November 9, 2016, Introduced by Reps. Iden and Pscholka and referred to the Committee on Energy Policy.
A bill to amend 1976 PA 451, entitled
"The revised school code,"
by amending section 1274a (MCL 380.1274a), as amended by 2003 PA
255.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1274a. (1) The board of a school district, intermediate
school district, or local act school district may contract with a
qualified provider for the acquisition or financing of energy
conservation and 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, or
from the proceeds of bonds or notes issued for energy
conservation and operational improvements, 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 are sufficient to cover them. Energy
conservation and operational improvements 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;
municipal utility improvements associated with an energy
conservation and operational improvement; and upgrading other
energy consuming equipment or appliances.
(2) A school board or intermediate school board that contracts
for energy conservation and operational improvements under
subsection (1) may require the qualified provider to furnish a bond
that guarantees energy cost 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 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 and
tasks to be performed under the energy saving performance contract.
(ii) The combined total net cost of all of the energy
conservation measures 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.
(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 published in January
2001 by the international performance measurement and verification
protocol inc.
(4) The board of a school district, intermediate school
district, or local act 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 shall not be subject to the revised municipal
finance act, 2001 PA 34, MCL 141.2101 to 141.2821, and shall not be
a municipal security or a debt as those terms are defined in that
act.
(6) Energy conservation and operational improvements or
substance removal or treatment authorized by this section is
subject to the competitive bidding requirements of section 1267.
(7) If energy conservation and operational improvements are
made by a school district, local act school district, or
intermediate school district as provided in this section, the
school board or intermediate school board shall determine the
following information and, within 60 days of the completion of the
improvements, 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 operational
improvements.
(b) Actual energy consumption during the 12-month period
before
completion commencement of the 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, including projected
savings over the duration of the installment contract.
(8) If energy conservation and operational improvements 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 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 a school district,
intermediate school district, or local act school district to
terminate that contract. Payments under a lease-purchase agreement
shall be a current operating expense subject to annual
appropriations of funds by the board of a school district,
intermediate school district, or local act school district and
shall obligate the board of a school district, intermediate school
district, or local act school district only for those sums payable
during the fiscal year of contract execution or any renewal year
thereafter. The board of a school district, intermediate school
district, or local act 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
operational improvements, provided that the board of a school
district, intermediate school district, or local act 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 operational improvements. The
lease-purchase agreement will terminate immediately and absolutely
and without further obligation on the part of the board of a school
district, intermediate school district, or local act 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 a school district, intermediate school
district, or local act school district under the lease-purchase
agreement. During the term of the lease-purchase agreement, the
board of a school district, intermediate school district, or local
act school district shall be the vested owner of the energy
conservation and operational improvements and may grant a security
interest in the energy conservation and operational improvements to
the provider of the lease-purchase agreement. Upon the termination
of the lease-purchase agreement and the satisfaction of the
obligations of the board of a school district, intermediate school
district, or local act school district, the provider of the lease-
purchase agreement shall release its security interest in the
energy conservation and operational improvements.
(10) (9)
As used in this section:
(a) "Energy saving performance contract" means an agreement
for the evaluation, recommendation, and implementation of energy
conservation measures 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 operational improvements
and facility energy management measures and that will provide these
services under the contract with a guarantee or on a performance
basis.