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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
HOUSE BILL 2472 By: Hill
AS INTRODUCED
An Act relating to public finance; amending 62 O.S.
2021, Section 318, which relates to performance based
efficiency contracts; providing authorized method for
initial payments; and providing an ef fective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 62 O.S. 2021, Section 318, is
amended to read as follows:
Section 318. A. For purposes of this section:
1. "Public entity" means any political subdivision of this
state, or a public trust which has as a beneficiary a political
subdivision of this state, or any institution o f higher education
which is part of The Oklaho ma State System of Higher Education;
2. "Performance-based efficiency contract" means a contract for
the design, development, financing, installation and service of any
improvement, repair, alteration or bette rment of any building or
facility owned, opera ted or planned by a public entity; or any
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equipment, fixture or furnishing to be added to or used in any such
building or facility; or any maintenance or operational strategy
that is designed and implemented th at will reduce utility
consumption or lower op erating costs, result in annual operating
cost savings, generate additional revenues or avoid capital cost
incurrence and may include, but is not limited to, one or more of
the following:
a. utility services,
b. heating, ventilating or air conditioning sys tem
modifications or replacements and automated control
systems,
c. replacement or modifications of lighting fixtures,
d. indoor air quality improvements to increase air
quality that conform to the applicable s tate or local
building code requirements when done in conjunction
with other cost-saving measures,
e. any additional building infrastructure improvement,
cost saving, life safety or any other improvement that
provides long-term operating cost reductions an d is in
compliance with state and local codes,
f. water-metering devices that increase efficiency or
accuracy of water measurement and energy reduction, or
g. any facility operation and support programs that
reduce operating cost;
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3. "Qualified provider" means a person or business experienced
or trained in the design, analysis and installation of energy
conservation and facility management measures. A qualified provider
must employ a professional engineer registered in the State of
Oklahoma; and
4. "State governmental entity " means the State of Okla homa or
any agency, board, commission, authority, departme nt, public trust
of which the state is the beneficiary or other instrumentality of
state government, other than a public trust with the state as
beneficiary whose jurisdiction is limited to one coun ty, including,
but not limited to, the following:
a. Oklahoma Municipal Power Authority,
b. Oklahoma Development Finance Authority,
c. Oklahoma Industrial Finance Authority,
d. Grand River Dam Authority,
e. Oklahoma Water Resources Board,
f. Northeast Oklahoma Public Facilities Authority,
g. Oklahoma Turnpike Aut hority,
h. Oklahoma Housing Finance Authority, and
i. Oklahoma Public, Industrial and Cultural Facilities
Authority.
B. In addition to any other legal ly permissible alternatives of
entering into contracts, any public entity may enter into
performance-based efficiency contracts with a qualified provider
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pursuant to the provisions of this section. The public entity may
make an initial payment from any funds available. Further, any
public entity may enter into an installment contract, lease purchase
agreement or other contractual obligation for the purpose of
financing performance -based efficiency projects for a term not to
exceed the greater of twenty (20) years or the useful life of the
project. A qualified provider to whom the contract is awarded shall
be required to give a sufficient bond to the public entity for its
faithful performance of the contract. In addition, the public
entity may require performance bonds covering the annual amount of
guaranteed savings over the contract term.
The contract's cost savings to the public entity must be
guaranteed each year during the term of the agreement. The savings
must be sufficient to offset the annual costs of the contract. In
calculating cost savings , the public entity may consider capital
cost avoidance and include additional revenue that is directly
attributed to the performance -based efficiency contract. The
contract shall provide for reimbursement to the public entity
annually for any shortfall o f guaranteed savings. Savings must be
measured, verified and documented during each year of the term and
may be utilized to meet the annual debt service. This section shall
constitute the sole authority necessary to enter into performance -
based efficiency contracts, without regard to compliance with other
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laws which may specify additional procedural requirements for
execution of contracts.
SECTION 2. This act shall become effective November 1, 2023.
59-1-6802 MAH 01/05/23