Coordination Council for review and comment before awarding
12-15    the contract.  The State Energy Conservation Office and the Texas
12-16    Energy Coordination Council will provide a cost-benefit analysis of
12-17    the proposals for energy conservation measures and an analysis of
12-18    the guaranteed savings projected by offerors and may charge a fee
12-19    for this service.  The contract shall be awarded to the responsible
12-20    offeror whose proposal, following negotiations, is determined to be
12-21    the most advantageous to the state agency considering the savings
12-22    and other evaluation factors set forth in the request for proposals
12-23    except that if the state agency finds that no offer is acceptable,
12-24    it shall refuse all offers.
12-25          (k)  To obtain the best final offers, the state agency may
12-26    allow proposal revisions after submissions and before the award of
 13-1    the contract.  Final review and approval of a [the] contract for
 13-2    energy conservation measures will be provided by the State Energy
 13-3    Conservation Office.
 13-4          (l)  The legislature shall base an agency's appropriation for
 13-5    energy or water costs during a fiscal year on the sum of:
 13-6                (1)  the agency's estimated energy or water costs for
 13-7    that fiscal year; and
 13-8                (2)  if a contract under this section is in effect, the
 13-9    agency's estimated net savings resulting from the contract during
13-10    the contract term, divided by the number of years in the contract
13-11    term.
13-12          SECTION 6.  This Act takes effect September 1, 1999.
13-13          SECTION 7.  The importance of this legislation and the
13-14    crowded condition of the calendars in both houses create an
13-15    emergency and an imperative public necessity that the
13-16    constitutional rule requiring bills to be read on three several
13-17    days in each house be suspended, and this rule is hereby suspended.