HBA-SEP H.B. 2277 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2277
By: Carter
Energy Resources
3/23/2001
Introduced



BACKGROUND AND PURPOSE 

Energy Performance Contracting is a financing method that allows a facility
to complete energy-saving improvements within an existing budget by
financing them with money saved through reduced utility expenditures.  Over
the past five legislative sessions, the legislature has passed and improved
upon measures to allow state agencies, state universities, and local
political subdivisions to enter into multi-year energy performance
contracts.  However, no state agency has taken advantage of this mechanism
to finance energy efficiency retrofits.  The State Energy Conservation
Office projects that $100,000 per day could be saved through this financing
method while improving state facilities.   House Bill 2277 clarifies the
authority of state agencies to use the Master Equipment Lease Purchase
Program administered by the Texas Public Finance Authority to finance
energy efficiency programs, and makes other changes to encourage state
agencies to utilize performance contracting.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2277 amends the Education, Government, and Local Government
codes to authorize the board of trustees of a school district, the
governing board of an institution of higher education, and the governing
body of a state agency or local government to enter into a contract for the
installation of energy conservation measures for facility repairs or
modifications necessary for the installation of energy conservation
measures.    

The bill authorizes a governing body of a state agency to finance energy
conservation measures with respect to existing buildings or facilities
through a lease or purchase contract under the Master Equipment Lease
Purchase Program administered by the Texas Public Finance Authority.  The
bill provides that the contractual obligation of a state agency
participating in an energy conservation measures contract includes costs of
design, engineering, installation, maintenance, repairs, and anticipated
debt service. The bill requires the State Energy Conservation Office to
establish guidelines and an approval process for state agency energy
conservation measures contracts.  The guidelines must require that the cost
savings projected by an offeror be reviewed by a licensed professional
engineer who is not associated with the contract and provide that The Texas
Engineering Practice Act applies to work performed under the contract.  The
bill requires an engineer who reviews a contract to maintain the
confidentiality of any proprietary information the engineer acquires while
reviewing the contract.  The bill removes the requirement that a contract
be reviewed or approved by the State Energy Conservation Office.  The bill
removes the provision requiring the state agency to submit, before awarding
the contract, a selected proposal to the State Energy Conservation Office
and the Texas Energy Coordination Council for review and comment.  The bill
also removes the provision authorizing the State Energy Conservation Office
and the Texas Energy Coordination Council to charge a  fee for providing a
cost benefit analysis of the proposals and an analysis of the guaranteed
savings projected by offerors and the provision providing that final review
and approval of the contract will be provided by the State Energy
Conservation Office.   
 
EFFECTIVE DATE

September 1, 2001.