Bill Text: MI HB5238 | 2017-2018 | 99th Legislature | Introduced
Bill Title: School aid; other; operational improvements for school districts; clarify terms. Amends sec. 1274a of 1976 PA 451 (MCL 380.1274a).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-05-10 - Assigned Pa 135'18 With Immediate Effect [HB5238 Detail]
Download: Michigan-2017-HB5238-Introduced.html
HOUSE BILL No. 5238
November 9, 2017, Introduced by Reps. Griffin and Iden and referred to the Committee on Local Government.
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending section 1274a (MCL 380.1274a), as amended by 2017 PA
23.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1274a. (1) The board of a school district or intermediate
school district may contract with a qualified provider for the
acquisition
or financing of energy conservation and improvements or
operational improvements to school facilities or infrastructure.
These improvements or the financing or refunding of the
improvements may be paid from operating funds of the school
district, from the proceeds of bonds or notes issued for energy
conservation
and improvements or operational improvements to school
facilities, or from an installment contract or lease-purchase
agreement, or the board or intermediate school board may enter into
1 or more energy saving performance contracts. These contracts may
contain a written financial guarantee providing that the costs of
improvements will be paid only if the energy savings or operational
savings
are sufficient to cover them. Energy
conservation and
operational
improvements to school facilities
may include, but are
not limited to, building envelope improvements; heating,
ventilating, and cooling upgrades; lighting retrofits; installing
or upgrading an energy management system; motor, pump, or fan
replacements; domestic water use reductions; information technology
improvements
associated with an energy conservation and operational
improvement to school facilities; municipal utility improvements
associated
with an energy conservation and operational improvement
to school facilities; and upgrading other energy consuming
equipment or appliances. Operational improvements include, but are
not limited to, installing equipment or providing services that
result in decreased, eliminated, or avoided operating or
maintenance costs. Operational improvements do not have to be
energy conservation related.
(2) A school board or intermediate school board that contracts
for
energy conservation and improvements
or operational
improvements to school facilities under subsection (1) may require
the qualified provider to furnish a bond that guarantees energy
cost savings or operational savings for a specified period of time.
(3) If a school board or intermediate school board enters into
an energy saving performance contract under this section, all of
the following apply:
(a) The bids for the contract shall provide a detailed
breakdown of the energy performance savings or operational savings
to be derived each year and for the duration of the energy saving
performance contract, including at least all of the following:
(i) A description of the guaranteed energy use savings or
operational savings, and tasks to be performed under the energy
saving performance contract.
(ii) The combined total net cost of all of the energy
conservation measures or operational improvements in the project.
(iii) The projected energy savings and operating and
maintenance cost savings resulting from the project.
(iv) The useful life of each energy conservation measure or
operational improvement.
(v) The simple payback period.
(b) The qualified provider shall certify that measurement and
verification techniques for determining cost savings will be
performed in accordance with the protocols promulgated by the
International Performance Measurement and Verification Protocol,
Inc.,
now known as Efficiency Value Valuation
Organization.
(4) The board of a school district or intermediate school
district may provide for the removal or treatment of asbestos or
other material injurious to health for school facilities and may
pay for the improvements from operating funds of the school
district or from the proceeds of bonds or notes issued for that
purpose.
(5) Issuance of bonds for the purposes authorized by this
section shall be considered as issued for capital expenditures for
all purposes including section 16 of article IX of the state
constitution of 1963. A lease-purchase agreement issued pursuant to
this subsection is not subject to the revised municipal finance
act, 2001 PA 34, MCL 141.2101 to 141.2821, and is not a municipal
security or a debt as those terms are defined in that act.
(6)
Energy conservation and improvements
or operational
improvements to school facilities, or substance removal or
treatment authorized by this section is subject to the competitive
bidding requirements of section 1267.
(7)
If energy conservation and improvements
or operational
improvements to school facilities are made by a school district or
intermediate school district as provided in this section, the
school board or intermediate school board shall determine the
following information and shall report the following information to
the state treasurer within 60 days after the completion of the
improvements:
(a) Name of each facility to which an improvement was made and
a
description of the energy conservation and improvements or
operational improvements to school facilities.
(b) Actual energy consumption during the 12-month period
before commencement of the energy conservation improvement.
(c) Project costs and expenditures, including the total of all
lease payments over the duration of the lease-purchase agreement.
(d) Estimated annual energy savings or operational savings,
including projected savings over the duration of the installment
contract.
(8)
If energy conservation and improvements
or operational
improvements to school facilities are made as provided in this
section, the school board or intermediate school board shall report
to the state treasurer by July 1 of each of the 5 years after the
improvements are completed the actual annual energy consumption or
operational savings of each facility to which improvements were
made. The forms for the reports required by this section shall be
furnished by the state treasurer.
(9) An installment contract described in this section may
include a lease-purchase agreement, which may be a multiyear
contractual obligation that provides for automatic renewal unless
positive action is taken by the board of the school district or
intermediate school district to terminate that contract. Payments
under a lease-purchase agreement are a current operating expense
subject to annual appropriations of funds by the board of the
school district or intermediate school district and shall obligate
the board of the school district or intermediate school district
only for those sums payable during the fiscal year of contract
execution or any renewal year thereafter. The board of the school
district or intermediate school district may make payments under a
lease-purchase agreement from any legally available funds or from a
combination of energy or operational savings, capital
contributions, future replacement costs avoided, or billable
revenue
enhancements that result from energy conservation and
improvements or operational improvements to school facilities, if
the board of the school district or intermediate school district
has determined that those funds are sufficient to cover, in
aggregate over the full term of the contractual agreement, the cost
of
the energy conservation and improvements
or operational
improvements to school facilities. The lease-purchase agreement
terminates immediately and absolutely and without further
obligation on the part of the board of the school district or
intermediate school district at the close of the fiscal year in
which it was executed or renewed or at such time as appropriated
and otherwise unobligated funds are no longer available to satisfy
the obligations of the board of the school district or intermediate
school district under the lease-purchase agreement. During the term
of the lease-purchase agreement, the board of the school district
or intermediate school district is the vested owner of the energy
conservation
and improvements or operational improvements and may
grant
a security interest in the energy conservation and
improvements or operational improvements to the provider of the
lease-purchase agreement. The board of the school district or
intermediate school district shall not be obligated under a lease-
purchase agreement for more than 20 years after either the date of
the
final completion of the energy conservation and improvements or
operational improvements to school facilities or the end of the
useful
life of the aggregate energy conservation and improvements
or operational improvements to school facilities, whichever occurs
first. Upon the termination of the lease-purchase agreement and the
satisfaction of the obligations of the board of the school district
or intermediate school district, the provider of the lease-purchase
agreement shall release its security interest in the energy
conservation
and improvements or operational improvements.
(10) As used in this section:
(a) "Energy saving performance contract" means an agreement
for the evaluation, recommendation, and implementation of energy
conservation measures or operational improvements including, but
not limited to, an energy audit or detailed energy study; the
design, installation, operation, and maintenance of 1 or more
energy conservation measures; energy management services; and an
energy savings guarantee.
(b) "Qualified provider" means an individual or a business
entity that is experienced in performing design, analysis, and
installation
of energy conservation and improvements
or operational
improvements and facility energy management measures and that will
provide these services under the contract with a guarantee or on a
performance basis.
