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H.B. 198

             1     

STATE AGENCY ENERGY EFFICIENCY

             2     
2008 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Fred R. Hunsaker

             5     
Senate Sponsor: Scott K. Jenkins

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts and amends provisions relating to state agency energy efficiency.
             10      Highlighted Provisions:
             11          This bill:
             12          .    requires the Legislature, subject to future budget constraints, to retain energy
             13      savings in a state agency's appropriation;
             14          .    requires the Legislature to appropriate a certain percentage of the replacement cost
             15      of existing facilities for the State Building Energy Efficiency Program;
             16          .    creates a revolving loan fund to lend monies to state agencies to finance energy
             17      efficiency measures;
             18          .    establishes a sunset date for certain provisions of the bill; and
             19          .    makes technical corrections.
             20      Monies Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          63-55-263, as last amended by Laws of Utah 2007, Chapters 216, 306, and 317
             27          63A-5-104, as last amended by Laws of Utah 2007, Chapter 12


             28      ENACTS:
             29          63A-5-602, Utah Code Annotated 1953
             30          63A-5-603, Utah Code Annotated 1953
             31      RENUMBERS AND AMENDS:
             32          63A-5-601, (Renumbered from 63-9-63, as last amended by Laws of Utah 2006,
             33      Chapter 278)
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 63-55-263 is amended to read:
             37           63-55-263. Repeal dates, Titles 63 to 63E.
             38          (1) Title 63, Chapter 25a, Part 3, Sentencing Commission, is repealed January 1, 2012.
             39          (2) The Crime Victims' Reparations Board, created in Section 63-25a-404 , is repealed
             40      July 1, 2017.
             41          (3) The Resource Development Coordinating Committee, created in Section
             42      63-38d-501 , is repealed July 1, 2015.
             43          (4) Title 63, Chapter 38f, Part 4, Enterprise Zone Act, is repealed July 1, 2008.
             44          (5) (a) Title 63, Chapter 38f, Part 11, Recycling Market Development Zone Act, is
             45      repealed July 1, 2010.
             46          (b) Sections 59-7-610 and 59-10-1007 regarding tax credits for certain persons in
             47      recycling market development zones, are repealed for taxable years beginning on or after
             48      January 1, 2011.
             49          (c) Notwithstanding Subsection (5)(b), a person may not claim a tax credit under
             50      Section 59-7-610 or 59-10-1007 :
             51          (i) for the purchase price of machinery or equipment described in Section 59-7-610 or
             52      59-10-1007 , if the machinery or equipment is purchased on or after July 1, 2010; or
             53          (ii) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), if
             54      the expenditure is made on or after July 1, 2010.
             55          (d) Notwithstanding Subsections (5)(b) and (c), a person may carry forward a tax credit
             56      in accordance with Section 59-7-610 or 59-10-1007 if:
             57          (i) the person is entitled to a tax credit under Section 59-7-610 or 59-10-1007 ; and
             58          (ii) (A) for the purchase price of machinery or equipment described in Section


             59      59-7-610 or 59-10-1007 , the machinery or equipment is purchased on or before June 30, 2010;
             60      or
             61          (B) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), the
             62      expenditure is made on or before June 30, 2010.
             63          (6) Title 63, Chapter 47, Utah Commission for Women and Families, is repealed July
             64      1, 2011.
             65          (7) Title 63, Chapter 75, Families, Agencies, and Communities Together for Children
             66      and Youth At Risk Act, is repealed July 1, 2016.
             67          (8) Title 63, Chapter 88, Navajo Trust Fund, is repealed July 1, 2008.
             68          (9) Title 63, Chapter 99, Utah Commission on Aging, is repealed July 1, 2009.
             69          (10) Section 63A-4-204 , authorizing the Risk Management Fund to provide coverage
             70      to any public school district that chooses to participate, is repealed July 1, 2016.
             71          (11) The requirement to fund the State Building Energy Efficiency Program in Section
             72      63A-5-104 (7) is repealed July 1, 2016.
             73          (12) Section 63A-5-603 , State Facility Energy Efficiency Fund, is repealed July 1,
             74      2016.
             75          [(11)] (13) Section 63C-8-106 , Rural residency training program, is repealed July 1,
             76      2015.
             77          Section 2. Section 63A-5-104 is amended to read:
             78           63A-5-104. Capital development and capital improvement process -- Approval
             79      requirements -- Limitations on new projects -- Emergencies.
             80          (1) As used in this section:
             81          (a) "Capital developments" means any:
             82          (i) remodeling, site, or utility projects with a total cost of $2,500,000 or more;
             83          (ii) new facility with a construction cost of $500,000 or more; or
             84          (iii) purchase of real property where an appropriation is requested to fund the purchase.
             85          (b) "Capital improvements" means any:
             86          (i) remodeling, alteration, replacement, or repair project with a total cost of less than
             87      $2,500,000;
             88          (ii) site and utility improvement with a total cost of less than $2,500,000; or
             89          (iii) new facility with a total construction cost of less than $500,000.


             90          (c) (i) "New facility" means the construction of any new building on state property
             91      regardless of funding source.
             92          (ii) "New facility" includes:
             93          (A) an addition to an existing building; and
             94          (B) the enclosure of space that was not previously fully enclosed.
             95          (iii) "New facility" does not mean:
             96          (A) the replacement of state-owned space that is demolished or that is otherwise
             97      removed from state use, if the total construction cost of the replacement space is less than
             98      $2,500,000; or
             99          (B) the construction of facilities that do not fully enclose a space.
             100          (d) "Operating deficit" means that estimated General Fund or Uniform School Fund
             101      revenues are less than budgeted for the current or next fiscal year.
             102          [(d)] (e) "Replacement cost of existing state facilities" means the replacement cost, as
             103      determined by the Division of Risk Management, of state facilities, excluding auxiliary
             104      facilities as defined by the State Building Board.
             105          [(e)] (f) "State funds" means public monies appropriated by the Legislature.
             106          (2) The State Building Board, on behalf of all state agencies, commissions,
             107      departments, and institutions shall submit its capital development recommendations and
             108      priorities to the Legislature for approval and prioritization.
             109          (3) (a) Except as provided in Subsections (3)(b), (d), and (e), a capital development
             110      project may not be constructed on state property without legislative approval.
             111          (b) Legislative approval is not required for a capital development project if the State
             112      Building Board determines that:
             113          (i) the requesting higher education institution has provided adequate assurance that:
             114          (A) state funds will not be used for the design or construction of the facility; and
             115          (B) the higher education institution has a plan for funding in place that will not require
             116      increased state funding to cover the cost of operations and maintenance to, or state funding for,
             117      immediate or future capital improvements to the resulting facility; and
             118          (ii) the use of the state property is:
             119          (A) appropriate and consistent with the master plan for the property; and
             120          (B) will not create an adverse impact on the state.


             121          (c) (i) The Division of Facilities Construction and Management shall maintain a record
             122      of facilities constructed under the exemption provided in Subsection (3)(b).
             123          (ii) For facilities constructed under the exemption provided in Subsection (3)(b), a
             124      higher education institution may not request:
             125          (A) increased state funds for operations and maintenance; or
             126          (B) state capital improvement funding.
             127          (d) Legislative approval is not required for:
             128          (i) the renovation, remodeling, or retrofitting of an existing facility with nonstate funds;
             129          (ii) facilities to be built with nonstate funds and owned by nonstate entities within
             130      research park areas at the University of Utah and Utah State University;
             131          (iii) facilities to be built at This is the Place State Park by This is the Place Foundation
             132      with funds of the foundation, including grant monies from the state, or with donated services or
             133      materials;
             134          (iv) capital projects that are funded by the Navajo Trust Fund Board from Navajo Trust
             135      Fund monies and the Uintah Basin Revitalization Fund that do not provide a new facility for a
             136      state agency or higher education institution; or
             137          (v) capital projects on school and institutional trust lands that are funded by the School
             138      and Institutional Trust Lands Administration from the Land Grant Management Fund and that
             139      do not fund construction of a new facility for a state agency or higher education institution.
             140          (e) (i) Legislative approval is not required for capital development projects to be built
             141      for the Department of Transportation as a result of an exchange of real property under Section
             142      72-5-111 .
             143          (ii) When the Department of Transportation approves those exchanges, it shall notify
             144      the president of the Senate, the speaker of the House, and the cochairs of the Capital Facilities
             145      and Administrative Services Subcommittee of the Legislature's Joint Appropriation Committee
             146      about any new facilities to be built under this exemption.
             147          (4) (a) The State Building Board, on behalf of all state agencies, commissions,
             148      departments, and institutions shall by January 15 of each year, submit a list of anticipated
             149      capital improvement requirements to the Legislature for review and approval.
             150          (b) Unless otherwise directed by the Legislature, the building board shall prioritize
             151      capital improvements from the list submitted to the Legislature up to the level of appropriation


             152      made by the Legislature.
             153          (c) In prioritizing capital improvements, the building board shall consider the results of
             154      facility evaluations completed by an architect/engineer as stipulated by the building board's
             155      facilities maintenance standards.
             156          (d) The building board may require an entity that benefits from a capital improvement
             157      project to repay the capital improvement funds from savings that result from the project.
             158          (5) The Legislature may authorize:
             159          (a) the total square feet to be occupied by each state agency; and
             160          (b) the total square feet and total cost of lease space for each agency.
             161          (6) (a) Except as provided in Subsection (6)(b), the Legislature may not fund the design
             162      or construction of any new capital development projects, except to complete the funding of
             163      projects for which partial funding has been previously provided, until the Legislature has
             164      appropriated 1.1% of the replacement cost of existing state facilities to capital improvements.
             165          [(b) (i) As used in this Subsection (6)(b), "operating deficit" means that estimated
             166      General Fund or Uniform School Fund revenues are less than budgeted for the current or next
             167      fiscal year.]
             168          [(ii)] (b) If the Legislature determines that an operating deficit exists, the Legislature
             169      may, in eliminating the deficit, reduce the amount appropriated to capital improvements to
             170      0.9% of the replacement cost of state buildings.
             171          (7) (a) Except as provided in Subsection (7)(b), the Legislature may not fund the design
             172      or construction of new capital developments until the Legislature has appropriated 0.065% of
             173      the replacement cost of existing state facilities to the Division of Facilities Construction and
             174      Management for the State Building Energy Efficiency Program.
             175          (b) If the Legislature determines that an operating deficit exists, the Legislature may, in
             176      eliminating the deficit, reduce the amount appropriated to the State Building Energy Efficiency
             177      Program to 0.045% of the replacement cost of existing state facilities.
             178          [(7)] (8) (a) If, after approval of capital development and capital improvement
             179      priorities by the Legislature under this section, emergencies arise that create unforeseen critical
             180      capital improvement projects, the State Building Board may, notwithstanding the requirements
             181      of Title 63, Chapter 38, Budgetary Procedures Act, reallocate capital improvement funds to
             182      address those projects.


             183          (b) The building board shall report any changes it makes in capital improvement
             184      allocations approved by the Legislature to:
             185          (i) the Office of Legislative Fiscal Analyst within 30 days of the reallocation; and
             186          (ii) the Legislature at its next annual general session.
             187          [(8)] (9) (a) The State Building Board may adopt a rule allocating to institutions and
             188      agencies their proportionate share of capital improvement funding.
             189          (b) The building board shall ensure that the rule:
             190          (i) reserves funds for the Division of Facilities Construction and Management for
             191      emergency projects; and
             192          (ii) allows the delegation of projects to some institutions and agencies with the
             193      requirement that a report of expenditures will be filed annually with the Division of Facilities
             194      Construction and Management and appropriate governing bodies.
             195          [(9)] (10) It is the intent of the Legislature that in funding capital improvement
             196      requirements under this section the General Fund be considered as a funding source for at least
             197      half of those costs.
             198          Section 3. Section 63A-5-601 , which is renumbered from Section 63-9-63 is
             199      renumbered and amended to read:
             200     
Part 6. Energy Conservation and Alternative Financing

             201           [63-9-63].     63A-5-601. Legislative findings and policy.
             202          (1) The Legislature finds the following:
             203          (a) The operation of facilities owned and controlled by the state consumes significant
             204      amounts of energy.
             205          (b) Facilities owned and controlled by the state present a significant opportunity for
             206      energy cost savings through the implementation of conservation measures.
             207          (c) Principles which produce efficient facility management in the private sector are
             208      equally applicable to the management of public buildings and facilities.
             209          (d) There exists, in the private sector, favorable alternative methods of financing
             210      energy conservation measures which are not readily adaptable to financing state facility energy
             211      efficiency improvements due to current budgetary practices.
             212          (e) Maximization of energy conservation efforts in light of limited resources requires
             213      careful advance planning by responsible agencies.


             214          (2) The Legislature declares that it is the policy of the state to:
             215          (a) undertake aggressive programs designed to reduce energy use in state facilities in
             216      order to reduce the operating costs of state government and to set an example of energy
             217      efficiency for the public;
             218          (b) utilize, to the greatest practical extent, alternative funding sources and methods of
             219      financing energy efficiency improvements in state facilities in a manner which minimizes the
             220      necessity for increased appropriations;
             221          (c) employ private sector management incentive principles, to the extent practicable, to
             222      implement the policies in Subsections (2)(a) and (b);
             223          (d) develop incentives to encourage state entities to conserve energy, reduce energy
             224      costs, and utilize renewable energy sources where practicable; and
             225          (e) procure and use energy efficient products where practicable.
             226          Section 4. Section 63A-5-602 is enacted to read:
             227          63A-5-602. Appropriation for energy efficiency measures.
             228          (1) For purposes of this part:
             229          (a) "Energy efficiency measures" is as defined in Section 63-9-67 .
             230          (b) "Energy savings" means monies not expended by a state agency as the result of
             231      energy efficiency measures.
             232          (c) "State agency" is as defined in Section 63-9-67 .
             233          (2) Subject to future budget constraints, the Legislature may not remove energy savings
             234      from a state agency's appropriation.
             235          (3) A state agency shall use energy savings to:
             236          (a) fund the cost of the energy efficiency measures; and
             237          (b) if funds are available after meeting the requirements of Subsection (3)(a), fund and
             238      implement new energy efficiency measures.
             239          (4) A state agency may consult with the State Building Energy Efficiency Program
             240      manager in the Division of Facilities and Construction Management regarding:
             241          (a) the cost effectiveness of energy efficiency measures; and
             242          (b) ways to measure energy savings that take into account fluctuations in energy costs
             243      and temperature.
             244          Section 5. Section 63A-5-603 is enacted to read:


             245          63A-5-603. State Facility Energy Efficiency Fund -- Contents -- Use of fund
             246      monies.
             247          (1) As used in this section:
             248          (a) "Board" means the State Building Board.
             249          (b) "Division" means the Division of Facilities Construction and Management.
             250          (c) "Fund" means the State Facility Energy Efficiency Fund created by this section.
             251          (2) There is created a revolving loan fund known as the "State Facility Energy
             252      Efficiency Fund."
             253          (3) To capitalize the fund, the Division of Finance shall, at the end of fiscal year
             254      2007-08, transfer all unobligated balances in the Stripper Well-Petroleum Violation Escrow
             255      Fund to the fund.
             256          (4) The fund shall consist of:
             257          (a) monies transferred under Subsection (3);
             258          (b) monies appropriated by the Legislature;
             259          (c) monies received for the repayment of loans made from the fund; and
             260          (d) interest earned on the fund.
             261          (5) The board shall make a loan from the fund to a state agency to, wholly or in part,
             262      finance energy efficiency measures.
             263          (6) (a) (i) A state agency requesting a loan shall submit an application to the board in
             264      the form and containing the information that the board requires, including plans and
             265      specifications for the proposed energy efficiency measures.
             266          (ii) A state agency may request a loan to fund all or part of the cost of energy efficiency
             267      measures.
             268          (b) If the board rejects the application, the board shall notify the applicant stating the
             269      reasons for the rejection.
             270          (7) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
             271      the board shall make rules establishing criteria to determine:
             272          (i) loan eligibility;
             273          (ii) energy efficiency measures priority; and
             274          (iii) ways to measure energy savings that take into account fluctuations in energy costs
             275      and temperature.


             276          (b) In making rules that establish prioritization criteria for energy efficiency measures,
             277      the board may consider:
             278          (i) possible additional sources of revenue;
             279          (ii) the feasibility and practicality of the energy efficiency measures;
             280          (iii) the energy savings attributable to eligible energy efficiency measures;
             281          (iv) the annual energy savings;
             282          (v) the projected energy cost payback of eligible energy efficiency measures;
             283          (vi) other benefits to the state attributable to eligible energy efficiency measures;
             284          (vii) the availability of federal funds for the energy efficiency measures; and
             285          (viii) whether to require a state agency to provide matching funds for the energy
             286      efficiency measures.
             287          (8) (a) In reviewing energy efficiency measures for possible funding, the board shall:
             288          (i) review the loan application and the plans and specifications for the energy
             289      efficiency measures;
             290          (ii) determine whether to grant the loan by applying the loan eligibility criteria; and
             291          (iii) if the loan is granted, prioritize funding of the energy efficiency measures by
             292      applying the prioritization criteria.
             293          (b) The board may condition approval of a loan application and the availability of
             294      funds on assurances from the state agency that the board considers necessary to ensure that the
             295      state agency:
             296          (i) uses the proceeds to pay the cost of the energy efficiency measures; and
             297          (ii) implements the energy efficiency measures.
             298          (9) The State Building Energy Efficiency Program shall provide staff support when the
             299      board performs the duties established in this section.





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    as of 2-5-08 3:42 PM


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