HB 597

A bill to be entitled
2An act relating to contracting for efficiency or
3conservation measures by state agencies; amending s.
4489.145, F.S.; including water and wastewater efficiency
5and conservation in the measures encouraged by the
6Legislature; revising definitions; providing for inclusion
7of water and wastewater efficiency and conservation
8measures in guaranteed performance savings contracts
9entered into by a state agency, municipality, or political
10subdivision; amending s. 287.064, F.S., relating to
11consolidated financing of deferred-payment purchases, to
12conform; providing an effective date.
14Be It Enacted by the Legislature of the State of Florida:
16     Section 1.  Section 489.145, Florida Statutes, is amended
17to read:
18     489.145  Guaranteed energy performance savings
20     (1)  SHORT TITLE.--This section may be cited as the
21"Guaranteed Energy Performance Savings Contracting Act."
22     (2)  LEGISLATIVE FINDINGS.--The Legislature finds that
23investment in energy, water, and wastewater efficiency or
24conservation measures in agency facilities can reduce the amount
25of energy and water consumed and wastewater to be treated and
26produce immediate and long-term savings. It is the policy of
27this state to encourage each agency agencies to invest in
28energy, water, and wastewater efficiency or conservation
29measures that provide such reductions reduce energy consumption,
30produce a cost savings for the agency, and, for energy measures,
31improve the quality of indoor air in public facilities and to
32operate, maintain, and, when economically feasible, build or
33renovate existing agency facilities in such a manner as to
34minimize energy and water consumption or wastewater production
35and maximize energy, water, and wastewater savings. It is
36further the policy of this state to encourage agencies to
37reinvest any energy savings resulting from energy, water, and
38wastewater efficiency or conservation measures in additional
39energy, water, and wastewater efficiency or conservation
40measures efforts.
41     (3)  DEFINITIONS.--As used in this section, the term:
42     (a)  "Agency" means the state, a municipality, or a
43political subdivision.
44     (b)  "Energy, water, and wastewater efficiency or
45conservation measure" means a training program, facility
46alteration, or equipment purchase to be used in new facilities
47or in retrofitting or adding to existing facilities or
48infrastructure new construction, including an addition to an
49existing facility, which reduces energy, water, wastewater, or
50operating costs and includes, but is not limited to:
51     1.  Insulation of the facility structure and systems within
52the facility.
53     2.  Storm windows and doors, caulking or weatherstripping,
54multiglazed windows and doors, heat-absorbing, or heat-
55reflective, glazed and coated window and door systems,
56additional glazing, reductions in glass area, and other window
57and door system modifications that reduce energy consumption.
58     3.  Automatic energy control systems.
59     4.  Heating, ventilating, or air-conditioning system
60modifications or replacements.
61     5.  Replacement or modifications of lighting fixtures to
62increase the energy efficiency of the lighting system, which, at
63a minimum, must conform to the applicable state or local
64building code.
65     6.  Energy recovery systems.
66     7.  Cogeneration systems that produce steam or forms of
67energy such as heat, as well as electricity, for use primarily
68within a facility or complex of facilities.
69     8.  Energy conservation measures that provide long-term
70operating cost reductions or significantly reduce Btu consumed.
71     9.  Renewable energy systems, such as solar, biomass, or
72wind systems.
73     10.  Devices that reduce water consumption or wastewater
74sewer charges.
75     11.  Equipment upgrades that improve the accuracy of
76billable revenue generating systems.
77     12.  Automated electronic or remotely controlled systems or
78measures that reduce direct personnel costs.
79     13.  Such other energy, water, or wastewater efficiency or
80conservation measures as may provide measurable operating cost
81reductions or billable revenue increases.
82     14.11.  Energy storage systems, such as fuel cells and
83thermal storage.
84     15.12.  Energy generating technologies, such as
86     16.13.  Any other repair, replacement, or upgrade of
87existing equipment.
88     (c)  "Energy, water, and wastewater cost savings" means a
89measured reduction in the cost of fuel, energy or water
90consumption, or wastewater production, and stipulated
91improvement in the operation and maintenance created from the
92implementation of one or more energy, water, and wastewater
93efficiency or conservation measures when compared with an
94established baseline for the previous cost of fuel, energy, or
95water consumption, or wastewater production, and stipulated
96operation and maintenance.
97     (d)  "Guaranteed energy performance savings contract" means
98a contract for the evaluation, recommendation, and
99implementation of energy, water, and wastewater efficiency or
100conservation measures, which, at a minimum, shall include:
101     1.  The design and installation of equipment to implement
102one or more of such measures and, if applicable, operation and
103maintenance of such measures.
104     2.  The amount of any actual annual savings that meet or
105exceed total annual contract payments made by the agency for the
107     3.  The finance charges incurred by the agency over the
108life of the contract.
109     (e)  "Guaranteed energy performance savings contractor"
110means a person or business that is licensed under chapter 471,
111chapter 481, or this chapter, and is experienced in the
112analysis, design, implementation, or installation of energy,
113water, or wastewater efficiency or conservation measures through
114energy performance contracts.
115     (4)  PROCEDURES.--
116     (a)  An agency may enter into a guaranteed energy
117performance savings contract with a guaranteed energy
118performance savings contractor to significantly reduce energy,
119water, or wastewater or operating costs of an agency facility
120through one or more energy, water, and wastewater efficiency or
121conservation measures.
122     (b)  Before design and installation of energy, water, and
123wastewater efficiency and conservation measures, the agency must
124obtain from a guaranteed energy performance savings contractor a
125report that summarizes the costs associated with the energy
126conservation measures and provides an estimate of the amount of
127the associated energy cost savings or operational improvements.
128The agency and the guaranteed energy performance savings
129contractor may enter into a separate agreement to pay for costs
130associated with the preparation and delivery of the report;
131however, payment to the contractor shall be contingent upon the
132report's projection of energy cost savings being equal to or
133greater than the total projected costs of the design and
134installation of the report's energy conservation or efficiency
136     (c)  The agency may enter into a guaranteed energy
137performance savings contract with a guaranteed energy
138performance savings contractor if the agency finds that the
139amount the agency would spend on the energy conservation or
140efficiency measures will not likely exceed the amount of the
141associated energy cost savings for up to 20 years from the date
142of installation, based on the life cycle cost calculations
143provided in s. 255.255, if the recommendations in the report
144were followed and if the qualified provider or providers give a
145written guarantee that such the energy cost savings will meet or
146exceed the costs of the system. The contract may provide for
147installment payments for a period not to exceed 20 years.
148     (d)  A guaranteed energy performance savings contractor
149must be selected in compliance with s. 287.055; except that if
150fewer than three firms are qualified to perform the required
151services, the requirement for agency selection of three firms,
152as provided in s. 287.055(4)(b), and the bid requirements of s.
153287.057 do not apply.
154     (e)  Before entering into a guaranteed energy performance
155savings contract, an agency must provide published notice of the
156meeting in which it proposes to award the contract, the names of
157the parties to the proposed contract, and the contract's
159     (f)  A guaranteed energy performance savings contract may
160provide for financing, including tax exempt financing, by a
161third party. The contract for third party financing may be
162separate from the energy performance savings contract. A
163separate contract for third party financing must include a
164provision that the third party financier must not be granted
165rights or privileges that exceed the rights and privileges
166available to the guaranteed energy performance savings
168     (g)  In determining the amount the agency will finance to
169acquire the efficiency or energy conservation measures, the
170agency may reduce such amount by the application of any grant
171moneys, rebates, or capital funding available to the agency for
172the purpose of buying down the cost of the guaranteed energy
173performance savings contract. However, in calculating the life
174cycle cost as required in paragraph (c), the agency shall not
175apply any grants, rebates, or capital funding.
177     (a)  A guaranteed energy performance savings contract must
178include a written guarantee that may include, but is not limited
179to the form of, a letter of credit, insurance policy, or
180corporate guarantee by the guaranteed energy performance savings
181contractor that annual associated energy cost savings will meet
182or exceed the amortized cost of the efficiency and energy
183conservation measures.
184     (b)  The guaranteed energy performance savings contract
185must provide that all payments, except obligations on
186termination of the contract before its expiration, may be made
187over time, but not to exceed 20 years from the date of complete
188installation and acceptance by the agency, and that the annual
189savings are guaranteed to the extent necessary to make annual
190payments to satisfy the guaranteed energy performance savings
192     (c)  The guaranteed energy performance savings contract
193must require that the guaranteed energy performance savings
194contractor to whom the contract is awarded provide a 100-percent
195public construction bond to the agency for its faithful
196performance, as required by s. 255.05.
197     (d)  The guaranteed energy performance savings contract may
198contain a provision allocating to the parties to the contract
199any annual associated energy cost savings that exceed the amount
200of the associated energy cost savings guaranteed in the
202     (e)  The guaranteed energy performance savings contract
203shall require the guaranteed energy performance savings
204contractor to provide to the agency an annual reconciliation of
205the guaranteed associated energy cost savings. If the
206reconciliation reveals a shortfall in such annual energy cost
207savings, the guaranteed energy performance savings contractor is
208liable for such shortfall. If the reconciliation reveals an
209excess in such annual energy cost savings, the excess savings
210may be allocated under paragraph (d) but may not be used to
211cover potential energy cost savings shortages in subsequent
212contract years.
213     (f)  The guaranteed energy performance savings contract
214must provide for payments of not less than one-twentieth of the
215price to be paid within 2 years from the date of the complete
216installation and acceptance by the agency, and the remaining
217costs to be paid at least quarterly, not to exceed a 20-year
218term, based on life cycle cost calculations.
219     (g)  The guaranteed energy performance savings contract may
220extend beyond the fiscal year in which it becomes effective;
221however, the term of any contract expires at the end of each
222fiscal year and may be automatically renewed annually for up to
22320 years, subject to the agency making sufficient annual
224appropriations based upon continued realized energy, water, or
225wastewater savings.
226     (h)  The guaranteed energy performance savings contract
227must stipulate that it does not constitute a debt, liability, or
228obligation of the state.
230Department of Management Services, with the assistance of the
231Office of the Chief Financial Officer, may, within available
232resources, provide technical assistance to state agencies
233contracting for energy, water, and wastewater efficiency or
234conservation measures and engage in other activities considered
235appropriate by the department for promoting and facilitating
236guaranteed energy performance contracting by state agencies. The
237Office of the Chief Financial Officer, with the assistance of
238the Department of Management Services, may, within available
239resources, develop model contractual and related documents for
240use by state agencies. Prior to entering into a guaranteed
241energy performance savings contract, any contract or lease for
242third-party financing, or any combination of such contracts, a
243state agency shall submit such proposed contract or lease to the
244Office of the Chief Financial Officer for review and approval.
245     Section 2.  Subsection (10) of section 287.064, Florida
246Statutes, is amended to read:
247     287.064  Consolidated financing of deferred-payment
249     (10)  Costs incurred pursuant to a guaranteed energy
250performance savings contract, including the cost of energy,
251water, and wastewater efficiency and conservation measures, each
252as defined in s. 489.145, may be financed pursuant to a master
253equipment financing agreement; however, the costs of training,
254operation, and maintenance may not be financed. The period of
255time for repayment of the funds drawn pursuant to the master
256equipment financing agreement under this subsection may exceed 5
257years but may not exceed 10 years.
258     Section 3.  This act shall take effect July 1, 2006.

CODING: Words stricken are deletions; words underlined are additions.