ENGROSSED

COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 2012

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

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[Originating in the Committee on Finance;

reported June 12, 2003.]

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A BILL to amend chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article three-b; to amend and reenact section three-hh, article one, chapter seven of said code; to amend and reenact section eighteen, article twelve, chapter eight of said code; and to amend article one, chapter thirty-one of said code by adding thereto a new section, designated section one hundred sixty-one, all relating to authorizing agencies, county commissions, municipalities and their instrumentalities to enter into performance-based contracts with qualified providers of energy conservation measures for the purpose of reducing energy operating costs of agency buildings; defining terms; setting forth conditions for proposals and contracts; setting terms of leases; allowing counties and municipalities and their instrumentalities as well as organizations under Section 501(c)(3) of the United States Internal Revenue Code to enter into sale-leaseback or like-kind exchange agreements with public and private parties; providing for the disposition of tax exemptions; and providing for insurance.

Be it enacted by the Legislature of West Virginia:
That chapter five-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article three-b; that section three-hh, article one, chapter seven of said code be amended and reenacted; that section eighteen, article twelve, chapter eight of said code be amended and reenacted; and that article one, chapter thirty-one of said code be amended by adding thereto a new section, designated section one hundred sixty-one, all to read as follows:

CHAPTER 5A. DEPARTMENT OF ADMINISTRATION.

ARTICLE 3B. ENERGY-SAVINGS CONTRACTS.
§5A-3B-1. Definitions.
As used in this article:

(a)"Agency" means all state departments, agencies, authorities and all political subdivisions, including cities, counties and boards of education.
(b)"Energy-conservation measures" means goods or services, or both, to reduce energy consumption operating costs of agency facilities. They include, but are not limited to, installation of one or more of the following:
(1)Insulation of a building structure and systems within a building;
(2)Storm windows or doors, caulking or weather stripping, multiglazed windows or doors, heat-absorbing or heat-reflective glazed and coated window or door systems, or other window or door modifications that reduce energy consumption;
(3)Automatic energy control systems;
(4)Heating, ventilating or air conditioning systems, including modifications or replacements;
(5)Replacement or modification of lighting fixtures to increase energy efficiency;
(6)Energy recovery systems;
(7)Cogeneration systems that produce steam or another form of energy for use by any agency in a building or complex of buildings owned by the agency; or
(8)Energy-conservation maintenance measures that provide long-term operating cost reductions of the building's present cost of operation.
(c)"Energy-savings contract" means a contract for the evaluation and recommendation of energy operations conservation measures, and for implementation of one or more measures. The contract shall provide that payments, except obligations upon termination of the contract before its expiration, are to be made over time. Any agency may supplement these payments with federal, state or local funds to reduce the annual cost or to lower the initial amount to be financed.
(d)"Qualified provider" means a person, firm or corporation experienced in the design, implementation and installation of energy-conservation measures.
§5A-3B-2. Contracts for energy-savings contracts.
(a)Agencies may enter into performance-based contracts with qualified providers of energy-conservation measures for the purpose of reducing energy operating costs of agency buildings.
(b)Agencies may enter into an energy-savings contract with a qualified provider to reduce energy operating costs significantly. Before entering into a contract or before the installation of equipment, modifications or remodeling to be furnished under a contract, the qualified provider shall first issue a proposal summarizing the scope of work to be performed. A proposal shall contain estimates of all costs of installation, modifications or remodeling, including the costs of design, engineering, installation, maintenance, repairs or debt service, as well as estimates of the amounts by which energy operating costs will be reduced. If the agency finds, after receiving the proposal, that the proposal includes one or more energy-conservation measures designed to save energy operating costs, the agency may enter into a contract with the provider pursuant to this section.
(c)An energy-savings contract shall include the following:
(1)A guarantee of a specific minimum amount of money that the agency will save in energy operating costs each year during the term of the contract;
(2)A statement of all costs of energy-conservation measures, including the costs of design, engineering, installation, maintenance, repairs and operations.
(d)An energy-savings contract which is performance-based and includes a guarantee of savings and a comprehensive approach of energy-conservation measures for improving comfort is subject to competitive bidding requirements: Provided, That the requirements of article five-a, chapter twenty-one of this code as to prevailing wage rates apply to the construction and installation work performed under a contract.
(e)Agencies may enter into a "lease with an option to purchase" contract for the purchase and installation of energy- conservation measures if the term of the lease does not exceed fifteen years, and the lease contract includes the provisions contained in subsection (f) of this section, and meets federal tax requirements for tax-exempt municipal leasing or long-term financing.
(f)An energy-savings contract may extend beyond the fiscal year in which it first becomes effective: Provided, That the contract may not exceed a fifteen-year term: Provided, however, That the long term contract is void unless the agreement provides that the agency has the option during each fiscal year of the contract to terminate the agreement. The agency may include in its annual budget for each fiscal year any amounts payable under long-term energy-savings contracts during that fiscal year.
CHAPTER 7. COUNTY COMMISSIONS AND OFFICERS.

ARTICLE 1. COUNTY COMMISSIONS GENERALLY.
§7-1-3hh. Authority to lease, sell or dispose of county property to the state, federal government or an instrumentality thereof.

(a)Every county commission, building commission created pursuant to article thirty-three, chapter eight of this code and development authority created pursuant to article twelve of this chapter is authorized to sell, lease as lessor or dispose of any of its real or personal property or any interest therein or any part thereof, as authorized in article five, chapter one of this code, or to the United States of America or any agency or instrumentality thereof, or to the state or any agency or instrumentality thereof, for a public purpose for an adequate consideration, without considering alone the commercial or market value of such the property.
(b)Every county commission, building commission created pursuant to article thirty-three, chapter eight of this code and development authority created pursuant to article twelve of this chapter may also enter into sale-leaseback or like-kind exchange agreements with public or private parties. Real and personal property taxation exemptions, exemptions relating to transfers of real property, exemptions from the payment of business and occupation, franchise and licensing taxes and exemptions from taxation relating to operations or facilities owned, leased or exchanged by a county commission, a county building commission or a county development authority that are set forth elsewhere in this code and available thereto shall not be affected by any transaction in which, for the purpose of obtaining financing, a county commission, a county building commission or a county development authority, directly or indirectly, leases or otherwise transfers the property to a private entity whose property would not otherwise be exempt and immediately thereafter enters into a leaseback or other agreement that, directly or indirectly, gives a county commission, a county building commission or a county development authority the right to use, control and possess the property. Notwithstanding anything in this code to the contrary, the exemptions from taxation described in this subsection available to a county commission, a county building commission or a county development authority shall also be available to any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives a county commission, a county building commission or a county development authority the right to use, control and possess the property. Any real or personal property that is acquired for the benefit of a county commission, a county building commission or a county development authority as provided in this section shall at the time be considered a public improvement and shall be insured against hazards and other liabilities as are similar properties and public improvements. Any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives a county commission, a county building commission or a county development authority the right to use, control and possess the property is exempt from any personal liability relating to the use, control or possession of the property.
(c)A county commission, a county building commission or a county development authority each may enter into performance-based contracts with qualified providers of energy-conservation measures for the purpose of reducing energy operating costs of buildings under the provisions of article three-b, chapter five-a of this code.
CHAPTER 8. MUNICIPAL CORPORATIONS.

ARTICLE 12. GENERAL AND SPECIFIC POWERS, DUTIES AND ALLIED RELATIONS OF MUNICIPALITIES, GOVERNING BODIES AND MUNICIPAL OFFICERS AND EMPLOYEES; SUITS AGAINST MUNICIPALITIES.

§8-12-18. Sale, lease or disposition of other municipal property.
(a)Every municipality, municipal building commission created pursuant to article thirty-three of this chapter and municipal development authority created pursuant to article twelve, chapter seven of this code is authorized to may sell, lease as lessor or dispose of any of its real or personal property or any interest therein or any part thereof (other than a public utility which shall be sold or leased in accordance with the provisions of section seventeen of this article), as authorized in article five, chapter one of this code, or to the United States of America or any agency or instrumentality thereof, or to the state or any agency or instrumentality thereof, for a public purpose for an adequate consideration, without considering alone the present commercial or market value of such the property.
(b)In all other cases involving a sale, any municipality is hereby empowered and authorized to may sell any of its real or personal property or any interest therein or any part thereof for a fair and adequate consideration, the property to be sold at public auction at a place designated by the governing body, but before making any sale, notice of the time, terms and place of sale, together with a brief description of the property to be sold, shall be published as a Class II legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code and the publication area for the publication shall be the municipality. The requirements of notice and public auction shall not apply to the sale of any one item or piece of property of less value than one thousand dollars and under no circumstances shall the provisions of this section be construed as being applicable to any transaction involving the trading in of municipally owned property on the purchase of new or other property for the municipality and every municipality shall have has plenary power and authority to enter into and consummate any trade-in transaction.
(c)In all other cases involving a lease, any municipality is hereby empowered and authorized to may lease as lessor any of its real or personal property or any interest therein or any part thereof for a fair and adequate consideration and for a term not exceeding fifty years. Every lease shall be authorized by resolution of the governing body of the municipality, which resolution may specify terms and conditions which must be contained in such the lease: Provided, That before any proposed lease is authorized by resolution of the governing body, a public hearing on the proposed lease shall be held by the governing body after notice of the date, time, place and purpose of the public hearing has been published as a Class I legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code and the publication area for the publication shall be the municipality. The power and authority granted in this subsection shall be is in addition to, and not in derogation of, any power and authority vested in any municipality under any constitutional or other statutory provision now or hereafter in effect.
(d)Notwithstanding anything in this section to the contrary, every municipality, municipal building commission created pursuant to article thirty-three, chapter eight of this code and development authority created pursuant to article twelve of this chapter may also enter into sale-leaseback or like-kind exchange agreements with public or private parties. Real and personal property taxation exemptions, exemptions relating to transfers of real property, exemptions from the payment of business and occupation, franchise and licensing taxes and exemptions from taxation relating to operations or facilities owned, leased or exchanged by a municipality, a municipal building commission or a municipal development authority that are set forth elsewhere in this code and available thereto shall not be affected by any transaction in which, for the purpose of obtaining financing, a municipality, a municipal building commission or a municipal development authority, directly or indirectly, leases or otherwise transfers the property to a private entity whose property would not otherwise be exempt and immediately thereafter enters into a leaseback or other agreement that, directly or indirectly, gives a municipality, a municipal building commission or a municipal development authority the right to use, control and possess the property. Notwithstanding anything in this code to the contrary, the exemptions from taxation described in this subsection available to a municipality, a municipal building commission or a municipal development authority shall also be available to any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives a municipality, a municipal building commission or a municipal development authority the right to use, control and possess the property. Any real or personal property that is acquired for the benefit of a municipality, a municipal building commission or a municipal development authority as provided in this section shall at the time be considered a public improvement and shall be insured against hazards and other liabilities as are similar properties and public improvements. Any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives a municipality, a municipal building commission or a municipal development authority the right to use, control and possess the property is exempt from any personal liability relating to the use, control or possession of the property.
(e)A municipality, a municipal building commission or a municipal development authority each may enter into performance-based contracts with qualified providers of energy-conservation measures for the purpose of reducing energy operating costs of buildings under the provisions of article three-b, chapter five-a of this code.
CHAPTER 31. CORPORATIONS.

ARTICLE 1. BUSINESS AND NONPROFIT CORPORATIONS.


 §31-1-161. Sale, lease or disposition of real property.
(a)In addition to any other powers enumerated in this article, any organization that is an organization under section 501(c)(3) of the United States Internal Revenue Code may enter into sale-leaseback or like-kind exchange agreements with public or private parties. Real and personal property taxation exemptions, exemptions relating to transfers of real property, exemptions from the payment of business and occupation, franchise and licensing taxes and exemptions from taxation relating to operations or facilities owned, leased or exchanged by an organization that is an organization under section 501(c)(3) of the United States Internal Revenue Code that are set forth elsewhere in this code and available thereto shall not be affected by any transaction in which, for the purpose of obtaining financing, the organization, directly or indirectly, leases or otherwise transfers the property to a private entity whose property would not otherwise be exempt and immediately thereafter enters into a leaseback or other agreement that, directly or indirectly, gives the organization authority the right to use, control and possess the property. Notwithstanding anything in this code to the contrary, the exemptions from taxation described in this subsection available to an organization that is an organization under section 501(c)(3) of the United States Internal Revenue Code shall also be available to any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives the organization the right to use, control and possess the property. Any real or personal property that is acquired for the benefit of an organization under section 501(c)(3) of the United States Internal Revenue Code as provided in this section shall at the time be considered a public improvement and shall be insured against hazards and other liabilities as are similar properties and public improvements. Any private entity that is a party to a leaseback, exchange or other agreement that, directly or indirectly, gives an organization under section 501(c)(3) of the United States Internal Revenue Code the right to use, control and possess the property is exempt from any personal liability relating to the use, control or possession of the property.