MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Appropriations

By: Representatives Ellzey, Shows

AN ACT TO AMEND SECTION 31-7-14, MISSISSIPPI CODE OF 1972, TO ALLOW A STATE AGENCY TO CONTRACT DIRECTLY FOR THE LEASE-PURCHASE OF ENERGY EFFICIENCY SERVICES AND EQUIPMENT; TO REQUIRE THE APPROVAL OF THE ENERGY DIVISION OF THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT ONLY ON THOSE CONTRACTS INVOLVING SHARED SAVINGS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 31-7-14, Mississippi Code of 1972, is amended as follows:

31-7-14. (1) (a)  * * * The board of trustees of any public school district, a state agency or any governing authority as defined in this chapter, may contract for energy efficiency, equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements on a * * * lease, energy services contract or lease-purchase basis in accordance with this section * * *. For the purposes of this section, energy efficiency equipment, services relating to the installation, operation and maintenance of equipment and improvements reasonably required to existing equipment and existing improvements shall be defined to include air conditioning systems.

(b) The board of trustees of any school district, junior college district or institution of higher learning or a state agency or the governing authorities of any other applicable entity which may enter into a * * * lease, energy services contract or lease-purchase contract for energy efficiency equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements shall contract in accordance with the following provisions:

(i) The board of trustees, state agency or governing authority shall publicly issue requests for proposals, advertised in the same manner as provided in Section 31-7-13 for seeking competitive sealed bids, concerning the provision of energy efficiency services relating to the installation, operation and maintenance of equipment, improvements reasonably required to existing equipment and existing improvements or the design, installation, ownership, operation and maintenance of energy efficiency equipment. Such requests for proposals shall contain terms and conditions relating to submission of proposals, evaluation and selection of proposals, financial terms, legal responsibilities, and such other matters as the board of trustees, the state agency or the governing authority determines to be appropriate for inclusion.

(ii) Upon receiving responses to the request for proposals, the board of trustees, the state agency or the governing authority may select the most qualified proposal or proposals on the basis of experience and qualifications of the proposers, the technical approach, the financial arrangements, the overall benefits to the school district, junior college district, institution of higher learning, agency or other governmental entity and such other relevant factors determined to be appropriate.

(iii) The board of trustees of school districts, junior college districts, institutions of higher learning, the state agency or the applicable governing authorities shall negotiate and enter into contracts with the person, persons, firm, or firms submitting the proposal selected as the most qualified pursuant to this section.

 * * *

(iv) All such contracts must contain the following annual allocation dependency clause: The continuation of this contract is contingent upon the appropriation of funds to fulfill the requirements of the contract by the Legislature or other budgeting authority. If the Legislature or other budgeting authority fails to appropriate sufficient monies to provide for the continuation of the contract, the contract shall terminate on the last day of the fiscal year for which allocations were made. Such termination shall be without penalty or expense to the school district, junior college district or institution of higher learning, state agency or applicable governing authority of any kind whatsoever, except as to the portions of payments for which funds shall have been allocated and budgeted.

(v) The annual rate of interest paid under any lease-purchase agreement authorized by this section shall not exceed the maximum interest rate to maturity on general obligation indebtedness permitted under Section 75-17-101.

(vi) The maximum lease term for any equipment acquired under this section shall not exceed the useful life of such equipment as determined according to the upper limit of the asset depreciation range (ADR) guidelines for the Class Life Asset Depreciation Range System established by the Internal Revenue Service pursuant to the United States Internal Revenue Code and the regulations thereunder as in effect on december 31, 1980, or comparable depreciation guidelines with respect to any equipment not covered by ADR guidelines.

(vii) The provisions of this subsection shall, with respect to the procurement of energy efficiency services and/or equipment, supersede the provisions of any contradictory or conflicting provisions of Chapter 7, Title 31, Mississippi Code of 1972, and other laws with respect to awarding public contracts.

(c) An energy services contract for the purposes of this section means those contracts where at least a portion of the cost of the energy efficiency contract is estimated to be paid for by savings in operating costs of the energy efficient equipment; however, payments for the contract are not contingent upon the actual savings realized from the equipment.

(2) (a)  * * * The board of trustees of any public school district, a state agency or any governing authority as defined in this chapter that decides to contract for energy efficiency equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements on a * * * lease, energy services contract or lease-purchase basis, such board, agency or governing authority may request assistance from the Division of Energy * * * of the Department of Economic and Community Development, hereinafter referred to as the "division," * * * in the development and negotiation of such contract. The board of trustees of any public school district, a state agency or any governing authority that requests assistance from the division may contract in accordance with subsection (1) of this section or may allow the division to contract on its behalf in accordance with paragraph (b) of this subsection (2).

(b) The board of trustees of any school district, junior college district or institution of higher learning, state agency or governing authority which may enter into a * * * lease, energy services contract or lease-purchase contract for energy efficiency equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements shall contract in accordance with the following provisions:

(i) The division shall be authorized to publicly issue requests for proposals, advertised in the same manner as provided in Section 31-7-13 for seeking competitive sealed bids, concerning the provision of energy efficiency services relating to the installation, operation and maintenance of equipment, improvements reasonably required to existing equipment and existing improvements or the design, installation, ownership, operation and maintenance of energy efficiency equipment. Such requests for proposals shall contain terms and conditions relating to submission of proposals, evaluation and selection of proposals, financial terms, legal responsibilities, and such other matters as the division shall determine to be appropriate for inclusion.

(ii) Upon receiving responses to the request for proposals, the division may select the most qualified proposal or proposals on the basis of experience and qualifications of the proposers, the technical approach, the financial arrangements, the overall benefits to the school district, junior college district, institution of higher learning, agency or other governmental entity and such other relevant factors determined to be appropriate.

(iii) The Division of Energy * * * of the Department of Economic and Community Development shall be authorized to enter into a contract with a party selected under the provisions of this subsection to provide financing to school districts, junior college districts, institutions of higher learning, state agencies and other applicable entities to purchase shared savings or lease-purchase energy efficiency equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements. Any master lease-purchase financing contract entered into by the division prior to the effective date of this act shall be valid and binding when the contract was entered into pursuant to the provisions prescribed by this subsection.

(iv) The board of trustees of school districts, junior college districts, institutions of higher learning, the state agency, or the applicable governing authorities shall negotiate and enter into contracts with the person, persons, firm, or firms submitting the proposal selected as the most qualified pursuant to this section.

(v) The provisions of any master lease-purchases agreements authorized under the provisions of this subsection shall comply with the requirements of subparagraphs (1)(b)(iv), (v) and (vi) of this section. The Division of Energy * * * of the Department of Economic and Community Development shall insure that there shall be a cost equity factor in any master lease-purchase agreement for all participating governmental entities and that local energy efficiency and climate control vendors shall be trained to maintain and repair any systems or equipment purchased under the master lease-purchase agreement.

(vi) The provisions of this subsection shall, with respect to the procurement of energy efficiency services and/or equipment, supersede the provisions of any contradictory or conflicting provisions of Chapter 7, Title 31, Mississippi Code of 1972, and other laws with respect to awarding public contracts.

(3) All lease-purchase agreements authorized by this section and the income therefrom shall be exempt from all taxation within the State of Mississippi, except gift, transfer and inheritance taxes.

(4) (a) If the board of trustees of any public school district, a state agency or any governing authority, as defined in this chapter, decides to contract for energy efficiency, equipment, services relating to the installation, operation or maintenance of equipment or improvements reasonably required to existing equipment and existing improvements on a shared savings basis or performance basis, the board, agency or governing authority must apply to the Division of Energy of the Department of Economic and Community Development requesting assistance in preparing requests for proposals, financial analysis and the development and negotiation of such contract under the procedures set forth in subsection (1) or subsection (2) of this section. The final contract shall be approved by the department.

(b) Any shared savings or performance contract entered into must include the requirements set forth in paragraph (1)(b) or (2)(b) of this section and also must include the following additional provisions:

(i) The terms of any shared savings or performance contract for efficiency services and/or equipment entered into pursuant to this section may not exceed ten (10) years.

(ii) The terms of any shared savings or performance contract entered into pursuant to this section must contain a guarantee of savings clause from the company providing energy efficiency, equipment, services relating to the installation, operation and maintenance of equipment or improvements reasonably required to existing equipment and existing improvements.

(c) A shared savings or performance contract for purposes of this section means those contracts where the cost of the energy efficiency contract is contingent upon and is paid for by the savings generated by the energy efficiency equipment or services.

(5) By September 1 of each year, each school district shall annually report to the Department of Energy and Transportation its energy usage and consumption by fuel type for the previous fiscal year.

SECTION 2. This act shall take effect and be in force from and after July 1, 1997.