88R13248 ANG-D

By: Toth H.B. No. 4370

A BILL TO BE ENTITLED

AN ACT

relating to the abolishment of the State Energy Conservation Office and the transfer of its functions to the comptroller.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 44.902(d), Education Code, is amended to read as follows:

(d) The board of trustees may submit the plan required under Subsection (a) to the comptroller [State Energy Conservation Office] for the purposes of determining whether funds available through loan programs administered by the comptroller [office] or tax incentives administered by the state or federal government are available to the district. The board may not disallow any proper allocation of incentives.

SECTION 2. Section 51.927(i), Education Code, is amended to read as follows:

(i) An energy savings performance contract shall be let according to the procedures established for procuring certain professional services by Section 2254.004, Government Code. Notice of the request for qualifications shall be given in the manner provided by Section 2156.002, Government Code. The Texas Higher Education Coordinating Board, in consultation with the comptroller [State Energy Conservation Office with regard to energy and water conservation measures], shall establish guidelines and an approval process for awarding energy savings performance contracts. The guidelines must require that the cost savings projected by an offeror be reviewed by a licensed professional engineer who has a minimum of three years of experience in energy calculation and review, is not an officer or employee of an offeror for the contract under review, and is not otherwise associated with the contract. In conducting the review, the engineer shall focus primarily on the proposed improvements from an engineering perspective, the methodology and calculations related to cost savings, increases in revenue, and, if applicable, efficiency or accuracy of metering equipment. An engineer who reviews a contract shall maintain the confidentiality of any proprietary information the engineer acquires while reviewing the contract. [A contract is not required to be reviewed or approved by the State Energy Conservation Office.] Sections 1001.053 and 1001.407, Occupations Code, apply to work performed under the contract.

SECTION 3. Section 55.115(b), Education Code, is amended to read as follows:

(b) A building, structure, or other facility to which this section applies must be designed and constructed or renovated so that the building, structure, or other facility complies with high-performance building standards, approved by the board of regents of the institution, that provide minimum requirements for energy use, natural resources use, and indoor air quality. [In approving high-performance building standards, a board of regents shall consider, but is not subject to, the high-performance building evaluation system approved by the state energy conservation office under Section 447.004, Government Code, and may solicit and consider recommendations from the advisory committee appointed under that section.]

SECTION 4. Section 109.203(a), Education Code, as added by Chapter 941 (S.B. 601), Acts of the 87th Legislature, Regular Session, 2021, is amended to read as follows:

(a) The agency advisory council is composed of representatives of the:

(1) Department of Agriculture;

(2) General Land Office;

(3) Parks and Wildlife Department;

(4) Railroad Commission of Texas;

(5) [State Energy Conservation Office;]

[(6)] Texas Commission on Environmental Quality;

(6) [(7)] Texas Economic Development and Tourism Office within the office of the governor; and

(7) [(8)] Texas Water Development Board.

SECTION 5. Section 403.404, Government Code, is amended to read as follows:

Sec. 403.404. ESTABLISHMENT OF GREEN JOB SKILLS GRANT PROGRAM. The comptroller shall establish a green job skills grant program, funded by the development fund under Section 403.403, through which the comptroller may award grants in cooperation with the Texas Workforce Commission [through the State Energy Conservation Office] for the implementation, expansion, and operation of green job skills training programs.

SECTION 6. Sections 2166.402(a) and (b), Government Code, are amended to read as follows:

(a) The governing body of a state agency, commission, or institution that is exempt from this chapter under Section 2166.003 shall adopt and publish energy or water conservation design standards [as provided by Section 447.004] for a new building under the entity's authority. The standards must be:

(1) consistent with those adopted by the commission for other state buildings; and

(2) prepared in cooperation and consultation with the comptroller [state energy conservation office].

(b) The comptroller [state energy conservation office] shall assist the governing body of a state agency, commission, or institution subject to Subsection (a) in preparing energy conservation standards by providing technical assistance and advice.

SECTION 7. Section 2166.403(b-2), Government Code, is amended to read as follows:

(b-2) In each detailed written evaluation under Subsection (b), the commission or governing body shall determine economic feasibility for each function by comparing the estimated cost of providing energy for all or part of the function using conventional design practices and energy systems or operating under conventional architectural or engineering designs with the estimated cost of providing energy for all or part of the function using alternative energy devices or operating under alternative energy-efficient architectural or engineering designs during the economic life of the building. The comptroller [comptroller's state energy conservation office, or its successor,] must approve any methodology or electronic software used by the commission or governing body, or an entity contracting with the commission or governing body, to make a comparison or determine feasibility under this subsection.

SECTION 8. Sections 2166.406(i) and (l), Government Code, are amended to read as follows:

(i) An energy savings performance contract shall be let according to the procedures established for procuring certain professional services by Section 2254.004. Notice of the request for qualifications shall be given in the manner provided by Section 2156.002. The comptroller [State Energy Conservation Office] shall establish guidelines and an approval process for awarding energy savings performance contracts. The guidelines adopted under this subsection must require that the cost savings projected by an offeror be reviewed by a licensed professional engineer who has a minimum of three years of experience in energy calculation and review, is not an officer or employee of an offeror for the contract under review, and is not otherwise associated with the contract. In conducting the review, the engineer shall focus primarily on the proposed improvements from an engineering perspective, the methodology and calculations related to cost savings, increases in revenue, and, if applicable, efficiency or accuracy of metering equipment. An engineer who reviews a contract shall maintain the confidentiality of any proprietary information the engineer acquires while reviewing the contract. An energy savings performance contract may not be entered into unless the contract has been approved by the comptroller [State Energy Conservation Office]. Sections 1001.053 and 1001.407, Occupations Code, apply to work performed under the contract.

(l) The guidelines adopted under Subsection (i) must require the comptroller [State Energy Conservation Office] to:

(1) review any reports submitted to the comptroller [office] that measure and verify cost savings to a state agency under an energy savings performance contract; and

(2) based on the reports, provide an analysis, on a periodic basis, of the cost savings under the energy savings performance contract to the state agency and the Legislative Budget Board until the state agency determines that the analysis is no longer required to accurately measure cost savings.

SECTION 9. The heading to Section 2305.011, Government Code, is amended to read as follows:

Sec. 2305.011. ADMINISTRATION BY COMPTROLLER'S OFFICE [AND ENERGY OFFICE].

SECTION 10. Sections 2305.011(a), (b), (c), and (d), Government Code, are amended to read as follows:

(a) The comptroller [energy office] shall oversee and monitor the administration of programs prescribed by this chapter.

(b) The governor and the comptroller [energy office] may establish direct grant programs and competitive grant programs in addition to the programs provided by this chapter.

(c) The comptroller [energy office] shall establish programs and criteria and evaluate a proposal in accordance with applicable federal guidelines.

(d) The comptroller [energy office] shall send to the appropriate federal entity all information required under applicable federal guidelines.

SECTION 11. Section 2305.012, Government Code, is amended to read as follows:

Sec. 2305.012. ADMINISTRATION; ASSISTANCE. (a) The comptroller [energy office] shall implement and administer this chapter.

(b) The comptroller [energy office] or the governor [through the energy office] may enlist the assistance of a private entity or a state agency, department, commission, or other entity to:

(1) evaluate or review a proposal;

(2) audit a program participant or a supervising state agency;

(3) perform administrative duties under this chapter; or

(4) develop eligibility or evaluation criteria.

SECTION 12. The heading to Section 2305.023, Government Code, is amended to read as follows:

Sec. 2305.023. ACCOUNT RECORDS; COMPTROLLER [ENERGY OFFICE] REPORT.

SECTION 13. Section 2305.023(b), Government Code, is amended to read as follows:

(b) Not later than January 15 of each odd-numbered year, the comptroller [energy office] shall submit to the governor and the legislature a biennial report that shows the expenditures from the account during the previous biennium and the amount remaining in the account on the date of the report.

SECTION 14. Section 2305.031, Government Code, is amended to read as follows:

Sec. 2305.031. OIL OVERCHARGE PROGRAMS. The comptroller [energy office] shall maintain a revolving loan program for the benefit of state agencies, universities, and political subdivisions. The comptroller [energy office] shall use oil overcharge funds for the programs and purposes in this subchapter.

SECTION 15. Sections 2305.032(a), (b), and (f), Government Code, are amended to read as follows:

(a) The comptroller [energy office] under the loanstar revolving loan program may provide loans to finance energy and water efficiency measures for public facilities.

(b) The comptroller [energy office] shall determine the terms under which a loan may be made under this section and shall set the interest rate for a loan at a low rate that the comptroller [energy office] determines is sufficient to recover the cost of administering the loan program.

(f) The comptroller [energy office] shall allocate at least $95 million, including loan commitments and cash on hand, to the loanstar program and shall administer the funds under its control in a manner that assures that funds available to the loanstar program equal or exceed $95 million at all times.

SECTION 16. Sections 2305.033(a) and (b), Government Code, are amended to read as follows:

(a) The comptroller [energy office] is the supervising state agency for the state energy program.

(b) In accordance with Part D, Title III, Energy Policy and Conservation Act (42 U.S.C. Section [Sec.] 6321 et seq.), and its subsequent amendments, the comptroller [energy office], under the program, shall distribute funds for projects that save measurable quantities of energy.

SECTION 17. Sections 2305.035(a) and (b), Government Code, are amended to read as follows:

(a) The comptroller [energy office] is the supervising state agency for the alternative fuels program.

(b) The comptroller [energy office] shall provide funds under the program to promote, facilitate, and support the use of alternative fuels in this state.

SECTION 18. Sections 2305.036(a), (b), and (f), Government Code, are amended to read as follows:

(a) The comptroller [energy office] is the supervising state agency for the housing partnership program.

(b) The comptroller [energy office] shall promote the efficient use of energy in Texas residential housing through grants, partnerships, and loans.

(f) The comptroller [energy office] may require grant recipients to match a grant in a ratio determined by the comptroller [energy office].

SECTION 19. Section 2305.037, Government Code, is amended to read as follows:

Sec. 2305.037. INNOVATIVE ENERGY DEMONSTRATION PROGRAM. (a) The comptroller [energy office] is the supervising state agency of the innovative energy demonstration program and shall distribute grant money under the program for demonstration projects that develop sustainable and innovative energy resources, including:

(1) a clean coal project, as defined by Section 5.001, Water Code;

(2) a gasification project for a coal and biomass mixture;

(3) photovoltaic, biomass, wind, and solar applications; and

(4) other appropriate low-emission, renewable, and sustainable energy applications.

(b) Contingent on the selection of a Texas site for the location of the coal-based integrated sequestration and hydrogen project to be built in partnership with the United States Department of Energy, commonly referred to as the FutureGen project, and to the extent that funds are appropriated for this purpose, the comptroller [energy office] shall distribute to the managing entity of the FutureGen project an amount equal to 50 percent of the total amount invested in the project by private industry sources. The managing entity of the FutureGen project shall provide records as considered necessary by the comptroller [energy office] to justify grants under this subsection. Cumulative distributions under this subsection may not exceed $20 million.

(c) The comptroller [energy office] may require a grant recipient under the program to match a grant in a ratio determined by the comptroller [energy office].

SECTION 20. Section 2305.038(a), Government Code, is amended to read as follows:

(a) The comptroller [energy office] is the supervisory agency for the local government energy program to provide energy management assistance to public schools, health care institutions, and other local governments.

SECTION 21. Sections 2305.039(a) and (c), Government Code, are amended to read as follows:

(a) The comptroller [energy office] is the supervising state agency of the transportation energy program and shall distribute funds under the program for projects relating to mass transit and other transportation services.

(c) The comptroller [energy office] may require a grant recipient to match a grant in a ratio determined by the comptroller [energy office].

SECTION 22. Sections 2305.075(a) and (b), Government Code, are amended to read as follows:

(a) The comptroller [energy office] is the supervising state agency for the small hospitals energy management program.

(b) The comptroller [energy office] shall use competitive grant money under the program to finance projects designed to assist small hospitals in controlling energy costs.

SECTION 23. Section 2306.6725(b), Government Code, is amended to read as follows:

(b) The department shall provide appropriate incentives as determined through the qualified allocation plan to reward applicants who agree to:

(1) equip the development that is the basis of the application with energy saving devices that meet applicable [the] standards [established by the state energy conservation office] or provide to a qualified entity, in a land use restriction agreement in accordance with Section 2306.6726, a right of first refusal to purchase the development at the minimum price provided in, and in accordance with the requirements of, Section 42(i)(7), Internal Revenue Code of 1986 (26 U.S.C. Section 42(i)(7)); and

(2) locate the development in a census tract in which there are no other existing developments supported by housing tax credits.

SECTION 24. Section 2306.252(b), Government Code, is amended to read as follows:

(b) The department, through the center, shall:

(1) provide educational material prepared in plain language to housing advocates, housing sponsors, borrowers, and tenants;

(2) provide technical assistance to nonprofit housing sponsors;

(3) assist in the development of housing policy, including the annual state low income housing plan and report and the consolidated plan; and

(4) provide, in cooperation with the [state energy conservation office, the] Texas Commission on Environmental Quality[,] and other governmental entities, information on the use of sustainable and energy efficient housing construction products and assist local governments and nonprofits in identifying information on sustainable and energy efficient housing construction and energy efficient resources and techniques.

SECTION 25. Section 2311.002(b), Government Code, is amended to read as follows:

(b) The comptroller [State Energy Conservation Office] shall establish guidelines for the evaluation under Subsection (a).

SECTION 26. Sections 388.003(a), (b), (b-2), (b-3), and (c), Health and Safety Code, are amended to read as follows:

(a) To achieve energy conservation in single-family residential construction, the energy efficiency chapter of the International Residential Code, as it existed on May 1, 2001, is adopted as the energy code in this state for single-family residential construction. On September 1, 2016, the energy efficiency chapter of the International Residential Code, as it existed on May 1, 2015, is adopted as the energy code in this state for single-family residential construction. On or after September 1, 2021, the comptroller [State Energy Conservation Office] may adopt and substitute for that energy code the latest published edition of the energy efficiency chapter of the International Residential Code, based on written findings on the stringency of the chapter submitted by the laboratory under Subsection (b-3). The comptroller [office]:

(1) may not adopt an edition under this subsection more often than once every six years; and

(2) by rule shall establish an effective date for an adopted edition that is not earlier than nine months after the date of adoption.

(b) To achieve energy conservation in all other residential, commercial, and industrial construction, the International Energy Conservation Code as it existed on May 1, 2001, is adopted as the energy code for use in this state for all other residential, commercial, and industrial construction. The comptroller [State Energy Conservation Office] may adopt and substitute for that energy code the latest published edition of the International Energy Conservation Code, based on written findings on the stringency of the edition submitted by the laboratory under Subsection (b-3). The comptroller [office] by rule shall establish an effective date for an adopted edition that is not earlier than nine months after the date of adoption.

(b-2) The comptroller [State Energy Conservation Office] by rule shall establish a procedure for persons who have an interest in the adoption of energy codes under Subsection (a) or (b) to have an opportunity to comment on the codes under consideration. The comptroller [office] shall consider persons who have an interest in adoption of those codes to include:

(1) commercial and residential builders, architects, and engineers;

(2) municipal, county, and other local government authorities;

(3) environmental groups; and

(4) manufacturers of building materials and products.

(b-3) The laboratory shall:

(1) submit to the comptroller [State Energy Conservation Office] written findings on the stringency of the latest published edition of the International Residential Code energy efficiency provisions only if the date of the edition allows the comptroller [office] to adopt the edition under Subsection (a)(1);

(2) submit to the comptroller [State Energy Conservation Office] written findings on the stringency of the latest published edition of the International Energy Conservation Code not later than six months after publication of a new edition; and

(3) in developing the findings, consider the comments submitted under Subsection (b-2).

(c) A municipality shall establish procedures:

(1) for the administration and enforcement of the codes;

(2) to ensure that code-certified inspectors shall perform inspections and enforce the code in the inspectors' jurisdictions; and

(3) to track and report to the comptroller [state energy conservation office] on implementation of the codes.

SECTION 27. Sections 388.005(d), (e), and (f), Health and Safety Code, are amended to read as follows:

(d) A political subdivision, institution of higher education, or state agency that does not attain the goals established under Subsection (c) must include in the report required by Subsection (e) justification that the entity has already implemented all available cost-effective measures. An entity that submits a report under this subsection indicating that the entity has reviewed its available options, has determined that no additional measures are cost-effective, and has already implemented all available cost-effective measures is exempt from the annual reporting requirement of Subsection (e) if a subsequent report would indicate no change in status. [An entity may be required to provide notice that it is exempt to the State Energy Conservation Office.]

(e) A political subdivision, institution of higher education, or state agency annually shall report to the comptroller [State Energy Conservation Office], on forms provided by the comptroller [that office], regarding the entity's goal, the entity's efforts to meet the goal, and progress the entity has made under this section. The comptroller [State Energy Conservation Office] shall provide assistance and information to the entity to help the entity meet goals established under this section. The comptroller [office] must develop and make available a standardized form for reporting purposes.

(f) This section does not apply to a state agency or an institution of higher education that the comptroller [State Energy Conservation Office] determines, before September 1, 2007, adopted a plan for conserving energy under which the agency or institution established a percentage goal for reducing the consumption of electricity. The exemption provided by this section applies only while the agency or institution has an energy conservation plan in effect and only if the agency or institution submits reports on the conservation plan each year to the governor, the Legislative Budget Board, and the comptroller [State Energy Conservation Office].

SECTION 28. Section 388.006, Health and Safety Code, is amended to read as follows:

Sec. 388.006. [STATE ENERGY CONSERVATION OFFICE] EVALUATION BY COMPTROLLER. The comptroller [State Energy Conservation Office] annually shall provide the laboratory with an evaluation of the effectiveness of state and political subdivision energy efficiency programs, including programs under this chapter. The laboratory shall calculate, based on the evaluation and the forms submitted to the comptroller [office], the amount of energy savings and estimated reduction in pollution achieved as a result of the implementation of programs. The laboratory shall share the information with the commission, the United States Environmental Protection Agency, and the Electric Reliability Council of Texas to help with long-term forecasting and in estimating pollution reduction.

SECTION 29. Section 302.001(9-a), Local Government Code, is amended to read as follows:

(9-a) "Pilot program" means a pilot program operated by the Energy Systems Laboratory at the Texas A&M Engineering Experiment Station, in consultation with the Texas Facilities Commission [and the State Energy Conservation Office], that:

(A) establishes and implements energy efficiency improvements to state-owned buildings maintained by the commission;

(B) generates savings in utility costs resulting from the improvements resulting in at least a 30 percent annual return on the costs of the improvements;

(C) provides for the participation of not fewer than two companies selected by the commission; and

(D) provides for any money attributable to utility cost savings resulting from the pilot program to be appropriated only to the commission.

SECTION 30. Section 39.905(b-3), Utilities Code, is amended to read as follows:

(b-3) Beginning not later than January 1, 2008, the commission, in consultation with the comptroller [State Energy Conservation Office], annually for a period of five years shall compute and report to ERCOT the projected energy savings and demand impacts for each entity in the ERCOT region that administers standard offer programs, market transformation programs, combined heating and power technology, demand response programs, solar incentive programs, appliance efficiency standards, energy efficiency programs in public buildings, and any other relevant programs that are reasonably anticipated to reduce electricity energy or peak demand or that serve as substitutes for electric supply.

SECTION 31. Sections 39.9051(f) and (g), Utilities Code, are amended to read as follows:

(f) Beginning April 1, 2012, a municipally owned utility must report each year to the comptroller [State Energy Conservation Office], on a standardized form developed by the comptroller [office], information regarding the combined effects of the energy efficiency activities of the utility from the previous calendar year, including the utility's annual goals, programs enacted to achieve those goals, and any achieved energy demand or savings goals.

(g) The comptroller [State Energy Conservation Office] shall provide the reports made under Subsection (f) to the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System. The laboratory shall calculate the energy savings and estimated pollution reductions that resulted from the reported activities.

SECTION 32. Sections 39.9052(b) and (c), Utilities Code, are amended to read as follows:

(b) Beginning April 1, 2012, an electric cooperative that had retail sales of more than 500,000 megawatt hours in 2005 must report each year to the comptroller [State Energy Conservation Office], on a standardized form developed by the comptroller [office], information regarding the combined effects of the energy efficiency activities of the electric cooperative from the previous calendar year, including the electric cooperative's annual goals, programs enacted to achieve those goals, and any achieved energy demand or savings goals.

(c) The comptroller [State Energy Conservation Office] shall provide the reports made under Subsection (b) to the Energy Systems Laboratory at the Texas Engineering Experiment Station of The Texas A&M University System. The laboratory shall calculate the energy savings and estimated pollution reductions that resulted from the reported activities.

SECTION 33. Section 39.911, Utilities Code, is amended to read as follows:

Sec. 39.911. ALTERNATIVE FUNDING FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY SYSTEMS. The comptroller [State Energy Conservation Office], in coordination with the governor, the Department of Agriculture, the Texas Commission on Environmental Quality, the Texas Education Agency, the commission, and other appropriate state agencies, shall solicit gifts, grants, and other financial resources available to fund energy efficiency improvements and renewable energy systems for public and private facilities in this state.

SECTION 34. Section 39.914(e), Utilities Code, is amended to read as follows:

(e) A municipally owned utility or electric cooperative shall consider and complete the determinations regarding net metering service as provided by the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Section 2601 et seq., as amended by the federal Energy Policy Act of 2005 (Pub. L. No. 109-58)) after proceedings conducted in accordance with that law. A municipally owned utility or electric cooperative shall report the determinations made under this subsection to the comptroller [State Energy Conservation Office] and include in that report information regarding metering electricity generated by solar panels on public school building rooftops.

SECTION 35. The following provisions are repealed:

(1) Section 55.115(c), Education Code;

(2) Chapter 447, Government Code;

(3) Section 2165.057(b), Government Code;

(4) Section 2305.002(3), Government Code; and

(5) Section 2305.034, Government Code.

SECTION 36. (a) On the effective date of this Act, the State Energy Conservation Office is abolished.

(b) The validity of an action taken by or in connection with the authority of the State Energy Conservation Office before the date the agency is abolished is not affected by the abolition.

SECTION 37. On the effective date of this Act:

(1) all powers and duties of the State Energy Conservation Office are transferred to the comptroller of public accounts;

(2) a rule, form, policy, procedure, or decision of the State Energy Conservation Office continues in effect as a rule, form, policy, procedure, or decision of the comptroller of public accounts until superseded by an act of the comptroller;

(3) a reference in law to the State Energy Conservation Office means the comptroller of public accounts;

(4) any action or proceeding before the State Energy Conservation Office is transferred without change in status to the comptroller of public accounts and the comptroller assumes, without a change in status, the position of the State Energy Conservation Office in any action or proceeding to which the State Energy Conservation Office is a party;

(5) all money, contracts, leases, rights, bonds, and obligations of the State Energy Conservation Office are transferred to the comptroller of public accounts;

(6) all personal property, including records, in the custody of the State Energy Conservation Office becomes the property of the comptroller of public accounts; and

(7) all funds appropriated by the legislature to the State Energy Conservation Office are transferred to the comptroller of public accounts.

SECTION 38. This Act takes effect September 1, 2023.