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The Committee on Environmental Preservation and Conservation

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(Saunders) recommended the following amendment to amendment

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(223658):

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     Senate Amendment

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     Delete line(s) 878-903

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and insert:

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Section 16.  Subsections (10) and (11) of section 287.064,

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Florida Statutes, are amended to read:

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     287.064  Consolidated financing of deferred-payment

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purchases.--

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     (10)(a) A master equipment financing agreement may finance

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the cost of energy, water, or wastewater efficiency and

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conservation measures, as defined in s. 489.145, excluding the

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costs of training, operation, and maintenance, for a term of

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repayment that may exceed five years but not more than twenty

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years.

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     (b) The guaranteed energy, water, and wastewater savings

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contractor shall provide for the replacement or the extension of

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the useful life of the equipment during the term of the contract.

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Costs incurred pursuant to a guaranteed energy performance

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savings contract, including the cost of energy conservation

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measures, each as defined in s. 489.145, may be financed pursuant

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to a master equipment financing agreement; however, the costs of

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training, operation, and maintenance may not be financed. The

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period of time for repayment of the funds drawn pursuant to the

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master equipment financing agreement under this subsection may

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exceed 5 years but may not exceed 10 years.

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     (11)  For purposes of consolidated financing of deferred

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payment commodity contracts under this section by a state agency,

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the annualized amount of any such contract must be supported from

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available recurring funds appropriated to the agency in an

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appropriation category, other than the expense appropriation

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category as defined in chapter 216, which that the Chief

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Financial Officer has determined is appropriate or which that the

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Legislature has designated for payment of the obligation incurred

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under this section.

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     Section 17.  Section 489.145, Florida Statutes, is amended

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to read:

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     489.145  Guaranteed energy performance savings contracting.-

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-

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     (1)  SHORT TITLE.--This section may be cited as the

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"Guaranteed Energy, Water and Wastewater Performance Savings

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Contracting Act."

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     (2)  LEGISLATIVE FINDINGS.--The Legislature finds that

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investment in energy, water and wastewater conservation measures

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in agency facilities can reduce the amount of energy and water

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consumed and wastewater treated and produce immediate and long-

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term savings. It is the policy of this state to encourage each

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agency agencies to invest in energy, water, and wastewater

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efficiency and conservation measures that reduce energy

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consumption, produce a cost savings for the agency, and improve

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the quality of indoor air in public facilities and to operate,

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maintain, and, when economically feasible, build or renovate

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existing agency facilities in such a manner as to minimize energy

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and water consumption and wastewater production and maximize

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energy, water, and wastewater savings. It is further the policy

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of this state to encourage agencies to reinvest any energy

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savings resulting from energy, water, and wastewater efficiency

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and conservation measures in additional energy, water, and

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wastewater conservation measures efforts.

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     (3)  DEFINITIONS.--As used in this section, the term:

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     (a)  "Agency" means the state, a municipality, or a

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political subdivision.

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     (b) "Energy conservation measure" means a training program,

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facility alteration, or equipment purchase to be used in new

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construction, including an addition to an existing facilities or

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infrastructure facility, which reduces energy, water, or

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wastewater or energy-related operating costs and includes, but is

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not limited to:

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     1.  Insulation of the facility structure and systems within

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the facility.

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     2.  Storm windows and doors, caulking or weatherstripping,

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multiglazed windows and doors, heat-absorbing, or heat-

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reflective, glazed and coated window and door systems, additional

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glazing, reductions in glass area, and other window and door

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system modifications that reduce energy consumption.

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     3.  Automatic energy control systems.

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     4.  Heating, ventilating, or air-conditioning system

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modifications or replacements.

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     5.  Replacement or modifications of lighting fixtures to

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increase the energy efficiency of the lighting system, which, at

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a minimum, must conform to the applicable state or local building

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code.

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     6.  Energy recovery systems.

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     7.  Cogeneration systems that produce steam or forms of

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energy such as heat, as well as electricity, for use primarily

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within a facility or complex of facilities.

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     8. Energy conservation measures that reduce Btu, kW, or kWh

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consumed or that provide long-term operating cost reductions or

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significantly reduce Btu consumed.

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     9.  Renewable energy systems, such as solar, biomass, or

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wind systems.

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     10.  Devices that reduce water consumption or sewer charges.

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     11. Energy storage systems, such as fuel cells and thermal

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storage.

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     12. Energy generating technologies, such as microturbines.

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     13.  Any other repair, replacement, or upgrade of existing

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equipment.

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     (c) "Energy, water, and wastewater cost savings" means a

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measured reduction in the cost of fuel, energy or water

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consumption or wastewater production, and stipulated operation

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and maintenance created from the implementation of one or more

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energy, water, or wastewater efficiency or conservation measures

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when compared with an established baseline for the previous cost

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of fuel, energy, or water consumption or wastewater production,

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and stipulated operation and maintenance.

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     (d) "Guaranteed energy, water, and wastewater performance

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savings contract" means a contract for the evaluation,

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recommendation, and implementation of energy, water, and

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wastewater efficiency or conservation measures, which, at a

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minimum, shall include:

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     1.  The design and installation of equipment to implement

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one or more of such measures and, if applicable, operation and

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maintenance of such measures.

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     2.  The amount of any actual annual savings that meet or

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exceed total annual contract payments made by the agency for the

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contract.

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     3.  The finance charges incurred by the agency over the life

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of the contract.

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     (e)  "Guaranteed energy performance savings contractor"

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means a person or business that is licensed under chapter 471,

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chapter 481, or this chapter, and is experienced in the analysis,

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design, implementation, or installation of energy conservation

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measures through energy performance contracts.

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     (f) "Investment grade energy audit" means a detailed

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energy, water, and wastewater audit with an accompanying analysis

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of proposed energy, water, and wastewater conservation measures,

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their costs, savings, and benefits prior to entry into an energy

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savings contract.

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     (4)  PROCEDURES.--

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     (a) An agency may enter into a guaranteed energy

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performance savings contract with a guaranteed energy performance

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savings contractor to significantly reduce energy, water, or

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wastewater consumption or production of energy-related operating

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costs of an agency facility through one or more energy, water, or

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wastewater efficiency or conservation measures.

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     (b)  Before design and installation of energy conservation

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measures, the agency must obtain from a guaranteed energy

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performance savings contractor an investment grade audit a report

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that summarizes the costs associated with the energy conservation

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measures or energy-related operational cost-saving measures and

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provides an estimate of the amount of the energy cost savings.

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The agency and the guaranteed energy performance savings

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contractor may enter into a separate agreement to pay for costs

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associated with the preparation and delivery of the report;

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however, payment to the contractor shall be contingent upon the

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report's projection of energy or operational cost savings being

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equal to or greater than the total projected costs of the design

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and installation of the report's energy conservation measures.

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     (c)  The agency may enter into a guaranteed energy

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performance savings contract with a guaranteed energy performance

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savings contractor if the agency finds that the amount the agency

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would spend on the energy conservation or energy-related cost-

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savings measures will not likely exceed the amount of the energy

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or energy-related cost savings for up to 20 years from the date

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of installation, based on the life cycle cost calculations

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provided in s. 255.255, if the recommendations in the report were

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followed and if the qualified provider or providers give a

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written guarantee that the energy or energy-related cost savings

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will meet or exceed the costs of the system. However, actual

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computed cost savings must meet or exceed the estimated cost

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savings provided in program approval. Baseline adjustments used

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in calculations must be specified in the contract. The contract

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may provide for installment payments for a period not to exceed

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20 years.

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     (d) A guaranteed energy performance savings contractor must

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be selected in compliance with s. 287.055; except that if fewer

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than three firms are qualified to perform the required services,

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the requirement for agency selection of three firms, as provided

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in s. 287.055(4)(b), and the bid requirements of s. 287.057 do

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not apply.

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     (e)  Before entering into a guaranteed energy performance

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savings contract, an agency must provide published notice of the

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meeting in which it proposes to award the contract, the names of

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the parties to the proposed contract, and the contract's purpose.

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     (f) A guaranteed energy performance savings contract may

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provide for financing, including tax-exempt financing, by a third

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party. The contract for third party financing may be separate

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from the guaranteed energy performance contract. A separate

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contract for third party financing must include a provision that

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the third party financier must not be granted rights or

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privileges that exceed the rights and privileges available to the

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guaranteed energy performance savings contractor.

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     (g) Financing for guaranteed energy performance savings

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contracts may be provided under the authority of s. 287.064.

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     (h) The Office of the Chief Financial Officer shall review

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proposals from state agencies to ensure that the most effective

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financing is being used.

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     (i) Annually, the agency that has entered into the contract

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shall provide the Department of Management Services and the Chief

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Financial Officer the measurement and verification report

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required by the contact to validate that energy savings have

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occurred.

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     (j)(g) In determining the amount the agency will finance to

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acquire the energy conservation measures, the agency may reduce

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such amount by the application of any grant moneys, rebates, or

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capital funding available to the agency for the purpose of buying

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down the cost of the guaranteed energy performance savings

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contract. However, in calculating the life cycle cost as required

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in paragraph (c), the agency shall not apply any grants, rebates,

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or capital funding.

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     (5)  CONTRACT PROVISIONS.--

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     (a) A guaranteed energy performance savings contract must

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include a written guarantee that may include, but is not limited

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to the form of, a letter of credit, insurance policy, or

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corporate guarantee by the guaranteed energy performance savings

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contractor that annual associated energy cost savings will meet

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or exceed the amortized cost of energy conservation measures.

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     (b) The guaranteed energy performance savings contract must

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provide that all payments, except obligations on termination of

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the contract before its expiration, may be made over time, but

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not to exceed 20 years from the date of complete installation and

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acceptance by the agency, and that the annual savings are

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guaranteed to the extent necessary to make annual payments to

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satisfy the guaranteed energy performance savings contract.

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     (c) The guaranteed energy performance savings contract must

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require that the guaranteed energy performance savings contractor

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to whom the contract is awarded provide a 100-percent public

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construction bond to the agency for its faithful performance, as

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required by s. 255.05.

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     (d) The guaranteed energy performance savings contract may

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contain a provision allocating to the parties to the contract any

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annual energy cost savings that exceed the amount of the energy

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cost savings guaranteed in the contract.

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     (e)  The guaranteed energy performance savings contract

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shall require the guaranteed energy performance savings

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contractor to provide to the agency an annual reconciliation of

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the guaranteed energy or energy-related cost savings. If the

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reconciliation reveals a shortfall in annual energy or energy-

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related cost savings, the guaranteed energy performance savings

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contractor is liable for such shortfall. If the reconciliation

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reveals an excess in annual energy cost savings, the excess

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savings may be allocated under paragraph (d) but may not be used

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to cover potential energy cost savings shortages in subsequent

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contract years.

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     (f) The guaranteed energy performance savings contract must

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provide for payments of not less than one-twentieth of the price

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to be paid within 2 years from the date of the complete

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installation and acceptance by the agency using straight-line

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amortization for the term of the loan, and the remaining costs to

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be paid at least quarterly, not to exceed a 20-year term, based

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on life cycle cost calculations.

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     (g) The guaranteed energy performance savings contract may

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extend beyond the fiscal year in which it becomes effective;

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however, the term of any contract expires at the end of each

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fiscal year and may be automatically renewed annually for up to

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20 years, subject to the agency making available sufficient

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annual funds appropriations based upon continued realized energy

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savings.

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     (h) The guaranteed energy performance savings contract must

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stipulate that it does not constitute a debt, liability, or

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obligation of the state.

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     (6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The

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Department of Management Services, with the assistance of the

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Office of the Chief Financial Officer, shall may, within

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available resources, provide technical content assistance to

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state agencies contracting for energy conservation measures and

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engage in other activities considered appropriate by the

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department for promoting and facilitating guaranteed energy

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performance contracting by state agencies. The Department of

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Management Services shall review the investment-grade audit for

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each proposed project and certify that the cost savings are

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appropriate and sufficient for the term of the contract. The

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Office of the Chief Financial Officer, with the assistance of the

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Department of Management Services, shall develop model

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contractual and other related documents and shall, by rule may,

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within available resources, develop the contract requirements

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model contractual and related documents for use by state and

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other agencies. Prior to entering into a guaranteed energy

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performance savings contract, any contract or lease for third-

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party financing, or any combination of such contracts, a state

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agency shall submit such proposed contract or lease to the Office

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of the Chief Financial Officer for review and approval. A

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proposed contract or lease shall include:

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     (a) Supporting information required by s. 216.023(a)9. in

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ss. 287.063(5) and 287.064(11). For contracts approved under s.

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489.145, the criteria may, at a minimum, include the

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specification of a benchmark cost of capital and minimum real

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rate of return on energy, water, or wastewater savings against

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which proposals shall be evaluated.

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     (b) Documentation supporting recurring funds requirements

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in ss. 287.063(5) and 287.064(11).

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     (c) Approval by the agency head or his or her designee.

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     (d) An agency measurement and verification plan to monitor

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cost savings.

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     (7) FUNDING SUPPORT.--For purposes of consolidated

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financing of deferred payment commodity contracts under this

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section by a state agency, any such contract must be supported

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from available recurring funds appropriated to the agency in an

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appropriation category, as defined in chapter 216, which the

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Legislature has designated for payment of the obligation incurred

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under this section, or which the Chief Financial Officer has

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determined is appropriate.

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The Office of the Chief Financial Officer may not approve any

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contract from any state agency submitted under this section which

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does not meet the requirements of this section.

3/19/2008  10:14:00 AM     EP.EP.05351