First Regular Session

Sixty-first General Assembly

LLS NO. 97­0607.01 DLC HOUSE BILL 97­1285

STATE OF COLORADO

BY REPRESENTATIVE Sullivant

STATE, VETERANS &

MILITARY AFFAIRS

APPROPRIATIONS

A BILL FOR AN ACT

CONCERNING ENERGY CONSERVATION MEASURES THAT MAY BE FINANCED BY STATE AGENCIES, AND MAKING AN APPROPRIATION THEREFOR.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Permits a state agency to enter into a contract for an analysis and recommendations pertaining to energy conservation and energy conservation measures that would significantly increase energy cost savings, utility cost savings, and operation and maintenance cost savings in buildings or other facilities owned or rented by the state agency. Requires approval of such contracts by the state personnel director.

Allows a state agency to enter into an energy performance contract if the energy analysis and recommendations indicate that annual payments for energy conservation measures are expected to equal to or be less than the sum of energy, utility, and operation and maintenance cost savings achieved by implementation of such measures and the state personnel director approves such analysis and recommendations. Requires the imposition of a surcharge under such contracts in the amount of 2% of the total amount of payments due, payable by the person or entity contracting with the state agency.

Permits an energy performance contract to include a lease­purchase agreement or other authorized financing agreements. Exempts such a lease­purchase agreement from legislative authorization requirements. Exempts such contracts from statutory requirements related to construction contracts with public entities and construction bidding for public projects.

Allows any savings realized from an energy performance contract to be transferred by the state agency from a utilities item of appropriation to an operating expense item. Provides that such a contract shall not constitute or give rise to an indebtedness within the meaning of any constitutional or statutory debt limitation.

Establishes the energy performance contracting fund and describes those moneys that shall be credited to such fund. Describes the permissible expenditures from the fund, including payments for contract fees for energy cost savings analysis and recommendations contracts and for contract payments for energy savings measures. Makes an appropriation of $500,000 to such fund.

Specifies that intradepartmental transfers from a utilities item appropriation may be made to an operating expense item.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  Article 30 of title 24, Colorado Revised Statutes, 1988 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW PART to read:

PART 20

ENERGY CONSERVATION MEASURES

24­30­2001.  Definitions. AS USED IN THIS PART 20, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "ENERGY CONSERVATION MEASURE" MEANS AN INSTALLATION OR MODIFICATION OF AN INSTALLATION IN OR UPON OR A REMODELING OF A BUILDING OR OTHER FACILITY TO REDUCE ENERGY CONSUMPTION AND INCLUDES, BUT IS NOT LIMITED TO, THE FOLLOWING:

(a)  INSULATION IN WALLS, ROOFS, FLOORS, AND FOUNDATIONS;

(b)  HEATING, VENTILATING, OR AIR CONDITIONING SYSTEM MODIFICATIONS OR REPLACEMENTS;

(c)  AUTOMATIC ENERGY CONTROL SYSTEMS;

(d)  REPLACEMENT OR MODIFICATION OF LIGHTING FIXTURES;

(e)  ENERGY RECOVERY SYSTEMS;

(f)  RENEWABLE ENERGY SYSTEMS;

(g)  COGENERATION SYSTEMS THAT PRODUCE STEAM OR FORMS OF ENERGY, SUCH AS HEAT OR ELECTRICITY, FOR USE PRIMARILY WITHIN A BUILDING OR COMPLEX OF BUILDINGS;

(h)  DEVICES THAT REDUCE WATER CONSUMPTION OR SEWER CHARGES;

(i)  CHANGES IN OPERATION AND MAINTENANCE PRACTICES;

(j)  ANY OTHER INSTALLATION, MODIFICATION OF INSTALLATION, OR REMODELING APPROVED AS AN ENERGY CONSERVATION MEASURE BY THE STATE PERSONNEL DIRECTOR.

(2)  "ENERGY COST SAVINGS" MEANS A COST SAVINGS CAUSED BY A REDUCTION IN METERED OR MEASURED PHYSICAL QUANTITIES OF A BULK FUEL OR UTILITY RESULTING FROM THE IMPLEMENTATION OF ONE OR MORE ENERGY CONSERVATION MEASURES WHEN COMPARED WITH AN ESTABLISHED BASELINE OF USAGE.

(3)  "ENERGY PERFORMANCE CONTRACT" MEANS A CONTRACT FOR ONE OR MORE ENERGY CONSERVATION MEASURES DESIGNED TO PRODUCE ENERGY COST SAVINGS, UTILITY COST SAVINGS, OR OPERATION AND MAINTENANCE COST SAVINGS, WHICH CONTRACT:

(a)  SETS FORTH SAVINGS ATTRIBUTABLE TO THE CALCULATED ENERGY COST SAVINGS, UTILITY COST SAVINGS, OR OPERATION AND MAINTENANCE COST SAVINGS FOR EACH YEAR DURING THE CONTRACT PERIOD;

(b)  PROVIDES THAT THE AMOUNT OF ACTUAL SAVINGS FOR EACH YEAR DURING THE CONTRACT PERIOD SHALL EXCEED ANNUAL CONTRACT PAYMENTS, INCLUDING MAINTENANCE COSTS, TO BE MADE DURING SUCH YEAR BY THE STATE AGENCY CONTRACTING FOR THE ENERGY CONSERVATION MEASURES;

(c)  REQUIRES THE PARTY ENTERING INTO SUCH CONTRACT WITH THE STATE AGENCY TO PROVIDE A WRITTEN GUARANTEE THAT THE SUM OF ENERGY COST SAVINGS, UTILITY COST SAVINGS, AND OPERATION AND MAINTENANCE COST SAVINGS FOR EACH YEAR DURING THE CONTRACT PERIOD SHALL NOT BE LESS THAN THE CALCULATED SAVINGS FOR THAT YEAR DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (3);

(d)  REQUIRES SUCH PARTY TO DEPOSIT WITH THE STATE AGENCY AN AMOUNT OF MONEY OR OTHER GUARANTEE DETERMINED NECESSARY BY THE STATE AGENCY TO ASSURE CONTRACT PAYMENTS TO SUCH PARTY DURING ANY ONE YEAR OF THE CONTRACT.

(4)  "OPERATION AND MAINTENANCE COST SAVINGS" MEANS A MEASURABLE DECREASE IN OPERATION AND MAINTENANCE COSTS THAT IS A DIRECT RESULT OF THE IMPLEMENTATION OF ONE OR MORE ENERGY CONSERVATION MEASURES. SUCH SAVINGS SHALL BE CALCULATED IN COMPARISON WITH AN ESTABLISHED BASELINE OF OPERATION AND MAINTENANCE COSTS.

(5)  "STATE AGENCY" MEANS A DEPARTMENT OR INSTITUTION OF THIS STATE, INCLUDING INSTITUTIONS OF HIGHER EDUCATION.

(6)  "UTILITY COST SAVINGS" MEANS A DECREASE IN UTILITY COSTS AS A RESULT OF CHANGES IN APPLICABLE UTILITY RATES OR UTILITY SERVICE SUPPLIERS. SUCH SAVINGS SHALL BE CALCULATED IN COMPARISON WITH AN ESTABLISHED BASELINE OF UTILITY COSTS.

24­30­2002.  Contracts for energy analysis and recommendations. (1)  SUBJECT TO SUBSECTION (2) OF THIS SECTION, A STATE AGENCY MAY CONTRACT WITH ANY ENTITY OR PERSON EXPERIENCED IN THE DESIGN AND IMPLEMENTATION OF ENERGY CONSERVATION FOR AN ENERGY ANALYSIS AND RECOMMENDATIONS PERTAINING TO SUCH MEASURES THAT WOULD SIGNIFICANTLY INCREASE ENERGY COST SAVINGS, UTILITY COST SAVINGS, AND OPERATION AND MAINTENANCE COST SAVINGS IN BUILDINGS OR OTHER FACILITIES OWNED OR RENTED BY THE STATE AGENCY.

(2)  THE STATE PERSONNEL DIRECTOR MAY AUTHORIZE A STATE AGENCY TO ENTER INTO SUCH A CONTRACT. SUCH CONTRACT SHALL BE NEGOTIATED BY THE STATE AGENCY PURSUANT TO THE NEGOTIATION REQUIREMENTS DESCRIBED IN PART 14 OF THIS ARTICLE; EXCEPT THAT DIRECT, INDIRECT, OVERHEAD, AND OTHER COSTS AND RATES MAY BE SOLICITED AND CONSIDERED IN THE EVALUATION OF QUALIFICATIONS AND INCLUDED IN ANY RESULTING CONTRACT. THE CONTRACT MAY INCLUDE PROVISIONS THAT DEFINE THE RATE, AMOUNT, AND NATURE OF COSTS THAT MAY BE PROPOSED IN ANY SUBSEQUENT ENERGY PERFORMANCE CONTRACT, THAT DESCRIBE THE CONTENT OF THE ANALYSIS, AND THAT RESERVE THE OPTION OF THE STATE AGENCY TO NEGOTIATE A SUITABLE ENERGY PERFORMANCE CONTRACT WITH SUCH PERSON OR ENTITY.

(3)  PAYMENT BY A STATE AGENCY FOR SUCH AN ANALYSIS AND RECOMMENDATIONS MAY BE MADE FROM MONEYS APPROPRIATED TO THE STATE AGENCY FOR OPERATING EXPENSES OR UTILITIES, OR FROM THE ENERGY PERFORMANCE CONTRACTING FUND, AS PROVIDED IN SECTION 24­30­2004.

24­30­2003.  Energy performance contracts. (1)  A STATE AGENCY MAY ENTER INTO AN ENERGY PERFORMANCE CONTRACT WITH ANY PERSON OR ENTITY EXPERIENCED IN THE DESIGN AND IMPLEMENTATION OF ENERGY CONSERVATION MEASURES FOR BUILDINGS OR OTHER FACILITIES OR WITH THE ENTITY OR PERSON WHO PERFORMED THE ENERGY ANALYSIS AND RECOMMENDATIONS PURSUANT TO SECTION 24­30­2002 IF:

(a)  SUCH ENERGY ANALYSIS AND RECOMMENDATIONS INDICATE THAT THE EXPECTED ANNUAL PAYMENTS REQUIRED UNDER THE CONTRACT, AND ANY ADDITIONAL MAINTENANCE COSTS FOR ONE OR MORE ENERGY CONSERVATION MEASURES, ARE EXPECTED TO BE EQUAL TO OR LESS THAN THE SUM OF THE ENERGY COST SAVINGS, UTILITY COST SAVINGS, AND OPERATION AND MAINTENANCE COST SAVINGS ACHIEVED BY THE IMPLEMENTATION OF SUCH MEASURES ON AN ANNUAL BASIS; AND

(b)  THE STATE PERSONNEL DIRECTOR, PURSUANT TO CRITERIA CONTAINED IN PROCEDURES ESTABLISHED BY SUCH DIRECTOR, APPROVES SUCH ANALYSIS AND RECOMMENDATIONS.

(2)  AN ENERGY PERFORMANCE CONTRACT SHALL ASSESS A SURCHARGE IN AN AMOUNT EQUAL TO TWO PERCENT OF THE TOTAL AMOUNT OF ALL PAYMENTS REQUIRED UNDER SUCH CONTRACT. SUCH SURCHARGE SHALL BE PAID BY THE PERSON OR ENTITY CONTRACTING WITH THE STATE AGENCY WITHIN __ DAYS AFTER THE FINAL INSTALLATION OF THE ENERGY CONSERVATION MEASURES REQUIRED BY SUCH CONTRACT. SUCH SURCHARGE SHALL BE DEPOSITED IN AND CREDITED TO THE ENERGY PERFORMANCE CONTRACTING FUND CREATED IN SECTION 24­30­2004.

(3) (a)  EXCEPT AS PROVIDED IN PARAGRAPH (b) OF THIS SUBSECTION (3), SUCH A CONTRACT SHALL BE NEGOTIATED BY THE STATE AGENCY PURSUANT TO THE NEGOTIATION REQUIREMENTS DESCRIBED IN PART 14 OF THIS ARTICLE.

(b)  THE NEGOTIATION REQUIREMENTS DESCRIBED IN PART 14 OF THIS ARTICLE AND ANY OTHER STATE COMPETITIVE BIDDING OR PROCUREMENT PROVISION SHALL NOT APPLY TO A STATE AGENCY THAT ENTERS INTO AN ENERGY PERFORMANCE CONTRACT WITH THE ENTITY OR PERSON WHO PERFORMED THE ENERGY ANALYSIS FOR AND MADE RECOMMENDATIONS TO THE STATE AGENCY PURSUANT TO SECTION 24­30­2002.

(4)  AN ENERGY PERFORMANCE CONTRACT MAY INCLUDE APPROPRIATE LEASE­PURCHASE OR OTHER AUTHORIZED FINANCING AGREEMENTS.

(5)  THE LEGISLATIVE AUTHORIZATION REQUIRED BY SECTION 24­82­801 (2) SHALL NOT APPLY TO A LEASE­PURCHASE AGREEMENT IN AN ENERGY PERFORMANCE CONTRACT, AND NO SUBSEQUENT LEGISLATIVE AUTHORIZATION SHALL BE REQUIRED FOR ANY PAYMENT MADE PURSUANT TO SUCH AN AGREEMENT.

(6)  PAYMENTS BY A STATE AGENCY REQUIRED UNDER AN ENERGY PERFORMANCE CONTRACT MAY BE MADE FROM MONEYS APPROPRIATED TO THE STATE AGENCY FOR OPERATING EXPENSES OR UTILITIES, OR FROM THE ENERGY PERFORMANCE CONTRACTING FUND, AS PROVIDED IN SECTION 24­30­2004.

(7)  THE PROVISIONS OF ARTICLES 91 AND 92 OF THIS TITLE SHALL NOT APPLY TO ENERGY PERFORMANCE CONTRACTS.

(8)  ENERGY PERFORMANCE CONTRACTS SHALL BE SUBJECT ONLY TO THE SUPERVISORY PROVISIONS OF PART 13 OF THIS ARTICLE; EXCEPT THAT LEGISLATIVE REPORTING AND COORDINATION REQUIREMENTS SHALL NOT APPLY TO ENERGY PERFORMANCE CONTRACTS PAID FROM THE ENERGY PERFORMANCE CONTRACTING FUND.

(9)  ALL MONEYS AVAILABLE AS A RESULT OF ENERGY PERFORMANCE CONTRACT SAVINGS THAT ARE IN EXCESS OF THE ANNUAL CALCULATED SAVINGS BY SUCH CONTRACT MAY BE UTILIZED AS PROVIDED IN SECTION 24­75­108 (3).

(10)  NO ENERGY PERFORMANCE CONTRACT ENTERED INTO OR INDEBTEDNESS INCURRED PURSUANT TO THIS PART 20 SHALL CONSTITUTE OR GIVE RISE TO AN INDEBTEDNESS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION.

(11)  THE STATE PERSONNEL DIRECTOR MAY ESTABLISH PROCEDURES CONTAINING CRITERIA FOR AUTHORIZATION OF ENERGY PERFORMANCE CONTRACTS.

24­30­2004.  Energy performance contracting fund. (1)  THERE IS HEREBY ESTABLISHED IN THE STATE TREASURY THE ENERGY PERFORMANCE CONTRACTING FUND, WHICH FUND SHALL BE CREDITED WITH THE FOLLOWING:

(a)  SUCH APPROPRIATIONS AS THE GENERAL ASSEMBLY MAY MAKE FROM THE GENERAL FUND FOR THE PURPOSES OF THIS PART 20;

(b)  ALL MONEYS RECEIVED FROM A SURCHARGE ASSESSED PURSUANT TO SECTION 24­30­2003;

(c)  ALL DONATIONS OR OTHER AUTHORIZED CONTRIBUTIONS TO THE FUND FROM PUBLIC OR PRIVATE ENTITIES; AND

(d)  ALL INTEREST EARNED ON SUCH MONEYS.

(2)  THE MONEYS IN THE FUND SHALL BE CONTINUOUSLY APPROPRIATED TO THE DEPARTMENT OF PERSONNEL FOR THE PURPOSES OF THIS PART 20. ANY MONEYS NOT EXPENDED AT THE END OF THE FISCAL YEAR SHALL REMAIN IN THE FUND AND SHALL NOT BE TRANSFERRED TO OR REVERT TO THE GENERAL FUND OF THE STATE. ALL MONEYS IN THE ENERGY PERFORMANCE CONTRACTING FUND SHALL NOT BE DEPOSITED IN OR TRANSFERRED TO THE GENERAL FUND OR ANY OTHER FUND, EXCEPT AS PERMITTED IN THIS SECTION FOR THE PURPOSE OF CAPITAL MAINTENANCE PROJECTS FUNDED OUT OF ENERGY COST SAVINGS.

(3)  EXPENDITURES FROM THE FUND MUST BE APPROVED BY THE STATE PERSONNEL DIRECTOR. EXPENDITURES FROM THE FUND MAY BE AUTHORIZED FOR:

(a)  PAYMENT OF CONTRACT FEES FOR ENERGY ANALYSIS AND RECOMMENDATIONS CONTRACTS;

(b)  PAYMENT OF MAINTENANCE AND REPAIR OBLIGATIONS PRESCRIBED BY AN ENERGY PERFORMANCE CONTRACT;

(c)  PAYMENTS UNDER AN ENERGY PERFORMANCE CONTRACT FOR ENERGY CONSERVATION MEASURES;

(d)  OTHER PAYMENTS NECESSARY TO EFFECTUATE THE PURPOSES OF AN ENERGY PERFORMANCE CONTRACT.

(4)  EXPENDITURES MAY BE MADE FROM THE FUND FOR THE PAYMENT OF REASONABLE COSTS OF THE DEPARTMENT OF PERSONNEL IN ADMINISTERING THIS PART 20.

24­30­2005.  Appropriation to energy performance contracting fund ­ repeal. (1)   IN ADDITION TO ANY OTHER APPROPRIATION, THERE IS HEREBY APPROPRIATED, OUT OF ANY MONEYS IN THE GENERAL FUND NOT OTHERWISE APPROPRIATED, TO THE ENERGY PERFORMANCE CONTRACTING FUND CREATED UNDER SECTION 24­30­2004 THE SUM OF FIVE HUNDRED THOUSAND DOLLARS ($500,000), OR SO MUCH THEREOF AS MAY BE NECESSARY, FOR THE PURPOSE OF IMPLEMENTING THIS PART 20. THE MONEYS APPROPRIATED BY THIS SECTION SHALL BECOME AVAILABLE UPON THE PASSAGE OF THIS PART 20 AND SHALL REMAIN AVAILABLE THROUGH JUNE 30, 1998.

(2)  THIS SECTION IS REPEALED, EFFECTIVE JULY 1, 1998.

SECTION 2.  24­75­108 (3) and (8), Colorado Revised Statutes, 1988 Repl. Vol., as amended, are amended to read:

24­75­108. Intradepartmental transfers between appropriations ­ repeal. (3) (a)  Transfers within a principal department from an operating expense item to a utilities item, from an operating expense item to a leased space item, or from a utilities item to a utilities item, which are made on or after May 1 and before the forty­fifth day after the close of each fiscal year, shall be deemed to be between like purposes within the meaning of subsection (1) of this section.

(b)  ANY SAVINGS REALIZED IN A UTILITIES ITEM RESULTING FROM AN ENERGY PERFORMANCE CONTRACT PURSUANT TO SECTION 24­30­2003 MAY BE TRANSFERRED TO AN OPERATING EXPENSE ITEM.

(8)  The total amount of moneys transferred between items of appropriation made to principal departments of state government and to the office of the governor pursuant to this section, other than transfers within a principal department from an operating expense item to a utilities item, FROM A UTILITIES ITEM TO AN OPERATING EXPENSE ITEM PURSUANT TO PARAGRAPH (b) OF SUBSECTION (3) OF THIS SECTION, or from a utilities item to a utilities item, shall not exceed two million dollars.

SECTION 3.  Effective date.  This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.