Bill Text: GA SB194 | 2009-2010 | Regular Session | Engrossed
Bill Title: State Purchasing; benefits based funding projects; revise provisions; change membership of an oversight committee
Spectrum: Partisan Bill (Republican 4-0)
Status: (Passed) 2011-01-01 - Effective Date [SB194 Detail]
Download: Georgia-2009-SB194-Engrossed.html
09 LC
14 0042S(SCS)
Senate
Bill 194
By:
Senators Chance of the 16th, Rogers of the 21st, Seabaugh of the 28th and Staton
of the 18th
AS
PASSED SENATE
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Part 1 of Article 3 of Chapter 5 of Title 50 of the Official Code of
Georgia Annotated, relating to state purchasing in general, so as to revise
provisions relating to benefits based funding projects in which payments to
vendors depend upon the realization of specified savings or revenue gains; to
change provisions relating to such projects, their required and permissible
terms, and their funding; to provide for an advisory role by the Georgia
Environmental Facilities Authority; to change the membership of an oversight
committee; to provide for related matters; to repeal conflicting laws; and for
other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Part
1 of Article 3 of Chapter 5 of Title 50 of the Official Code of Georgia
Annotated, relating to state purchasing in general, is amended by revising Code
Section 50-5-77, relating to benefits based funding projects, as
follows:
"50-5-77.
(a)
As used in this Code section, the term:
(1)
'Agency' means every state department, agency, board, bureau, and commission
including without limitation the Board of Regents of the University System of
Georgia.
(2)
'Authority' means the Georgia Environmental Facilities Authority.
(2)(3)
'Benefits based funding project' means any governmental improvement project in
which payments to vendors depend upon the realization of specified savings or
revenue gains attributable solely to the improvements, provided that each
benefits based funding project is structured as follows:
(A)
The vendor
promises,
or accepts the condition,
guarantees
that the improvements will generate actual and quantifiable savings or enhanced
revenues;
(B)
The agency develops a measurement tool for calculating the savings or enhanced
revenues realized from the project; and
(C)
The funding for the project shall be attributable solely to its successful
implementation for the period specified in the
contract, or,
where applicable, from sums remitted by the vendor or surety to remedy a deficit
in guaranteed savings or revenue
gains.
(3)(4)
'External oversight committee' means a committee composed of the executive
director of the Georgia Technology Authority, the commissioner of administrative
services, the director of the Office of Planning and Budget, the state auditor,
the state
accounting officer, the Governor's
designee, the chairperson of the House Committee on Appropriations, and the
chairperson of the Senate
Finance
Committee on
Appropriations.
(4)(5)
'Measurement tool' means the formula used to measure the actual savings or
enhanced revenues and includes a means for distinguishing enhanced revenue or
savings from normal activities, including the possibility of no savings or
revenue growth or an increased expenditure or decline in revenue. Baseline
parameters must be defined based on historical costs or revenues for a minimum
of one year. The measurement tool shall use the baseline parameters to forecast
savings or enhanced revenues and to determine the overall benefits and fiscal
feasibility of the proposed project.
(5)(6)
'Special dedicated fund' means any fund established pursuant to this Code
section from which the vendor or vendors are compensated as part of a benefits
based funding project. The moneys in the special dedicated fund shall be deemed
contractually obligated and shall not lapse at the end of each fiscal
year.
(b)
An agency shall be authorized to enter into multiyear lease, purchase, or lease
purchase contracts of all kinds for the acquisition of
equipment,
goods, materials,
real
or personal property,
improvements
to real property, services,
construction
services, renovation services, and
supplies as benefits based funding projects; provided, however, that a condition
precedent to the award of the contract is a competitive solicitation in
compliance with any applicable purchasing laws now or hereafter enacted,
including without limitation the provisions of this chapter and Chapter 25 of
this title; and provided, further, that the contract shall contain provisions
for the following:
(1)
The contract shall terminate absolutely and without further obligation on the
part of the agency at the close of the fiscal year in which it was executed and
at the close of each succeeding fiscal year for which it may be
renewed;
(2)
The contract shall terminate absolutely and without further obligation on the
part of the agency at such time as the agency determines that actual savings or
incremental revenue gains are not being generated to satisfy the obligations
under the contract;
(3)(2)
The contract may be renewed only by a positive action taken by the
agency;
(3)
In addition to any other remedies available to the agency, the contract shall
provide that at such time as the agency determines that actual savings or
incremental revenue gains are not being generated to satisfy the obligations
under the contract, the vendor shall be required to remedy the deficit in actual
savings or incremental revenue gains by remitting to the state an amount equal
to the deficit. The vendor shall also be required to provide at contract
execution and upon execution of any contract renewals an energy savings
guarantee bond, a bank letter of credit, escrowed funds, a corporate guarantee
from a corporation with an investment grade credit rating, or other surety
instrument acceptable to the agency equal to the value of the project's annual
savings or revenue gains;
(4)
The contract shall state the total obligation of the agency for repayment for
the fiscal year of execution and shall state the total obligation for repayment
which will be incurred in each fiscal year renewal term, if renewed;
and
(5)
The term of the contract, including any renewal periods, may not
exceed
extend past
the date that is ten years
from the date
of the completion of the project that is the subject of the
contract.;
and
(6)
The agency's financial obligations under the contract are limited to and cannot
exceed the savings or incremental revenue gains, as calculated using the
measurement tool, actually generated by the benefits based funding project, even
if no savings or enhanced revenues are realized from the project.
(c)
Any contract developed under this Code section containing the provisions
enumerated in subsection (b) of this Code section shall be deemed to obligate
the agency only for those sums payable during the fiscal year of execution or,
in the event of a renewal by the agency, for those sums payable in the
individual fiscal year renewal term and only to the extent that savings or
enhanced revenues are attributable to the benefits based funding project
calculated using the measurement tool
and, where
applicable, sums remitted by the vendor or surety to remedy a deficit in
guaranteed savings or revenue
gains.
(d)
No contract developed and executed pursuant to this Code section shall be deemed
to create a debt of the state for the payment of any sum beyond the fiscal year
of execution or, in the event of a renewal, beyond the fiscal year of such
renewal.
(e)
Any such contract may provide for the payment by the agency of interest or the
allocation of a portion of the contract payment to interest, provided that the
contract is in compliance with this Code section.
(f)
During the term of the contract, including any renewal periods, the agency
shall, using the measurement tool, periodically calculate the total amount of
the savings or enhanced revenues attributable to the implementation of the
benefits based funding project. To the extent that savings or enhanced revenues
are realized, the agency shall transfer from its budget into the special
dedicated fund an amount up to but not to exceed the amount owed on the contract
for the then current fiscal year term's obligation to provide for
payments, or,
where applicable, sums remitted by the vendor or surety to remedy a deficit in
guaranteed savings or revenue gains may be transferred to the special dedicated
fund by the agency.
(g)
During the term of the contract, including any renewal periods, the agency
shall, using the measurement tool, calculate the total amount of the savings or
enhanced revenues attributable to the implementation of the benefits based
funding project during the then current fiscal year at least 30 days prior to
the end of the then current fiscal year. If the agency renews the contract and
to the extent that savings or enhanced revenues are realized in excess of the
amount due on the contract in the then current fiscal year term, the agency
shall transfer prior to the end of the then current fiscal year from its budget
into the special dedicated fund an amount up to but not to exceed the next
fiscal year's obligation to provide for future payments.
(h)
Promptly upon nonrenewal, termination, or expiration of the contract, any moneys
remaining in the special dedicated fund shall be deposited in the general fund
of the state.
(i)
Each agency is authorized to accept title to property subject to the benefits
based funding contract and is authorized to transfer title back to the vendor in
the event the contract is not fully consummated.
(j)
Payments to which a vendor is entitled under the contract may not be assigned
without the approval of the agency. In its discretion, the agency may agree
that the vendor may assign the payments to which it is entitled under the
benefits based funding contract to a third party, provided that the agency will
be made party to the assignment agreement and that any such assignment agreement
will not alter the obligations of the agency under the contract, specifically
including, but not limited to, the provisions required by subsection (b) of
this Code section; and provided that the vendor, at the time of the request that
the agency agree to an assignment of payments, must provide to the agency an
energy savings guarantee bond, a bank letter of credit, escrowed funds, a
corporate guarantee from a corporation with an investment grade credit rating,
or other surety instrument acceptable to the agency equal to the guaranteed
savings for the total project duration including any anticipated renewal periods
and the energy savings guarantee bond, bank letter of credit, escrowed funds,
corporate guarantee from a corporation with an investment grade credit rating,
or other surety instrument acceptable to the agency must remain in force for the
entire project duration including any renewal periods. As savings are realized
and verified by the measurement tool during the term of the contract including
renewal periods, the value of the energy savings guarantee bond, bank letter of
credit, escrowed funds, corporate guarantee from a corporation with an
investment grade credit rating, or other surety instrument acceptable to the
agency may decrease proportionately.
(j)(k)
The external oversight committee shall have the responsibility to
review and
advise
direct the
authority to perform reviews and to recommend approval of all benefits based
funding projects advising:
(1)
The overall feasibility of the benefits based funding project;
(2)
The measurement tool;
(3)
The projected savings or enhanced revenues; and
(4)
The dollars to be set aside for vendor payments.
(l)
At the recommendation of the authority,
each
(k)
Each benefits based funding project and
the proposed contract shall be approved by the external oversight committee
prior to execution of the contract and
prior to
any renewal thereof
shall be
subject to further review by the authority or the external oversight committee
at any time.
(l)(m)
Each agency shall prepare
and
certify an annual report
to be sent
to the external oversight committee, the Governor, and the General
Assembly on all contracts entered into
pursuant to this Code section, describing the benefits based funding
project,
its
projects,
the progress
of the
projects,
its
the
consolidated savings or enhanced revenues
of such
projects, and such other information as
may be relevant.
This annual
report shall be sent to the authority on behalf of the external oversight
committee at a date determined by the authority. The authority shall review and
consolidate all agency reports and submit a consolidated report to the Governor,
the General Assembly, and the external oversight
committee."
SECTION
2.
All
laws and parts of laws in conflict with this Act are repealed.