ENGROSSED

H. B. 222


(By Mr. Speaker, Mr. Kiss, and Delegate Trump)

[By Request of the Executive]

[Introduced June 11, 2003.]




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 3-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; 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, county building commissions, and county development authorities to enter into performance-based contracts with qualified providers of energy-conservation measures for the purpose of reducing energy operating costs of agency buildings; authorizing counties and their instrumentalities to enter into sale leaseback arrangements; exemptions available to private entity who is a party to the leaseback; leasebacks to be considered public improvements; personal liability of a private entity who is a party to a leaseback; specifying county commission and county building commission interest in real property; relating to municipality, municipal building commission and municipal development authority interest in real property; relating to the interest in real property of organizations that are organizations under section 501(c)(3) of the United States Internal Revenue Code; and tax exemption of section 501(c)(3) organizations not affected by leasebacks.

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, 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 any state department, division, office, commission, authority, board or other unit authorized by law to
enter into contracts for the provision of goods or services;
(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 performance-based contract for the evaluation and recommendation of energy operations conservation measures, and for implementation of one or more measures.

(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 are authorized to enter into performance-based contracts with qualified providers of energy-conservation measures for the purpose of significantly reducing energy operating costs of agency owned buildings, subject to the requirements of this section.

(b) 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 must 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, the installation of which is guaranteed to result in a net savings of a minimum of five percent of the then current energy operating costs which savings will, at a minimum, satisfy any debt service required, the agency may enter into a contract with the provider pursuant to this section.
(c) An energy-savings contract must include the following:

(1) A guarantee of a specific minimum net percentage amount of at least five percent of energy operating costs each year over the term of the contract that the agency will save;

(2) A statement of all costs of energy-conservation measures, including the costs of design, engineering, installation, maintenance, repairs and operations; and

(3) A provision that payments, except obligations upon termination of the contract before its expiration, are to be made over time.

(d) An agency may supplement its payments with federal, state or local funds to reduce the annual cost or to lower the initial amount to be financed.

(e) An energy-savings contract is subject to competitive bidding requirements and other requirements of article three of
this chapter.
(f) An energy-savings contract may extend beyond the fiscal year in which it first becomes effective: Provided, That such a contract may not exceed a fifteen year term: Provided, however, That the long term contract will be void unless the agreement provides that the agency shall have the option during each fiscal year of the contract to terminate the agreement.

(g) 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.

(h) 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.

(i) Upon the issuance of an request for proposals or request for quotations for an energy savings contract, the agency shall provide a copy thereof to the joint committee on government and finance.

(j) Before signing an energy-savings contract or extending an
existing energy savings contract, the agency shall give thirty days written notice, which notice shall include a copy of the proposal containing the information required by subsection (b) of this section, to the joint committee on government and finance.

 Delegate Michael moves to amend the title of the bill to read as follows:

H. B. 222 -- "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, relating to authorizing state agencies to enter into performance-based contracts with qualified providers of energy- conservation measures for the purpose of reducing energy operating costs of agency owned buildings."