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ENGROSSED HOUSE
BILL NO. 2472 By: Archer and Hill of the
House
and
Paxton of the Senate
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; requiring certain savi ngs amount;
and declaring an emergency .
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 ben eficiary a political
subdivision of this state, or any institution o f higher education
which is part of The Oklahoma State System of Higher Education;
2. "Performance-based efficiency contract" means a contract for
the design, development, financing, inst allation and service of any
improvement, repair, alteration or bette rment of any building or
facility owned, operated 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 mai ntenance or operational strategy
that is designed and implemented th at will reduce utility
consumption or lower operating 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 system
modifications or replacements and automated control
systems,
c. replacement or modifications of lighting fixtures,
d. indoor air quality i mprovements 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 ot her 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 su pport programs that
reduce operating cost;
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3. "Qualified provider" means a person or busines s 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 Oklahoma 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 i s limited to one county, 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 Boa rd,
f. Northeast Oklahoma Public Facilities Authority,
g. Oklahoma Turnpike Aut hority,
h. Oklahoma Housing Finance Authority, and
i. Oklahoma Public, Industrial an d Cultural Facilities
Authority.
B. In addition to any other legal ly permissible alternative s 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 lif e 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 th e 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. Any
initial payment from funds other than an installment agreement must
also be offset by savings, as described herein, over the term of the
agreement. In calculating cost savings, the public entity may
consider capital cost avoidance an d include additional re venue that
is directly attributed to the performance -based efficiency contract.
The contract shall provide for reimbursement to the public entity
annually for any shortfall of guaranteed savings. Savings must be
measured, verified and documented during e ach 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 -
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based efficiency contracts, without regard to compliance with other
laws which may specify addit ional procedural requirements for
execution of contracts.
SECTION 2. It being immediately necessary for the preservation
of the public peace, heal th or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage an d approval.
Passed the House of Representatives the 20th day of March, 2023
Presiding Officer of the House
of Representatives
Passed the Senate the ____ day of __________, 2023.
Presiding Officer of the Senate