SB5308 – Oversight for municipal energy service contracts.
Prime Sponsor – Senator Short (R; 7th District; Ferry, Stevens, Pend Oreille counties)
Current status – Returned to Senate Rules 3rd Reading by House at end of 2019 Session; Reintroduced and retained in present status for 2020 session. Failed to pass out of the Senate by cutoff; placed in the “X” file.
Next step would be – Dead bill…
Legislative tracking page for the bill.

2019 Legislative History –
In the Senate (Passed)
Had a hearing before the Senate Committee on Environment, Energy & Technology on February 5th. Substitute bill passed out of committee February 20th; referred to Ways and Means. Had a hearing there February 27th; amended 2nd substitute with minor changes passed out of that committee February 28th. Placed on 2nd reading by Rules Committee March 5th. Passed by the Senate March 12th.
In the House –
Referred to the Committee on State Government & Tribal Relations. Still in committee by 2019 cutoff; returned to Senate Rules 3rd Reading by House at end of 2019 Session

Comments –
The 1st substitute replaces the complaint provisions with a requirement for DES to consider contractors’ past performance and comments from municipalities in revising the registry. Almost all the minor changes made in Ways and Means are summarized on the first page of the 2nd substitute..

Summary –

Performance based energy service contractors sign contracts to increase buildings’ efficiency. They provide the capital, do the work, and guarantee a certain level of performance in return for long-term payments from the owners, who often gain from the savings on their utility bills.
Currently, if a city or county decides to negotiate one of these contracts, other State procurement requirements don’t apply to the project. The bill creates a system for overseeing their contracts.

Details –
The bill requires a conference with the Department of Enterprise Services by the parties to one of these contracts about the capabilities of the energy equipment and services, expected outcomes for the municipality, and whether other energy equipment and services might be better for the municipality’s purposes. Any proposed revisions have to be recorded and agreed to by all the parties.

The technical documents for these projects have to be prepared by an architect and/or a professional engineer.

The department has to provide third-party verification of the work within 90 days after it’s finished, to see that equipment and services are installed and performing correctly and that the municipality’s staff has been trained to use and maintain the equipment.

The bill requires withholding 10% of the any funding the department provides to help municipalities obtain a contract until monitoring is complete.

The bill creates a system for handling complaints about the work by cities and counties. These have to be filed within two years of the discovery of a defect. If a complaint is filed, 10% of any funding supplied by the department _must_ be withheld or recouped from the contractor, though it _may_ be provided to the contractor after the complaint is resolved. The department currently maintains a registry of these companies, and contractors are to be removed from that as soon as any complaint is filed, and only returned to it when it’s resolved.

The Joint Legislative Audit Review Committee must report to the Legislature by the end of 2020 on the structure of the performance-based contracting services program, including the roles of the department, contractors, municipalities; its cost-effectiveness; whether these contracts adequately protect municipalities from defects; whether they lead to superior outcomes for municipalities compared to general procurement practices that aren’t required for one of these projects; and whether the program limits the range of options for energy equipment and services available to municipalities.