AN ACT TO provide that any energy savings realized by constituent institutions of the university of north carolina shall remain available to the institution and a portion of those energy savings shall be used for other energy conservation measures; and to expand the use of operational leases by local boards of education.

The General Assembly of North Carolina enacts:

SECTION 1.  Article 1 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑30.3B.  Energy conservation savings.
(a)	In addition to the funds carried forward under G.S. 116‑30.3, the General Fund current operations appropriations credit balance remaining at the end of each fiscal year for utilities of a constituent institution that is energy savings realized from implementing an energy conservation measure shall be carried forward by the institution to the next fiscal year. Sixty percent (60%) of the energy savings realized shall be utilized for energy conservation measures by that institution. The use of funds under this section shall be limited to onetime capital and operating expenditures that will not impose additional financial obligations on the State. The Director of the Budget, under the authority set forth in G.S. 143C‑6‑2, shall establish the General Fund current operations credit balance remaining in each budget code of each institution.
(b)	The Director of the Budget shall not decrease the recommended continuation budget requirements for utilities for constituent institutions by the amount of energy savings realized from implementing energy conservation measures, including savings achieved through a guaranteed energy savings contract.
(c)	Constituent institutions shall submit annual reports on the use of funds authorized pursuant to this section as required under G.S. 143‑64.12.
(d)	As used in this section, 'energy savings,' 'guaranteed energy savings contract,' and 'energy conservation measure' have the same meaning as in G.S. 143‑64.17."
SECTION 2.  G.S. 143‑64.12(a) reads as rewritten:
"(a)	The Department of Commerce through the State Energy Office shall develop a comprehensive program to manage energy, water, and other utility use for State agencies and State institutions of higher learning and shall update this program annually. Each State agency and State institution of higher learning shall develop and implement a management plan that is consistent with the State's comprehensive program under this subsection to manage energy, water, and other utility use. The energy consumption per gross square foot for all State buildings in total shall be reduced by twenty percent (20%) by 2010 and thirty percent (30%) by 2015 based on energy consumption for the 2002‑2003 fiscal year. Each State agency and State institution of higher learning shall update its management plan annually and include strategies for supporting the energy consumption reduction requirements under this subsection. Each community college shall submit to the State Energy Office an annual written report of utility consumption and costs. Management plans submitted annually by State institutions of higher learning shall include all of the following:
(1)	Estimates of all costs associated  with implementing energy conservation measures, including pre‑installation and post‑installation costs.
(2)	The cost of analyzing the projected energy savings.
(3)	Design costs, engineering costs, pre‑installation costs, post‑installation costs, debt service, and any costs for converting to an alternative energy source.
(4)	An analysis that identifies projected annual energy savings and estimated payback periods."
SECTION 3.  G.S. 115C‑530 reads as rewritten:
"§ 115C‑530.  Operational leases of school buildings and school facilities.
(a)	Local boards of education may enter into operational leases of real or personal property for use as school buildings or school facilities. Operational leases for terms of less than three years shall not be subject to the approval of the board of county commissioners. Operational leases for terms of three years or longer, including periods that may be added to the original term through the exercise of options to renew or extend, are permitted if all of the following conditions are met:
(1)	The budget resolution includes an appropriation authorizing the current fiscal year's portion of the obligation.
(2)	An unencumbered balance remains in the appropriation sufficient to pay in the current fiscal year the sums obligated by the lease for the current fiscal year.
(3)	The leases are approved by a resolution adopted by the board of county commissioners. If an operational lease is approved by the board of county commissioners, in each year the county commissioners shall appropriate sufficient funds to meet the amounts to be paid during the fiscal year under the lease.
(4)	Any construction, repair, or renovation of the property is in compliance with the requirements of G.S. 115C‑521(c) relating to energy guidelines.
For purposes of this section, an operational lease is defined according to generally accepted accounting principles and may be for new or existing buildings.
(b)	Local boards of education may enter into contracts for the  construction, repair, or renovation of leased property if (i) the budget resolution includes an appropriation authorizing the obligation, (ii) an unencumbered balance remains in the appropriation sufficient to pay in the current fiscal year the sums obligated by the transaction for the current fiscal year, and (iii) the  construction, repair, or renovation is in compliance with the requirements of G.S. 115C‑521(c) relating to energy guidelines. Construction, repair, or renovation work undertaken or contracted by a private developer is subject to the requirements of Article 8 of Chapter 143 of the General Statutes. Contracts for new construction and renovation that are subject to the bidding requirements of G.S. 143‑129(a) and which do not constitute continuing contracts for capital outlay must be approved by the board of county commissioners.
(c)	Operational leases and contracts entered into under this section are subject to approval by the Local Government Commission under Article 8 of Chapter 159 of the General Statutes if they meet the standards set out in G.S. 159‑148(a)(1), 159‑148(a)(2), and 159‑148(a)(3). For purposes of determining whether the standards set out in G.S. 159‑148(a)(3) have been met, only the five hundred thousand dollar ($500,000) threshold shall apply."
SECTION 4.  This act becomes effective July 1, 2010, and applies to contracts entered into on or after that date.
In the General Assembly read three times and ratified this the 9th day of July, 2010.

	_____________________________________
		 Walter H. Dalton
	 President of the Senate

	_____________________________________
		 Joe Hackney
	 Speaker of the House of Representatives

	_____________________________________
		 Beverly E. Perdue
	 Governor

Approved __________.m. this ______________ day of ___________________, 2010