S.B. No. 1050 amends Chapter 302 of the Local Government Code to strengthen the framework for energy savings performance contracts (ESPCs) for local governments in Texas. The bill introduces new definitions and provisions, including the requirement for local governments to select a qualified third-party engineer to oversee the procurement process, evaluate proposals, and ensure compliance with contract terms. It mandates that ESPCs include guarantees from providers regarding energy savings and outlines conditions for contract termination if these guarantees are not met. Additionally, the bill establishes a fee structure for third-party engineers, capped at 2.5% of the total contract value, and prohibits providers from suggesting third-party engineers to avoid conflicts of interest.

The legislation also introduces comprehensive guidelines for conducting investment grade audits, which are essential for evaluating energy and water conservation measures. It specifies that audits must be performed at no cost to local governments and outlines the necessary documentation and training that providers must offer. Furthermore, the bill enhances compliance and fraud deterrence measures by requiring providers to maintain a compliance program and mandating annual measurement and verification reviews of energy savings. It establishes penalties for corruption in the awarding of contracts, classifying offenses related to contingent compensation as felonies of the second degree. Overall, the bill aims to improve accountability, transparency, and effective management of energy savings performance contracts within local governments.

Statutes affected:
Introduced: Local Government Code 302.001, Education Code 44.901 (Local Government Code 302, Education Code 44)