GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 100*

Short Title:  Local Energy Savings Contracts.	(Public)
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Sponsors: Representatives Bowman, Bowen, Brawley, Brubaker, Jeffus, Luebke, and Stewart. 
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Referred to:  Environment.
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February 10, 1993

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE UNITS OF LOCAL GOVERNMENT, LOCAL SCHOOL BOARDS, AND COMMUNITY COLLEGES TO ENTER INTO GUARANTEED ENERGY SAVINGS CONTRACTS IN ORDER TO FINANCE ENERGY CONSERVATION MEASURES IN LOCAL PUBLIC FACILITIES.
The General Assembly of North Carolina enacts:
Section 1.  The title of Article 3B of Chapter 143 of the General Statutes reads as rewritten:
"Energy Conservation in Public Facilities."
Sec. 2.  Existing Article 3B of Chapter 143 of the General Statutes is designated as Part 1 of that Article, to be entitled "Energy Policy on Public Buildings and Life Cycle Cost Analysis."
Sec. 3.  G.S. 143-64.14 reads as rewritten:
"§ 143-64.14.  Application of Part.
The provisions of this Part shall not apply to municipalities or counties, nor to any agency or department of any municipality or county; provided, however, this Part shall apply to any board of a community college.  Community college is defined in G.S. 115D-2(2)."
Sec. 4.  Article 3B of Chapter 143 of the General Statutes is amended by adding a new Part to read:
"Part 2.  Guaranteed Energy Savings Contracts for Local Governmental Units.
"§ 143-64.18.  Definitions.
As used in this Part:
(1)	'Energy conservation measure' means a facility alteration or training related to the operation of the facility that reduces energy consumption or operating costs and includes:
a.	Insulation of the building structure and systems within the building;
b.	Storm windows or doors, caulking, weatherstripping, multiglazed windows or doors, heat-absorbing or heat-reflective glazed or coated window or door systems, additional glazing, reductions in glass area, or other window or door system modifications that reduce energy consumption;
c.	Automatic energy control systems;
d.	Heating, ventilating, or air conditioning system modifications or replacements;
e.	Replacement or modification of lighting fixtures to increase the energy efficiency of a lighting system without increasing the overall illumination of a facility, unless an increase in illumination is necessary to conform to the applicable State or local building code or the light system after the proposed modifications are made;
f.	Energy recovery systems;
g.	Cogeneration systems that produce steam or forms of energy such as heat, as well as electricity, for use primarily within a building or complex of buildings; or
h.	Other energy conservation measures that provide long-term operating cost reductions or significantly reduce energy consumed.
(2)	'Energy savings' means a measured reduction in fuel, energy, or operating costs created from the implementation of one or more energy conservation measures when compared with an established baseline of previous fuel, energy, or operating costs.
(3)	'Guaranteed energy savings contract' means a contract for the evaluation, recommendation, or implementation of energy conservation measures, including the design and installation of equipment or the repair or replacement of existing equipment, in which all payments, except obligations on termination of the contract before its expiration, are to be made over time, and in which energy savings are guaranteed to exceed costs.
(4)	'Local governmental unit' means any board or governing body of a political subdivision of the State, including any board of a community college, any school board, or an agency, commission, or authority of a political subdivision of the State.
(5)	'Qualified provider' means a person or business experienced in the design, implementation, and installation of energy conservation measures.
(6)	'Request for proposals' means a negotiated procurement initiated by a local governmental unit by way of a published notice that includes the following:
a.	The name and address of the local governmental unit.
b.	The name, address, title, and telephone number of a contract person in the local governmental unit.
c.	Notice indicating that the local governmental unit is requesting qualified providers to propose energy conservation measures through a guaranteed energy savings contract.
d.	The date, time, and place where proposals must be received.
e.	The evaluation criteria for assessing the proposals.
f.	A statement reserving the right of the local governmental unit to reject any or all such proposals.
g.	Any other stipulations and clarifications the local governmental unit may require.
"§ 143-64.19.  Solicitation of guaranteed energy savings contracts.
(a)	Before entering into a guaranteed energy savings contract, the primary purpose of which is to save energy through the purchase, repair, or improvement of real property, a local governmental unit shall issue a request for proposals.  Notice of the request shall be published at least one week in advance of the time specified for opening of the proposals in at least one newspaper of general circulation in the geographic area for which the local governmental unit is responsible.
(b)	The local governmental unit shall evaluate a sealed proposal from any qualified provider.  Proposals shall contain estimates of all costs of installation, modification, or remodeling, including costs of design, engineering, installation, maintenance, repairs, or debt service, and estimates of energy savings.
(c)	Proposals received pursuant to this section shall be opened by a member or employee of the governing body of the local governmental unit at a public opening at which the contents of the proposals shall be announced and recorded in the minutes of the governing body.  Proposals shall be evaluated for the local governmental unit by a licensed architect or engineer on the basis of:
(1)	The information required in subsection (b) of this section; and
(2)	The criteria stated in the request for proposals.
The local governmental unit may include any reasonable fee for evaluation of the proposal as part of the payments made under the guaranteed energy savings contract.
(d)	The local governmental unit shall select the qualified provider that it determines to best meet the needs of the local governmental unit.
(e)	Nothing in this section shall limit the authority of local governmental units as set forth in Article 3D of Chapter 143 of the General Statutes.
"§ 143-64.20.  Guaranteed energy savings contracts.
(a)	A local governmental unit may enter into a guaranteed energy savings contract with a qualified provider if:
(1)	The term of the contract does not exceed 10 years from the date of the installation and acceptance by the local governmental unit of the energy conservation measures provided for under the contract; and
(2)	The local governmental unit finds that the energy savings resulting from the performance of the contract will equal or exceed the total cost of the contract.
(b)	Before entering into a guaranteed energy savings contract, the local governmental unit shall provide published notice of the meeting at which it proposes to award the contract, the names of the parties to the proposed contract, and the contract's purpose.
(c)	A qualified provider entering into a guaranteed energy savings contract under this Part shall provide a bond to the local governmental unit in the amount equal to one hundred percent (100%) of the amount of the guaranteed energy savings contract to assure the provider's faithful performance.  Any bonds required by this subsection shall be subject to the provisions of Article 3 of Chapter 44A of the General Statutes.
(d)	As used in this section, 'total cost' shall include, but not be limited to, costs of construction, costs of financing, and costs of maintenance and training during the term of the contract.  'Total cost' does not include any obligations on termination of the contract before its expiration.
"§ 143-64.21.  Installment and lease-purchase contracts.
Units of local government may contract for the installation or purchase of energy conservation measures pursuant to the provisions of G.S. 160A-20.  Notwithstanding the provisions of G.S. 160A-20(h), any community college or board of education may enter into an installment or lease-purchase contract for the purpose of financing a guaranteed energy savings contract.
"§ 143-64.22.  Contract continuance.
  A guaranteed energy savings contract may extend beyond the fiscal year in which it becomes effective.  Such a contract shall stipulate that it does not constitute a debt, liability, or obligation of any local governmental unit or a pledge of the faith and credit of any unit of local government.
"§ 143-64.23.  Payments under contract.
A local governmental unit may use funds designated for operating or capital expenditures for any guaranteed energy savings contract, including purchases using installment payment contracts.  State aids or appropriations to any local governmental unit shall not be reduced as a result of energy savings occurring as a result of a guaranteed energy savings contract."
Sec. 5.  Article 8 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-129.4.  Guaranteed energy savings contracts.
The letting of guaranteed energy savings contracts, as defined in Part 2 of Article 3B of this Chapter, shall be subject to the provisions of that Part."
Sec. 6.  G.S. 115C-47 is amended by adding a new subdivision to read:
"(28a)	To Enter Guaranteed Energy Savings Contracts for Energy Conservation Measures. – Local boards may purchase energy conservation measures by guaranteed energy savings contracts pursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes."
Sec. 7.  G.S. 115C-521(c) reads as rewritten:
"(c)	The building of all new schoolhouses and the repairing of all old schoolhouses shall be under the control and direction of, and by contract with, the board of education in which such building and repairing is done.  Boards of education shall not invest any money in any new building that is not built in accordance with plans approved by the State Superintendent to structural and functional soundness, safety and sanitation, nor contract for more money than is made available for its erection. However, this subsection shall not be construed so as to prevent boards of education from investing any money in buildings that are being constructed pursuant to a continuing contract of construction as provided for in G.S. 115C-441(c1).  All contracts for buildings shall be in writing and all buildings shall be inspected, received, and approved by the local superintendent and the architect before full payment is made therefor: Provided, that this subsection shall not prohibit boards of education from repairing and altering buildings with the help of janitors and other regular employees of said board.
In the design and construction of new school facilities and in the repair and renovation of existing school facilities, the local board of education shall consider the placement of windows to use the climate of North Carolina for both light and ventilation in case of power shortages. A local board shall also consider the installation of solar energy systems in the school facilities whenever practicable.  Local school boards may enter into guaranteed energy savings contracts for the evaluation, recommendation, or implementation of energy conservation measures in existing school facilities pursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes.
In the case of any school buildings erected, repaired, or equipped with any money loaned or granted by the State to any local school administrative unit, the State Board of Education, under such rules as it may deem advisable, may retain any amount not to exceed fifteen percent (15%) of said loan or grant, until such completed buildings, erected or repaired, in whole or in part, from such loan or grant funds, shall have been approved by a designated agent of the State Board of Education.
Upon such approval by the State Board of Education, the State Treasurer is authorized to pay the balance of the loan or grant to the treasurer of the local school administrative unit for which said loan or grant was made."
Sec. 8.  G.S. 115D-20 is amended by adding a new subdivision to read:
"(10)	To enter into guaranteed energy savings contracts pursuant to Part 2 of Article 3B of Chapter 143 of the General Statutes."
Sec. 9.  This act is effective upon ratification.