Texas 2025 - 89th Regular

Texas Senate Bill SB1050 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R3775 CMO-D
2	2	By: Hinojosa of Hidalgo S.B. No. 1050
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to energy savings performance contracts for local
10	10	governments; creating criminal offenses; authorizing a fee.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Chapter 302, Local Government Code, is amended
13	13	by designating Section 302.001 as Subchapter A and adding a
14	14	subchapter heading to read as follows:
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	SECTION 2. Section 302.001, Local Government Code, is
17	17	amended by amending Subdivisions (5) and (8) and adding
18	18	Subdivisions (8-a), (11), (12), and (13) to read as follows:
19	19	(5) "Guarantee" and "written guarantee" mean [means] a
20	20	written guarantee of a provider that the energy savings, increase
21	21	in billable revenues, or increase in meter accuracy, as applicable,
22	22	from the energy or water conservation or usage measures will at
23	23	least equal the cost of the energy or water conservation or usage
24	24	measures, all causally connected work, and ancillary improvements
25	25	provided for in an energy savings performance contract.
26	26	(8) "Local government" means a county, municipality,
27	27	school district, or other political subdivision of this state. [The
28	28	term does not include a school district authorized to enter into an
29	29	energy savings performance contract under Section 44.901,
30	30	Education Code.]
31	31	(8-a) "Measurement and verification" means a method of
32	32	confirming whether a guaranteed energy savings, an increase in
33	33	billable revenues, or an increase in meter accuracy resulting from
34	34	an energy or water conservation or usage measure is being met as
35	35	specified under an energy savings performance contract and this
36	36	chapter.
37	37	(11) "Request for qualifications" means a competitive
38	38	selection process achieved by a multistep negotiated procurement
39	39	process that involves sequential steps for the evaluation of
40	40	submissions by prospective providers.
41	41	(12) "Subcontractor" means a person, other than an
42	42	employee of a provider, who contracts with the provider to furnish
43	43	labor or materials to fulfill an obligation to the provider who is
44	44	acting as a general contractor or prime contractor for any of the
45	45	authorized work, including installation, required by an energy
46	46	savings performance contract. The term includes a subcontractor of
47	47	any tier, supplier, vendor, fabricator, or manufacturer.
48	48	(13) "Third-party engineer" means a professional
49	49	engineer who is selected or designated by a local government under
50	50	Section 302.0031.
51	51	SECTION 3. Section 302.007, Local Government Code, is
52	52	transferred to Subchapter A, Chapter 302, Local Government Code, as
53	53	added by this Act, and redesignated as Section 302.0021, Local
54	54	Government Code, to read as follows:
55	55	Sec. 302.0021 [302.007]. EXEMPTION FROM OTHER CONTRACTING
56	56	LAW. Chapter 2269, Government Code, does not apply to this
57	57	chapter.
58	58	SECTION 4. Subchapter A, Chapter 302, Local Government
59	59	Code, as added by this Act, is amended by adding Section 302.0031 to
60	60	read as follows:
61	61	Sec. 302.0031. THIRD-PARTY ENGINEER. (a) A local
62	62	government shall select or designate a third-party engineer to:
63	63	(1) act as the local government's representative, and
64	64	serve as the local government's consultant, throughout the energy
65	65	savings performance contract procurement process and the duration
66	66	of the measurement and verification services under Section 302.301;
67	67	(2) assist the local government in evaluating the
68	68	qualifications, proposals, and change orders of, and any related
69	69	presentations by, a provider;
70	70	(3) provide to the local government a written report
71	71	containing both a qualitative and quantitative evaluation of a
72	72	provider's qualifications submitted in response to a request for
73	73	qualifications;
74	74	(4) review an investment grade audit report and
75	75	supporting documentation completed by the provider and any
76	76	subsequent change order, contract addendum, or other amendment to
77	77	the proposed energy savings performance contract;
78	78	(5) prepare written opinions in accordance with Section
79	79	302.104 and submit written opinions to the State Energy
80	80	Conservation Office if specified under Section 302.105 for the
81	81	office to archive;
82	82	(6) perform the measurement and verification review of
83	83	the meter guarantee under Sections 302.052 and 302.053;
84	84	(7) monitor the performance of the provider's or
85	85	independent third party's measurement and verification services
86	86	required under Section 302.301;
87	87	(8) review the provider's or independent third party's
88	88	measurement and verification reports under Section 302.301; and
89	89	(9) review the provider's annual reconciliation
90	90	statement under Section 302.302.
91	91	(b) The third-party engineer must be a professional
92	92	engineer licensed under Chapter 1001, Occupations Code, and must:
93	93	(1) have a minimum of three years of specialized
94	94	experience with energy savings performance contracts;
95	95	(2) have demonstrated technical competence in
96	96	relation to, and working knowledge of, the procurement process of
97	97	energy savings performance contracts;
98	98	(3) not be an officer or employee of:
99	99	(A) a provider for the energy savings performance
100	100	contract; or
101	101	(B) a wholly owned subsidiary, majority-owned
102	102	subsidiary, parent company, or affiliate of the provider for the
103	103	contract; and
104	104	(4) not be otherwise associated with the energy
105	105	savings performance contract.
106	106	(c) A local government:
107	107	(1) if the third-party engineer is not a full-time
108	108	employee of the local government, shall procure the third-party
109	109	engineer's services in accordance with the procedures prescribed
110	110	for procuring the professional services of an engineer under
111	111	Section 2254.004, Government Code; and
112	112	(2) shall pay a third-party engineer described by
113	113	Subdivision (1) a pre-negotiated fee based on the work completed if
114	114	the local government does not enter into an energy savings
115	115	performance contract that was reviewed by the third-party engineer
116	116	under Section 302.104.
117	117	(d) A provider selected to perform an investment grade audit
118	118	and propose an energy savings performance contract is prohibited
119	119	from suggesting, recommending, or arranging a third-party
120	120	engineer.
121	121	(e) Before the local government selects or designates a
122	122	third-party engineer, the third-party engineer shall certify in
123	123	writing to the local government that the engineer meets the
124	124	qualifications required under Subsection (b) and that there is no
125	125	conflict of interest with regard to the local government and the
126	126	proposals the third-party engineer is to evaluate that result from
127	127	the request for qualifications.
128	128	(f) A third-party engineer who reviews an energy savings
129	129	performance contract shall maintain the confidentiality of any
130	130	proprietary information the third-party engineer acquires while
131	131	reviewing the contract.
132	132	(g) A local government may require a provider to include in
133	133	the calculation of the cost of a proposal for an energy savings
134	134	performance contract any fees payable by the local government for
135	135	use of a third-party engineer who is not a full-time employee of the
136	136	local government. A fee charged by a third-party engineer
137	137	described by this subsection may not exceed 2.5 percent of the total
138	138	value of the energy savings performance contract at the time that a
139	139	contract is executed by that provider.
140	140	(h) The written report under Subsection (a)(3) must include
141	141	a recommendation for selecting a provider, but the local government
142	142	is not obligated to follow the recommendation.
143	143	SECTION 5. Chapter 302, Local Government Code, is amended
144	144	by adding Subchapter B, and a heading is added to that subchapter to
145	145	read as follows:
146	146	SUBCHAPTER B. ENERGY SAVINGS PERFORMANCE CONTRACT
147	147	SECTION 6. Sections 302.002 and 302.006, Local Government
148	148	Code, are transferred to Subchapter B, Chapter 302, Local
149	149	Government Code, as added by this Act, redesignated as Sections
150	150	302.051 and 302.052, Local Government Code, respectively, and
151	151	amended to read as follows:
152	152	Sec. 302.051 [302.002]. ENERGY SAVINGS PERFORMANCE
153	153	CONTRACTS. (a) The governing body of a local government may enter
154	154	into an energy savings performance contract in accordance with this
155	155	chapter if:
156	156	(1) the contract includes the provisions required
157	157	under this section; and
158	158	(2) the local government receives approval for the
159	159	contract from the State Energy Conservation Office under Section
160	160	302.105.
161	161	(b) Each energy or water conservation or usage measure must
162	162	comply with current local, state, and federal construction,
163	163	plumbing, and environmental codes and
164	164	regulations. Notwithstanding Section 302.001, an energy savings
165	165	performance contract may not include improvements or equipment that
166	166	allow or cause water from any condensing, cooling, or industrial
167	167	process or any system of nonpotable usage over which public water
168	168	supply system officials do not have sanitary control to be returned
169	169	to the potable water supply.
170	170	(b-1) An energy savings performance contract must contain
171	171	provisions requiring the provider of the energy or water
172	172	conservation or usage measures to provide a written guarantee.
173	173	(c) An energy savings performance contract must contain a
174	174	provision requiring the provider to provide to the local government
175	175	an annual reconciliation statement of the written guarantee as
176	176	required by Section 302.302.
177	177	(d) The written guarantee must require the provider to pay
178	178	the local government for any shortfall amounts based on the results
179	179	of the measurement and verification review required under Section
180	180	302.301. If the energy savings, increase in billable revenues, or
181	181	both, resulting from an energy savings performance contract fall
182	182	short of the energy savings and increase in billable revenues
183	183	projected under the contract and all required shortfall payments to
184	184	the local government have not been made, the local government may
185	185	terminate the contract without incurring any additional obligation
186	186	to the provider.
187	187	(e) An energy savings performance contract and any other
188	188	contract entered into by the local government with a provider under
189	189	this chapter must contain a prohibition against contingent fees as
190	190	follows: "The provider warrants that he or she has not employed or
191	191	retained any company or person, other than a bona fide employee
192	192	working solely for the provider, to solicit or secure this
193	193	agreement and that he or she has not paid or agreed to pay any
194	194	person, company, corporation, individual, or firm, other than a
195	195	bona fide employee working solely for the provider, any fee,
196	196	commission, percentage, gift, or other consideration contingent
197	197	upon or resulting from the award or making of this agreement."
198	198	(f) An energy savings performance contract and any other
199	199	contract entered into by the local government with a provider must
200	200	contain the following provision: "The provider agrees that through
201	201	the term of the performance contract and contract amendment
202	202	thereafter the provider will maintain a compliance program and
203	203	internal controls designed to detect and deter fraudulent and
204	204	corrupt conduct through, among other things: policies and
205	205	procedures to create redundancy in the subcontractor bid review,
206	206	bid normalization, bid revision, subcontractor selection, and
207	207	energy savings and cost review processes."
208	208	(g) The provisions required by Subsections (b-1)-(f) cannot
209	209	be waived in a contract.
210	210	(h) The energy savings performance contract must contain a
211	211	provision stating that the contract is not executory until approval
212	212	is obtained under Section 302.105.
213	213	Sec. 302.052 [302.006]. METER GUARANTEES. (a) This
214	214	section applies to any energy savings performance contract that:
215	215	(1) provides for any metering or related equipment,
216	216	system, or process or procedure; and
217	217	(2) includes a meter guarantee by the provider,
218	218	regardless of whether the meter guarantee is a part of a broader
219	219	guarantee applicable to other energy or water conservation or usage
220	220	measures or causally connected work.
221	221	(b) Not later than the fifth anniversary of the effective
222	222	date of an energy savings performance contract, the third-party
223	223	[an] engineer shall test a statistically relevant sample of the
224	224	meters installed or implemented under the contract to determine or
225	225	calculate the actual average accuracy and shall compare the actual
226	226	average accuracy to the baseline average accuracy of those tested
227	227	meters.
228	228	(c) A meter guarantee applies if the third-party engineer
229	229	reports to the local government and the provider that the average
230	230	accuracy of the tested meters as of the testing date is less than
231	231	the baseline average accuracy of the tested meters as of the testing
232	232	date.
233	233	(d) The amount payable under the meter guarantee, based on
234	234	the results of the measurement and verification report under
235	235	Section 302.301, must be determined for each year subject to the
236	236	provider's annual reconciliation statement under Section 302.302
237	237	[engineer's report] and is equal to the difference between:
238	238	(1) the agreed increase in billable revenues based on
239	239	the estimated accuracy of all of the meters for each year, according
240	240	to the energy savings performance contract; and
241	241	(2) the actual revenues for the same year that would
242	242	result from applying the third-party engineer's reported actual
243	243	average accuracy of the tested meters to all of the meters subject
244	244	to the energy savings performance contract, using the same contract
245	245	components that were used to calculate the agreed increase in
246	246	billable revenues for that year, assuming the annual decrease in
247	247	actual average accuracy of all the meters was a pro rata percentage
248	248	of the reported total decrease in actual average accuracy.
249	249	(e) Notwithstanding Subsection (d), if the meter guarantee
250	250	in the contract is part of a broader guarantee applicable to other
251	251	energy or water conservation or usage measures that are greater in
252	252	value [or causally connected work] under the contract, the amount
253	253	payable under the meter guarantee for any year during the
254	254	measurement and verification period is subtracted from [reduced or
255	255	offset by] the difference between:
256	256	(1) the actual sum of the energy savings and the
257	257	increase in billable revenues resulting from the other energy or
258	258	water conservation or usage measures or causally connected work for
259	259	that year during the measurement and verification period; and
260	260	(2) the guaranteed amount of the energy savings and
261	261	the increase in billable revenues from the other energy or water
262	262	conservation or usage measures or causally connected work for that
263	263	year during the measurement and verification period.
264	264	[(f) A test conducted under this section must be performed
265	265	in accordance with the procedures established by the International
266	266	Performance Measurement and Verification Protocol or succeeding
267	267	standards of the United States Department of Energy.]
268	268	(g) A third-party [An] engineer conducting a test under this
269	269	section shall:
270	270	(1) verify that the tested meters have been properly
271	271	maintained and are operating properly; [and]
272	272	(2) comply with Sections 302.0031 and 302.104(b);
273	273	(3) conduct the test in accordance with the
274	274	methodologies authorized under Section 302.053; and
275	275	(4) perform the measurement and verification review of
276	276	the meter guarantee under Section 302.053 [Section 302.005(c)].
277	277	(h) A provider shall select both old and new meters to test
278	278	when performing an investment grade audit and developing baseline
279	279	average accuracy of existing meters to include in the investment
280	280	grade audit report. In developing the baseline average accuracy,
281	281	the provider may not include within its guarantee calculation
282	282	meters that were inactive or out of service at the time of the
283	283	investment grade audit. The meter guarantee may not include an
284	284	escalation factor that assumes water will increase by a certain
285	285	percentage each year.
286	286	SECTION 7. Subchapter B, Chapter 302, Local Government
287	287	Code, as added by this Act, is amended by adding Sections 302.053,
288	288	302.054, and 302.055 to read as follows:
289	289	Sec. 302.053. MEASUREMENT AND VERIFICATION OF GUARANTEE.
290	290	Any guaranteed energy savings, increase in billable revenues, and,
291	291	if applicable, efficiency or accuracy of metering equipment must:
292	292	(1) be consistent with the investment grade audit
293	293	report under Section 302.103; and
294	294	(2) be determined using one of the measurement and
295	295	verification methodologies listed in:
296	296	(A) the United States Department of Energy's
297	297	measurement and verification guidelines for energy savings
298	298	performance contracts;
299	299	(B) the International Performance Measurement
300	300	and Verification Protocol maintained by the Efficiency Valuation
301	301	Organization; or
302	302	(C) Guideline 14-2023 of the American Society of
303	303	Heating, Refrigerating, and Air-Conditioning Engineers.
304	304	Sec. 302.054. MAINTENANCE SERVICES. (a) The local
305	305	government may not be required under the terms of an energy savings
306	306	performance contract to purchase a maintenance contract or other
307	307	maintenance agreement from the provider if the local government
308	308	takes appropriate action to budget for its own personnel or another
309	309	provider to maintain new systems installed pursuant to an existing
310	310	system affected by the energy savings performance contract. The
311	311	provider shall provide proper training and a sufficient number of
312	312	operation and maintenance manuals for all equipment replacements or
313	313	upgrades at each facility location.
314	314	(b) A provider shall provide to the local government the
315	315	full capabilities to operate, maintain, repair, update,
316	316	reconfigure, and engineer changes necessary to accommodate
317	317	facility or operational changes or to incorporate new energy
318	318	savings control strategies for any system, including a facility
319	319	automation and control system, proposed under this chapter. A
320	320	provider is not required under this subsection to provide the local
321	321	government with access to the operating system of the provider, but
322	322	the user interface software must provide for all capabilities
323	323	described by this subsection.
324	324	(c) If a local government agrees to retain the same provider
325	325	subject to the written guarantee to perform maintenance services
326	326	for energy or water conservation or usage measures under an energy
327	327	savings performance contract or a subsequent change order, contract
328	328	addendum, or other amendment to the energy savings performance
329	329	contract, an agreement for the maintenance services must include a
330	330	provision stating that the maintenance services:
331	331	(1) are subject to budget appropriations of the local
332	332	government on an annual basis; and
333	333	(2) may be discontinued at any time over the
334	334	guaranteed period with no negative impact to the energy savings
335	335	performance contract.
336	336	Sec. 302.055. REQUIRED PROVISION FOR CHANGE ORDER OR
337	337	CONTRACT ADDENDUM. A change order or contract addendum to an energy
338	338	savings performance contract must contain a provision that the
339	339	change order or contract addendum, as applicable, is not executory
340	340	until approval is obtained under Section 302.105. The provisions
341	341	of the energy savings performance contract not subject to the
342	342	change order or addendum may continue while approval of the change
343	343	order or addendum is pending.
344	344	SECTION 8. Chapter 302, Local Government Code, is amended
345	345	by adding Subchapter C, and a heading is added to that subchapter to
346	346	read as follows:
347	347	SUBCHAPTER C. PROCUREMENT PROCEDURES FOR ENERGY SAVINGS
348	348	PERFORMANCE CONTRACTS
349	349	SECTION 9. Section 302.005, Local Government Code, is
350	350	transferred to Subchapter C, Chapter 302, Local Government Code, as
351	351	added by this Act, redesignated as Section 302.101, Local
352	352	Government Code, and amended to read as follows:
353	353	Sec. 302.101 [302.005]. BIDDING PROCEDURES; REQUEST FOR
354	354	QUALIFICATIONS [AWARD OF CONTRACT]. (a) An energy savings
355	355	performance contract under this chapter may be let in accordance
356	356	with the procedures established for procuring certain professional
357	357	services by Section 2254.004, Government Code. Notice of the
358	358	request for qualifications must [shall] be published in the manner
359	359	provided for competitive bidding.
360	360	(a-1) Before issuing a request for qualifications, a local
361	361	government shall select or designate a third-party engineer to act
362	362	as the local government's representative and serve as its
363	363	consultant in accordance with Section 302.0031.
364	364	[(b) Before entering into an energy savings performance
365	365	contract, the governing body must require that the energy savings,
366	366	increase in billable revenues, or increase in meter accuracy
367	367	estimated or projected by a provider be reviewed by a licensed
368	368	professional engineer who:
369	369	[(1) has a minimum of three years of experience in
370	370	energy calculation and review;
371	371	[(2) is not an officer or employee of a provider for
372	372	the contract under review; and
373	373	[(3) is not otherwise associated with the contract.]
374	374	(c) [In conducting the review, the engineer shall focus
375	375	primarily on the proposed improvements from an engineering
376	376	perspective, the methodology and calculations related to cost
377	377	savings, increases in revenue, and, if applicable, efficiency or
378	378	accuracy of metering equipment. An engineer who reviews a contract
379	379	shall maintain the confidentiality of any proprietary information
380	380	the engineer acquires while reviewing the contract.] Sections
381	381	1001.053 and 1001.407, Occupations Code, apply to work performed
382	382	under the contract.
383	383	(d) The scope of an energy savings performance contract may
384	384	not be modified under this section by change order, contract
385	385	addendum, or other method:
386	386	(1) to perform work that is not related to, connected
387	387	with, or otherwise ancillary to the measures identified in the
388	388	original scope of an energy savings performance contract; or
389	389	(2) in a way that increases the price of the original
390	390	awarded contract by more than 25 percent of the original contract
391	391	value.
392	392	(e) Subsection (d) applies only to the design or
393	393	construction of a water supply project, water plant, wastewater
394	394	plant, water and wastewater distribution or conveyance facility, or
395	395	drainage project.
396	396	SECTION 10. Subchapter C, Chapter 302, Local Government
397	397	Code, as added by this Act, is amended by adding Sections 302.102,
398	398	302.103, 302.104, 302.105, 302.106, 302.107, and 302.108 to read as
399	399	follows:
400	400	Sec. 302.102. PRELIMINARY UTILITY AUDIT. (a) In response
401	401	to a request for qualifications, a local government may request a
402	402	provider to complete a preliminary utility audit in accordance with
403	403	this section and submit a written report based on the results of the
404	404	preliminary utility audit before entering into an agreement for an
405	405	investment grade audit under Section 302.103. The results of the
406	406	preliminary utility audit may form the basis for a provider's
407	407	proposed investment grade audit under that section.
408	408	(b) The preliminary utility audit must show for each
409	409	proposed energy or water conservation or usage measure, at a
410	410	minimum, a comparison of the estimated costs and estimated project
411	411	energy savings, increase in billable revenues, and, if applicable,
412	412	efficiency or accuracy of metering equipment to support
413	413	justification for each proposed energy or water conservation or
414	414	usage measure.
415	415	(c) To complete a preliminary utility audit, the provider
416	416	must conduct an on-site survey of the facilities identified in the
417	417	published request for qualifications. The local government shall
418	418	assist the provider with the collection of necessary facility
419	419	technical information, including by providing to the provider:
420	420	(1) at least three years of utility bills;
421	421	(2) floor plans as needed; and
422	422	(3) maintenance records as needed.
423	423	(d) A preliminary utility audit:
424	424	(1) must be performed on a representative sample of
425	425	existing facilities; or
426	426	(2) if the local government is considering
427	427	constructing a new facility, must be completed using comparative
428	428	existing facilities with similar floor plans and identical uses.
429	429	(e) The preliminary utility audit must be provided at no
430	430	cost to the local government and with no obligation to select the
431	431	provider to perform an investment grade audit.
432	432	(f) For a preliminary utility audit requested under this
433	433	section and before an agreement for an investment grade audit under
434	434	Section 302.103 is executed, a local government may not require a
435	435	provider to submit:
436	436	(1) a full engineering evaluation of the facilities;
437	437	(2) a detailed scope of construction; or
438	438	(3) any architectural or engineering designs.
439	439	Sec. 302.103. INVESTMENT GRADE AUDIT; REPORT. (a)
440	440	Following successful negotiations of an investment grade audit
441	441	agreement, the selected qualified provider shall perform an
442	442	investment grade audit to establish the exact scope of work to be
443	443	performed under a proposed energy savings performance contract.
444	444	The results of the audit will form the basis for negotiating the
445	445	energy savings performance contract with the local government.
446	446	(b) Before entering into an agreement for an investment
447	447	grade audit under this section, the local government shall request
448	448	the selected qualified provider to submit to the local government
449	449	the provider's costing methodology. The costing methodology under
450	450	this subsection:
451	451	(1) must include the provider's:
452	452	(A) policy on subcontractor markup;
453	453	(B) definition of general conditions;
454	454	(C) range of costs for general conditions;
455	455	(D) policy on retainage;
456	456	(E) policy on contingencies;
457	457	(F) discount for prompt payment; and
458	458	(G) expected staffing for administrative duties;
459	459	and
460	460	(2) may not include a guaranteed maximum price or bid
461	461	for overall design or construction under an energy savings
462	462	performance contract.
463	463	(c) The scope of work for an investment grade audit must
464	464	include:
465	465	(1) collecting facility information, such as data and
466	466	background information on:
467	467	(A) facilities;
468	468	(B) equipment;
469	469	(C) operations; and
470	470	(D) utility use and costs;
471	471	(2) conducting an inventory of existing systems and
472	472	equipment, which requires a physical inspection of the facility and
473	473	an interview with a facility manager to log information on major
474	474	energy and water-using equipment;
475	475	(3) establishing the current baseline and base year
476	476	consumption and reconciling those with end-use consumption
477	477	projections;
478	478	(4) identifying and assessing a list of potential
479	479	energy or water conservation or usage measures with a detailed
480	480	projection of energy savings, increase in billable revenues, or
481	481	accuracy of metering equipment to be obtained at the facilities as a
482	482	result of the implementation of the recommended energy or water
483	483	conservation or usage measures; and
484	484	(5) preparing a detailed investment grade audit report
485	485	that includes:
486	486	(A) a proposed measurement and verification
487	487	plan;
488	488	(B) a sample periodic utility savings report and
489	489	annual reconciliation statement; and
490	490	(C) the items described by Subsection (d).
491	491	(d) The investment grade audit report under Subsection
492	492	(c)(5) must:
493	493	(1) specify the total and itemization cost of each
494	494	recommended energy or water conservation or usage measure that will
495	495	be included in a proposed energy savings performance contract,
496	496	including projected costs associated with:
497	497	(A) the investment grade audit;
498	498	(B) the design of the measure;
499	499	(C) any engineering services;
500	500	(D) any financing and debt services;
501	501	(E) the third-party engineer services;
502	502	(F) annual measurement and verification
503	503	services;
504	504	(G) annual maintenance services;
505	505	(H) training of employees; and
506	506	(I) repairs;
507	507	(2) identify the methodologies for measurement and
508	508	verification, in accordance with Section 302.053, of the energy
509	509	savings or increase in billable revenues, or both, for each
510	510	recommended energy or water conservation or usage measure;
511	511	(3) identify all design and compliance issues that
512	512	require the professional services of an architect or engineer, and
513	513	identify the architect or engineer who will provide those services;
514	514	(4) include a schedule of all costs, showing a
515	515	calculation of each cost of implementing the proposed energy or
516	516	water conservation or usage measures and the projected energy
517	517	savings, increase in billable revenues, or increase in meter
518	518	accuracy that could be realized and maximized;
519	519	(5) list the subcontractors and vendors to be used by
520	520	the provider with respect to the proposed energy savings
521	521	performance contract; and
522	522	(6) identify maintenance requirements necessary to
523	523	ensure continued energy savings, an increase in billable revenues,
524	524	or an increase in meter accuracy that could be realized and
525	525	maximized and describe how those requirements will be fulfilled.
526	526	(e) The outcome of an investment grade audit cannot be
527	527	predetermined. The provider may not make up losses or
528	528	inefficiencies to make the cost of the energy savings performance
529	529	contract project appear budget neutral.
530	530	(f) The cost for an investment grade audit must be based on
531	531	the cost per square foot actually audited and is intended to be the
532	532	market rate for an investment grade audit. The cost may then be
533	533	adjusted by mutual written agreement of the parties in the event
534	534	that the audited square footage is changed by either party.
535	535	(g) On completion of the investment grade audit, the
536	536	provider shall submit the investment grade audit report prepared
537	537	under this section to the local government.
538	538	Sec. 302.104. REVIEW BY THIRD-PARTY ENGINEER; REPORT. (a)
539	539	Before obtaining approval of a proposed energy savings performance
540	540	contract as required by Section 302.105, the local government shall
541	541	require the third-party engineer selected or designated under
542	542	Section 302.0031 to review the investment grade audit report and
543	543	supporting documentation and any subsequent change order, contract
544	544	addendum, or other amendment to the proposed contract. The
545	545	third-party engineer must verify that the proposed energy savings
546	546	performance contract, the investment grade audit report, and the
547	547	measurement and verification plan present a cohesive package that
548	548	fully describes the intended scope of services.
549	549	(b) In conducting the review under Subsection (a), the
550	550	third-party engineer shall provide the local government with a
551	551	written opinion evaluating and validating the methodology and
552	552	calculations related to energy savings, increase in billable
553	553	revenues, and, if applicable, efficiency or accuracy of metering
554	554	equipment associated with each proposed energy or water
555	555	conservation or usage measure identified in the investment grade
556	556	audit report that will become part of the final energy savings
557	557	performance contract or any subsequent change order, contract
558	558	addendum, or other amendment to the final energy savings
559	559	performance contract. The third-party engineer may recommend that
560	560	the local government not enter into the contract.
561	561	(c) In identifying and developing potential energy or water
562	562	conservation or usage measures, the third-party engineer shall
563	563	certify that the documents described by Subsection (a) have been
564	564	reviewed and are complete.
565	565	Sec. 302.105. REVIEW BY STATE AGENCY. (a) Before awarding
566	566	an energy savings performance contract, a local government shall
567	567	submit the proposed contract to the State Energy Conservation
568	568	Office for review and approval in accordance with this section. The
569	569	office shall review the documents submitted and evaluate the
570	570	economic assumptions that purportedly support the implementation
571	571	of each energy or water conservation or usage measure.
572	572	(b) The State Energy Conservation Office shall evaluate the
573	573	technical and economic feasibility of each energy or water
574	574	conservation or usage measure in the proposed contract and either
575	575	approve or disapprove each of those proposed energy or water
576	576	conservation or usage measures.
577	577	(c) In addition to the submission of a final proposed energy
578	578	savings performance contract under Subsection (a), the local
579	579	government must submit:
580	580	(1) the final investment grade audit report under
581	581	Section 302.103;
582	582	(2) the proposed measurement and verification plan;
583	583	(3) a sample periodic utility savings report;
584	584	(4) the written certifications listed under
585	585	Subsection (e); and
586	586	(5) any other relevant documents determined necessary
587	587	by the State Energy Conservation Office to streamline the review.
588	588	(d) In conducting an evaluation under this section, the
589	589	State Energy Conservation Office shall make the office's
590	590	determination on the basis of a review of:
591	591	(1) the project's scope and whether it is appropriate
592	592	for an energy savings performance contract;
593	593	(2) the project's compliance with applicable
594	594	provisions of this chapter;
595	595	(3) the written certifications required under
596	596	Subsection (e); and
597	597	(4) the methodology and calculations related to energy
598	598	savings, increase in billable revenues, and, if applicable,
599	599	efficiency or accuracy of metering equipment.
600	600	(e) To obtain approval for the proposed energy savings
601	601	performance contract, the local government shall submit the
602	602	following written certifications for review as provided by this
603	603	section:
604	604	(1) each member of the governing body shall certify
605	605	that in lieu of competitive bidding or competitive sealed proposals
606	606	for construction services under a public work contract, the energy
607	607	savings performance contract was procured under a request for
608	608	qualifications process in accordance with this chapter;
609	609	(2) the provider shall certify that neither the
610	610	provider nor any of the provider's affiliates or subcontractors, or
611	611	employees of the provider or the provider's affiliates or
612	612	subcontractors, has bribed, or attempted to bribe, an official or
613	613	employee of the local government in connection with the energy
614	614	savings performance contract and has not participated in the
615	615	creation of the request for qualifications for the energy savings
616	616	performance contract;
617	617	(3) the provider or any third-party engineer
618	618	contracted to perform a measurement and verification review shall
619	619	certify that the methodologies for determining energy savings,
620	620	increase in billable revenues, and, if applicable, efficiency or
621	621	accuracy of metering equipment will be performed in accordance with
622	622	Section 302.053; and
623	623	(4) the third-party engineer shall certify that the
624	624	engineer is free from financial interest in the provider of the
625	625	energy savings performance contract that conflicts with the proper
626	626	completion of work associated with the contract.
627	627	(f) The State Energy Conservation Office shall complete the
628	628	office's review and provide its approval or disapproval not later
629	629	than the 90th business day after the date of receiving a complete
630	630	proposed energy savings performance contract. Submission of an
631	631	incomplete contract may result in delayed review and approval.
632	632	(g) The State Energy Conservation Office may charge a
633	633	reasonable fee for conducting a review under this section, and the
634	634	payment of the fee may be included in the financing for the energy
635	635	savings performance contract.
636	636	(h) A local government that fails to provide documentation
637	637	required by the State Energy Conservation Office in accordance with
638	638	this section may not engage in further energy savings performance
639	639	contracts until the documentation has been provided.
640	640	(i) The local government shall hold harmless the State
641	641	Energy Conservation Office and the officers, employees, and
642	642	representatives of the office from all liability, actions, claims,
643	643	demands, or suits associated with the execution or performance of
644	644	the energy savings performance contract.
645	645	(j) The State Energy Conservation Office may adopt rules
646	646	necessary to implement this section.
647	647	Sec. 302.106. AWARDING OF ENERGY SAVINGS PERFORMANCE
648	648	CONTRACT. (a) Prior to the award of any energy savings performance
649	649	contract, the local government shall, in accordance with Section
650	650	302.105, submit the technical documents needed and obtain approval
651	651	from the State Energy Conservation Office.
652	652	(b) On receiving notice of approval from the State Energy
653	653	Conservation Office under Section 302.105, a local government shall
654	654	enter into the energy savings performance contract with the
655	655	qualified provider for the work, including any construction work,
656	656	identified in the investment grade audit report.
657	657	(c) The local government shall provide a copy of the
658	658	executed energy savings performance contract and corresponding
659	659	addenda to the State Energy Conservation Office not later than the
660	660	30th day after the effective date of the contract.
661	661	Sec. 302.107. CHANGE ORDER AND CONTRACT ADDENDUM SUBJECT TO
662	662	SAME REVIEW PROCESS. Each change order or contract addendum to an
663	663	energy savings performance contract is subject to the same review
664	664	and approval requirements of the energy savings performance
665	665	contract under Sections 302.104 and 302.105.
666	666	Sec. 302.108. PROCUREMENT OF CERTAIN CONSTRUCTION-RELATED
667	667	SERVICES. (a) This section applies to the purchase of a
668	668	construction-related service from a provider related to an energy
669	669	savings performance contract in an amount that exceeds $50,000.
670	670	(b) A local government may not use a purchasing cooperative
671	671	under Chapter 791, Government Code, or a local cooperative
672	672	organization under Subchapter F, Chapter 271, of this code for the
673	673	purchase of a preliminary utility audit, an investment grade audit,
674	674	architectural services, design services, or engineering services
675	675	from a provider under an energy savings performance contract.
676	676	SECTION 11. Chapter 302, Local Government Code, is amended
677	677	by adding Subchapter D, and a heading is added to that subchapter to
678	678	read as follows:
679	679	SUBCHAPTER D. PAYMENTS; METHOD OF FINANCING
680	680	SECTION 12. Section 302.003, Local Government Code, is
681	681	transferred to Subchapter D, Chapter 302, Local Government Code, as
682	682	added by this Act, and redesignated as Section 302.151, Local
683	683	Government Code, to read as follows:
684	684	Sec. 302.151 [302.003]. PAYMENT AND PERFORMANCE BOND.
685	685	Notwithstanding any other law, before entering into an energy
686	686	savings performance contract, the governing body of the local
687	687	government shall require the provider of the energy or water
688	688	conservation or usage measures to file with the governing body a
689	689	payment and performance bond relating to the installation of the
690	690	measures in accordance with Chapter 2253, Government Code. The
691	691	governing body may also require a separate bond to cover the value
692	692	of the guarantee.
693	693	SECTION 13. Subchapter D, Chapter 302, Local Government
694	694	Code, as added by this Act, is amended by adding Section 302.152 to
695	695	read as follows:
696	696	Sec. 302.152. PAYMENTS TO PROVIDERS. (a) Subject to
697	697	Subsection (b), the governing body of a local government may pay the
698	698	provider of an energy or water conservation or usage measure,
699	699	including payment of debt service as defined by Section 26.012, Tax
700	700	Code, solely out of the energy savings or increase in billable
701	701	revenues realized by the local government under the energy savings
702	702	performance contract.
703	703	(b) A payment to the provider must be based on the
704	704	percentage of project completion, and not on a pre-established
705	705	schedule.
706	706	(c) A local government may use excess actual guaranteed
707	707	energy savings or increase in billable revenues revealed by an
708	708	annual reconciliation statement under Section 302.302 throughout
709	709	the term of an energy savings performance contract to reinvest in
710	710	other energy or water conservation or usage measures within the
711	711	scope of the contract through a change order or contract addendum as
712	712	authorized under this chapter.
713	713	SECTION 14. Section 302.004, Local Government Code, is
714	714	transferred to Subchapter D, Chapter 302, Local Government Code, as
715	715	added by this Act, redesignated as Section 302.153, Local
716	716	Government Code, and amended to read as follows:
717	717	Sec. 302.153 [302.004]. METHOD OF FINANCING; CONTRACTUAL
718	718	OBLIGATIONS FOR CERTAIN CONTRACTS [TERMS OF CONTRACT]. (a) An
719	719	energy savings performance contract may be financed:
720	720	(1) under a lease-purchase contract that has a term
721	721	not to exceed 20 years from the final date of installation and that
722	722	meets federal tax requirements for tax-free municipal leasing or
723	723	long-term financing;
724	724	(2) with the proceeds of bonds; or
725	725	(3) under a contract with the provider of the energy or
726	726	water conservation or usage measures that has a term not to exceed
727	727	the lesser of 20 years from the final date of installation or the
728	728	average useful life of the energy or water conservation or usage
729	729	measures.
730	730	[(a-1) Notwithstanding other law, the governing body of a
731	731	local government may use any available money to pay the provider of
732	732	the energy or water conservation measures under this section, and
733	733	the governing body is not required to pay for such costs solely out
734	734	of the savings realized by the local government under an energy
735	735	savings performance contract. The governing body may contract with
736	736	the provider to perform work that is related to, connected with, or
737	737	otherwise ancillary to the measures identified in the scope of an
738	738	energy savings performance contract.]
739	739	(b) [An energy savings performance contract shall contain
740	740	provisions requiring the provider of the energy or water
741	741	conservation or usage measures to provide a guarantee.] If the term
742	742	of the contract exceeds one year, the local government's
743	743	contractual obligations in any one year during the term of the
744	744	contract beginning after the final date of installation may not
745	745	exceed the total energy and water savings, the net operating cost
746	746	savings, and the stipulated or agreed upon increase in billable
747	747	revenues resulting from the estimated increase in meter accuracy,
748	748	divided by the number of years in the contract term.
749	749	SECTION 15. Chapter 302, Local Government Code, is amended
750	750	by adding Subchapters E, F, and G to read as follows:
751	751	SUBCHAPTER E. WORK PERFORMED UNDER PERFORMANCE CONTRACT
752	752	Sec. 302.201. SUBCONTRACTORS FOR AUTHORIZED WORK UNDER
753	753	PERFORMANCE CONTRACT. (a) A provider may be designated as the
754	754	general contractor or prime contractor for the installation or
755	755	implementation of any authorized work under an energy savings
756	756	performance contract, including any improvements to be made
757	757	pursuant to the contract, provided that a subcontractor contracting
758	758	with the provider for that purpose:
759	759	(1) is experienced in the design, installation, or
760	760	implementation of the energy or water conservation or usage
761	761	measures agreed to between the provider and local government; and
762	762	(2) submits to the local government all written
763	763	certifications required under this chapter.
764	764	(b) During the negotiation of an energy savings performance
765	765	contract, the provider shall submit to the local government a list
766	766	of subcontractors the provider intends to use and disclose whether
767	767	a subcontractor on the list is a subsidiary or wholly owned or
768	768	partially owned affiliate of the provider. The provider shall
769	769	update the disclosure during the term of the contract.
770	770	(c) A subsidiary or wholly owned or partially owned
771	771	affiliate of a provider may not be an eligible contractor or
772	772	subcontractor under an energy savings performance contract unless:
773	773	(1) an analysis provided to the local government
774	774	demonstrates that there is an economic advantage to the local
775	775	government in having the contractor or subcontractor perform work
776	776	as part of the contract; and
777	777	(2) the local government determines that having the
778	778	contractor or subcontractor perform work as part of the contract
779	779	provides the best value for the local government.
780	780	Sec. 302.202. WORK RELATED OR ANCILLARY TO MEASURES. The
781	781	governing body of a local government may contract with a provider of
782	782	energy or water conservation or usage measures to perform work that
783	783	is related to, connected with, or otherwise ancillary to the
784	784	measures identified in the scope of an energy savings performance
785	785	contract.
786	786	SUBCHAPTER F. FRAUD DETERRENCE PROGRAM
787	787	Sec. 302.251. COMPLIANCE PROGRAM AND INTERNAL CONTROL TO
788	788	DETECT AND DETER FRAUD. (a) A provider that enters into an energy
789	789	savings performance contract under this chapter shall maintain a
790	790	compliance program and internal controls designed to detect and
791	791	deter fraudulent and corrupt conduct, including:
792	792	(1) policies and procedures to create redundancy in
793	793	the subcontractor bid review, bid normalization, bid revision, and
794	794	selection process; and
795	795	(2) energy savings, increase in billable revenues, and
796	796	cost review processes.
797	797	(b) The policies and procedures described by Subsection
798	798	(a)(1) must specifically correct or prevent the circumstances that
799	799	would allow a single employee to control the subcontractor
800	800	selection process and obtain kickbacks or bribes either directly
801	801	from subcontractors and vendors or indirectly through
802	802	intermediaries in connection with the energy savings performance
803	803	contract.
804	804	(c) If necessary and appropriate, a provider shall modify an
805	805	existing compliance contract to ensure that the provider maintains
806	806	a rigorous compliance program that incorporates relevant internal
807	807	controls, policies, and procedures designed to effectively detect
808	808	and deter violation of fraud, anti-corruption, procurement
809	809	integrity, and anti-kickback laws.
810	810	SUBCHAPTER G. ANNUAL REPORTS AND STATEMENTS
811	811	Sec. 302.301. ANNUAL MEASUREMENT AND VERIFICATION REVIEW;
812	812	REPORT. (a) During the term of an energy savings performance
813	813	contract and at the discretion of the local government, a local
814	814	government shall retain the provider or an independent third party,
815	815	other than the third-party engineer, to perform an annual
816	816	measurement and verification review of, and prepare a report on,
817	817	energy savings, increase in billable revenues, and, if applicable,
818	818	efficiency or accuracy of metering equipment resulting from the
819	819	energy or water conservation or usage measures when compared with
820	820	the established baseline set forth in the energy savings
821	821	performance contract.
822	822	(b) The measurement and verification review and report must
823	823	comply with the measurement and verification methodologies
824	824	described by Section 302.053 that were published or listed on the
825	825	date the energy savings performance contract was entered into
826	826	between the local government and provider. An independent third
827	827	party retained under this section must:
828	828	(1) have the qualifications of a third-party engineer
829	829	as described by Section 302.0031(b); and
830	830	(2) be retained under a separate contract from the
831	831	third-party engineer selected under Section 302.0031.
832	832	Sec. 302.302. ANNUAL RECONCILIATION STATEMENT. (a)
833	833	Pursuant to Section 302.051(c), the provider shall provide an
834	834	annual reconciliation statement of the guaranteed energy savings or
835	835	increase in billable revenues based on the results of the
836	836	measurement and verification review under Section 302.301. The
837	837	statement must disclose any shortfall or surplus between guaranteed
838	838	energy savings or increase in billable revenues specified in the
839	839	energy savings performance contract and actual, not stipulated,
840	840	energy savings incurred during a given guarantee year as described
841	841	by Subsection (b). If the annual reconciliation statement reveals
842	842	an excess actual guaranteed energy savings or excess increase in
843	843	billable revenues in a given year, the surplus may not be used to
844	844	cover any shortfalls in subsequent contract years.
845	845	(b) A guarantee year consists of a 12-month term beginning
846	846	on the date all the energy or water conservation or usage measures
847	847	become fully operational.
848	848	(c) A provider shall pay the local government any shortfall
849	849	amount not later than the 30th day after the date the total year
850	850	energy savings have been determined.
851	851	SECTION 16. Chapter 302, Local Government Code, is amended
852	852	by adding Subchapter H, and a heading is added to that subchapter to
853	853	read as follows:
854	854	SUBCHAPTER H. ENFORCEMENT
855	855	SECTION 17. Section 302.008, Local Government Code, is
856	856	transferred to Subchapter H, Chapter 302, Local Government Code, as
857	857	added by this Act, redesignated as Sections 302.351 and 302.352,
858	858	Local Government Code, and amended to read as follows:
859	859	Sec. 302.351 [302.008]. CONTRACTS VOIDABLE [ENFORCEMENT].
860	860	[(a)] A contract entered into or an arrangement made in violation
861	861	of this chapter is voidable as against public policy.
862	862	Sec. 302.352. DECLARATORY OR INJUNCTIVE RELIEF.
863	863	[(b)] This chapter may be enforced through an action for
864	864	declaratory or injunctive relief filed not later than the 10th day
865	865	after the date the contract is awarded.
866	866	SECTION 18. Subchapter H, Chapter 302, Local Government
867	867	Code, as added by this Act, is amended by adding Sections 302.353,
868	868	302.354, and 302.355 to read as follows:
869	869	Sec. 302.353. VIOLATION OF PERFORMANCE CONTRACT PROVISION
870	870	CONTAINING PROHIBITION AGAINST CONTINGENCY FEES. If a provider
871	871	violates the provision of an energy savings performance contract
872	872	described by Section 302.051(e), the local government may:
873	873	(1) terminate the contract without liability; and
874	874	(2) at the local government's discretion, deduct from
875	875	the contract price, including any finance charges subject to the
876	876	contract, or otherwise recover, the full amount of the fee,
877	877	commission, percentage, gift, or consideration.
878	878	Sec. 302.354. CRIMINAL OFFENSES. (a) In this section,
879	879	"person" means an individual, corporation, association,
880	880	partnership, firm, or company.
881	881	(b) A person, including an employee working for a provider,
882	882	commits an offense if the person offers, agrees, or contracts to
883	883	solicit or secure an energy savings performance contract or
884	884	subcontract related to the contract for any other person and the
885	885	person is paid or to be paid any fee, commission, percentage, gift,
886	886	or other consideration contingent on, or resulting from, the
887	887	awarding or making of an energy savings performance contract.
888	888	(c) A person commits an offense if the person offers to pay,
889	889	or pays, any fee, commission, percentage, gift, or other
890	890	consideration contingent on, or resulting from, the awarding or
891	891	making of an energy savings performance contract.
892	892	(d) A local government official commits an offense if the
893	893	official offers to solicit or secure, or solicits or secures, an
894	894	energy savings performance contract between the local government
895	895	and a person and the official is to be paid, or is paid, any fee,
896	896	commission, percentage, gift, or other consideration contingent on
897	897	the awarding or making of the energy savings performance contract.
898	898	(e) A person who is a local government employee or
899	899	contractor with any influence on the awarding or making of an energy
900	900	savings performance contract commits an offense if the person
901	901	offers to solicit or secure, or solicits or secures, an energy
902	902	savings performance contract and the person is to be paid, or is
903	903	paid, any fee, commission, percentage, gift, or other consideration
904	904	contingent on the awarding or making of an energy savings
905	905	performance contract between the local government and another
906	906	person.
907	907	(f) An offense under this section is a felony of the second
908	908	degree.
909	909	(g) If conduct that constitutes an offense under this
910	910	section also constitutes an offense under another law, including
911	911	money laundering under Chapter 34, Penal Code, the actor may be
912	912	prosecuted under this section, the other law, or both.
913	913	Sec. 302.355. ENFORCEMENT BY ATTORNEY GENERAL AND LOCAL
914	914	PROSECUTOR. With the consent of the appropriate local county or
915	915	district attorney, the attorney general has concurrent
916	916	jurisdiction with that consenting local prosecutor to prosecute an
917	917	offense under Section 302.354.
918	918	SECTION 19. Article 59.01(2), Code of Criminal Procedure,
919	919	is amended to read as follows:
920	920	(2) "Contraband" means property of any nature,
921	921	including real, personal, tangible, or intangible, that is:
922	922	(A) used in the commission of:
923	923	(i) any first or second degree felony under
924	924	the Penal Code;
925	925	(ii) any felony under Section 15.031(b),
926	926	21.11, or 38.04 or Chapter 29, 30, 31, 32, 33, 33A, or 35, Penal
927	927	Code;
928	928	(iii) any felony under Chapter 43, Penal
929	929	Code, except as provided by Paragraph (B);
930	930	(iv) any felony under The Securities Act
931	931	(Title 12, Government Code); or
932	932	(v) any offense under Chapter 49, Penal
933	933	Code, that is punishable as a felony of the third degree or state
934	934	jail felony, if the defendant has been previously convicted three
935	935	times of an offense under that chapter;
936	936	(B) used or intended to be used in the commission
937	937	of:
938	938	(i) any felony under Chapter 481, Health
939	939	and Safety Code (Texas Controlled Substances Act);
940	940	(ii) any felony under Chapter 483, Health
941	941	and Safety Code;
942	942	(iii) a felony under Chapter 152, Finance
943	943	Code;
944	944	(iv) any felony under Chapter 20A or 34,
945	945	Penal Code;
946	946	(v) a Class A misdemeanor under Subchapter
947	947	B, Chapter 365, Health and Safety Code, if the defendant has been
948	948	previously convicted twice of an offense under that subchapter;
949	949	(vi) any felony under Chapter 32, Human
950	950	Resources Code, or Chapter 31, 32, 35A, or 37, Penal Code, that
951	951	involves a health care program, as defined by Section 35A.01, Penal
952	952	Code;
953	953	(vii) a Class B misdemeanor under Chapter
954	954	522, Business & Commerce Code;
955	955	(viii) a Class A misdemeanor under Section
956	956	306.051, Business & Commerce Code;
957	957	(ix) any offense under Section 42.10, Penal
958	958	Code;
959	959	(x) any offense under Section 46.06(a)(1)
960	960	or 46.14, Penal Code;
961	961	(xi) any offense under Chapter 71, Penal
962	962	Code;
963	963	(xii) any offense under Section 20.05,
964	964	20.06, 20.07, 43.04, or 43.05, Penal Code;
965	965	(xiii) an offense under Section 326.002,
966	966	Business & Commerce Code;
967	967	(xiv) any offense under Section 545.420,
968	968	Transportation Code; or
969	969	(xv) any offense punishable under Section
970	970	42.03(d) or (e), Penal Code;
971	971	(C) the proceeds gained from the commission of a
972	972	felony listed in Paragraph (A) or (B) of this subdivision, a
973	973	misdemeanor listed in Paragraph (B)(vii), (ix), (x), (xi), (xii),
974	974	(xiv), or (xv) of this subdivision, or a crime of violence;
975	975	(D) acquired with proceeds gained from the
976	976	commission of a felony listed in Paragraph (A) or (B) of this
977	977	subdivision, a misdemeanor listed in Paragraph (B)(vii), (ix), (x),
978	978	(xi), (xii), (xiv), or (xv) of this subdivision, or a crime of
979	979	violence;
980	980	(E) used to facilitate or intended to be used to
981	981	facilitate the commission of a felony under Section 15.031 or
982	982	Chapter 43, Penal Code; [or]
983	983	(F) used to facilitate or intended to be used to
984	984	facilitate the commission of an offense under Section 20.05, 20.06,
985	985	or 20.07 or Chapter 20A, Penal Code; or
986	986	(G) the proceeds gained from the commission of an
987	987	offense under Section 302.354(b), (c), (d), or (e), Local
988	988	Government Code.
989	989	SECTION 20. Section 44.901, Education Code, is repealed.
990	990	SECTION 21. The changes in law made by this Act apply to a
991	991	contract entered into or amended or modified on or after the
992	992	effective date of this Act. A contract entered into or amended or
993	993	modified before the effective date of this Act is governed by the
994	994	law in effect on the date the contract was entered into or amended
995	995	or modified, and the former law is continued in effect for that
996	996	purpose.
997	997	SECTION 22. This Act takes effect September 1, 2025.