H 3155 General Bill, By H.H. Keyserling, M.F. Jaskwhich, K.G. Kempe, 
I.K. Rudnick and C.Y. Waites
 A Bill to create and house administratively within the State Budget and
 Control Board the South Carolina Energy Resource and Management Development
 Authority, to constitute the Authority as an instrumentality of the State for
 the performance of essential governmental functions involving energy
 conservation and alternative financing of conservation measures as defined in
 this Act, to provide for the membership of the Authority, to require the
 Budget and Control Board to provide technical and clerical services and
 personnel as the Authority may require in the performance of its functions and
 to provide certain liaison services with other agencies of state government,
 to require the Authority to reimburse the Budget and Control Board for
 services provided, to provide for the powers of the Authority and of any joint
 venture created pursuant to this Act, to provide for related matters
 concerning the establishment and functioning of the Authority, to require
 state agencies and local school boards to submit an energy consumption report
 covering a particular fiscal year to the Authority in a format established by
 the Authority, to require a state agency, upon entering into a contractual
 agreement with the Authority, to establish a separate budget line item in
 accordance with the procedures under the Budget and Control Board to be
 established for repayment of energy conservation projects as contracted with
 the Authority, to provide that each responsible state agency or local school
 board, upon approval of a new energy conservation work program by the
 Authority, may make certain expenditures from the referenced line item of the
 State Budget in an amount not to exceed that agency's or local school board's
 appropriation to that line item of the State Budget, to provide that annual
 state energy management plans are required of all agencies and local school
 boards undertaking energy conservation projects as a result of this Act, and
 to require that plans be reviewed by the Authority each year for the duration
 of projects.

   12/27/90  House  Prefiled
   12/27/90  House  Referred to Committee on Ways and Means
   01/08/91  House  Introduced and read first time HJ-83
   01/08/91  House  Referred to Committee on Ways and Means HJ-84
   03/04/92  House  Tabled in committee

A BILL

TO CREATE AND HOUSE ADMINISTRATIVELY WITHIN THE STATE BUDGET AND CONTROL BOARD THE SOUTH CAROLINA ENERGY RESOURCE AND MANAGEMENT DEVELOPMENT AUTHORITY, TO CONSTITUTE THE AUTHORITY AS AN INSTRUMENTALITY OF THE STATE FOR THE PERFORMANCE OF ESSENTIAL GOVERNMENTAL FUNCTIONS INVOLVING ENERGY CONSERVATION AND ALTERNATIVE FINANCING OF CONSERVATION MEASURES AS DEFINED IN THIS ACT, TO PROVIDE FOR THE MEMBERSHIP OF THE AUTHORITY, TO REQUIRE THE BUDGET AND CONTROL BOARD TO PROVIDE TECHNICAL AND CLERICAL SERVICES AND PERSONNEL AS THE AUTHORITY MAY REQUIRE IN THE PERFORMANCE OF ITS FUNCTIONS AND TO PROVIDE CERTAIN LIAISON SERVICES WITH OTHER AGENCIES OF STATE GOVERNMENT, TO REQUIRE THE AUTHORITY TO REIMBURSE THE BUDGET AND CONTROL BOARD FOR SERVICES PROVIDED, TO PROVIDE FOR THE POWERS OF THE AUTHORITY AND OF ANY JOINT VENTURE CREATED PURSUANT TO THIS ACT, TO PROVIDE FOR RELATED MATTERS CONCERNING THE ESTABLISHMENT AND FUNCTIONING OF THE AUTHORITY, TO REQUIRE STATE AGENCIES AND LOCAL SCHOOL BOARDS TO SUBMIT AN ENERGY CONSUMPTION REPORT COVERING A PARTICULAR FISCAL YEAR TO THE AUTHORITY IN A FORMAT ESTABLISHED BY THE AUTHORITY, TO REQUIRE A STATE AGENCY, UPON ENTERING INTO A CONTRACTUAL AGREEMENT WITH THE AUTHORITY, TO ESTABLISH A SEPARATE BUDGET LINE ITEM IN ACCORDANCE WITH THE PROCEDURES UNDER THE BUDGET AND CONTROL BOARD TO BE ESTABLISHED FOR REPAYMENT OF ENERGY CONSERVATION PROJECTS AS CONTRACTED WITH THE AUTHORITY, TO PROVIDE THAT EACH RESPONSIBLE STATE AGENCY OR LOCAL SCHOOL BOARD, UPON APPROVAL OF A NEW ENERGY CONSERVATION WORK PROGRAM BY THE AUTHORITY, MAY MAKE CERTAIN EXPENDITURES FROM THE REFERENCED LINE ITEM OF THE STATE BUDGET IN AN AMOUNT NOT TO EXCEED THAT AGENCY'S OR LOCAL SCHOOL BOARD'S APPROPRIATION TO THAT LINE ITEM OF THE STATE BUDGET, TO PROVIDE THAT ANNUAL STATE ENERGY MANAGEMENT PLANS ARE REQUIRED OF ALL AGENCIES AND LOCAL SCHOOL BOARDS UNDERTAKING ENERGY CONSERVATION PROJECTS AS A RESULT OF THIS ACT, AND TO REQUIRE THAT PLANS BE REVIEWED BY THE AUTHORITY EACH YEAR FOR THE DURATION OF PROJECTS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. The General Assembly finds:

(1) The operation of building facilities owned and controlled by the State and local public school boards consumes significant amounts of energy.

(2) Facilities owned and controlled by the State and local school boards present a significant opportunity for energy cost savings through the implementation of cost-effective conservation measures.

(3) Principles which produce efficient facility management in the private sector are applicable equally to the management of tax-supported state buildings and local public educational facilities.

(4) There exist, in the private sector, favorable alternative methods of financing energy conservation measures which are not adaptable readily to financing state facility energy efficiency improvements due to current laws and budgetary practices.

(5) Maximization of energy conservation efforts in light of limited costly energy resources and revenues requires careful advance planning by responsible agencies.

SECTION 2. The General Assembly declares that it is the policy of the State to:

(1) undertake aggressive programs designed to reduce energy use in state buildings and local educational facilities to reduce the operating costs of government and to set an example of energy efficiency for the public;

(2) utilize, to the greatest practical extent, alternative methods of financing energy efficiency improvements in public facilities to minimize the necessity for increased taxes or appropriations;

(3) employ practicable private sector management incentive principles to implement the policies in items (1) and (2) of this section.

SECTION 3. For the purposes of this act:

(1) "Authority" means the South Carolina Energy Resource and Management Development Authority, an independent agency created and established pursuant to this act and housed within the Budget and Control Board.

(2) "Energy conservation activity" means the technical evaluation and installation or modification of equipment, building components, and operations in a facility. These activities primarily will reduce energy consumption or allow the use of an alternative energy source. Energy conservation activities include, but are not limited to, installation of insulation, storm windows and doors, energy control systems, solar heating, cogeneration facilities, and heat recovery systems, and replacement of boilers and incandescent lights.

(3) "Energy management plans" include timeliness, conservation measures to reduce energy consumption, projected costs, energy saving goals, and delegated responsibilities for identifying and completing energy conservation activities.

(4) "Facility" means a building or group of buildings served by a central energy distribution system or components of a central energy distribution system, and which are owned by, or leased to a state agency or local school board.

(5) "Lease-purchase agreement" means an agreement under which a private firm leases energy conservation equipment to a building user with lease principal and interest payments being paid with any energy cost savings attributable to the equipment.

(6) "Responsible state agency" means any state agency responsible for utility payments for a state-owned or controlled facility.

(7) "Shared savings agreement" means an agreement under which a private firm provides capital for energy conservation improvements in a building at no initial cost to the building owner. All energy cost savings are shared between the building owner and the private firm.

(8) "Revenues" means monies or income received by the authority, including, but not limited to, fees, charges, lease payments, income on investments, bonds, payments due and owing on account of any instrument, contract, or agreement between the authority and any person or agency, local school board, gifts, grants, or any other monies or payments to which the authority is entitled under the provisions of this act.

(9) "Oil overcharge funds" means funds received by the State from the federal government, court decisions, or other oil overcharge settlements which permit their use in a revolving loan fund or grant account to finance energy conservation measures in state-owned facilities or local public educational facilities.

(10) "Revenue bonds" means bonds issued by the authority that are secured and insured by the anticipated revenues generated by the energy efficiency projects funded through the bonds. The issuance of such bonds may not be for more than five years, thereby establishing the rate of return on energy investments at not less than twenty percent.

(11) "School facility" means any local public educational facility, including administrative buildings, shops, gymnasiums, or other educational buildings subject to local taxes and state revenues under the jurisdiction of the local district school board.

SECTION 4. (A) There is created and housed administratively within the State Budget and Control Board the South Carolina Energy Resource and Management Development Authority which is constituted an instrumentality of the State for the performance of essential governmental functions involving energy conservation and alternative financing of conservation measures as defined in this act.

(B) The authority consists of five members appointed by the Governor for four-year terms. One member must be experienced in energy matters, one member must be a licensed mechanical engineer experienced in energy conservation, a third member must be experienced in the financing of public facilities, a fourth member must be a representative of a local school board, and the fifth member must be an electrical engineer. The Governor shall designate a member to serve as chairman. Authority members must be allowed the usual mileage, per diem, and subsistence as provided by law for members of state boards, committees, and commissions. All members shall serve until their successors have been appointed and qualify. A vacancy occurring in the membership of the authority must be filled for the remainder of the particular term in the same manner as original appointment. Of the members appointed originally to the authority, the members who are the electrical engineer and the representative of a local school board shall serve initial terms of two years each but shall serve terms of four years each thereafter.

(C) The Budget and Control Board shall provide technical and clerical services and personnel as the authority may require in the performance of its functions and shall provide liaison services with other agencies of state government to disseminate information and comment on authority matters. The authority shall reimburse the Budget and Control Board for such services from its revenues or from any other funding source.

(D) To the extent necessary, the authority shall require any participating state agency or the Department of Education to advance funds to pay for the expenditures required by subsections (B) and (C) of this section and other preliminary costs. The funds must be reimbursed to the advancing party from the proceeds of the sale of revenue bonds or other revenue sources for future proposed projects.

SECTION 5. (A) The authority or any joint venture created pursuant to this act has all of the powers necessary and convenient to carry out and effectuate the purposes and provisions of this act, including, but without limiting the generality of the foregoing, the following powers:

(1) the power to construct, reconstruct, install, design, improve, expand, operate, maintain, lease, transfer, assign, or own, in whole or in part, energy conservation measures or energy generation facilities for the benefit of any participating state agencies or local school boards and to enter into joint ventures with state agencies and local school boards to effectuate the purposes of this act;

(2) the power to acquire by deed, purchase, lease, contract, gift, or devise any real or personal property, upon terms and conditions as it considers advisable, and to lease, sell, or dispose of the property in the manner necessary or desirable to carry out the objects and purposes of this act. However, a lease or conveyance of real property owned by the authority or by other state agencies or local school boards to a private person shall reflect the fair market value of the property leased or conveyed;

(3) the power to select, approve, and contract for services in the performance of architectural and engineering design and the power to select, approve, and contract for the supervision of design and construction, project construction, system management, and other professional or technical services as required for either prequalification of a contractor or the resubmission by any person or association of persons of a proposal in response to an official request for proposal or similar written communication of the authority, whenever these services are considered necessary, desirable, or convenient in carrying out the purposes of the authority. However, the authority's obligation to pay under the contract may not be secured by the full faith and credit of the State but must be secured by the assets of the authority;

(4) the power to contract with any person, state agency, or local school board for the performance of all services necessary to effectuate the purposes of this act. However, the obligation of the authority, state agency, or local school board to pay under any contract may not be secured by the full faith and credit of the State of South Carolina, state agency, or local school board;

(5) the power to contract with any person to sell energy or other by-products of energy generation facilities and to collect revenue therefrom;

(6) the power to procure and keep in force adequate insurance or otherwise provide for the adequate protection of its property as well as to indemnify and save harmless it and its officers, agents, or employees against loss or liability with respect to any risk to which it or they may be exposed in carrying out any function of the authority;

(7) the power to do anything else necessary for the construction, operation, and maintenance of building energy conservation facilities not otherwise prohibited by law;

(8) the power to receive, administer, and comply with the conditions or requirements respecting any appropriation, gift, grant, or donation of any monies, including monies from state or federal sources;

(9) the power to sue and be sued in its own name, plead, and be impleaded;

(10) the power to adopt an official seal and alter it;

(11) the power to adopt bylaws for the regulation of its affairs and the conduct of its business and to prescribe regulations and policies in connection with the performance of its functions and duties.

(B) Neither the authority nor any joint venture established pursuant to this act is subject to the provisions of the South Carolina Consolidated Procurement Code (Chapter 35 of Title 11 of the 1976 Code) or any other provision of law which would restrict or conflict with its duties, powers, functions, or purposes under this act.

(C) Notwithstanding the powers granted in subsection (A) of this section, the authority does not have the power to require any state agency or local school board to contract or enter into a joint venture with the authority.

SECTION 6. (A) Not later than thirty days after the close of each fiscal year, each responsible state agency or local school board shall submit an energy consumption report covering that fiscal year to the authority in a format established by the authority. The energy consumption report must identify:

(1) each facility or major energy system covered by the report;

(2) utility account numbers;

(3) monthly consumption of energy by fuel type;

(4) monthly per unit cost of energy by fuel type.

(B) Upon entering into a contractual agreement with the authority, a state agency must establish

a separate budget line item in accordance with the procedures under the Budget and Control Board to be established for repayment of energy conservation projects as contracted with the authority. Until the contractual agreements have been met, the state agency shall continue to make the appropriate payment and may not transfer funds from this line item.

Upon entering into a contractual agreement with the authority, a local school board must ensure that expenditures for repayment of energy conservation projects will be made. Until the contractual agreements have been met, the local school board shall continue to meet the requirements of the contract.

(C) Each responsible state agency or local school board, upon approval of a new energy conservation work program by the authority, may make expenditures from the line item of the state budget referenced in subsection (B) of this section, in an amount not to exceed that agency's or local school board's appropriation to that line item of the state budget, for necessary payments for energy conservation equipment, lease-purchase agreements, and shared savings agreements.

(D) Annual state energy management plans are required of all agencies and local school boards undertaking energy conservation projects as a result of this act. Plans must be reviewed by the authority each year for the duration of projects.

SECTION 7. This act takes effect upon approval by the Governor.