By Carter                                             H.B. No. 2277
         77R8288 JAT-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to contracts by certain educational institutions, state
 1-3     agencies, and local governments for energy conservation measures.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 44.901(b), Education Code, is amended to
 1-6     read as follows:
 1-7           (b)  A contract to which this section applies includes a
 1-8     contract for the installation of:
 1-9                 (1)  insulation of the building structures and systems
1-10     within the building;
1-11                 (2)  storm windows or doors, caulking or
1-12     weatherstripping, multiglazed windows or doors, heat absorbing or
1-13     heat reflective glazed and coated window or door systems, or other
1-14     window or door system modifications that reduce energy consumption;
1-15                 (3)  automatic energy control systems, including
1-16     computer software and technical data licenses;
1-17                 (4)  heating, ventilating, or air-conditioning system
1-18     modifications or replacements;
1-19                 (5)  lighting fixtures that increase energy efficiency;
1-20                 (6)  energy recovery systems;
1-21                 (7)  electric systems improvements; or
1-22                 (8)  other energy conservation-related improvements or
1-23     equipment, [(]including:
1-24                       (A)  improvements or equipment relating to
 2-1     renewable energy; and
 2-2                       (B)  facility repairs or modifications necessary
 2-3     for the installation of energy conservation measures under this
 2-4     section[)].
 2-5           SECTION 2. Sections 51.927(b) and (i), Education Code, are
 2-6     amended to read as follows:
 2-7           (b)  A contract to which this section applies includes a
 2-8     contract for the installation of:
 2-9                 (1)  insulation of a building structure and systems
2-10     within a building;
2-11                 (2)  storm windows of doors, caulking or weather
2-12     stripping, multiglazed windows or doors, heat-absorbing or
2-13     heat-reflective glazed and coated window or door systems, or other
2-14     window or door system modifications that reduce energy consumption;
2-15                 (3)  automatic energy control systems, including
2-16     computer software and technical data licenses;
2-17                 (4)  heating, ventilating, or air conditioning system
2-18     modifications or replacements;
2-19                 (5)  lighting fixtures that increase energy efficiency;
2-20                 (6)  energy recovery systems;
2-21                 (7)  electric systems improvements; or
2-22                 (8)  other energy conservation-related improvements or
2-23     equipment, [(]including:
2-24                       (A)  improvements or equipment relating to
2-25     renewable energy; and
2-26                       (B)  facility repairs or modifications necessary
2-27     for the installation of energy conservation measures under this
 3-1     section[)].
 3-2           (i)  A contract under this section may be let under
 3-3     competitive sealed proposal procedures. Notice of the request for
 3-4     proposals shall be given in the manner provided for in Chapter
 3-5     2156, Government Code. The Texas Higher Education Coordinating
 3-6     Board, in consultation with the State Energy Conservation Office
 3-7     [and the Texas Energy Coordination Council] with regard to energy
 3-8     conservation measures, shall establish guidelines and an approval
 3-9     process for contracts awarded under this section. The guidelines
3-10     must require that the cost savings projected by an offeror be
3-11     reviewed by a licensed professional engineer who is not an officer
3-12     or employee of an offeror for the contract under review or
3-13     otherwise associated with the contract. An engineer who reviews a
3-14     contract shall maintain the confidentiality of any proprietary
3-15     information the engineer acquires while reviewing the contract. A
3-16     contract is not required to be reviewed or approved by the State
3-17     Energy Conservation Office [or Texas Energy Coordination Council].
3-18     Section 19, The Texas Engineering Practice Act (Article 3271a,
3-19     Vernon's Texas Civil Statutes), applies to work performed under the
3-20     contract. The contract shall be awarded to the responsible offeror
3-21     whose proposal, following negotiations, is determined by the
3-22     institution to be the most advantageous to the institution
3-23     considering the guaranteed savings and other evaluation factors set
3-24     forth in the request for proposals, except that if the institution
3-25     finds that no offer is acceptable, it shall refuse all offers.
3-26           SECTION 3. Sections 2166.406(b), (g), (h), (i), and (l),
3-27     Government Code, are amended to read as follows:
 4-1           (b)  A contract authorized under this section includes a
 4-2     contract for the installation of:
 4-3                 (1)  insulation of the building structure and systems
 4-4     within the building;
 4-5                 (2)  storm windows or doors, caulking or weather
 4-6     stripping, multiglazed windows or doors, heat absorbing or heat
 4-7     reflective glazed and coated window or door systems, or other
 4-8     window or door system modifications that reduce energy consumption;
 4-9                 (3)  automatic energy control systems, including
4-10     computer software and technical data licenses;
4-11                 (4)  heating, ventilating, or air-conditioning system
4-12     modifications or replacements;
4-13                 (5)  lighting fixtures that increase energy efficiency;
4-14                 (6)  energy recovery systems;
4-15                 (7)  electric systems improvements; or
4-16                 (8)  other energy conservation-related improvements or
4-17     equipment, [(]including:
4-18                       (A)  improvements or equipment relating to
4-19     renewable energy; and
4-20                       (B)  facility repairs or modifications necessary
4-21     for the installation of energy conservation measures under this
4-22     section[)].
4-23           (g)  Energy conservation measures with respect to existing
4-24     buildings or facilities may be financed:
4-25                 (1)  under a lease/purchase contract that has a term
4-26     not to exceed 15 years from the final date of installation and that
4-27     meets federal tax requirements for tax-free municipal leasing or
 5-1     long-term financing, including a lease/purchase contract under the
 5-2     Master Equipment Lease Purchase Program administered by the Texas
 5-3     Public Finance Authority;
 5-4                 (2)  with the proceeds of bonds; or
 5-5                 (3)  under a contract with the provider of the energy
 5-6     conservation measures that has a term not to exceed 15 years from
 5-7     the final date of installation.
 5-8           (h)  A contract for energy conservation measures shall
 5-9     contain provisions pursuant to which the provider of the energy
5-10     conservation measures guarantees the amount of the savings to be
5-11     realized by the state agency under the contract. If the term of a
5-12     contract for energy conservation measures exceeds one year, the
5-13     agency's contractual obligation, including costs of design,
5-14     engineering, installation, maintenance, repairs, and anticipated
5-15     debt service, in any year during the term of the contract beginning
5-16     after the final date of installation may not exceed the total
5-17     energy and operating cost savings, including but not limited to
5-18     electrical, gas, or other utility cost savings and operating cost
5-19     savings resulting from automatic monitoring and control, as
5-20     determined by the state agency in this subsection, divided by the
5-21     number of years in the contract term.
5-22           (i)  A contract under this section may be let under
5-23     competitive sealed proposal procedures. Notice of the request for
5-24     proposals shall be given in the manner provided for in Chapter
5-25     2156. The State Energy Conservation Office shall establish
5-26     guidelines and an approval process for contracts awarded under this
5-27     section. The guidelines adopted under this subsection must require
 6-1     that the cost savings projected by an offeror be reviewed by a
 6-2     licensed professional engineer who is not an officer or employee of
 6-3     an offeror for the contract under review or otherwise associated
 6-4     with the contract. An engineer who reviews a contract shall
 6-5     maintain the confidentiality of any proprietary information the
 6-6     engineer acquires while reviewing the contract. A contract is not
 6-7     required to be reviewed or approved by the State Energy
 6-8     Conservation Office. Section 19, The Texas Engineering Practice Act
 6-9     (Article 3271a, Vernon's Texas Civil Statutes), applies to work
6-10     performed under the contract. [Before awarding the contract, the
6-11     state agency shall submit the selected proposal to the State Energy
6-12     Conservation Office and the Texas Energy Coordination Council for
6-13     review and comment before awarding the contract. The State Energy
6-14     Conservation Office and the Texas Energy Coordination Council will
6-15     provide a cost-benefit analysis of the proposals and an analysis of
6-16     the guaranteed savings projected by offerors and may charge a fee
6-17     for this service.] The contract shall be awarded to the responsible
6-18     offeror whose proposal, following negotiations, is determined to be
6-19     the most advantageous to the state agency considering the savings
6-20     and other evaluation factors set forth in the request for proposals
6-21     except that if the state agency finds that no offer is acceptable,
6-22     it shall refuse all offers.
6-23           (l)  To obtain the best final offers, the state agency may
6-24     allow proposal revisions after submissions and before the award of
6-25     the contract. [Final review and approval of the contract will be
6-26     provided by the State Energy Conservation Office.]
6-27           SECTION 4. Section 302.002(b), Local Government Code, is
 7-1     amended to read as follows:
 7-2           (b)  A contract authorized under this chapter includes a
 7-3     contract for the installation of:
 7-4                 (1)  insulation of the building structure and systems
 7-5     within the building;
 7-6                 (2)  storm windows or doors, caulking or weather
 7-7     stripping, multiglazed windows or doors, heat-absorbing or
 7-8     heat-reflective glazed and coated window or door systems, or other
 7-9     window or door system modifications that reduce energy consumption;
7-10                 (3)  automatic energy control systems, including
7-11     computer software and technical data licenses;
7-12                 (4)  heating, ventilating, or air conditioning system
7-13     modifications or replacements;
7-14                 (5)  lighting fixtures that increase energy efficiency;
7-15                 (6)  energy recovery systems;
7-16                 (7)  electric systems improvements; or
7-17                 (8)  other energy-conservation-related improvements or
7-18     equipment, [(]including:
7-19                       (A)  improvements or equipment relating to
7-20     renewable energy; and
7-21                       (B)  facility repairs or modifications necessary
7-22     for the installation of energy conservation measures under this
7-23     section[)].
7-24           SECTION 5. This Act takes effect September 1, 2001, and
7-25     applies only to contracts entered into by an educational
7-26     institution, state agency, or local government on or after that
7-27     date. Contracts entered into by an educational institution, state
 8-1     agency, or local government before the effective date of this Act
 8-2     are covered by the law in effect on the date the contract was
 8-3     entered into, and the former law is continued in effect for that
 8-4     purpose.