Bill Text: AZ SB1172 | 2011 | Fiftieth Legislature 1st Regular | Introduced
Bill Title: Energy and water savings accounts
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-02-16 - Referred to Senate RULES Committee [SB1172 Detail]
Download: Arizona-2011-SB1172-Introduced.html
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REFERENCE TITLE: energy and water savings accounts |
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State of Arizona Senate Fiftieth Legislature First Regular Session 2011
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SB 1172 |
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Introduced by Senator Nelson
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AN ACT
amending title 9, chapter 4, article 8, Arizona Revised Statutes, by adding section 9‑499.16; amending title 11, chapter 2, article 4, Arizona Revised Statutes, by adding section 11‑254.08; amending section 15‑213.01, Arizona Revised Statutes, as amended by laws 2009, chapter 101, section 1; repealing section 15‑213.01, Arizona Revised Statutes, as amended by laws 2010, chapter 117, section 4; repealing section 15‑342, Arizona Revised Statutes, as amended by Laws 2010, chapter 117, section 6 and as amended by Laws 2010, chapter 332, section 10; amending title 15, chapter 12, article 3, Arizona Revised Statutes, by adding section 15‑1453; amending title 15, chapter 13, article 2, Arizona Revised Statutes, by adding section 15‑1650.02; amending title 34, chapter 1, article 1, Arizona Revised Statutes, by adding section 34‑105; repealing section 34‑201, Arizona Revised Statutes, as amended by laws 2010, chapter 117, section 12 and as amended by Laws 2010, chapter 244, section 24; repealing sections 34‑455 and 34‑456, Arizona Revised Statutes; amending section 35‑142, Arizona Revised Statutes; amending title 35, chapter 1, article 3, Arizona Revised Statutes, by adding section 35‑156; repealing Laws 2009, chapter 101, sections 12, 13 and 14 and Laws 2010, chapter 117, section 27; amending Laws 2010, chapter 244, section 43 and Laws 2010, chapter 332, section 38; relating to energy and water savings accounts.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 9, chapter 4, article 8, Arizona Revised Statutes, is amended by adding section 9-499.16, to read:
9-499.16. Energy and water savings accounts
A. The governing body of a city or town may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water savings projects in public facilities. A city or town may deposit in the account monies from one or more companies that provide utility, energy or water services to the city or town pursuant to contracts that are executed between the companies and the city or town and that are designed to save energy or water in public facilities. A city or town may use monies in the energy and water savings account for payments under a contract entered into pursuant to section 34‑105.
B. A city or town shall use monies deposited in an energy and water savings account as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in facilities that are owned or operated by the city or town. Any contract that is entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the city or town that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection E of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.
C. A city or town shall use expenditures from an energy and water savings account only for the following:
1. Projects or measures pursuant to a contract pursuant to this section or section 34-105 that save energy or water in facilities that are owned or operated by the city or town. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to cities or towns by a qualified provider or a utility, energy or water services company.
2. Repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities are the most recent authorized rate of return approved by the Arizona corporation commission.
D. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the city or town shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the city or town on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the city or town shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.
E. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the city or town shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule must result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the city or town over the life of the installed measures that the city or town would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.
F. The city or town shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection E of this section to the energy and water savings account from the maintenance and operation portion of the city's or town's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection E of this section, which shall be paid by the city or town from the energy and water savings account.
G. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the city or town, the city or town may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection E of this section.
H. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the city's or town's budget.
I. A city or town may deposit energy-related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. A city or town shall use these rebate or grant monies to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. A city or town is not required to repay the rebate or grant monies in the manner described in subsection E of this section pursuant to the agreements with the providers of rebate or grant funds.
J. A city or town may deposit monies from other funding sources, including clean renewable energy bonds and the American recovery and reinvestment act of 2009 (P.L. 111-5) funding, in the energy and water savings account to fund energy or water saving projects in public facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the city or town and the provider of the funding.
K. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any city or town.
L. For all projects carried out under this section, a city or town shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
Sec. 2. Title 11, chapter 2, article 4, Arizona Revised Statutes, is amended by adding section 11-254.08, to read:
11-254.08. Energy and water savings accounts
A. The board of supervisors may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water savings projects in county facilities. The county may deposit in the account monies from one or more companies that provide utility, energy or water services to the county pursuant to contracts that are executed between the companies and the county and that are designed to save energy or water in public facilities. The county may use monies in the energy and water savings account for payments under a contract entered into pursuant to section 34-105.
B. The auditor general shall prescribe the appropriate designation of the energy and water savings accounts in the uniform system of financial records and shall prescribe reporting requirements on the appropriate budget forms and annual financial report forms.
C. A county shall use monies deposited in an energy and water savings account as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in facilities that are owned or operated by the county. Any contract that is entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the county that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection F of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.
D. A county shall use expenditures from an energy and water savings account only for the following:
1. Projects or measures pursuant to a contract pursuant to this section or section 34-105 that save energy or water in facilities that are owned or operated by the county. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to counties by a qualified provider or a utility, energy or water services company.
2. Repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities are the most recent authorized rate of return approved by the Arizona corporation commission.
E. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the county shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the county on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the county shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.
F. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the county shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule must result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the county over the life of the installed measures that the county would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.
G. The county shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection F of this section to the energy and water savings account from the maintenance and operation portion of the county's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection F of this section, which shall be paid by the county from the energy and water savings account.
H. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the county, the county may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection F of this section.
I. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the county's budget.
J. A county may deposit energy-related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. A county shall use these rebate or grant monies to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. A county is not required to repay the rebate or grant monies in the manner described in subsection F of this section, pursuant to the agreements with the providers of rebate or grant funds.
K. A county may deposit monies from other funding sources, including clean renewable energy bonds and the American recovery and reinvestment act of 2009 (P.L. 111-5) funding, in the energy and water savings account to fund energy or water saving projects in county facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the county and the provider of the funding.
L. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any county.
M. For all projects carried out under this section, the county shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
Sec. 3. Section 15-213.01, Arizona Revised Statutes, as amended by Laws 2009, chapter 101, section 1, is amended to read:
15-213.01. Procurement practices; guaranteed energy cost savings contracts; definitions
A. Notwithstanding section 15‑213, subsection A, a school district may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider through a competitive sealed proposal process as provided by the procurement practices adopted by the state board of education.
B. A school district may enter into a guaranteed energy cost savings contract with a qualified provider if it determines that the amount it would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy and operational costs over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter, after the date installation or implementation is complete, if the recommendations in the proposal are followed. The school district shall retain the cost savings achieved by a guaranteed energy cost saving contract, and these cost savings may be used to pay for the contract and project implementation. A school district shall not use excess utilities monies for the contract or for project implementation.
C. The school district shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy and operational cost savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. The school district shall set forth each criterion with its respective numerical weighting in the request for proposal.
D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job.
E. A study shall be performed by the selected qualified provider in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. This report shall be reviewed and approved by the school district before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved study to the school facilities board and the department of commerce energy office.
F. The guaranteed energy cost savings contract shall require that, in determining whether the projected energy savings calculations have been met, the energy or operational cost savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed and operational costs avoided after installation or implementation of the energy cost savings measures. The qualified provider and the school district may agree to make modifications to the energy baseline only for any of the following:
1. Changes in utility rates.
2. Changes in the number of days in the utility billing cycle.
3. Changes in the square footage of the facility.
4. Changes in the operational schedule of the facility.
5. Changes in facility temperature.
6. Significant changes in the weather.
7. Significant changes in the amount of equipment or lighting utilized in the facility.
8. Significant changes in the nature or intensity of energy use such as the change of classroom space to laboratory space.
G. The information to develop the energy baseline shall be derived from actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The measurements shall be taken in the year preceding the installation or implementation of energy cost savings measures.
H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure. At the qualified provider's expense, the proposal shall include an independent, third-party validation of cost savings calculations by a licensed, registered professional engineer who has demonstrated experience in energy analysis.
I. A school district, or two or more school districts, may enter into an installment payment contract or lease‑purchase agreement with a qualified provider for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life of the energy cost savings measures implemented or twenty‑five years, whichever is shorter. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made over time. If a school district purchases the energy cost savings measure, the qualified provider shall guaranty that the energy or operational costs savings meet or exceed the school district's total cost of purchase. The qualified provider's written guarantee of cost savings pursuant to subsection j of this section shall automatically terminate when a school district's cost savings meet or exceed its total cost to purchase the energy savings measure.
J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational costs savings, or both, will meet or exceed the costs of the energy cost savings measures over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter, except as provided in subsection I of this section. The qualified provider shall:
1. For the first three years of savings, prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings.
2. Reimburse the school district for any shortfall of guaranteed energy cost savings on an annual basis basis, except that additional savings achieved in prior years shall be applied and credited against any shortfall in subsequent years.
K. The school district may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third-party financing institution.
L. A qualified provider that is awarded the contract shall give a sufficient bond to the school district for its faithful performance of the equipment installment.
M. The qualified provider is required to make public information in the subcontractor's bids only if the qualified provider is awarded the guaranteed energy cost savings contract by the school district.
N. For all projects carried out under this section, the district shall report to the department of commerce energy office and the school facilities board:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
O. For all projects carried out under this section, the district shall report to the school facilities board, by October 15 each year, the actual energy and cost savings.
P. This section does not apply to the construction of new buildings.
Q. A school district may utilize a simplified energy performance contract for projects less than five hundred thousand dollars. Simplified energy performance contracts are not required to include an energy savings guarantee and shall comply with all requirements in this section except for the requirements that are specifically related to the energy savings guarantee and the measurement and verification of the guaranteed savings.
R. For the purposes of this section:
1. "Construction" means the process of building, altering, repairing, improving or demolishing any school district structure or building, or other public improvements of any kind to any school district real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property.
2. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures.
3. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption or operating costs and may include one or more of the following, and any related meters or other measuring devices:
(a) Insulating the building structure or systems in the building.
(b) Storm windows or doors, caulking or weather stripping, multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.
(c) Automated or computerized energy control systems.
(d) Heating, ventilating or air conditioning system modifications or replacements.
(e) Replacing or modifying lighting fixtures to increase the energy efficiency of the 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 for the lighting system after the proposed modifications are made.
(f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements.
(g) Energy recovery systems.
(h) Installing a new or retrofitting an existing day lighting system.
(i) Any life safety measures that provide long‑term operating cost reductions and that comply with state and local codes.
(j) Implementing operation programs through education, training and software that reduce the operating costs.
(k) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water.
(l) Devices that reduce water consumption and water costs or that reduce sewer charges.
(m) Rainwater harvesting systems.
(n) Combined heat and power systems.
(o) Renewable and alternative energy projects and renewable energy power service agreements.
(p) Self-generation systems.
(q) Any additional building systems and infrastructure that produce energy, or that provide utility or operational cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety.
4. "Guaranteed energy cost savings contract" means a contract for implementing one or more energy cost savings measures.
5. "Life cycle cost" means the sum of present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the United States department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13423, January 2007.
6. "Operational savings" means reductions in actual budget line items currently being expended or savings realized from the implementation or installation of energy cost savings measures.
7. "Qualified provider" means a person or a business experienced in designing, implementing or installing energy cost savings measures.
Sec. 4. Repeal
A. Section 15-213.01, Arizona Revised Statutes, as amended by Laws 2010, chapter 117, section 4 is repealed.
B. Section 15-342, Arizona Revised Statutes, as amended by Laws 2010, chapter 117, section 6 is repealed.
C. Section 15-342, Arizona Revised Statutes, as amended by Laws 2010, chapter 332, section 10.
Sec. 5. Title 15, chapter 12, article 3, Arizona Revised Statutes, is amended by adding section 15-1453, to read:
15-1453. Energy and water savings accounts
A district board may establish an energy and water savings account in the same manner as a school district pursuant to section 15-910.02 and may fund and use monies for guaranteed energy savings contracts pursuant to section 34-105.
Sec. 6. Title 15, chapter 13, article 2, Arizona Revised Statutes, is amended by adding section 15-1650.02, to read:
15-1650.02. Energy and water savings accounts
The Arizona board of regents may establish an energy and water savings account in the same manner as a school district pursuant to section 15-910.02 and may fund and use monies for guaranteed energy savings contracts pursuant to section 34-105.
Sec. 7. Title 34, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 34-105, to read:
34-105. Guaranteed energy savings contracts; definitions
A. An agent may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider.
B. An agent may enter into a guaranteed energy cost savings contract with a qualified provider if it determines that the amount it would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy and operational costs over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter, after the date that installation or implementation is complete, if the recommendations in the proposal are followed. An agent shall retain the cost savings achieved by a guaranteed energy cost saving contract, and these cost savings may be used to pay for the contract and project implementation. An agent shall not use excess utilities monies for the contract or for project implementation.
C. An agent shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy and operational cost savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. An agent shall state each criterion with its respective numerical weighting in the request for proposal.
D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job.
E. The selected qualified provider shall perform a study in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. The agent shall review and approve this report before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved study to the department of commerce energy office.
F. The guaranteed energy cost savings contract shall require that in determining whether the projected energy savings calculations have been met, the energy or operational costs savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed and operational costs avoided after installation or implementation of the energy cost savings measures. The qualified provider and the agent may agree to make modifications to the energy baseline only for any of the following:
1. Changes in utility rates.
2. Changes in the number of days in the utility billing cycle.
3. Changes in the square footage of the facility.
4. Changes in the operational schedule of the facility.
5. Changes in facility temperature.
6. Significant changes in the weather.
7. Significant changes in the amount of equipment or lighting utilized in the facility.
8. Significant changes in the nature or intensity of energy use such as the change of classroom space to laboratory space.
G. The information to develop the energy baseline shall be derived from actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The measurements shall be taken in the year preceding the installation or implementation of energy cost savings measures.
H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure. At the qualified provider's expense, the proposal shall include an independent, third-party validation of cost savings calculations by a licensed, registered professional engineer who has demonstrated experience in energy analysis.
I. An agent, or two or more agents, may enter into an installment payment contract or lease-purchase agreement with a qualified provider for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life of the energy cost savings measures implemented, or twenty-five years, whichever is shorter. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made over time. If an agent purchases the energy cost savings measure, the qualified provider shall guaranty that the energy or operational cost savings meet or exceed the agent's total cost of purchase. The qualified provider's written guarantee of cost savings pursuant to subsection J shall automatically terminate when an agent's cost savings meet or exceed its total cost to purchase the energy savings measure.
J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational cost savings, or both, will meet or exceed the costs of the energy cost savings measures over the expected life of the energy cost savings measures implemented, or within twenty-five years, whichever is shorter, except as provided in subsection I. The qualified provider shall:
1. For the first three years of savings, prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings.
2. Reimburse the agent for any shortfall of guaranteed energy cost savings on an annual basis, except that any additional savings achieved in prior years shall be applied and credited against any shortfall in subsequent years.
K. The agent may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third‑party financing institution.
L. A qualified provider that is awarded the contract shall give a sufficient bond to the agent for its faithful performance of the equipment installment.
M. The qualified provider is required to make public information in the subcontractor's bids only if the qualified provider is awarded the guaranteed energy cost savings contract by the agent.
N. For all projects carried out under this section, the agent shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
O. This section does not apply to the construction of new buildings.
P. An agent may use a simplified energy performance contract for projects less than five hundred thousand dollars. Simplified energy performance contracts are not required to include an energy savings guarantee and shall comply with all requirements in this section except for the requirements that are specifically related to the energy savings guarantee and the measurement and verification of the guaranteed savings.
Q. For the purposes of this section:
1. "Agent" has the same meaning prescribed in section 34-101 but also includes a community college district organized under title 15, chapter 12, the department of administration and the Arizona board of regents.
2. "Construction" means the process of building, altering, repairing, improving or demolishing any structure or building, or other public improvements of any kind to any real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property.
3. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures.
4. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption or operating costs and may include one or more of the following, and any related meters or other measuring devices:
(a) Insulating the building structure or systems in the building.
(b) Storm windows or doors, caulking or weather stripping, multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.
(c) Automated or computerized energy control systems.
(d) Heating, ventilating or air conditioning system modifications or replacements.
(e) Replacing or modifying lighting fixtures to increase the energy efficiency of the 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 for the lighting system after the proposed modifications are made.
(f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements.
(g) Energy recovery systems.
(h) Installing a new or retrofitting an existing day lighting system.
(i) Any life safety measures that provide long-term operating cost reductions and that comply with state and local codes.
(j) Implementing operation programs through education, training and software that reduce the operating costs.
(k) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water.
(l) Devices that reduce water consumption and water costs or that reduce sewer charges.
(m) Rainwater harvesting systems.
(n) Combined heat and power systems.
(o) Renewable and alternative energy projects and renewable energy power service agreements.
(p) Self-generation systems.
(q) Any additional building systems and infrastructure that produce energy, or that provide utility or operational cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety.
5. "Guaranteed energy cost savings contract" means a contract for implementing one or more energy cost savings measures.
6. "Life cycle cost" means the sum of the present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the united states department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13123, January 2007.
7. "Operational cost savings" means reductions in actual budget line items currently being expended or savings realized from the implementation or installation of energy cost savings measures.
8. "Qualified provider" means a person or a business experienced in designing, implementing or installing energy cost savings measures.
Sec. 8. Repeal
A. Section 34-201, Arizona Revised Statutes, as amended by Laws 2010, chapter 117, section 12, is repealed.
B. Section 34-201, Arizona Revised Statutes, as amended by Laws 2010, chapter 244, section 24, is repealed.
Sec. 9. Repeal
Sections 34-455 and 34-456, Arizona Revised Statutes, are repealed.
Sec. 10. Section 35-142, Arizona Revised Statutes, is amended to read:
35-142. Monies kept in funds separate from state general fund; receipt and withdrawal
A. All monies received for and belonging to the state shall be deposited in the state treasury and credited to the state general fund except the following, which shall be placed and retained in separate funds:
1. The unexpendable principal of monies received from federal land grants shall be placed in separate funds and the account of each such separate fund shall bear a title indicating the source and the institution or purpose to which such fund belongs.
2. The interest, rentals and other expendable money received as income from federal land grants shall be placed in separate accounts, each account bearing a title indicating the source and the institution or purpose to which the fund belongs. Such expendable monies shall be expended only as authorized, regulated and controlled by the general appropriation act or other act of the legislature.
3. All private or quasi‑private monies authorized by law to be paid to or held by the state treasurer shall be placed in separate accounts, each account bearing a title indicating the source and purpose of such fund.
4. All monies legally pledged to retirement of building indebtedness or bonds issued by those institutions authorized to incur such indebtedness or to issue such bonds shall be placed in separate accounts.
5. Monies of a multi‑county water conservation district authorized by law to be paid to or held by the state treasurer shall be placed in separate accounts, each account bearing a title indicating the source and purpose of such fund.
6. All monies collected by the Arizona game and fish department shall be deposited in a special fund known as the state game and fish protection fund for the use of the Arizona game and fish commission in carrying out the provisions of title 17.
7. All federal monies that are received by the department of economic security for family assistance benefits and medical eligibility as a result of efficiencies developed by the department of economic security and that would otherwise revert to the state general fund pursuant to section 35‑190 shall be retained for use by the department of economic security in accordance with the terms and conditions imposed by the federal funding source in an account or accounts established or authorized by the state treasurer.
8. Monies designated by law as special state funds shall not be considered a part of the general fund. Unless otherwise prescribed by law, the state treasurer shall be the custodian of all such funds.
9. All monies received and any accounts established and maintained by the director of the Arizona state retirement system or the administrator of the public safety personnel retirement system, the corrections officer retirement plan and the elected officials' retirement plan.
10. All monies required to be deposited in the energy and water savings account established pursuant to section 35-156.
B. No money shall be received or held by the state treasurer except as authorized by law, and in every instance the treasurer shall issue a receipt for money received and shall record the transaction in the statewide accounting system. No money shall be withdrawn from the treasury except on the warrant or electronic funds transfer voucher of the department of administration.
C. All federal monies granted and paid to the state by the federal government shall be accounted for in the accounts or funds of the state in the necessary detail to meet federal and state accounting, budgetary and auditing requirements, and all appropriations for matching such federal monies shall be transferred from the general fund to such separate funds as needed, except as otherwise required by the federal government.
D. Nothing in this section requires the establishment of separate accounts or funds for such federal monies unless otherwise required by federal or state law. The department of administration has the authority to use the most efficient system of accounts and records, consistent with legal requirements and standard and necessary fiscal safeguards.
E. Nothing in this section precludes the creation by the department of administration of a clearing account or other acceptable accounting method to effect prompt payment of claims from an approved budget or appropriation. The department of administration shall report each account or fund established or cancelled to the directors of the joint legislative budget committee and the governor's office of strategic planning and budgeting.
F. Nothing in this section or any other section precludes the use of monies kept in funds separate from the general fund, the interest from which accrues to the general fund, for payment of claims against the general fund, provided sufficient monies remain available for payment of claims against such funds.
G. The department of administration may issue warrants for qualified expenditures of federal program monies before they are deposited in the state treasury. The receipt of federal monies shall be timed to coincide, as closely as administratively feasible, with the redemption of warrants by the state treasurer. The department of administration shall limit expenditures to the amount that has been made available for the use under the grant award by the federal government. The state agency initiating the expenditures is responsible for ensuring that expenditures qualify for coverage under the guidelines of the federal grant award.
H. The department of administration shall establish the policies and procedures for all state agencies for drawing federal monies. When the established method results in federal monies being held by this state, the department of administration may use the interest earned on the monies to pay the federal government for any related interest liability. If an interest liability is incurred due to a state agency varying from the established policies and procedures, the department of administration shall charge the appropriate agency account or fund. Interest payment charges to agencies shall be reported by the department of administration to the joint legislative budget committee on or before March 1. Any federal interest liability owed to this state as a result of the delayed federal disbursements shall be used to offset this state's interest liability to the federal government. Any remaining interest earnings shall be deposited in the state general fund.
I. Any state agency or authorized agent of a state agency may accept credit cards pursuant to an agreement entered into by the state treasurer pursuant to section 35‑315 for the payment of any amount due to that agency or agent or this state.
J. Except for the department of revenue for tax payments, agencies or authorized agents on behalf of state agencies that accept credit cards shall deduct any applicable discount fee and processing fee associated with the transaction amount before depositing the net amount in the appropriate state fund. No other reduction is permitted against the transaction amount. The net amount deposited in the appropriate state fund shall be considered as the full deposit required by law of monies received by the agency or the authorized agent. Payment of any applicable discount fee and processing fee shall be accounted for in the annual report submitted to the governor's office of strategic planning and budgeting in accordance with section 41‑1273. The transaction amount of any credit card transaction shall not be reduced by any discount fee or processing fee in an amount in excess of the merchant card settlement fees reflected in the state banking contract with the state treasurer's office.
K. Any state agency that contracts with an authorized agent for the electronic processing of transactions pursuant to title 41, chapter 23 may include a provision in the contract to allow the authorized agent to impose a convenience fee. If allowed, the convenience fee shall be charged to the cardholder in addition to the transaction amount, except for the following:
1. Except as provided in subsection R of this section, any permits, licenses or other authorizations needed to pursue a trade or occupation in this state.
2. Except as provided in subsection R of this section, any permits, licenses or other authorizations needed to establish, expand or operate a business in this state.
3. Except as provided in subsection R of this section, any permits, licenses or other authorizations needed to register a vehicle or license a driver in this state.
L. Each state agency or its authorized agent shall:
1. Deduct the amount of the convenience fee before depositing the transaction amount or the transaction amount reduced by the discount fee or the processing fee, or both, into the appropriate state fund.
2. Not deduct any part of the convenience fee from the transaction amount before depositing the net amount into the appropriate state fund.
3. Deduct the amount of the discount fee or the processing fee, or both, from the transaction amount before depositing the net amount into the appropriate state fund.
M. The net amount deposited in the appropriate state fund pursuant to subsection K or L of this section shall be considered as the full deposit of monies that is required by law and that is received by the agency.
N. Notwithstanding section 35‑142.01, convenience fees received by a state agency or its authorized agent are limited to, and may be used to offset, the costs imposed by the authorized agent in processing the transactions.
O. When the percentage of electronic transactions first exceeds at least thirty per cent of a state agency's total transactions, the state agency shall perform a cost benefit report, including costs of convenience fees, the amount of revenue generated and any realized cost savings. The state agency shall submit the cost benefit report to the joint legislative budget committee within six months after reaching the thirty per cent threshold.
P. State agencies shall report the number of transactions, the number of electronic transactions, the total dollar amount of transactions processed, the total dollar amount of any discount fee, the total dollar amount of any processing fee and the total dollar amount of any convenience fee charged, deducted or paid pursuant to subsections J and K of this section annually by October 1 to the governor, the government information technology agency and the joint legislative budget committee.
Q. Nothing in this section or any other provision of law authorizes any state agency, authorized agent of any state agency or budget unit to establish a bank account for any government monies. All monies received by or on behalf of this state shall be deposited with and in the custody of the state treasurer or in an account that is authorized by the state treasurer pursuant to this section. This subsection does not apply to monies received and any accounts established and maintained by the director of the Arizona state retirement system or the administrator of the public safety personnel retirement system, the corrections officer retirement plan and the elected officials' retirement plan.
R. If a state agency provides an alternative method of payment, the convenience fee may be charged to the cardholder in addition to the transaction amount.
Sec. 11. Title 35, chapter 1, article 3, Arizona Revised Statutes, is amended by adding section 35-156, to read:
35-156. Energy and water savings account
A. This state may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water savings projects in public facilities. This state may deposit in the account monies from one or more companies that provide utility, energy or water services to this state pursuant to contracts that are executed between the companies and the department of administration and that are designed to save energy or water in public facilities. The department of administration may use monies in the energy and water savings account for payments under a contract entered into pursuant to section 34-105.
B. The department of administration shall use monies deposited in the energy and water savings account as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in facilities that are owned or operated by this state. Any contract that is entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the department of administration that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection E of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.
C. The department of administration shall use expenditures from the energy and water savings account only for the following:
1. Projects or measures pursuant to a contract pursuant to this section or section 34-105 that save energy or water in facilities that are owned or operated by this state. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to this state by a qualified provider or a utility, energy or water services company.
2. Repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract. Reasonable carrying charges for investor owned utilities are the most recent authorized rate of return approved by the Arizona corporation commission.
D. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the department of administration shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by this state on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the department of administration shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.
E. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the department of administration shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule must result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the state over the life of the installed measures that this state would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.
F. The department of administration shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection E of this section to the energy and water savings account from the maintenance and operation portion of this state's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection E of this section, which shall be paid by the department of administration from the energy and water savings account.
G. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the department of administration, the department of administration may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection e of this section.
H. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of this state's budget.
I. The department of administration may deposit energy-related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. The department of administration shall use these rebate or grant monies to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. The department of administration is not required to repay the rebate or grant monies in the manner described in subsection E of this section pursuant to the agreements with the providers of rebate or grant funds.
J. The department of administration may deposit monies from other funding sources, including clean renewable energy bonds and the American recovery and reinvestment act of 2009 (P.L. 111-5) funding, in the energy and water savings account to fund energy or water saving projects in public facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the department of administration and the provider of the funding.
K. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with this state.
L. For all projects carried out under this section, the department of administration shall report to the department of commerce energy office:
1. The name of the project.
2. The qualified provider.
3. The total cost of the project.
4. The expected energy and cost savings.
Sec. 12. Repeal
A. Laws 2009, chapter 101, sections 12, 13 and 14 are repealed.
B. Laws 2010, chapter 117, section 27 is repealed.
Sec. 13. Laws 2010, chapter 244, section 43 is amended to read:
Sec. 43. Effective date
A. This act is effective from and after September 30, 2011 except as provided in subsection B of this section.
B. Section 34‑201, Arizona Revised Statutes, as amended by section 24 of this act, is effective from and after June 30, 2013.
Sec. 14. Laws 2010, chapter 332, section 38 is amended to read:
Sec. 38. Effective date
A. Sections 15-1781, 15-1782, 15-1783, 15-1784 and 15-1851, Arizona Revised Statutes, as amended by this act, are effective from and after June 30, 2011.
B. Section 15‑342, Arizona Revised Statutes, as amended by section 10 of this act, is effective from and after June 30, 2013.
