HB 597

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 a state agency, municipality, or political
10	subdivision; amending s. 287.064, F.S., relating to
11	consolidated financing of deferred-payment purchases, to
12	conform; providing an effective date.
13
14	Be It Enacted by the Legislature of the State of Florida:
15
16	Section 1.  Section 489.145, Florida Statutes, is amended
17	to read:
18	489.145  Guaranteed energy performance savings
19	contracting.--
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
23	investment in energy, water, and wastewater efficiency or
24	conservation measures in agency facilities can reduce the amount
25	of energy and water consumed and wastewater to be treated and
26	produce immediate and long-term savings. It is the policy of
27	this state to encourage each agency agencies to invest in
28	energy, water, and wastewater efficiency or conservation
29	measures that provide such reductions reduce energy consumption,
30	produce a cost savings for the agency, and, for energy measures,
31	improve the quality of indoor air in public facilities and to
32	operate, maintain, and, when economically feasible, build or
33	renovate existing agency facilities in such a manner as to
34	minimize energy and water consumption or wastewater production
35	and maximize energy, water, and wastewater savings. It is
36	further the policy of this state to encourage agencies to
37	reinvest any energy savings resulting from energy, water, and
38	wastewater efficiency or conservation measures in additional
39	energy, water, and wastewater efficiency or conservation
40	measures efforts.
41	(3)  DEFINITIONS.--As used in this section, the term:
42	(a)  "Agency" means the state, a municipality, or a
43	political subdivision.
44	(b)  "Energy, water, and wastewater efficiency or
45	conservation measure" means a training program, facility
46	alteration, or equipment purchase to be used in new facilities
47	or in retrofitting or adding to existing facilities or
48	infrastructure new construction, including an addition to an
49	existing facility, which reduces energy, water, wastewater, or
50	operating costs and includes, but is not limited to:
51	1.  Insulation of the facility structure and systems within
52	the facility.
53	2.  Storm windows and doors, caulking or weatherstripping,
54	multiglazed windows and doors, heat-absorbing, or heat-
55	reflective, glazed and coated window and door systems,
56	additional glazing, reductions in glass area, and other window
57	and door system modifications that reduce energy consumption.
58	3.  Automatic energy control systems.
59	4.  Heating, ventilating, or air-conditioning system
60	modifications or replacements.
61	5.  Replacement or modifications of lighting fixtures to
62	increase the energy efficiency of the lighting system, which, at
63	a minimum, must conform to the applicable state or local
64	building code.
65	6.  Energy recovery systems.
66	7.  Cogeneration systems that produce steam or forms of
67	energy such as heat, as well as electricity, for use primarily
68	within a facility or complex of facilities.
69	8.  Energy conservation measures that provide long-term
70	operating cost reductions or significantly reduce Btu consumed.
71	9.  Renewable energy systems, such as solar, biomass, or
72	wind systems.
73	10.  Devices that reduce water consumption or wastewater
74	sewer charges.
75	11.  Equipment upgrades that improve the accuracy of
76	billable revenue generating systems.
77	12.  Automated electronic or remotely controlled systems or
78	measures that reduce direct personnel costs.
79	13.  Such other energy, water, or wastewater efficiency or
80	conservation measures as may provide measurable operating cost
81	reductions or billable revenue increases.
82	14.11.  Energy storage systems, such as fuel cells and
83	thermal storage.
84	15.12.  Energy generating technologies, such as
85	microturbines.
86	16.13.  Any other repair, replacement, or upgrade of
87	existing equipment.
88	(c)  "Energy, water, and wastewater cost savings" means a
89	measured reduction in the cost of fuel, energy or water
90	consumption, or wastewater production, and stipulated
91	improvement in the operation and maintenance created from the
92	implementation of one or more energy, water, and wastewater
93	efficiency or conservation measures when compared with an
94	established baseline for the previous cost of fuel, energy, or
95	water consumption, or wastewater production, and stipulated
96	operation and maintenance.
97	(d)  "Guaranteed energy performance savings contract" means
98	a contract for the evaluation, recommendation, and
99	implementation of energy, water, and wastewater efficiency or
100	conservation measures, which, at a minimum, shall include:
101	1.  The design and installation of equipment to implement
102	one or more of such measures and, if applicable, operation and
103	maintenance of such measures.
104	2.  The amount of any actual annual savings that meet or
105	exceed total annual contract payments made by the agency for the
106	contract.
107	3.  The finance charges incurred by the agency over the
108	life of the contract.
109	(e)  "Guaranteed energy performance savings contractor"
110	means a person or business that is licensed under chapter 471,
111	chapter 481, or this chapter, and is experienced in the
112	analysis, design, implementation, or installation of energy,
113	water, or wastewater efficiency or conservation measures through
114	energy performance contracts.
115	(4)  PROCEDURES.--
116	(a)  An agency may enter into a guaranteed energy
117	performance savings contract with a guaranteed energy
118	performance savings contractor to significantly reduce energy,
119	water, or wastewater or operating costs of an agency facility
120	through one or more energy, water, and wastewater efficiency or
121	conservation measures.
122	(b)  Before design and installation of energy, water, and
123	wastewater efficiency and conservation measures, the agency must
124	obtain from a guaranteed energy performance savings contractor a
125	report that summarizes the costs associated with the energy
126	conservation measures and provides an estimate of the amount of
127	the associated energy cost savings or operational improvements.
128	The agency and the guaranteed energy performance savings
129	contractor may enter into a separate agreement to pay for costs
130	associated with the preparation and delivery of the report;
131	however, payment to the contractor shall be contingent upon the
132	report's projection of energy cost savings being equal to or
133	greater than the total projected costs of the design and
134	installation of the report's energy conservation or efficiency
135	measures.
136	(c)  The agency may enter into a guaranteed energy
137	performance savings contract with a guaranteed energy
138	performance savings contractor if the agency finds that the
139	amount the agency would spend on the energy conservation or
140	efficiency measures will not likely exceed the amount of the
141	associated energy cost savings for up to 20 years from the date
142	of installation, based on the life cycle cost calculations
143	provided in s. 255.255, if the recommendations in the report
144	were followed and if the qualified provider or providers give a
145	written guarantee that such the energy cost savings will meet or
146	exceed the costs of the system. The contract may provide for
147	installment payments for a period not to exceed 20 years.
148	(d)  A guaranteed energy performance savings contractor
149	must be selected in compliance with s. 287.055; except that if
150	fewer than three firms are qualified to perform the required
151	services, the requirement for agency selection of three firms,
152	as provided in s. 287.055(4)(b), and the bid requirements of s.
153	287.057 do not apply.
154	(e)  Before entering into a guaranteed energy performance
155	savings contract, an agency must provide published notice of the
156	meeting in which it proposes to award the contract, the names of
157	the parties to the proposed contract, and the contract's
158	purpose.
159	(f)  A guaranteed energy performance savings contract may
160	provide for financing, including tax exempt financing, by a
161	third party. The contract for third party financing may be
162	separate from the energy performance savings contract. A
163	separate contract for third party financing must include a
164	provision that the third party financier must not be granted
165	rights or privileges that exceed the rights and privileges
166	available to the guaranteed energy performance savings
167	contractor.
168	(g)  In determining the amount the agency will finance to
169	acquire the efficiency or energy conservation measures, the
170	agency may reduce such amount by the application of any grant
171	moneys, rebates, or capital funding available to the agency for
172	the purpose of buying down the cost of the guaranteed energy
173	performance savings contract. However, in calculating the life
174	cycle cost as required in paragraph (c), the agency shall not
175	apply any grants, rebates, or capital funding.
176	(5)  CONTRACT PROVISIONS.--
177	(a)  A guaranteed energy performance savings contract must
178	include a written guarantee that may include, but is not limited
179	to the form of, a letter of credit, insurance policy, or
180	corporate guarantee by the guaranteed energy performance savings
181	contractor that annual associated energy cost savings will meet
182	or exceed the amortized cost of the efficiency and energy
183	conservation measures.
184	(b)  The guaranteed energy performance savings contract
185	must provide that all payments, except obligations on
186	termination of the contract before its expiration, may be made
187	over time, but not to exceed 20 years from the date of complete
188	installation and acceptance by the agency, and that the annual
189	savings are guaranteed to the extent necessary to make annual
190	payments to satisfy the guaranteed energy performance savings
191	contract.
192	(c)  The guaranteed energy performance savings contract
193	must require that the guaranteed energy performance savings
194	contractor to whom the contract is awarded provide a 100-percent
195	public construction bond to the agency for its faithful
196	performance, as required by s. 255.05.
197	(d)  The guaranteed energy performance savings contract may
198	contain a provision allocating to the parties to the contract
199	any annual associated energy cost savings that exceed the amount
200	of the associated energy cost savings guaranteed in the
201	contract.
202	(e)  The guaranteed energy performance savings contract
203	shall require the guaranteed energy performance savings
204	contractor to provide to the agency an annual reconciliation of
205	the guaranteed associated energy cost savings. If the
206	reconciliation reveals a shortfall in such annual energy cost
207	savings, the guaranteed energy performance savings contractor is
208	liable for such shortfall. If the reconciliation reveals an
209	excess in such annual energy cost savings, the excess savings
210	may be allocated under paragraph (d) but may not be used to
211	cover potential energy cost savings shortages in subsequent
212	contract years.
213	(f)  The guaranteed energy performance savings contract
214	must provide for payments of not less than one-twentieth of the
215	price to be paid within 2 years from the date of the complete
216	installation and acceptance by the agency, and the remaining
217	costs to be paid at least quarterly, not to exceed a 20-year
218	term, based on life cycle cost calculations.
219	(g)  The guaranteed energy performance savings contract may
220	extend beyond the fiscal year in which it becomes effective;
221	however, the term of any contract expires at the end of each
222	fiscal year and may be automatically renewed annually for up to
223	20 years, subject to the agency making sufficient annual
224	appropriations based upon continued realized energy, water, or
225	wastewater savings.
226	(h)  The guaranteed energy performance savings contract
227	must stipulate that it does not constitute a debt, liability, or
228	obligation of the state.
229	(6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The
230	Department of Management Services, with the assistance of the
231	Office of the Chief Financial Officer, may, within available
232	resources, provide technical assistance to state agencies
233	contracting for energy, water, and wastewater efficiency or
234	conservation measures and engage in other activities considered
235	appropriate by the department for promoting and facilitating
236	guaranteed energy performance contracting by state agencies. The
237	Office of the Chief Financial Officer, with the assistance of
238	the Department of Management Services, may, within available
239	resources, develop model contractual and related documents for
240	use by state agencies. Prior to entering into a guaranteed
241	energy performance savings contract, any contract or lease for
242	third-party financing, or any combination of such contracts, a
243	state agency shall submit such proposed contract or lease to the
244	Office of the Chief Financial Officer for review and approval.
245	Section 2.  Subsection (10) of section 287.064, Florida
246	Statutes, is amended to read:
247	287.064  Consolidated financing of deferred-payment
248	purchases.--
249	(10)  Costs incurred pursuant to a guaranteed energy
250	performance savings contract, including the cost of energy,
251	water, and wastewater efficiency and conservation measures, each
252	as defined in s. 489.145, may be financed pursuant to a master
253	equipment financing agreement; however, the costs of training,
254	operation, and maintenance may not be financed. The period of
255	time for repayment of the funds drawn pursuant to the master
256	equipment financing agreement under this subsection may exceed 5
257	years 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.