77R10038 MTB-D                           
         By Carter                                             H.B. No. 2278
         Substitute the following for H.B. No. 2278:
         By Carter                                         C.S.H.B. No. 2278
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the consolidation and functions of the energy
 1-3     management center and the state energy conservation office and to
 1-4     the transfer of the powers and duties of the center and the office
 1-5     to the comptroller's office.
 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-7           SECTION 1. Chapter 447, Government Code, is amended to read
 1-8     as follows:
 1-9                CHAPTER 447. STATE ENERGY CONSERVATION OFFICE
1-10                         [ENERGY MANAGEMENT CENTER]
1-11           Sec. 447.001.  ESTABLISHMENT OF OFFICE [CENTER]. (a)  The
1-12     state energy conservation office [management center] is established
1-13     in the comptroller's office [General Services Commission] and shall
1-14     be authorized to promote those policies of the state enumerated in
1-15     this chapter.
1-16           (b)  The state energy conservation office performs the
1-17     functions prescribed for the office by Chapter 2305.
1-18           Sec. 447.0011.  REFERENCE IN LAW. A reference in law to the
1-19     energy management center means the state energy conservation
1-20     office.
1-21           Sec. 447.002.  INFORMATION; RULES; PROGRAMS. The state energy
1-22     conservation office [management center] shall develop and provide
1-23     energy conservation information for the state. The office [center]
1-24     may make rules relating to the adoption and implementation of
 2-1     energy conservation programs applicable to state buildings and
 2-2     facilities.  The office [center] may act in such other capacities
 2-3     as otherwise authorized by state or federal law.  The office's
 2-4     [center's] rules for programs and energy conservation, adopted
 2-5     under Chapter 2001, may include provisions relating to the
 2-6     retrofitting of existing state structures with energy-saving
 2-7     devices and to the energy-related renovation of such structures.
 2-8     To the extent that the office [of the governor] receives money
 2-9     appropriated for energy efficiency programs, the office [of the
2-10     governor, through the energy management center,] shall implement
2-11     programs that it [the center] identifies as encouraging energy
2-12     conservation by state government.  The office shall adopt rules
2-13     requiring [Unless money is available for the implementation of such
2-14     a program,] a state agency to implement [is not required to spend
2-15     money for] an energy conservation measure or program in accordance
2-16     with the plans developed under Section 447.010 if:
2-17                 (1)  the measure or program meets the eligibility
2-18     requirements of Section 2166.406; and
2-19                 (2)  funding is available, including funding from a
2-20     financing method prescribed by Section 2166.406 [under this
2-21     section].
2-22           Sec. 447.003.  LIAISON TO FEDERAL GOVERNMENT. The state
2-23     energy conservation office [management center] shall serve as the
2-24     state liaison to the federal government for the implementation and
2-25     administration of federal programs relating to state agency energy
2-26     matters.  In that capacity, the office [center] shall administer
2-27     state programs established under:
 3-1                 (1)  Part D, Title III, Energy Policy and Conservation
 3-2     Act (42 U.S.C. 6321 et seq.);
 3-3                 (2)  Part G, Title III, Energy Policy and Conservation
 3-4     Act (42 U.S.C. 6371 et seq.);
 3-5                 (3)  the National Energy Extension Service Act (42
 3-6     U.S.C. 7001 et seq.); and
 3-7                 (4)  other federal energy conservation programs as may
 3-8     be assigned to the office [energy management center] by the
 3-9     governor or legislature.
3-10           Sec. 447.004.  DESIGN STANDARDS. (a)  The state energy
3-11     conservation office [management center] shall adopt and publish
3-12     energy conservation design standards, under Chapter 2001, that all
3-13     new state buildings and major renovation projects, including
3-14     buildings and major renovation projects of state-supported
3-15     institutions of higher education, are required to meet.  The office
3-16     [center] shall define what constitutes a major renovation project
3-17     under this section and shall review and update the standards
3-18     biennially.
3-19           (b)  The standards must include performance and procedural
3-20     standards for the maximum energy conservation allowed by the latest
3-21     and most cost-effective technology that is consistent with the
3-22     requirements of public health, safety, and economic resources.
3-23           (c)  The standards must be adopted in terms of energy
3-24     consumption levels and must take into consideration the various
3-25     classes of building uses and must allow for design flexibility.
3-26     Procedural standards must be directed toward specific design and
3-27     building practices that produce good thermal resistance and low
 4-1     infiltration and toward requiring practices in the design of
 4-2     mechanical and electrical systems that maximize energy efficiency.
 4-3     The procedural standards must concern, as applicable:
 4-4                 (1)  insulation;
 4-5                 (2)  lighting;
 4-6                 (3)  ventilation;
 4-7                 (4)  climate control;
 4-8                 (5)  special energy requirements of health-related
 4-9     facilities of higher education and state agencies; and
4-10                 (6)  any other item that the office [center] considers
4-11     appropriate that is adopted under Chapter 2001.
4-12           (d)  In order to demonstrate compliance with the requirement
4-13     to adopt and update the conservation design standards, each agency
4-14     and institution of higher education shall submit a copy of its
4-15     design and construction manuals to the office [center] on request.
4-16           (e)  Prior to construction, agencies and institutions of
4-17     higher education shall have the design architect or engineer on the
4-18     project certify to the agency or institution, with a copy to the
4-19     office [energy management center], that all new building
4-20     construction and major building renovation projects comply with the
4-21     energy conservation design standards required under this section.
4-22           Sec. 447.005.  ENERGY EFFICIENCY PROJECTS. Subject to
4-23     applicable state and federal laws or guidelines, the state energy
4-24     conservation office [management center] may implement energy
4-25     efficiency projects at state agencies or may assist those agencies
4-26     in implementing the projects through energy efficiency programs
4-27     financed through state or federal grants or loans.
 5-1           Sec. 447.006.  OBTAINING AND REPORTING DATA. The state energy
 5-2     conservation office [management center] shall [obtain]
 5-3     semiannually:
 5-4                 (1)  obtain from each state agency information relating
 5-5     to the progress each agency has made in reducing energy costs
 5-6     through adherence to the plans developed under Section 447.010; and
 5-7                 (2)  report the information obtained in Subdivision (1)
 5-8     to the Legislative Budget Board [cost of heating and cooling
 5-9     buildings owned by the state].
5-10           Sec. 447.007.  MODEL CODES. The state energy conservation
5-11     office [management center] may recommend model energy conservation
5-12     building codes to municipalities for use in enacting or amending
5-13     municipal ordinances.
5-14           Sec. 447.008.  ADDITIONAL ENERGY SERVICES. (a)  The state
5-15     energy conservation office [management center] may provide
5-16     additional energy services, including:
5-17                 (1)  training of designated state employees in energy
5-18     management, energy-accounting techniques, and energy efficient
5-19     design and construction;
5-20                 (2)  technical assistance regarding energy efficient
5-21     capital improvements, energy efficient building design, and
5-22     cogeneration and thermal storage investments;
5-23                 (3)  technical assistance to the State Auditor and to
5-24     state agencies regarding conducting energy management performance
5-25     audits and monitoring of utility bills to detect billing errors;
5-26                 (4)  technical assistance to state agencies regarding
5-27     third-party financing of energy efficient capital improvement
 6-1     projects; and
 6-2                 (5)  other energy-related assistance requested by
 6-3     agencies, other legislatively created entities of the state,
 6-4     institutions of higher education, and consortiums of institutions
 6-5     of higher education that the office [center] considers appropriate.
 6-6           (b)  Using available state, federal, or oil overcharge funds,
 6-7     the office [energy management center] may assist state agencies and
 6-8     institutions of higher education in analyzing and negotiating rates
 6-9     for electricity and natural gas supplies from locally certificated
6-10     electric suppliers, natural gas suppliers, or state-owned energy
6-11     resources, including transportation charges for natural gas.  The
6-12     provisions of this section shall not be construed to empower the
6-13     office [energy management center] to negotiate rates for natural
6-14     gas supplies on behalf of state agencies or institutions but rather
6-15     to provide technical assistance as needed.
6-16           (c)  Agencies and institutions of higher education may seek
6-17     the assistance of the office [energy management center] before
6-18     negotiating or contracting for the supply and transportation of
6-19     natural gas and electricity that will result in an anticipated
6-20     annual expenditure of more than $100,000.
6-21           (d)  Any state agency or institution of higher education with
6-22     expertise in rate analysis, negotiation, or any other matter
6-23     related to the procurement of electricity and natural gas supplies
6-24     from locally certificated electric suppliers, natural gas
6-25     suppliers, or state-owned energy resources may assist the office
6-26     [energy management center] whenever practicable.  The attorney
6-27     general on request shall assist the office [energy management
 7-1     center] and other state agencies and institutions of higher
 7-2     education in negotiating rates for electricity and other terms of
 7-3     electric utility service.
 7-4           (e)  Using available funds from any source where permitted,
 7-5     the office [energy management center] may assist state agencies,
 7-6     legislatively created entities of the state, institutions of higher
 7-7     education, and consortiums of institutions of higher education to
 7-8     further the goals and pursue the policies of the state in energy
 7-9     research as may be determined by the governor or the legislature.
7-10     The office [energy management center] may assist state agencies,
7-11     which are hereby authorized to act in accordance with this section,
7-12     in implementing federal energy policy as expressed in Pub. L. No.
7-13     102-486, 106 Stat. 2776 (1992).
7-14           (f)  The office [energy management center] on request may
7-15     negotiate rates for electricity and other terms of electric utility
7-16     service for a state agency or institution of higher education.  The
7-17     office [energy management center] may also negotiate the rates and
7-18     the other terms of service for a group of agencies and institutions
7-19     together in a single contract.
7-20           (g)  The office [energy management center] shall analyze the
7-21     rates for electricity charged to and the amount of electricity used
7-22     by state agencies and institutions of higher education to determine
7-23     ways the state could obtain lower rates and use less electricity.
7-24     State agencies, including the Public Utility Commission of Texas,
7-25     and institutions of higher education shall assist the office
7-26     [energy management center] in obtaining the information the office
7-27     [center] requires to perform its analysis.
 8-1           (h)  The office [energy management center] and the attorney
 8-2     general shall cooperate in monitoring efforts to deregulate the
 8-3     electric utility industry and in reporting on the ways in which
 8-4     deregulation would affect state government as a purchaser of
 8-5     electricity.  The office [energy management center], represented by
 8-6     the attorney general, may intervene in proceedings before the
 8-7     Public Utility Commission of Texas that are related to deregulating
 8-8     all or part of the electric utility industry to represent the
 8-9     interests of state government as a purchaser of electricity in
8-10     those proceedings.
8-11           Sec. 447.009.  ENERGY AUDITS. (a)  The state energy
8-12     conservation office [management center] shall conduct audits of
8-13     state-owned buildings used by state agencies.  The audits shall be
8-14     designed to assist state agencies in reducing energy consumption
8-15     and costs through improved energy efficiency.
8-16           (b)  Based on the audit performed under Subsection (a) of
8-17     this section, the state energy conservation office [of the
8-18     governor] may recommend changes to improve energy efficiency.
8-19           (c)  The state energy conservation office [management center]
8-20     may provide training, technical assistance, and funding, if
8-21     available, to the State Auditor's office or the office charged with
8-22     performing management audits of state agencies to conduct energy
8-23     management audits in state agencies and institutions of higher
8-24     education.
8-25           (d)  State agencies and institutions of higher education
8-26     shall conduct reviews and audits of utility billings and contracts
8-27     to detect billing errors.  Contracts with private sector firms must
 9-1     comply with all applicable provisions of Chapter 654 regarding
 9-2     professional services contracts and may not be awarded on a
 9-3     contingent fee basis unless a finding that the contract is
 9-4     necessary, reasonable, and prudent is obtained from the office of
 9-5     the governor.
 9-6           Sec. 447.010.  [ENERGY-SAVING DEVICES OR MEASURES. (a)  On
 9-7     approval by the energy -management center, a state agency that
 9-8     reduces its energy expenses may use any funds saved by the agency
 9-9     from appropriated utility funds for the purchase of energy-saving
9-10     devices or measures.  For purposes of this section, "energy-saving
9-11     device or measure" means a device or measure that directly reduces
9-12     energy costs or the consumption of a lighting, heating,
9-13     ventilating, or air conditioning system or of other equipment that
9-14     uses electricity, natural gas, fuel oil, or any other energy source
9-15     without materially altering the quality of such lighting, heating,
9-16     ventilating, air conditioning, or other energy consuming system.]
9-17           [(b)  A state agency, in accordance with the recommendations
9-18     of an energy audit, may purchase energy-saving devices or measures
9-19     from appropriated utility funds if the savings in utility funds
9-20     projected by the audit will offset the purchase within four years.
9-21     A copy of the recommendation and repayment schedule must be
9-22     attached to the purchase voucher as evidence of the projected
9-23     savings.]
9-24           [Sec. 447.011.]  ENERGY MANAGEMENT PLANNING. (a)  The state
9-25     energy conservation office [management center] shall provide energy
9-26     management planning assistance to state agencies and institutions
9-27     of higher education, including:
 10-1                (1)  preparation of a long-range plan for the delivery
 10-2    of reliable, cost-effective utility services for state agencies,
 10-3    institutions of higher education, boards, and commissions in Travis
 10-4    County.  This plan shall be presented to the affected agencies for
 10-5    use in preparing their five-year construction and major
 10-6    rehabilitation plans.  After other energy-saving alternatives are
 10-7    considered, district heating and cooling and on-site generation of
 10-8    electricity may be considered in planning for reliable, efficient,
 10-9    and cost-effective utility services;
10-10                (2)  assistance to the Department of Public Safety for
10-11    energy emergency contingency planning, using state or federal funds
10-12    when available; [and]
10-13                (3)  assistance to state agencies and institutions of
10-14    higher education in preparing comprehensive energy management
10-15    plans.  The office [energy management center] shall prepare
10-16    guidelines for the preparation of these plans.  State agencies and
10-17    institutions of higher education that expend more than $250,000
10-18    annually for heating, lighting, and cooling and that occupy
10-19    state-owned buildings shall prepare and submit a five-year energy
10-20    management plan to the office [center].  Agencies and institutions
10-21    of higher education with smaller usage may be required to submit
10-22    such plans.  Updated plans shall be submitted biennially when
10-23    requested by the office; and
10-24                (4)  assistance to state agencies other than
10-25    institutions of higher education in meeting the requirements of
10-26    Section 447.002, including assistance in scheduling and assigning
10-27    priorities to implementation plans to ensure that state agencies
 11-1    adopt qualified cost-effective efficiency measures and programs for
 11-2    all state facilities by September 1, 2006 [center].
 11-3          (b)  The energy management plan required in Subsection (a)(3)
 11-4    shall be included in the five-year construction and major
 11-5    rehabilitation plans for institutions of higher education as
 11-6    required under Section 61.058 and 61.0651, Education Code.
 11-7          SECTION 2. Section 2305.002(3), Government Code, is amended
 11-8    to read as follows:
 11-9                (3)  "Energy office" means the state energy
11-10    conservation office of the comptroller's office as established by
11-11    Chapter 447 [General Services Commission].
11-12          SECTION 3. The heading to Section 2305.011, Government Code,
11-13    is amended to read as follows:
11-14          Sec. 2305.011.  ADMINISTRATION BY COMPTROLLER'S OFFICE
11-15    [GENERAL SERVICES COMMISSION] AND ENERGY OFFICE.
11-16          SECTION 4.  Section 2305.011, Government Code, is amended by
11-17    adding Subsection (f) to read as follows:
11-18          (f)  The comptroller may adopt rules as necessary to
11-19    administer the programs prescribed by this chapter.
11-20          SECTION 5. Section 2305.022, Government Code, is amended to
11-21    read as follows:
11-22          Sec. 2305.022.  USE OF ACCOUNT. Money in the account may be
11-23    used only by the governor and the comptroller's office [General
11-24    Services Commission] to implement and operate the programs
11-25    authorized by this chapter.
11-26          SECTION 6. On September 1, 2001:
11-27                (1)  the energy management center established under
 12-1    Chapter 447, Government Code, as it existed on the effective date
 12-2    of this Act, and the state energy conservation office established
 12-3    under Chapter 2305, Government Code, are consolidated;
 12-4                (2)  all functions and activities performed by the
 12-5    General Services Commission that relate to energy conservation
 12-6    under Chapter 447 or 2305, Government Code, immediately before that
 12-7    date are transferred to the comptroller's office;
 12-8                (3)  all employees of the General Services Commission
 12-9    who primarily perform duties related to energy conservation under
12-10    Chapter 447 or 2305, Government Code, become employees of the
12-11    comptroller's office;
12-12                (4)  a rule, standard, or form adopted by the General
12-13    Services Commission that relates to energy conservation under
12-14    Chapter 447 or 2305, Government Code, is a rule or form of the
12-15    comptroller's office and remains in effect until altered by the
12-16    office;
12-17                (5)  a reference in law to the  General Services
12-18    Commission that relates to energy conservation under Chapter 447 or
12-19    2305, Government Code, means the comptroller's office;
12-20                (6)  a proceeding involving the General Services
12-21    Commission that is related to energy conservation under Chapter 447
12-22    or 2305, Government Code, is transferred without change in status
12-23    to the comptroller's office, and the comptroller's office assumes
12-24    without a change in status the position of the General Services
12-25    Commission in a proceeding relating to energy conservation to which
12-26    the General Services Commission is a party;
12-27                (7)  all money, contracts, leases, rights, and
 13-1    obligations of the General Services Commission related to energy
 13-2    conservation under Chapter 447 or 2305, Government Code, are
 13-3    transferred to the comptroller's office;
 13-4                (8)  all property, including records, in the custody of
 13-5    the General Services Commission related to energy conservation
 13-6    under Chapter 447 or 2305, Government Code, becomes property of the
 13-7    comptroller's office; and
 13-8                (9)  all funds appropriated by the legislature to the
 13-9    General Services Commission for purposes related to energy
13-10    conservation under Chapter 447 or 2305, Government Code, are
13-11    transferred to the comptroller's office.
13-12          SECTION 7. This Act takes effect September 1, 2001.