HB 0597CS


1The Governmental Operations Committee recommends the following:
3     Council/Committee Substitute
4     Remove the entire bill and insert:
A bill to be entitled
6An act relating to contracting for efficiency or
7conservation measures by state agencies; amending s.
8489.145, F.S.; including water and wastewater efficiency
9and conservation in the measures encouraged by the
10Legislature; revising definitions; providing for inclusion
11of water and wastewater efficiency and conservation
12measures in guaranteed performance savings contracts
13entered into by a state agency, municipality, or political
14subdivision; amending s. 287.064, F.S., relating to
15consolidated financing of deferred-payment purchases, to
16conform; providing an effective date.
18Be It Enacted by the Legislature of the State of Florida:
20     Section 1.  Section 489.145, Florida Statutes, is amended
21to read:
22     489.145  Guaranteed energy performance savings
24     (1)  SHORT TITLE.--This section may be cited as the
25"Guaranteed Energy Performance Savings Contracting Act."
26     (2)  LEGISLATIVE FINDINGS.--The Legislature finds that
27investment in energy, water, and wastewater efficiency or
28conservation measures in agency facilities can reduce the amount
29of energy and water consumed and wastewater to be treated and
30produce immediate and long-term savings. It is the policy of
31this state to encourage each agency agencies to invest in
32energy, water, and wastewater efficiency or conservation
33measures that provide such reductions reduce energy consumption,
34produce a cost savings for the agency, and, for energy measures,
35improve the quality of indoor air in public facilities and to
36operate, maintain, and, when economically feasible, build or
37renovate existing agency facilities in such a manner as to
38minimize energy and water consumption or wastewater production
39and maximize energy, water, and wastewater savings. It is
40further the policy of this state to encourage agencies to
41reinvest any energy savings resulting from energy, water, and
42wastewater efficiency or conservation measures in additional
43energy, water, and wastewater efficiency or conservation
44measures efforts.
45     (3)  DEFINITIONS.--As used in this section, the term:
46     (a)  "Agency" means the state, a municipality, or a
47political subdivision.
48     (b)  "Energy, water, and wastewater efficiency or
49conservation measure" means a training program, facility
50alteration, or equipment purchase to be used in new facilities
51or in retrofitting or adding to existing facilities or
52infrastructure new construction, including an addition to an
53existing facility, which reduces energy, water, wastewater, or
54operating costs and includes, but is not limited to:
55     1.  Insulation of the facility structure and systems within
56the facility.
57     2.  Storm windows and doors, caulking or weatherstripping,
58multiglazed windows and doors, heat-absorbing, or heat-
59reflective, glazed and coated window and door systems,
60additional glazing, reductions in glass area, and other window
61and door system modifications that reduce energy consumption.
62     3.  Automatic energy control systems.
63     4.  Heating, ventilating, or air-conditioning system
64modifications or replacements.
65     5.  Replacement or modifications of lighting fixtures to
66increase the energy efficiency of the lighting system, which, at
67a minimum, must conform to the applicable state or local
68building code.
69     6.  Energy recovery systems.
70     7.  Cogeneration systems that produce steam or forms of
71energy such as heat, as well as electricity, for use primarily
72within a facility or complex of facilities.
73     8.  Energy conservation measures that provide long-term
74operating cost reductions or significantly reduce Btu consumed.
75     9.  Renewable energy systems, such as solar, biomass, or
76wind systems.
77     10.  Devices that reduce water consumption or wastewater
78sewer charges.
79     11.  Equipment upgrades that improve the accuracy of
80billable revenue generating systems.
81     12.  Automated electronic or remotely controlled systems or
82measures that reduce direct personnel costs.
83     13.  Such other energy, water, or wastewater efficiency or
84conservation measures as may provide measurable operating cost
85reductions or billable revenue increases.
86     14.11.  Energy storage systems, such as fuel cells and
87thermal storage.
88     15.12.  Energy generating technologies, such as
90     16.  Cool roof coating.
91     17.13.  Any other repair, replacement, or upgrade of
92existing equipment.
93     (c)  "Energy, water, and wastewater cost savings" means a
94measured reduction in the cost of fuel, energy or water
95consumption, or wastewater production, and stipulated
96improvement in the operation and maintenance created from the
97implementation of one or more energy, water, and wastewater
98efficiency or conservation measures when compared with an
99established baseline for the previous cost of fuel, energy, or
100water consumption, or wastewater production, and stipulated
101operation and maintenance.
102     (d)  "Guaranteed energy performance savings contract" means
103a contract for the evaluation, recommendation, and
104implementation of energy, water, and wastewater efficiency or
105conservation measures, which, at a minimum, shall include:
106     1.  The design and installation of equipment to implement
107one or more of such measures and, if applicable, operation and
108maintenance of such measures.
109     2.  The amount of any actual annual savings that meet or
110exceed total annual contract payments made by the agency for the
112     3.  The finance charges incurred by the agency over the
113life of the contract.
114     (e)  "Guaranteed energy performance savings contractor"
115means a person or business that is licensed under chapter 471,
116chapter 481, or this chapter, and is experienced in the
117analysis, design, implementation, or installation of energy,
118water, or wastewater efficiency or conservation measures through
119energy performance contracts.
120     (4)  PROCEDURES.--
121     (a)  An agency may enter into a guaranteed energy
122performance savings contract with a guaranteed energy
123performance savings contractor to significantly reduce energy,
124water, or wastewater or operating costs of an agency facility
125through one or more energy, water, and wastewater efficiency or
126conservation measures.
127     (b)  Before design and installation of energy, water, and
128wastewater efficiency and conservation measures, the agency must
129obtain from a guaranteed energy performance savings contractor a
130report that summarizes the costs associated with the energy
131conservation measures and provides an estimate of the amount of
132the associated energy cost savings or operational improvements.
133The agency and the guaranteed energy performance savings
134contractor may enter into a separate agreement to pay for costs
135associated with the preparation and delivery of the report;
136however, payment to the contractor shall be contingent upon the
137report's projection of energy cost savings being equal to or
138greater than the total projected costs of the design and
139installation of the report's energy conservation or efficiency
141     (c)  The agency may enter into a guaranteed energy
142performance savings contract with a guaranteed energy
143performance savings contractor if the agency finds that the
144amount the agency would spend on the energy conservation or
145efficiency measures will not likely exceed the amount of the
146associated energy cost savings for up to 20 years from the date
147of installation, based on the life cycle cost calculations
148provided in s. 255.255, if the recommendations in the report
149were followed and if the qualified provider or providers give a
150written guarantee that such the energy cost savings will meet or
151exceed the costs of the system. The contract may provide for
152installment payments for a period not to exceed 20 years.
153     (d)  A guaranteed energy performance savings contractor
154must be selected in compliance with s. 287.055; except that if
155fewer than three firms are qualified to perform the required
156services, the requirement for agency selection of three firms,
157as provided in s. 287.055(4)(b), and the bid requirements of s.
158287.057 do not apply.
159     (e)  Before entering into a guaranteed energy performance
160savings contract, an agency must provide published notice of the
161meeting in which it proposes to award the contract, the names of
162the parties to the proposed contract, and the contract's
164     (f)  A guaranteed energy performance savings contract may
165provide for financing, including tax exempt financing, by a
166third party. The contract for third party financing may be
167separate from the energy performance savings contract. A
168separate contract for third party financing must include a
169provision that the third party financier must not be granted
170rights or privileges that exceed the rights and privileges
171available to the guaranteed energy performance savings
173     (g)  In determining the amount the agency will finance to
174acquire the efficiency or energy conservation measures, the
175agency may reduce such amount by the application of any grant
176moneys, rebates, or capital funding available to the agency for
177the purpose of buying down the cost of the guaranteed energy
178performance savings contract. However, in calculating the life
179cycle cost as required in paragraph (c), the agency shall not
180apply any grants, rebates, or capital funding.
182     (a)  A guaranteed energy performance savings contract must
183include a written guarantee that may include, but is not limited
184to the form of, a letter of credit, insurance policy, or
185corporate guarantee by the guaranteed energy performance savings
186contractor that annual associated energy cost savings will meet
187or exceed the amortized cost of the efficiency and energy
188conservation measures.
189     (b)  The guaranteed energy performance savings contract
190must provide that all payments, except obligations on
191termination of the contract before its expiration, may be made
192over time, but not to exceed 20 years from the date of complete
193installation and acceptance by the agency, and that the annual
194savings are guaranteed to the extent necessary to make annual
195payments to satisfy the guaranteed energy performance savings
197     (c)  The guaranteed energy performance savings contract
198must require that the guaranteed energy performance savings
199contractor to whom the contract is awarded provide a 100-percent
200public construction bond to the agency for its faithful
201performance, as required by s. 255.05.
202     (d)  The guaranteed energy performance savings contract may
203contain a provision allocating to the parties to the contract
204any annual associated energy cost savings that exceed the amount
205of the associated energy cost savings guaranteed in the
207     (e)  The guaranteed energy performance savings contract
208shall require the guaranteed energy performance savings
209contractor to provide to the agency an annual reconciliation of
210the guaranteed associated energy cost savings. If the
211reconciliation reveals a shortfall in such annual energy cost
212savings, the guaranteed energy performance savings contractor is
213liable for such shortfall. If the reconciliation reveals an
214excess in such annual energy cost savings, the excess savings
215may be allocated under paragraph (d) but may not be used to
216cover potential energy cost savings shortages in subsequent
217contract years.
218     (f)  The guaranteed energy performance savings contract
219must provide for payments of not less than one-twentieth of the
220price to be paid within 2 years from the date of the complete
221installation and acceptance by the agency, and the remaining
222costs to be paid at least quarterly, not to exceed a 20-year
223term, based on life cycle cost calculations.
224     (g)  The guaranteed energy performance savings contract may
225extend beyond the fiscal year in which it becomes effective;
226however, the term of any contract expires at the end of each
227fiscal year and may be automatically renewed annually for up to
22820 years, subject to the agency making sufficient annual
229appropriations based upon continued realized energy, water, or
230wastewater savings.
231     (h)  The guaranteed energy performance savings contract
232must stipulate that it does not constitute a debt, liability, or
233obligation of the state.
235Department of Management Services, with the assistance of the
236Office of the Chief Financial Officer, may, within available
237resources, provide technical assistance to state agencies
238contracting for energy, water, and wastewater efficiency or
239conservation measures and engage in other activities considered
240appropriate by the department for promoting and facilitating
241guaranteed energy performance contracting by state agencies. The
242Office of the Chief Financial Officer, with the assistance of
243the Department of Management Services, may, within available
244resources, develop model contractual and related documents for
245use by state agencies. Prior to entering into a guaranteed
246energy performance savings contract, any contract or lease for
247third-party financing, or any combination of such contracts, a
248state agency shall submit such proposed contract or lease to the
249Office of the Chief Financial Officer for review and approval.
250     Section 2.  Subsection (10) of section 287.064, Florida
251Statutes, is amended to read:
252     287.064  Consolidated financing of deferred-payment
254     (10)  Costs incurred pursuant to a guaranteed energy
255performance savings contract, including the cost of energy,
256water, and wastewater efficiency and conservation measures, each
257as defined in s. 489.145, may be financed pursuant to a master
258equipment financing agreement; however, the costs of training,
259operation, and maintenance may not be financed. The period of
260time for repayment of the funds drawn pursuant to the master
261equipment financing agreement under this subsection may exceed 5
262years but may not exceed 10 years.
263     Section 3.  This act shall take effect July 1, 2006.

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