AN ACT AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS TO FUND THE STATE BUILDING ENERGY CONSERVATION PROGRAM; APPROVING ENERGY CONSERVATION PROJECTS FOR FISCAL YEARS 2000 AND 2001; APPROPRIATING BOND PROCEEDS TO THE DEPARTMENT OF ENVIRONMENTAL QUALITY; PLEDGING THE CREDIT OF THE STATE OF MONTANA TO SECURE THE BONDS TO BE ISSUED; REAPPROPRIATING STRIPPER-WELL PAYMENTS CONTAINED IN THE FEDERAL SPECIAL REVENUE FUND; AMENDING THE PROCEDURE FOR IDENTIFYING BUILDINGS THAT HAVE A POTENTIAL FOR ENERGY SAVINGS AND THE AUTHORITY TO TRANSFER FUNDS FOR DESIGNING AND CONSTRUCTING ENERGY IMPROVEMENTS; AMENDING SECTIONS 90-4-605 AND 90-4-607, MCA; AND PROVIDING AN EFFECTIVE DATE.

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

Section 1. Section 90-4-605, MCA, is amended to read:

"90-4-605. Preparation of energy conservation program. (1) The department shall work with state agencies to identify buildings that have a potential for energy savings, based on age, energy use, function, and condition of the building.

(2) Based on the criteria in subsection (1) and on the feasibility of leveraging other funds, such as federal and utility energy conservation program money, the department shall select certain facilities for indepth energy analyses to identify the technical and financial feasibility of making energy conservation improvements to the facilities.

(3) During the energy analyses, the department shall consult with the utilities that serve the selected facilities to discuss potential impacts on the utilities and their customers of making energy conservation improvements to these facilities.

(4) Upon completion of the energy analyses, the department shall submit to the governor its findings and a list of projects recommended for funding under the energy conservation program. The department shall identify estimated costs and savings to the state based on these analyses.

(5) The department shall compile a report that must include the following:

(a) a listing of contacts between the department and other state agencies;

(b) a summary of the department's review of agency requests and a selection of projects for indepth analysis;

(c) a summary of the energy analyses conducted by the department, including the estimated cost of each proposed project and the estimated energy cost savings of each proposed project;

(d) a description of measures taken by the department to address the issues that were raised in the consultation with the affected utilities; and

(e) if a fuel switching measure is proposed, an analysis of the costs to the affected utility and its customers and of the benefits to the state.

(6) If a fuel switching measure is proposed, the department shall demonstrate through the analysis required by subsection (5)(e) that the benefits to the state exceed the costs to the utility and its customers.

(7) The department shall submit the report required by subsection (5) to the governor before September 1 of each even-numbered year."

Section 2. Section 90-4-607, MCA, is amended to read:

"90-4-607. Duties of department. In addition to the duties set forth in 90-4-605, the department is authorized to:

(1) analyze state utility data to identify high-potential energy conservation projects;

(2) perform comprehensive energy analyses on state-owned buildings, structures, and facilities, contracting with private engineers when necessary;

(3) transfer funds and authority to the department of administration to:

(a) procure design and construction of cost-effective energy improvements; and

(b) transfer funds and authority to other agencies to procure, design, and construct cost-effective energy improvements; and

(4) train facility maintenance staff in energy saving techniques and maintenance of energy improvements and monitor energy conservation projects to ensure that cost savings are realized and are adequate to cover the debt service if bonds have been issued to fund the improvements."

Section 3. Stripper-well payments -- reappropriation -- definition -- priority. (1) There is reappropriated from the stripper-well payments contained in the federal special revenue fund to the department of environmental quality $100,000 to fulfill duties authorized by 90-4-605 and 90-4-607. The original appropriation was contained in section 9, Chapter 597, Laws of 1989. The reappropriation is a biennial appropriation.

(2) (a) "Stripper-well payments" means the oil overcharge payments made to the United States treasury for distribution to the state of Montana as the result of the final settlement agreement in Cause No. M.D.L. 378, United States district court for the district of Kansas, and any interest accrued on the payments.

(b) The term does not include stripper-well payments that have been expended or legally obligated or that have been incorporated into any of the existing federal energy programs as the result of prior appropriations by the legislature.

(3) The stripper-well payments reappropriated in this section have a higher priority than any other appropriation of stripper-well payments for fiscal years 2000 and 2001.

Section 4. Appropriations of bond proceeds. There is appropriated from bond proceeds authorized by Chapter 571, Laws of 1991, Chapter 350, Laws of 1993, Chapter 61, Laws of 1995, Chapter 81, Laws of 1997, and [section 6], $450,000 to the department of environmental quality to fulfill duties under 90-4-605 and 90-4-607. This appropriation is a biennial appropriation.

Section 5. Approval of energy conservation projects -- definition. (1) Pursuant to Title 90, chapter 4, part 6, the legislature approves the following energy conservation projects for fiscal years 2000 and 2001.

University of Montana

Science Complex, Missoula

Montana State University

Cowan Hall Remodel, Havre

Special Education Building, Billings

Department of Administration

Justice Building

Department of Transportation

Signal Light Retrofit Project

University of Montana

Grizzly Pool

Department of Military Affairs

Maintenance Shop Building, Helena

(2) In addition to the energy conservation projects listed in subsection (1), the department of environmental quality may expend funds appropriated under [section 6] to respond to lost energy saving opportunities. This includes coordination of energy improvement projects with the long-range building program's capital improvement projects.

(3) For purposes of this section, a "lost energy saving opportunity" means an opportunity to improve energy use that would provide significant energy and cost savings to the state and that will be technically infeasible or uneconomical if the department of environmental quality is delayed in providing the necessary funds until specific legislative approval can be obtained.

(4) If the costs of the projects authorized in subsections (1) and (2) are substantially below the bond amount authorized in [section 6], the department of environmental quality may fund projects that otherwise would be proposed as part of the state building energy conservation package for fiscal years 2002 and 2003.

Section 6. Bond authorization -- appropriation of bond proceeds. (1) The board of examiners may, pursuant to 90-4-611, issue and sell bonds of the state in an aggregate principal amount not to exceed $3 million for fiscal years 2000 and 2001 for the projects approved in [section 5] and to fulfill duties authorized by 90-4-605 and 90-4-607, as provided in [section 4]. The bonds are general obligations for which the full faith and credit and taxing powers of the state are pledged for payment of the principal and interest on the bonds. The bonds must be issued as provided by Title 17, chapter 5, part 8.

(2) The proceeds of the bonds, other than any premiums and accrued interest received, must be deposited in the energy conservation program account established by 90-4-612. Premiums and accrued interest must be deposited in the debt service fund established in 17-2-102. Proceeds of bonds deposited in the energy conservation program account may be used to pay the costs of issuing the bonds, to fulfill duties authorized by 90-4-605 and 90-4-607, and to fund the projects approved in [section 5]. For purposes of 17-5-803 and 17-5-804, the energy conservation program account constitutes a capital projects account. The bond proceeds must be available to the department of environmental quality and may be used for the purposes authorized in this section without further budgetary authorization.

Section 7. Requirements for approval of state debt. Because [section 6] authorizes the creation of state debt, Article VIII, section 8, of the Montana constitution requires a vote of two-thirds of the members of each house of the legislature for enactment of [section 6].

Section 8. Effective date. [This act] is effective July 1, 1999.

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I hereby certify that the within bill,

HB 0012, originated in the House.

Chief Clerk of the House

Speaker of the House

Signed this	day

of	, .

President of the Senate

Signed this	day

of	, .

HOUSE BILL NO. 12

INTRODUCED BY J. QUILICI

BY REQUEST OF THE DEPARTMENT OF ENVIRONMENTAL QUALITY AND THE OFFICE OF BUDGET AND PROGRAM PLANNING

AN ACT AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS TO FUND THE STATE BUILDING ENERGY CONSERVATION PROGRAM; APPROVING ENERGY CONSERVATION PROJECTS FOR FISCAL YEARS 2000 AND 2001; APPROPRIATING BOND PROCEEDS TO THE DEPARTMENT OF ENVIRONMENTAL QUALITY; PLEDGING THE CREDIT OF THE STATE OF MONTANA TO SECURE THE BONDS TO BE ISSUED; REAPPROPRIATING STRIPPER-WELL PAYMENTS CONTAINED IN THE FEDERAL SPECIAL REVENUE FUND; AMENDING THE PROCEDURE FOR IDENTIFYING BUILDINGS THAT HAVE A POTENTIAL FOR ENERGY SAVINGS AND THE AUTHORITY TO TRANSFER FUNDS FOR DESIGNING AND CONSTRUCTING ENERGY IMPROVEMENTS; AMENDING SECTIONS 90-4-605 AND 90-4-607, MCA; AND PROVIDING AN EFFECTIVE DATE.