Oklahoma 2022 Regular Session

Oklahoma House Bill HB3691 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3		-	ENGR. H. B. NO. 3691 Page 1 1
	3	+	HB3691 HFLR Page 1
	4	+	BOLD FACE denotes Committee Amendments. 1
4	5		2
5	6		3
6	7		4
7	8		5
8	9		6
9	10		7
10	11		8
11	12		9
12	13		10
13	14		11
14	15		12
15	16		13
16	17		14
17	18		15
18	19		16
19	20		17
20	21		18
21	22		19
22	23		20
23	24		21
24	25		22
25	26		23
26	27		24
27	28
28		-	ENGROSSED HOUSE
29		-	BILL NO. 3691 By: McDugle of the House
	29	+	HOUSE OF REPRESENTATIVES - FLOOR VERSION
30	30
31		-	~~and~~
	31	+	STATE OF OKLAHOMA
32	32
33		-	Leewright of the Senate
	33	+	2nd Session of the 58th Legislature (2022)
	34	+
	35	+	COMMITTEE SUBSTITUTE
	36	+	FOR
	37	+	HOUSE BILL NO. 3691 By: McDugle
34	38
35	39
36	40
37	41
38	42
	43	+	COMMITTEE SUBSTITUTE
39	44
40		-
41		-
42		-	[ energy efficiency - modifying state entity that may
43		-	enter into certain contracts - effective date ]
	45	+	An Act relating to energy efficiency; amending 61
	46	+	O.S. 2021, Section 212, which rel ates to performance-
	47	+	based efficiency contracts; modifying definition;
	48	+	amending 70 O.S. 2021, Section 5 -131.2, which relates
	49	+	to energy conservation measures; modifying
	50	+	definition; and providing an effective date.
44	51
45	52
46	53
47	54
48	55		BE IT ENACTED BY THE PEOPLE OF T HE STATE OF OKLAHOMA:
49	56		SECTION 1. AMENDATORY 61 O.S. 2021, Section 212, is
50	57		amended to read as follows:
51	58		Section 212. A. For purposes of this section:
52	59		1. "Performance-based efficiency contract " means a contract for
53	60		the design, development, financing, installation, construction and
54	61		service of any improvement, repair, alteration or betterment of any
55	62		public building or facility; or any equipment, fixture or furnishing
56	63		to be added to or used in any such building or facility; or any
57	64		maintenance or operational strategy that is designed and implemented
58		-	that will reduce utility consumption or lower operating costs, and
59		-	may include, but is not limited to, one or more of the following:
60		-	a. utility services,
61	65
62		-	ENGR. H. B. NO. 3691 Page 2 1
	66	+	HB3691 HFLR Page 2
	67	+	BOLD FACE denotes Committee Amendments. 1
63	68		2
64	69		3
65	70		4
66	71		5
67	72		6
68	73		7
69	74		8
70	75		9
71	76		10
72	77		11
73	78		12
74	79		13
75	80		14
76	81		15
77	82		16
78	83		17
79	84		18
80	85		19
81	86		20
82	87		21
83	88		22
84	89		23
85	90		24
86	91
	92	+	that will reduce utility consumption or lower operating costs, and
	93	+	may include, but is not limited to, one or more of the following:
	94	+	a. utility services,
87	95		b. heating, ventilating or air condi tioning system
88	96		modifications or replacements and automated control
89	97		systems,
90	98		c. replacement or modifications of lighting fixtures,
91	99		d. indoor air quality improvements to increase air
92	100		quality that conform to the applicabl e state or local
93	101		building code require ments when done in conjunction
94	102		with other cost-saving measures,
95	103		e. any additional building infrastructure improvement,
96	104		cost saving, life safety or any other improvement that
97	105		provides long-term operating cost reductions and is in
98	106		compliance with state and l ocal codes, or
99	107		f. any facility operation and support programs that
100	108		reduce operating cost , or
101	109		g. alternative energy production infrastructure ; and
102	110		2. "Qualified provider" means a person or business experienced
103	111		or trained in the design, analysis, constructi on and/or installation
104		-	of energy conservation and facility management measures as
105		-	determined by the Office of Management and Enterprise Services . A
	112	+	of energy conservation and facility management measures. A
106	113		qualified provider must employ a professional engineer registered in
107	114		the State of Oklahoma.
108		-	B. In addition to any other legal ly permissible alternatives of
109		-	entering into contracts, the Office of Management and Enterprise
110		-	Services Construction and Properties Di vision a state agency may
111	115
112		-	ENGR. H. B. NO. 3691 Page 3 1
	116	+	HB3691 HFLR Page 3
	117	+	BOLD FACE denotes Committee Amendments. 1
113	118		2
114	119		3
115	120		4
116	121		5
117	122		6
118	123		7
119	124		8
120	125		9
121	126		10
122	127		11
123	128		12
124	129		13
125	130		14
126	131		15
127	132		16
128	133		17
129	134		18
130	135		19
131	136		20
132	137		21
133	138		22
134	139		23
135	140		24
136	141
137		-	enter into performance -based efficiency contracts on behalf of all
138		-	state agencies with a qualified provider pursuant to the provisions
139		-	of this section.
	142	+	B. In addition to any other legally permis sible alternatives of
	143	+	entering into contracts, the Office of Management and Enterprise
	144	+	Services Construction and Properties Di vision may enter into
	145	+	performance-based efficiency contracts on behalf of all state
	146	+	agencies with a qualified provider pursuant to the provisions of
	147	+	this section.
140	148		A qualified provider to whom the contract is awarded sh all be
141		-	required to provide to the ~~Division state agency~~ a sufficient bond
142		-	~~for its~~ faithful performance of the contract. In addition, the
143		-	~~Division state agency may~~ require performance bonds cove ring the
144		-	~~annual amount of guaranteed s avings~~ over the contract term. The
145		-	~~Office of Management and~~ Enterprise Services ~~A state agency~~ may
146		-	~~enter into an installment contract, lease~~ purchase agreement or
147		-	~~other contractual obligation for the purpose~~ of financing
148		-	~~performance-based efficiency projects for a term not to~~ exceed the
149		-	~~greater of twenty (20) years or the useful life of the~~ project.
150		-	The qualified provider must guarantee the contract 's cost
	149	+	required to provide to the Divi sion a sufficient bond for its
	150	+	faithful performance of the contract. In addition, the Division may
	151	+	require performance bonds cove ring the annual amount of guaranteed
	152	+	savings over the contract term. The Office of Mana gement and
	153	+	Enterprise Services may ent er into an installment contract, lease
	154	+	purchase agreement or other contractual obligation for the purpose
	155	+	of financing performance -based efficiency projects for a term not to
	156	+	exceed the greater of twenty (20) years or the useful life of the
	157	+	project.
	158	+	The qualified provider must guarantee the contract ’s cost
151	159		savings each year during the term of the agreement. In calculating
152	160		cost savings, the public entity may consider cap ital cost avoidance
153	161		and include additional revenue that is directly attributed to the
154	162		performance-based efficiency contract. The savings must be
155	163		sufficient to offset the annual costs of the contract. The contract
156	164		shall provide for reimbursement to the st ate agency undertaking the
157	165		project annually for an y shortfall of guaranteed savings. Sa vings
158		-	must be measured, verified and documented each year of the term and
159		-	may be utilized to meet the annual debt service.
160	166
161		-	ENGR. H. B. NO. 3691 Page 4 1
	167	+	HB3691 HFLR Page 4
	168	+	BOLD FACE denotes Committee Amendments. 1
162	169		2
163	170		3
164	171		4
165	172		5
166	173		6
167	174		7
168	175		8
169	176		9
170	177		10
171	178		11
172	179		12
173	180		13
174	181		14
175	182		15
176	183		16
177	184		17
178	185		18
179	186		19
180	187		20
181	188		21
182	189		22
183	190		23
184	191		24
185	192
	193	+	must be measured, verified and documented each year of the term and
	194	+	may be utilized to meet the annual debt service.
186	195		The contracts authorized by this section shal l include
187		-	procedures for modifying the contract sh ould the Division ~~state~~
188		-	~~agency determine~~ it ~~necessa ry~~.
	196	+	procedures for modifying the contract sh ould the Division determine
	197	+	it necessary.
189	198		This section shall constitute the sole authority necessary to
190	199		enter into performance -based efficiency contracts, without regar d to
191	200		compliance with other laws which may specify additional procedural
192	201		requirements for execution of contracts.
193	202		SECTION 2. AMENDATORY 70 O.S. 2021, Section 5 -131.2, is
194	203		amended to read as follows:
195	204		Section 5-131.2 A. As used in this section, "energy
196	205		conservation measures" means one or more of the following items:
197	206		1. Insulation of the building structure or systems within the
198	207		building;
199	208		2. Storm windows or doors, caulk ing or weather-stripping,
200	209		multiglazed windows or doors, heat -absorbing or heat-reflective,
201	210		glazed, and coated window or door systems, additional glazin g,
202	211		reductions in glass area, or other window and door system
203	212		modifications that reduce energy consumption ;
204	213		3. Automatic or computerized energy control systems;
205	214		4. Heating, ventilating or air conditioning system
206	215		modifications or replacements;
207		-	5. Replacement or modification of lighting fixtures to increase
208		-	the energy efficiency of the lighting system, but not for the sole
209		-	purpose of increasing the overall illuminat ion of a facility, unless
210	216
211		-	ENGR. H. B. NO. 3691 Page 5 1
	217	+	HB3691 HFLR Page 5
	218	+	BOLD FACE denotes Committee Amendments. 1
212	219		2
213	220		3
214	221		4
215	222		5
216	223		6
217	224		7
218	225		8
219	226		9
220	227		10
221	228		11
222	229		12
223	230		13
224	231		14
225	232		15
226	233		16
227	234		17
228	235		18
229	236		19
230	237		20
231	238		21
232	239		22
233	240		23
234	241		24
235	242
	243	+	5. Replacement or modification of lighting fixtures to increase
	244	+	the energy efficiency of the lighting system, but not for the sole
	245	+	purpose of increasing the overall illuminat ion of a facility, unless
236	246		an increase in illumination is necessary to conform to the
237	247		applicable state or local building codes for the lighting system
238	248		after the proposed modifications are made;
239	249		6. Indoor air quality improvements;
240	250		7. Energy recovery syste ms;
241	251		8. Energy awareness education programs; and
242	252		9. Water-metering devices that increase effi ciency or accuracy
243	253		of water measurement and reduce energy consumption ; and
244	254		10. Alternative energy production infrastructure .
245	255		B. The board of education of any school district in compliance
246	256		with the provisions of this section, may enter into an energy
247	257		conservation contract for the purpose of implementing energy
248	258		conservation measures designed to reduce the energy consumption of
249	259		school facilities.
250	260		C. 1. The board of education shall require the provider of th e
251	261		energy conservation measures to file with the bo ard of education a
252	262		performance bond that is in an amount the board finds reasonable and
253	263		necessary to protect the interests of the board and that covers t he
254	264		value of the guaranteed savings on the contract an d is conditioned
255	265		on the faithful execution of the terms of the contract.
256		-	2. If bonding industry limitations prevent execution of a
257		-	performance bond which covers guaranteed savings for the entire term
258		-	of the lease-purchase agreement the contract may allow an option
259		-	for:
260	266
261		-	ENGR. H. B. NO. 3691 Page 6 1
	267	+	HB3691 HFLR Page 6
	268	+	BOLD FACE denotes Committee Amendments. 1
262	269		2
263	270		3
264	271		4
265	272		5
266	273		6
267	274		7
268	275		8
269	276		9
270	277		10
271	278		11
272	279		12
273	280		13
274	281		14
275	282		15
276	283		16
277	284		17
278	285		18
279	286		19
280	287		20
281	288		21
282	289		22
283	290		23
284	291		24
285	292
	293	+	2. If bonding industry limitations prevent execution of a
	294	+	performance bond which covers guaranteed savings for the entire term
	295	+	of the lease-purchase agreement the contract may allow an option
	296	+	for:
286	297		a. a performance bond which covers guaranteed savings for
287	298		a shorter term. At the completion of the bond term, a
288	299		new bond may be executed which covers guaranteed
289	300		savings for an additiona l period of years. This
290	301		process may be continued in l ike manner for the
291	302		duration of the lease -purchase agreement as specified
292	303		by subsection D of this section, or
293	304		b. a performance bond which covers guaranteed savings for
294	305		a shorter term. At the completio n of the bond term,
295	306		if the bond cannot be renewed as pro vided in
296	307		subparagraph a of this paragraph and if t here has been
297	308		a guaranteed savings shortfall during the last twelve
298	309		(12) months, the board of education may assume a
299	310		continued annual shortfall of the same amount and
300	311		request repayment from the contractor o f the net
301	312		present value of the shortfall through t he end of the
302	313		lease repayment period. The discount factor to
303	314		calculate the net present value shall be the annual
304	315		percentage rate of the lease -purchase agreement.
305		-	D. 1. The board of education may enter in to an energy
306		-	conservation contract for a p eriod of more than one (1) year for the
307		-	implementation of energy conservation measures with a perso n or
308		-	business entity if the board of education finds that the amount the
309		-	school district would spend on the energy conservation measures,
310	316
311		-	ENGR. H. B. NO. 3691 Page 7 1
	317	+	HB3691 HFLR Page 7
	318	+	BOLD FACE denotes Committee Amendments. 1
312	319		2
313	320		3
314	321		4
315	322		5
316	323		6
317	324		7
318	325		8
319	326		9
320	327		10
321	328		11
322	329		12
323	330		13
324	331		14
325	332		15
326	333		16
327	334		17
328	335		18
329	336		19
330	337		20
331	338		21
332	339		22
333	340		23
334	341		24
335	342
	343	+	D. 1. The board of education may enter in to an energy
	344	+	conservation contract for a period of more than one (1) year for the
	345	+	implementation of energy conservation measures with a person or
	346	+	business entity if the board of education finds that the amount the
	347	+	school district would spend on the energy conservation measures,
336	348		excluding any initial parti al payment, will not exceed the total
337	349		savings over the repayment period of the energy conservation
338	350		contract from the date of installation.
339	351		2. The term of the energy conservation contract and the lease-
340	352		purchase agreement shall include the installation peri od and the
341	353		lease repayment period.
342	354		3. If the term of an energy conservation contract exceeds one
343	355		(1) year, the contractual obligation of the schoo l district,
344	356		excluding any initial partial payment, in any y ear during the term
345	357		of the energy conservation con tract may not exceed the total savings
346	358		including, but not limited to, electrical, gas, or other utility
347	359		cost savings and savings from lowered maint enance, as determined by
348	360		the board of education. Savings s hall be guaranteed by the entity
349	361		providing the energy conservation measures.
350	362		4. Energy conservation contracts shall not permit the carry -
351	363		forward of savings above the guaranteed amount from one ye ar to a
352	364		future year shortfall.
353	365		5. Maintenance for energy co nservation measures may be a part
354	366		of the energy conservation contract.
355		-	6. The board of education shall consider all costs of the
356		-	energy conservation measures, including costs of design,
357		-	engineering, installation, maintenance, m aintenance tools and
358		-	equipment, spare parts, repairs, and debt service .
359	367
360		-	ENGR. H. B. NO. 3691 Page 8 1
	368	+	HB3691 HFLR Page 8
	369	+	BOLD FACE denotes Committee Amendments. 1
361	370		2
362	371		3
363	372		4
364	373		5
365	374		6
366	375		7
367	376		8
368	377		9
369	378		10
370	379		11
371	380		12
372	381		13
373	382		14
374	383		15
375	384		16
376	385		17
377	386		18
378	387		19
379	388		20
380	389		21
381	390		22
382	391		23
383	392		24
384	393
	394	+	6. The board of education shall consider all costs of the
	395	+	energy conservation measures, including costs of design,
	396	+	engineering, installation, maintenance, m aintenance tools and
	397	+	equipment, spare parts, repairs, and debt service.
385	398		E. In addition to any other provisions, the energy conservation
386	399		contract shall:
387	400		1. Provide that all savings should be tracked and audited by
388	401		the contractor with an annual report prov ided to the board of
389	402		education along with a payment by the provider for reimbu rsement of
390	403		savings not realized;
391	404		2. Be for a term of years that is not less than the term of
392	405		years of any associated lease -purchase agreement;
393	406		3. Provide that the board of educ ation may terminate the
394	407		agreement for nonperformance by the contractor;
395	408		4. Contain a nonappropriation clause; and
396	409		5. Contain a baseline calculation and an energy savings
397	410		calculation. The calculations shall be perf ormed in accordance with
398	411		the procedures used by the International Pr otocol for Measurement
399	412		and Verification Procedures (IPMVP) or succeeding standard of the
400	413		United States Department of Energy.
401	414		F. 1. An energy conservation contract, with respect to
402	415		existing buildings or facilities, may be funde d through a lease-
403	416		purchase agreement that meets federal tax requirements for t ax-free
404	417		municipal leasing or long -term financing.
405		-	2. The repayment period of the lease -purchase agreement shall
406		-	not exceed the greater of twenty (20) years or the weighted avera ge
407		-	equipment life of any equ ipment to be installed under the energy
408		-	conservation contract.
409	418
410		-	ENGR. H. B. NO. 3691 Page 9 1
	419	+	HB3691 HFLR Page 9
	420	+	BOLD FACE denotes Committee Amendments. 1
411	421		2
412	422		3
413	423		4
414	424		5
415	425		6
416	426		7
417	427		8
418	428		9
419	429		10
420	430		11
421	431		12
422	432		13
423	433		14
424	434		15
425	435		16
426	436		17
427	437		18
428	438		19
429	439		20
430	440		21
431	441		22
432	442		23
433	443		24
434	444
	445	+	2. The repayment period of the lease -purchase agreement shall
	446	+	not exceed the greater of twenty (20) years or the weighted avera ge
	447	+	equipment life of any equ ipment to be installed under the energy
	448	+	conservation contract.
435	449		3. Lease-purchase agreements for energy conservation measures
436	450		shall be considered separate from the energy conservation co ntract
437	451		and shall contain a nonappropriatio n clause.
438	452		G. 1. Prior to entering into an energy conservation contract,
439	453		the board of education shall solicit a request for qualification
440	454		from one or more energy service company providers. Requests for
441	455		qualification must solicit quotations and must speci fy the relative
442	456		importance of guaranteed savings, price, financial performance and
443	457		stability, quality, technical ability, experience and other
444	458		evaluation factors.
445	459		2. In order to determine the energy savings measur es to be
446	460		considered by proposers, the boar d of education may hire an
447	461		independent energy consultant.
448	462		3. Fees assessed by the consultant will be paid from proceeds
449	463		of any financing associated with the energy conservation contract.
450	464		H. Proposals shall be ope ned in a manner that avoids disclosure
451	465		of the contents to competing of ferors and keeps the proposals
452	466		confidential during negotiations.
453	467		I. The board of education and the offeror selected through the
454	468		request for qualification procedures shall enter into a me morandum
455		-	of understanding which shall req uire the provider to perform
456		-	preliminary analysis regarding the physic al features and operating
457		-	history of the facilities under consideration. There shall be no
458		-	financial obligation to the school district for this analysis.
459	469
460		-	ENGR. H. B. NO. 3691 Page 10 1
	470	+	HB3691 HFLR Page 10
	471	+	BOLD FACE denotes Committee Amendments. 1
461	472		2
462	473		3
463	474		4
464	475		5
465	476		6
466	477		7
467	478		8
468	479		9
469	480		10
470	481		11
471	482		12
472	483		13
473	484		14
474	485		15
475	486		16
476	487		17
477	488		18
478	489		19
479	490		20
480	491		21
481	492		22
482	493		23
483	494		24
484	495
	496	+	of understanding which shall req uire the provider to perform
	497	+	preliminary analysis regarding the physical featu res and operating
	498	+	history of the facilities under consideration. There shall be no
	499	+	financial obligation to the school district for this analysis.
485	500		J. After completion of the pre liminary analysis, the energ y
486	501		service provider shall perform a detailed energy performance audit
487	502		on the specific buildings or facilities as agreed to by the
488	503		political subdivision. This audit shall provide a cost b asis for
489	504		operating the existing building o r facilities and the detaile d
490	505		information necessary to make a financial decisi on regarding a long-
491	506		term performance-based efficiency contract. The cost of this audit
492	507		may be rolled into the terms of a performance -based efficiency
493	508		contract. If the school di strict decides not to enter into a long-
494	509		term performance-based efficiency cont ract with the provider, the
495	510		school district must pay the sum stipulated in the performance audit
496	511		contract.
497	512		K. Trade secrets and proprie tary information clearly identified
498	513		in the proposals shall not be open for public inspection.
499	514		SECTION 3. This act shall become effective November 1, 2022.
500		-	Passed the House of Representatives the 22nd day of March, 2022.
501	515
502		-
503		-
504		-
505		-	Presiding Officer of the House
506		-	of Representatives
507		-
508		-
509		-	Passed the Senate the ___ day of __________, 2022.
510		-
511		-
512		-
513		-
514		-	Presiding Officer of the Senate
515		-
	516	+	COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE, dated
	517	+	03/02/2022 - DO PASS, As Amended.