1 STATE OF OKLAHOMA
2 1st Session of the 59th Legislature (2023)
3 HOUSE BILL 2472 By: Hill
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6 AS INTRODUCED
7 An Act relating to public finance; amending 62 O.S.
2021, Section 318, which relates to performance based
8 efficiency contracts; providing authorized method for
initial payments; and providing an effective date.
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13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
14 SECTION 1. AMENDATORY 62 O.S. 2021, Section 318, is
15 amended to read as follows:
16 Section 318. A. For purposes of this section:
17 1. "Public entity" means any political subdivision of this
18 state, or a public trust which has as a beneficiary a political
19 subdivision of this state, or any institution of higher education
20 which is part of The Oklahoma State System of Higher Education;
21 2. "Performance-based efficiency contract" means a contract for
22 the design, development, financing, installation and service of any
23 improvement, repair, alteration or betterment of any building or
24 facility owned, operated or planned by a public entity; or any
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1 equipment, fixture or furnishing to be added to or used in any such
2 building or facility; or any maintenance or operational strategy
3 that is designed and implemented that will reduce utility
4 consumption or lower operating costs, result in annual operating
5 cost savings, generate additional revenues or avoid capital cost
6 incurrence and may include, but is not limited to, one or more of
7 the following:
8 a. utility services,
9 b. heating, ventilating or air conditioning system
10 modifications or replacements and automated control
11 systems,
12 c. replacement or modifications of lighting fixtures,
13 d. indoor air quality improvements to increase air
14 quality that conform to the applicable state or local
15 building code requirements when done in conjunction
16 with other cost-saving measures,
17 e. any additional building infrastructure improvement,
18 cost saving, life safety or any other improvement that
19 provides long-term operating cost reductions and is in
20 compliance with state and local codes,
21 f. water-metering devices that increase efficiency or
22 accuracy of water measurement and energy reduction, or
23 g. any facility operation and support programs that
24 reduce operating cost;
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1 3. "Qualified provider" means a person or business experienced
2 or trained in the design, analysis and installation of energy
3 conservation and facility management measures. A qualified provider
4 must employ a professional engineer registered in the State of
5 Oklahoma; and
6 4. "State governmental entity" means the State of Oklahoma or
7 any agency, board, commission, authority, department, public trust
8 of which the state is the beneficiary or other instrumentality of
9 state government, other than a public trust with the state as
10 beneficiary whose jurisdiction is limited to one county, including,
11 but not limited to, the following:
12 a. Oklahoma Municipal Power Authority,
13 b. Oklahoma Development Finance Authority,
14 c. Oklahoma Industrial Finance Authority,
15 d. Grand River Dam Authority,
16 e. Oklahoma Water Resources Board,
17 f. Northeast Oklahoma Public Facilities Authority,
18 g. Oklahoma Turnpike Authority,
19 h. Oklahoma Housing Finance Authority, and
20 i. Oklahoma Public, Industrial and Cultural Facilities
21 Authority.
22 B. In addition to any other legally permissible alternatives of
23 entering into contracts, any public entity may enter into
24 performance-based efficiency contracts with a qualified provider
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1 pursuant to the provisions of this section. The public entity may
2 make an initial payment from any funds available. Further, any
3 public entity may enter into an installment contract, lease purchase
4 agreement or other contractual obligation for the purpose of
5 financing performance-based efficiency projects for a term not to
6 exceed the greater of twenty (20) years or the useful life of the
7 project. A qualified provider to whom the contract is awarded shall
8 be required to give a sufficient bond to the public entity for its
9 faithful performance of the contract. In addition, the public
10 entity may require performance bonds covering the annual amount of
11 guaranteed savings over the contract term.
12 The contract's cost savings to the public entity must be
13 guaranteed each year during the term of the agreement. The savings
14 must be sufficient to offset the annual costs of the contract. In
15 calculating cost savings, the public entity may consider capital
16 cost avoidance and include additional revenue that is directly
17 attributed to the performance-based efficiency contract. The
18 contract shall provide for reimbursement to the public entity
19 annually for any shortfall of guaranteed savings. Savings must be
20 measured, verified and documented during each year of the term and
21 may be utilized to meet the annual debt service. This section shall
22 constitute the sole authority necessary to enter into performance-
23 based efficiency contracts, without regard to compliance with other
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1 laws which may specify additional procedural requirements for
2 execution of contracts.
3 SECTION 2. This act shall become effective November 1, 2023.
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5 59-1-6802 MAH 01/05/23
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