1-1 By: Carter (Senate Sponsor - Fraser) H.B. No. 2277
1-2 (In the Senate - Received from the House April 30, 2001;
1-3 May 1, 2001, read first time and referred to Committee on State
1-4 Affairs; May 9, 2001, reported favorably, as amended, by the
1-5 following vote: Yeas 8, Nays 0; May 9, 2001, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Fraser
1-7 Amend H.B. 2277 as follows:
1-8 On page 6, line 18, strike the line and replace with the
1-9 following:
1-10 "A contract under this chapter may be let in accordance with".
1-11 A BILL TO BE ENTITLED
1-12 AN ACT
1-13 relating to contracts by certain educational institutions, state
1-14 agencies, and local governments for energy conservation measures.
1-15 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-16 SECTION 1. Sections 44.901(b), (e), (g), (h), and (i),
1-17 Education Code, are amended to read as follows:
1-18 (b) A contract to which this section applies includes a
1-19 contract for the installation or implementation of:
1-20 (1) insulation of the building structures and systems
1-21 within the building;
1-22 (2) storm windows or doors, caulking or
1-23 weatherstripping, multiglazed windows or doors, heat absorbing or
1-24 heat reflective glazed and coated window or door systems, or other
1-25 window or door system modifications that reduce energy consumption;
1-26 (3) automatic energy control systems, including
1-27 computer software and technical data licenses;
1-28 (4) heating, ventilating, or air-conditioning system
1-29 modifications or replacements;
1-30 (5) lighting fixtures that increase energy efficiency;
1-31 (6) energy recovery systems;
1-32 (7) electric systems improvements; or
1-33 (8) other energy conservation-related improvements or
1-34 equipment, [(]including improvements or equipment relating to
1-35 renewable energy[)].
1-36 (e) Before entering into a contract for energy conservation
1-37 measures, the board shall require the provider of the energy
1-38 conservation measures to file with the board a payment and
1-39 performance bond relating to the installation of energy
1-40 conservation measures in accordance with Chapter 2253, Government
1-41 Code. The board [that is in an amount the board finds reasonable
1-42 and necessary to protect the interests of the school district and
1-43 that] may also require a separate bond to cover the value of the
1-44 guaranteed savings on the contract [and is conditioned on the
1-45 faithful execution of the terms of the contract].
1-46 (g) A contract for energy conservation measures shall
1-47 contain provisions pursuant to which the provider of the energy
1-48 conservation measures guarantees the amount of the savings to be
1-49 realized by the school district under the contract. If the term of
1-50 a contract for energy conservation measures exceeds one year, the
1-51 school district's contractual obligations in any one year during
1-52 the term of the contract beginning after the final date of
1-53 installation may not exceed the total energy and operating cost
1-54 savings, including but not limited to electrical, gas, or other
1-55 utility cost savings and operating cost savings resulting from the
1-56 measures [automatic monitoring and control] as determined by the
1-57 school district in this subsection, divided by the number of years
1-58 in the contract term.
1-59 (h) A contract under this section shall [may] be let
1-60 according to the [under competitive proposal] procedures
1-61 established for professional services by Section 2254.004,
1-62 Government Code. Notice of the request for qualifications
1-63 [proposals] shall be published in the manner provided for
2-1 competitive bidding. [Requests for proposals must solicit
2-2 quotations and must specify the relative importance of guaranteed
2-3 savings, price, return on investment, financial performance and
2-4 stability, quality, technical ability, experience, and other
2-5 evaluation factors. The contract shall be awarded to the
2-6 responsible offeror whose proposal, following negotiations, is
2-7 determined to be the most advantageous to the school district
2-8 considering the guaranteed savings and other evaluation factors set
2-9 forth in the request for proposals.]
2-10 [(i) To obtain the best final offers, the school district
2-11 may allow proposal revisions after submissions and before the award
2-12 of the contract.]
2-13 SECTION 2. Sections 51.927(b), (e), (f), and (h)-(l),
2-14 Education Code, are amended to read as follows:
2-15 (b) A contract to which this section applies includes a
2-16 contract for the installation or implementation of:
2-17 (1) insulation of a building structure and systems
2-18 within a building;
2-19 (2) storm windows or [of] doors, caulking or weather
2-20 stripping, multiglazed windows or doors, heat-absorbing or
2-21 heat-reflective glazed and coated window or door systems, or other
2-22 window or door system modifications that reduce energy consumption;
2-23 (3) automatic energy control systems, including
2-24 computer software and technical data licenses;
2-25 (4) heating, ventilating, or air conditioning system
2-26 modifications or replacements;
2-27 (5) lighting fixtures that increase energy efficiency;
2-28 (6) energy recovery systems;
2-29 (7) electric systems improvements; or
2-30 (8) other energy conservation-related improvements or
2-31 equipment, [(]including improvements or equipment related to
2-32 renewable energy[)].
2-33 (e) Before entering into a contract for energy conservation
2-34 measures, the board shall require the provider of the energy
2-35 conservation measures to file with the board a payment and
2-36 performance bond in accordance with Chapter 2253, Government Code.
2-37 The board may also require a separate bond to cover the value of
2-38 the guaranteed savings on [that is in an amount the board finds
2-39 reasonable and necessary to protect the interests of the
2-40 institution and is conditioned on the faithful execution of the
2-41 terms of] the contract.
2-42 (f) The board may enter into a contract for a period of more
2-43 than one year for energy conservation measures with an entity if
2-44 the board finds that the amount the institution would spend on the
2-45 energy conservation measures will not exceed the amount to be saved
2-46 in energy and operating costs over 15 years from the date of
2-47 installation. If the term of a contract for energy conservation
2-48 measures exceeds one year, the board's contractual obligation in
2-49 any year during the term of the contract beginning after the final
2-50 date of installation may not exceed the total energy and operating
2-51 cost savings, including but not limited to electrical, gas, or
2-52 other utility cost savings and operating cost savings resulting
2-53 from the measures [automatic monitoring and control], as determined
2-54 by the board in this subsection, divided by the number of years in
2-55 the contract term beginning after the final date of installation.
2-56 The board shall consider all costs of the energy conservation
2-57 measures, including costs of design, engineering, installation,
2-58 maintenance, repairs, and debt service.
2-59 (h) A contract for energy conservation measures shall
2-60 contain provisions pursuant to which the provider of the energy
2-61 conservation measures guarantees the amount of the savings to be
2-62 realized by the institution of higher education under the contract.
2-63 The Master Equipment Lease Purchase Program operated by the Texas
2-64 Public Finance Authority may be utilized by an institution to fund
2-65 a contract for energy conservation measures so long as the costs of
2-66 the energy conservation measures, including costs of design,
2-67 engineering, installation, [maintenance, repairs,] and anticipated
2-68 debt service requirements of the Master Equipment Lease Purchase
2-69 Program, do not exceed the total energy and operating cost savings,
3-1 as described in Subsection (f), beginning after the final date of
3-2 installation.
3-3 (i) A contract under this section shall [may] be let
3-4 according to the [under competitive sealed proposal] procedures
3-5 established for professional services by Section 2254.004,
3-6 Government Code. Notice of the request for qualifications
3-7 [proposals] shall be given in the manner provided for under Section
3-8 2156.002 [in Chapter 2156], Government Code. The Texas Higher
3-9 Education Coordinating Board, in consultation with the State Energy
3-10 Conservation Office [and the Texas Energy Coordination Council]
3-11 with regard to energy conservation measures, shall establish
3-12 guidelines and an approval process for contracts awarded under this
3-13 section. The guidelines must require that the cost savings
3-14 projected by an offeror be reviewed by a licensed professional
3-15 engineer who is not an officer or employee of an offeror for the
3-16 contract under review or otherwise associated with the contract. An
3-17 engineer who reviews a contract shall maintain the confidentiality
3-18 of any proprietary information the engineer acquires while
3-19 reviewing the contract. A contract is not required to be reviewed
3-20 or approved by the State Energy Conservation Office [or Texas
3-21 Energy Coordination Council]. Section 19, The Texas Engineering
3-22 Practice Act (Article 3271a, Vernon's Texas Civil Statutes),
3-23 applies to work performed under the contract. [The contract shall
3-24 be awarded to the responsible offeror whose proposal, following
3-25 negotiations, is determined by the institution to be the most
3-26 advantageous to the institution considering the guaranteed savings
3-27 and other evaluation factors set forth in the request for
3-28 proposals, except that if the institution finds that no offer is
3-29 acceptable, it shall refuse all offers.]
3-30 (j) [In accordance with regulations adopted by the
3-31 institution, the institution may conduct discussions with offerors
3-32 who submit proposals and who are determined to be reasonably
3-33 qualified for the award of the contract. Offerors shall be treated
3-34 fairly and equally with respect to any opportunity for discussion
3-35 and revision of proposals. To obtain the best final offers, the
3-36 institution may allow proposal revisions after submissions and
3-37 before the award of the contract.]
3-38 [(k) If provided in a request for proposals under Subsection
3-39 (i), proposals shall be opened in a manner that avoids disclosure
3-40 of the contents to competing offerors and keeps the proposals
3-41 secret during negotiations. All proposals are open for public
3-42 inspection after a contract is awarded unless the information is
3-43 excepted from disclosure under Chapter 552, Government Code.]
3-44 [(l)] The legislature shall base an institution's
3-45 appropriation for energy costs during a fiscal year on the sum of:
3-46 (1) the institution's estimated energy costs for that
3-47 fiscal year; and
3-48 (2) if a contract under this section is in effect, the
3-49 institution's estimated net savings resulting from the contract
3-50 during the contract term, divided by the number of years in the
3-51 contract term.
3-52 SECTION 3. Sections 2166.406(b), (e), and (g)-(m), Government
3-53 Code, are amended to read as follows:
3-54 (b) A contract authorized under this section includes a
3-55 contract for the installation or implementation of:
3-56 (1) insulation of the building structure and systems
3-57 within the building;
3-58 (2) storm windows or doors, caulking or weather
3-59 stripping, multiglazed windows or doors, heat absorbing or heat
3-60 reflective glazed and coated window or door systems, or other
3-61 window or door system modifications that reduce energy consumption;
3-62 (3) automatic energy control systems, including
3-63 computer software and technical data licenses;
3-64 (4) heating, ventilating, or air-conditioning system
3-65 modifications or replacements;
3-66 (5) lighting fixtures that increase energy efficiency;
3-67 (6) energy recovery systems;
3-68 (7) electric systems improvements; or
3-69 (8) other energy conservation-related improvements or
4-1 equipment, [(]including improvements or equipment related to
4-2 renewable energy[)].
4-3 (e) Before entering into a contract for energy conservation
4-4 measures, the governing body of the state agency shall require the
4-5 provider of the energy conservation measures to file with the
4-6 governing body a payment and performance bond in accordance with
4-7 Chapter 2253. The governing body may also require a separate bond
4-8 to cover the value of the guaranteed savings on [that is in an
4-9 amount the governing body finds reasonable and necessary to protect
4-10 the interests of the state agency and that is conditioned on the
4-11 faithful execution of the terms of] the contract.
4-12 (g) Energy conservation measures with respect to existing
4-13 buildings or facilities may be financed:
4-14 (1) under a lease/purchase contract that has a term
4-15 not to exceed 15 years from the final date of installation and that
4-16 meets federal tax requirements for tax-free municipal leasing or
4-17 long-term financing, including a lease/purchase contract under the
4-18 Master Equipment Lease Purchase Program administered by the Texas
4-19 Public Finance Authority;
4-20 (2) with the proceeds of bonds; or
4-21 (3) under a contract with the provider of the energy
4-22 conservation measures that has a term not to exceed 15 years from
4-23 the final date of installation.
4-24 (h) A contract for energy conservation measures shall
4-25 contain provisions pursuant to which the provider of the energy
4-26 conservation measures guarantees the amount of the savings to be
4-27 realized by the state agency under the contract. If the term of a
4-28 contract for energy conservation measures exceeds one year, the
4-29 agency's contractual obligation, including costs of design,
4-30 engineering, installation, and anticipated debt service, in any
4-31 year during the term of the contract beginning after the final date
4-32 of installation may not exceed the total energy and operating cost
4-33 savings, including but not limited to electrical, gas, or other
4-34 utility cost savings and operating cost savings resulting from the
4-35 measures [automatic monitoring and control], as determined by the
4-36 state agency in this subsection, divided by the number of years in
4-37 the contract term.
4-38 (i) A contract under this section shall [may] be let
4-39 according to the [under competitive sealed proposal] procedures
4-40 established for professional services by Section 2254.004. Notice
4-41 of the request for qualifications [proposals] shall be given in the
4-42 manner provided for under Section 2156.002 [in Chapter 2156]. The
4-43 State Energy Conservation Office shall establish guidelines and an
4-44 approval process for contracts awarded under this section. The
4-45 guidelines adopted under this subsection must require that the cost
4-46 savings projected by an offeror be reviewed by a licensed
4-47 professional engineer who is not an officer or employee of an
4-48 offeror for the contract under review or otherwise associated with
4-49 the contract. An engineer who reviews a contract shall maintain
4-50 the confidentiality of any proprietary information the engineer
4-51 acquires while reviewing the contract. Section 19, The Texas
4-52 Engineering Practice Act (Article 3271a, Vernon's Texas Civil
4-53 Statutes), applies to work performed under the contract. [Before
4-54 awarding the contract, the state agency shall submit the selected
4-55 proposal to the State Energy Conservation Office and the Texas
4-56 Energy Coordination Council for review and comment before awarding
4-57 the contract. The State Energy Conservation Office and the Texas
4-58 Energy Coordination Council will provide a cost-benefit analysis of
4-59 the proposals and an analysis of the guaranteed savings projected
4-60 by offerors and may charge a fee for this service. The contract
4-61 shall be awarded to the responsible offeror whose proposal,
4-62 following negotiations, is determined to be the most advantageous
4-63 to the state agency considering the savings and other evaluation
4-64 factors set forth in the request for proposals except that if the
4-65 state agency finds that no offer is acceptable, it shall refuse all
4-66 offers.]
4-67 (j) [In accordance with regulations adopted by the state
4-68 agency, the state agency may conduct discussions with offerors who
4-69 submit proposals and who are determined to be reasonably qualified
5-1 for the award of the contract. Offerors shall be treated fairly and
5-2 equally with respect to any opportunity for discussion and revision
5-3 of proposals.]
5-4 [(k) If provided in a request for proposals, proposals shall
5-5 be opened in a manner that avoids disclosure of the contents to
5-6 competing offerors and keeps the proposals secret during
5-7 negotiations. All proposals are open for public inspection after a
5-8 contract is awarded unless the information is excepted from
5-9 disclosure under Chapter 552.]
5-10 [(l) To obtain the best final offers, the state agency may
5-11 allow proposal revisions after submissions and before the award of
5-12 the contract. Final review and approval of the contract will be
5-13 provided by the State Energy Conservation Office.]
5-14 [(m)] The legislature shall base an agency's appropriation
5-15 for energy costs during a fiscal year on the sum of:
5-16 (1) the agency's estimated energy costs for that
5-17 fiscal year; and
5-18 (2) if a contract under this section is in effect, the
5-19 agency's estimated net savings resulting from the contract during
5-20 the contract term, divided by the number of years in the contract
5-21 term.
5-22 SECTION 4. Section 302.002(b), Local Government Code, is
5-23 amended to read as follows:
5-24 (b) A contract authorized under this chapter includes a
5-25 contract for the installation or implementation of:
5-26 (1) insulation of the building structure and systems
5-27 within the building;
5-28 (2) storm windows or doors, caulking or weather
5-29 stripping, multiglazed windows or doors, heat-absorbing or
5-30 heat-reflective glazed and coated window or door systems, or other
5-31 window or door system modifications that reduce energy consumption;
5-32 (3) automatic energy control systems, including
5-33 computer software and technical data licenses;
5-34 (4) heating, ventilating, or air conditioning system
5-35 modifications or replacements;
5-36 (5) lighting fixtures that increase energy efficiency;
5-37 (6) energy recovery systems;
5-38 (7) electric systems improvements; or
5-39 (8) other energy-conservation-related improvements or
5-40 equipment, [(]including improvements or equipment related to
5-41 renewable energy[)].
5-42 SECTION 5. Section 302.003, Local Government Code, is amended
5-43 to read as follows:
5-44 Sec. 302.003. PAYMENT AND PERFORMANCE BOND. Notwithstanding
5-45 any other law to the contrary, before entering into a contract for
5-46 energy conservation measures, the governing body of the local
5-47 government shall [may, at its option:]
5-48 [(1)] require the provider of the energy conservation
5-49 measures to file with the governing body a payment and performance
5-50 bond relating to the installation of energy conservation measures
5-51 in accordance with Chapter 2253, Government Code. The governing
5-52 body may also require a separate bond to [that is in an amount the
5-53 governing body finds reasonable and necessary to protect the
5-54 interests of the local government and that may also] cover the
5-55 value of the guaranteed savings on the contract [and is conditioned
5-56 on the faithful execution of the terms of the contract; or]
5-57 [(2) choose not to require a payment and performance
5-58 bond in connection with the contract].
5-59 SECTION 6. Section 302.004, Local Government Code, is amended
5-60 to read as follows:
5-61 Sec. 302.004. METHOD OF FINANCING; TERMS OF CONTRACT. (a)
5-62 Energy conservation measures with respect to [existing] buildings
5-63 or facilities may be financed:
5-64 (1) under a lease-purchase contract that has a term
5-65 not to exceed 15 years from the final date of installation and that
5-66 meets federal tax requirements for tax-free municipal leasing or
5-67 long-term financing;
5-68 (2) with the proceeds of bonds; or
5-69 (3) under a contract with the provider of the energy
6-1 conservation measures that has a term not to exceed 15 years from
6-2 the final date of installation.
6-3 (b) The contract shall contain provisions pursuant to which
6-4 the provider of the energy conservation measures guarantees the
6-5 amount of the savings to be realized by the local government under
6-6 the contract. If the term of a contract for energy conservation
6-7 measures exceeds one year, the local government's contractual
6-8 obligations in any one year during the term of the contract
6-9 beginning after the final date of installation may not exceed the
6-10 total energy and operating cost savings, including but not limited
6-11 to electrical, gas, or other utility cost savings and operating
6-12 cost savings resulting from the measures [automatic monitoring and
6-13 control] as determined by the local government in this subsection,
6-14 divided by the number of years in the contract term.
6-15 SECTION 7. Section 302.005, Local Government Code, is amended
6-16 to read as follows:
6-17 Sec. 302.005. BIDDING PROCEDURES; AWARD OF CONTRACT. [(a)]
6-18 A contract under this chapter shall [may] be let in accordance with
6-19 the [under competitive proposal] procedures established for
6-20 professional services by Section 2254.004, Government Code. Notice
6-21 of the request for qualifications [proposals] shall be published in
6-22 the manner provided for competitive bidding. [Requests for
6-23 proposals must solicit quotations and must specify the relative
6-24 importance of guaranteed savings, price, return on investment,
6-25 financial performance and stability, quality, technical ability,
6-26 experience, and other evaluation factors.]
6-27 [(b) The contract shall be awarded to the responsible
6-28 offeror whose proposal, following negotiations, is determined to be
6-29 the most advantageous to the local government considering the
6-30 guaranteed savings and other evaluation factors set forth in the
6-31 request for proposals.]
6-32 [(c) To obtain the best final offers, the local government
6-33 may allow proposal revisions after submissions and before the award
6-34 of the contract.]
6-35 SECTION 8. This Act takes effect September 1, 2001, and
6-36 applies only to a contract entered into by an educational
6-37 institution, state agency, or local government on or after that
6-38 date. A contract entered into by an educational institution, state
6-39 agency, or local government before the effective date of this Act
6-40 is covered by the law in effect on the date the contract was
6-41 entered into, and the former law is continued in effect for that
6-42 purpose.
6-43 * * * * *