CS/HB 37

1	A bill to be entitled
2	An act relating to contracting for efficiency or
3	conservation measures by state agencies; amending s.
4	489.145, F.S.; including water and wastewater efficiency
5	and conservation in the measures encouraged by the
6	Legislature; revising definitions; providing for inclusion
7	of water and wastewater efficiency and conservation
8	measures in guaranteed performance savings contracts
9	entered into by state agencies, municipalities, or
10	political subdivisions; requiring the Department of
11	Management Services to adopt specified rules relating to
12	guaranteed performance savings contractors; amending s.
13	287.064, F.S., relating to consolidated financing of
14	deferred-payment purchases, to conform; providing an
15	effective date.
16
17	Be It Enacted by the Legislature of the State of Florida:
18
19	Section 1.  Section 489.145, Florida Statutes, is amended
20	to read:
21	489.145  Guaranteed energy performance savings
22	contracting.--
23	(1)  SHORT TITLE.--This section may be cited as the
24	"Guaranteed Energy Performance Savings Contracting Act."
25	(2)  LEGISLATIVE FINDINGS.--The Legislature finds that
26	investment in energy, water, and wastewater efficiency or
27	conservation measures in agency facilities can reduce the amount
28	of energy and water consumed and wastewater to be treated and
29	produce immediate and long-term savings. It is the policy of
30	this state to encourage each agency agencies to invest in
31	energy, water, and wastewater efficiency or conservation
32	measures that provide such reductions reduce energy consumption,
33	produce a cost savings for the agency, and, for energy measures,
34	improve the quality of indoor air in public facilities and to
35	operate, maintain, and, when economically feasible, build or
36	renovate existing agency facilities in such a manner as to
37	minimize energy and water consumption and wastewater production
38	and maximize energy, water, and wastewater savings. It is
39	further the policy of this state to encourage each agency
40	agencies to reinvest any energy savings resulting from energy,
41	water, and wastewater efficiency or conservation measures in
42	additional energy, water, and wastewater efficiency or
43	conservation measures efforts.
44	(3)  DEFINITIONS.--As used in this section, the term:
45	(a)  "Agency" means the state, a municipality, or a
46	political subdivision.
47	(b)  "Energy, water, or wastewater efficiency or
48	conservation measure" means a training program, facility
49	alteration, or equipment purchase to be used in new facilities
50	or in retrofitting or adding to existing facilities or
51	infrastructure that construction, including an addition to an
52	existing facility, which reduces energy, water, wastewater, or
53	operating costs and includes, but is not limited to:
54	1.  Insulation of the facility structure and systems within
55	the facility.
56	2.  Storm windows and doors, caulking or weatherstripping,
57	multiglazed windows and doors, heat-absorbing, or heat-
58	reflective, glazed and coated window and door systems,
59	additional glazing, reductions in glass area, and other window
60	and door system modifications that reduce energy consumption.
61	3.  Automatic energy control systems.
62	4.  Heating, ventilating, or air-conditioning system
63	modifications or replacements.
64	5.  Replacement or modifications of lighting fixtures to
65	increase the energy efficiency of the lighting system, which, at
66	a minimum, must conform to the applicable state or local
67	building code.
68	6.  Energy recovery systems.
69	7.  Cogeneration systems that produce steam or forms of
70	energy such as heat, as well as electricity, for use primarily
71	within a facility or complex of facilities.
72	8.  Energy conservation measures that provide long-term
73	operating cost reductions or significantly reduce Btu consumed.
74	9.  Renewable energy systems, such as solar, biomass, or
75	wind systems.
76	10.  Devices that reduce water consumption or wastewater
77	sewer charges.
78	11.  Energy storage systems, such as fuel cells and thermal
79	storage.
80	12.  Energy-generating generating technologies, such as
81	microturbines.
82	13.  Cool roof coating.
83	14.  Automated electronic or remotely controlled systems or
84	measures that reduce direct personnel costs.
85	15.  Equipment upgrades that improve the accuracy of
86	billable revenue-generating systems.
87	16.13.  Any other repair, replacement, or upgrade of
88	existing equipment.
89	17.  Any other conservation measures that provide
90	measurable operating cost reductions or billable revenue
91	increases.
92	(c)  "Energy, water, or wastewater cost savings" means a
93	measured reduction in the cost of fuel, energy or water
94	consumption, or wastewater production and stipulated improvement
95	in the operation and maintenance created from the implementation
96	of one or more energy, water, or wastewater efficiency or
97	conservation measures when compared with an established baseline
98	for the previous cost of fuel, energy or water consumption, or
99	wastewater production and stipulated operation and maintenance.
100	(d)  "Guaranteed energy performance savings contract" means
101	a contract for the evaluation, recommendation, and
102	implementation of energy, water, or wastewater efficiency or
103	conservation measures, which, at a minimum, shall include:
104	1.  The design and installation of equipment to implement
105	one or more of such measures and, if applicable, operation and
106	maintenance of such measures.
107	2.  The amount of any actual annual savings that meet or
108	exceed total annual contract payments made by the agency for the
109	contract.
110	3.  The finance charges incurred by the agency over the
111	life of the contract.
112	(e)  "Guaranteed energy performance savings contractor"
113	means a person or business that is licensed under chapter 471,
114	chapter 481, or this chapter, and is experienced in the
115	analysis, design, implementation, or installation of energy,
116	water, or wastewater efficiency or conservation measures through
117	guaranteed energy performance savings contracts.
118	(4)  PROCEDURES.--
119	(a)  An agency may enter into a guaranteed energy
120	performance savings contract with a guaranteed energy
121	performance savings contractor to significantly reduce energy,
122	water, or wastewater or operating costs of an agency facility
123	through one or more energy, water, or wastewater efficiency or
124	conservation measures.
125	(b)  Before design and installation of energy, water, or
126	wastewater efficiency and conservation measures, the agency must
127	obtain from a guaranteed energy performance savings contractor a
128	report that summarizes the costs associated with the energy
129	conservation measures and provides an estimate of the amount of
130	the associated energy cost savings or operational improvements.
131	The agency and the guaranteed energy performance savings
132	contractor may enter into a separate agreement to pay for costs
133	associated with the preparation and delivery of the report;
134	however, payment to the contractor shall be contingent upon the
135	report's projection of energy cost savings being equal to or
136	greater than the total projected costs of the design and
137	installation of the report's energy conservation or efficiency
138	measures.
139	(c)  The agency may enter into a guaranteed energy
140	performance savings contract with a guaranteed energy
141	performance savings contractor if the agency finds that the
142	amount the agency would spend on the energy conservation or
143	efficiency measures will not likely exceed the amount of the
144	associated energy cost savings for up to 20 years from the date
145	of installation, based on the life cycle cost calculations
146	provided in s. 255.255, if the recommendations in the report
147	were followed and if the qualified provider or providers give a
148	written guarantee that such the energy cost savings will meet or
149	exceed the costs of the system. The contract may provide for
150	installment payments for a period not to exceed 20 years.
151	(d)  A guaranteed energy performance savings contractor
152	must be selected in compliance with s. 287.055,; except that if
153	fewer than three firms are qualified to perform the required
154	services, the requirement for agency selection of three firms,
155	as provided in s. 287.055(4)(b), and the bid requirements of s.
156	287.057 do not apply.
157	(e)  Before entering into a guaranteed energy performance
158	savings contract, an agency must provide published notice of the
159	meeting in which it proposes to award the contract, the names of
160	the parties to the proposed contract, and the contract's
161	purpose.
162	(f)  A guaranteed energy performance savings contract may
163	provide for financing, including tax-exempt financing, by a
164	third party. The contract for third-party third party financing
165	may be separate from the guaranteed energy performance savings
166	contract. A separate contract for third-party third party
167	financing must include a provision that the third-party third
168	party financier must not be granted rights or privileges that
169	exceed the rights and privileges available to the guaranteed
170	energy performance savings contractor.
171	(g)  In determining the amount the agency will finance to
172	acquire the efficiency or energy conservation measures, the
173	agency may reduce such amount by the application of any grant
174	moneys, rebates, or capital funding available to the agency for
175	the purpose of buying down the cost of the guaranteed energy
176	performance savings contract. However, in calculating the life
177	cycle cost as required in paragraph (c), the agency shall not
178	apply any grants, rebates, or capital funding.
179	(5)  CONTRACT PROVISIONS.--
180	(a)  A guaranteed energy performance savings contract must
181	include a written guarantee that may include, but is not limited
182	to the form of, a letter of credit, insurance policy, or
183	corporate guarantee by the guaranteed energy performance savings
184	contractor that annual associated energy cost savings will meet
185	or exceed the amortized cost of the efficiency or energy
186	conservation measures.
187	(b)  The guaranteed energy performance savings contract
188	must provide that all payments, except obligations on
189	termination of the contract before its expiration, may be made
190	over time, but not to exceed 20 years from the date of complete
191	installation and acceptance by the agency, and that the annual
192	savings are guaranteed to the extent necessary to make annual
193	payments to satisfy the guaranteed energy performance savings
194	contract.
195	(c)  The guaranteed energy performance savings contract
196	must require that the guaranteed energy performance savings
197	contractor to whom the contract is awarded provide a 100-percent
198	public construction bond to the agency for its faithful
199	performance, as required by s. 255.05.
200	(d)  The guaranteed energy performance savings contract may
201	contain a provision allocating to the parties to the contract
202	any annual associated energy cost savings that exceed the amount
203	of the associated energy cost savings guaranteed in the
204	contract.
205	(e)  The guaranteed energy performance savings contract
206	shall require the guaranteed energy performance savings
207	contractor to provide to the agency an annual reconciliation of
208	the guaranteed associated energy cost savings. If the
209	reconciliation reveals a shortfall in such annual energy cost
210	savings, the guaranteed energy performance savings contractor is
211	liable for such shortfall. If the reconciliation reveals an
212	excess in such annual energy cost savings, the excess savings
213	may be allocated under paragraph (d) but may not be used to
214	cover potential energy cost savings shortages in subsequent
215	contract years.
216	(f)  The guaranteed energy performance savings contract
217	must provide for payments of not less than one-twentieth of the
218	price to be paid within 2 years from the date of the complete
219	installation and acceptance by the agency, and the remaining
220	costs to be paid at least quarterly, not to exceed a 20-year
221	term, based on life cycle cost calculations.
222	(g)  The guaranteed energy performance savings contract may
223	extend beyond the fiscal year in which it becomes effective;
224	however, the term of any contract expires at the end of each
225	fiscal year and may be automatically renewed annually for up to
226	20 years, subject to the agency making sufficient annual
227	appropriations based upon continued realized energy, water, or
228	wastewater savings.
229	(h)  The guaranteed energy performance savings contract
230	must stipulate that it does not constitute a debt, liability, or
231	obligation of the state.
232	(6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The
233	Department of Management Services, with the assistance of the
234	Office of the Chief Financial Officer, may, within available
235	resources, provide technical assistance to state agencies
236	contracting for energy, water, or wastewater efficiency or
237	conservation measures and engage in other activities considered
238	appropriate by the department for promoting and facilitating
239	guaranteed energy performance savings contracting by state
240	agencies. The Office of the Chief Financial Officer, with the
241	assistance of the Department of Management Services, may, within
242	available resources, develop model contractual and related
243	documents for use by state agencies. Prior to entering into a
244	guaranteed energy performance savings contract, any contract or
245	lease for third-party financing, or any combination of such
246	contracts, a state agency shall submit such proposed contract or
247	lease to the Office of the Chief Financial Officer for review
248	and approval.
249	(7)  RULES.--The Department of Management Services shall
250	adopt rules to define the experience qualifications of
251	guaranteed performance savings contractors.
252	Section 2.  Subsection (10) of section 287.064, Florida
253	Statutes, is amended to read:
254	287.064  Consolidated financing of deferred-payment
255	purchases.--
256	(10)  Costs incurred pursuant to a guaranteed energy
257	performance savings contract, including the cost of energy,
258	water, or wastewater efficiency and conservation measures, each
259	as defined in s. 489.145, may be financed pursuant to a master
260	equipment financing agreement; however, the costs of training,
261	operation, and maintenance may not be financed. The period of
262	time for repayment of the funds drawn pursuant to the master
263	equipment financing agreement under this subsection may exceed 5
264	years but may not exceed 10 years.
265	Section 3.  This act shall take effect July 1, 2008.

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