HB 0597

CS

CHAMBER ACTION

1	The Governmental Operations Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to contracting for efficiency or
7	conservation measures by state agencies; amending s.
8	489.145, F.S.; including water and wastewater efficiency
9	and conservation in the measures encouraged by the
10	Legislature; revising definitions; providing for inclusion
11	of water and wastewater efficiency and conservation
12	measures in guaranteed performance savings contracts
13	entered into by a state agency, municipality, or political
14	subdivision; amending s. 287.064, F.S., relating to
15	consolidated financing of deferred-payment purchases, to
16	conform; providing an effective date.
17
18	Be It Enacted by the Legislature of the State of Florida:
19
20	Section 1.  Section 489.145, Florida Statutes, is amended
21	to read:
22	489.145  Guaranteed energy performance savings
23	contracting.--
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
27	investment in energy, water, and wastewater efficiency or
28	conservation measures in agency facilities can reduce the amount
29	of energy and water consumed and wastewater to be treated and
30	produce immediate and long-term savings. It is the policy of
31	this state to encourage each agency agencies to invest in
32	energy, water, and wastewater efficiency or conservation
33	measures that provide such reductions reduce energy consumption,
34	produce a cost savings for the agency, and, for energy measures,
35	improve the quality of indoor air in public facilities and to
36	operate, maintain, and, when economically feasible, build or
37	renovate existing agency facilities in such a manner as to
38	minimize energy and water consumption or wastewater production
39	and maximize energy, water, and wastewater savings. It is
40	further the policy of this state to encourage agencies to
41	reinvest any energy savings resulting from energy, water, and
42	wastewater efficiency or conservation measures in additional
43	energy, water, and wastewater efficiency or conservation
44	measures efforts.
45	(3)  DEFINITIONS.--As used in this section, the term:
46	(a)  "Agency" means the state, a municipality, or a
47	political subdivision.
48	(b)  "Energy, water, and wastewater efficiency or
49	conservation measure" means a training program, facility
50	alteration, or equipment purchase to be used in new facilities
51	or in retrofitting or adding to existing facilities or
52	infrastructure new construction, including an addition to an
53	existing facility, which reduces energy, water, wastewater, or
54	operating costs and includes, but is not limited to:
55	1.  Insulation of the facility structure and systems within
56	the facility.
57	2.  Storm windows and doors, caulking or weatherstripping,
58	multiglazed windows and doors, heat-absorbing, or heat-
59	reflective, glazed and coated window and door systems,
60	additional glazing, reductions in glass area, and other window
61	and door system modifications that reduce energy consumption.
62	3.  Automatic energy control systems.
63	4.  Heating, ventilating, or air-conditioning system
64	modifications or replacements.
65	5.  Replacement or modifications of lighting fixtures to
66	increase the energy efficiency of the lighting system, which, at
67	a minimum, must conform to the applicable state or local
68	building code.
69	6.  Energy recovery systems.
70	7.  Cogeneration systems that produce steam or forms of
71	energy such as heat, as well as electricity, for use primarily
72	within a facility or complex of facilities.
73	8.  Energy conservation measures that provide long-term
74	operating cost reductions or significantly reduce Btu consumed.
75	9.  Renewable energy systems, such as solar, biomass, or
76	wind systems.
77	10.  Devices that reduce water consumption or wastewater
78	sewer charges.
79	11.  Equipment upgrades that improve the accuracy of
80	billable revenue generating systems.
81	12.  Automated electronic or remotely controlled systems or
82	measures that reduce direct personnel costs.
83	13.  Such other energy, water, or wastewater efficiency or
84	conservation measures as may provide measurable operating cost
85	reductions or billable revenue increases.
86	14.11.  Energy storage systems, such as fuel cells and
87	thermal storage.
88	15.12.  Energy generating technologies, such as
89	microturbines.
90	16.  Cool roof coating.
91	17.13.  Any other repair, replacement, or upgrade of
92	existing equipment.
93	(c)  "Energy, water, and wastewater cost savings" means a
94	measured reduction in the cost of fuel, energy or water
95	consumption, or wastewater production, and stipulated
96	improvement in the operation and maintenance created from the
97	implementation of one or more energy, water, and wastewater
98	efficiency or conservation measures when compared with an
99	established baseline for the previous cost of fuel, energy, or
100	water consumption, or wastewater production, and stipulated
101	operation and maintenance.
102	(d)  "Guaranteed energy performance savings contract" means
103	a contract for the evaluation, recommendation, and
104	implementation of energy, water, and wastewater efficiency or
105	conservation measures, which, at a minimum, shall include:
106	1.  The design and installation of equipment to implement
107	one or more of such measures and, if applicable, operation and
108	maintenance of such measures.
109	2.  The amount of any actual annual savings that meet or
110	exceed total annual contract payments made by the agency for the
111	contract.
112	3.  The finance charges incurred by the agency over the
113	life of the contract.
114	(e)  "Guaranteed energy performance savings contractor"
115	means a person or business that is licensed under chapter 471,
116	chapter 481, or this chapter, and is experienced in the
117	analysis, design, implementation, or installation of energy,
118	water, or wastewater efficiency or conservation measures through
119	energy performance contracts.
120	(4)  PROCEDURES.--
121	(a)  An agency may enter into a guaranteed energy
122	performance savings contract with a guaranteed energy
123	performance savings contractor to significantly reduce energy,
124	water, or wastewater or operating costs of an agency facility
125	through one or more energy, water, and wastewater efficiency or
126	conservation measures.
127	(b)  Before design and installation of energy, water, and
128	wastewater efficiency and conservation measures, the agency must
129	obtain from a guaranteed energy performance savings contractor a
130	report that summarizes the costs associated with the energy
131	conservation measures and provides an estimate of the amount of
132	the associated energy cost savings or operational improvements.
133	The agency and the guaranteed energy performance savings
134	contractor may enter into a separate agreement to pay for costs
135	associated with the preparation and delivery of the report;
136	however, payment to the contractor shall be contingent upon the
137	report's projection of energy cost savings being equal to or
138	greater than the total projected costs of the design and
139	installation of the report's energy conservation or efficiency
140	measures.
141	(c)  The agency may enter into a guaranteed energy
142	performance savings contract with a guaranteed energy
143	performance savings contractor if the agency finds that the
144	amount the agency would spend on the energy conservation or
145	efficiency measures will not likely exceed the amount of the
146	associated energy cost savings for up to 20 years from the date
147	of installation, based on the life cycle cost calculations
148	provided in s. 255.255, if the recommendations in the report
149	were followed and if the qualified provider or providers give a
150	written guarantee that such the energy cost savings will meet or
151	exceed the costs of the system. The contract may provide for
152	installment payments for a period not to exceed 20 years.
153	(d)  A guaranteed energy performance savings contractor
154	must be selected in compliance with s. 287.055; except that if
155	fewer than three firms are qualified to perform the required
156	services, the requirement for agency selection of three firms,
157	as provided in s. 287.055(4)(b), and the bid requirements of s.
158	287.057 do not apply.
159	(e)  Before entering into a guaranteed energy performance
160	savings contract, an agency must provide published notice of the
161	meeting in which it proposes to award the contract, the names of
162	the parties to the proposed contract, and the contract's
163	purpose.
164	(f)  A guaranteed energy performance savings contract may
165	provide for financing, including tax exempt financing, by a
166	third party. The contract for third party financing may be
167	separate from the energy performance savings contract. A
168	separate contract for third party financing must include a
169	provision that the third party financier must not be granted
170	rights or privileges that exceed the rights and privileges
171	available to the guaranteed energy performance savings
172	contractor.
173	(g)  In determining the amount the agency will finance to
174	acquire the efficiency or energy conservation measures, the
175	agency may reduce such amount by the application of any grant
176	moneys, rebates, or capital funding available to the agency for
177	the purpose of buying down the cost of the guaranteed energy
178	performance savings contract. However, in calculating the life
179	cycle cost as required in paragraph (c), the agency shall not
180	apply any grants, rebates, or capital funding.
181	(5)  CONTRACT PROVISIONS.--
182	(a)  A guaranteed energy performance savings contract must
183	include a written guarantee that may include, but is not limited
184	to the form of, a letter of credit, insurance policy, or
185	corporate guarantee by the guaranteed energy performance savings
186	contractor that annual associated energy cost savings will meet
187	or exceed the amortized cost of the efficiency and energy
188	conservation measures.
189	(b)  The guaranteed energy performance savings contract
190	must provide that all payments, except obligations on
191	termination of the contract before its expiration, may be made
192	over time, but not to exceed 20 years from the date of complete
193	installation and acceptance by the agency, and that the annual
194	savings are guaranteed to the extent necessary to make annual
195	payments to satisfy the guaranteed energy performance savings
196	contract.
197	(c)  The guaranteed energy performance savings contract
198	must require that the guaranteed energy performance savings
199	contractor to whom the contract is awarded provide a 100-percent
200	public construction bond to the agency for its faithful
201	performance, as required by s. 255.05.
202	(d)  The guaranteed energy performance savings contract may
203	contain a provision allocating to the parties to the contract
204	any annual associated energy cost savings that exceed the amount
205	of the associated energy cost savings guaranteed in the
206	contract.
207	(e)  The guaranteed energy performance savings contract
208	shall require the guaranteed energy performance savings
209	contractor to provide to the agency an annual reconciliation of
210	the guaranteed associated energy cost savings. If the
211	reconciliation reveals a shortfall in such annual energy cost
212	savings, the guaranteed energy performance savings contractor is
213	liable for such shortfall. If the reconciliation reveals an
214	excess in such annual energy cost savings, the excess savings
215	may be allocated under paragraph (d) but may not be used to
216	cover potential energy cost savings shortages in subsequent
217	contract years.
218	(f)  The guaranteed energy performance savings contract
219	must provide for payments of not less than one-twentieth of the
220	price to be paid within 2 years from the date of the complete
221	installation and acceptance by the agency, and the remaining
222	costs to be paid at least quarterly, not to exceed a 20-year
223	term, based on life cycle cost calculations.
224	(g)  The guaranteed energy performance savings contract may
225	extend beyond the fiscal year in which it becomes effective;
226	however, the term of any contract expires at the end of each
227	fiscal year and may be automatically renewed annually for up to
228	20 years, subject to the agency making sufficient annual
229	appropriations based upon continued realized energy, water, or
230	wastewater savings.
231	(h)  The guaranteed energy performance savings contract
232	must stipulate that it does not constitute a debt, liability, or
233	obligation of the state.
234	(6)  PROGRAM ADMINISTRATION AND CONTRACT REVIEW.--The
235	Department of Management Services, with the assistance of the
236	Office of the Chief Financial Officer, may, within available
237	resources, provide technical assistance to state agencies
238	contracting for energy, water, and wastewater efficiency or
239	conservation measures and engage in other activities considered
240	appropriate by the department for promoting and facilitating
241	guaranteed energy performance contracting by state agencies. The
242	Office of the Chief Financial Officer, with the assistance of
243	the Department of Management Services, may, within available
244	resources, develop model contractual and related documents for
245	use by state agencies. Prior to entering into a guaranteed
246	energy performance savings contract, any contract or lease for
247	third-party financing, or any combination of such contracts, a
248	state agency shall submit such proposed contract or lease to the
249	Office of the Chief Financial Officer for review and approval.
250	Section 2.  Subsection (10) of section 287.064, Florida
251	Statutes, is amended to read:
252	287.064  Consolidated financing of deferred-payment
253	purchases.--
254	(10)  Costs incurred pursuant to a guaranteed energy
255	performance savings contract, including the cost of energy,
256	water, and wastewater efficiency and conservation measures, each
257	as defined in s. 489.145, may be financed pursuant to a master
258	equipment financing agreement; however, the costs of training,
259	operation, and maintenance may not be financed. The period of
260	time for repayment of the funds drawn pursuant to the master
261	equipment financing agreement under this subsection may exceed 5
262	years 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.