HB2337 - 491R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 9, chapter 4, article 6.4, Arizona Revised Statutes, is amended by adding section 9-469, to read:

START_STATUTE9-469. Energy efficiency construction; report; definition

A. a city or town shall report to the department of commerce energy office information collected as part of the municipal building permit application and approval process whether the building will meet the requirements of an energy efficient residential or commercial building and shall report the energy rating system value for the building if the building receives an energy rating.

B. On or before February 1, 2010 and each year through 2021, each city and town shall report to the department of commerce energy office:

1. The total number of building permits issued in the city or town in the preceding calendar year for all new residential buildings and for all new commercial buildings.

2. The number and percentage of those permits that were issued for new energy efficient residential and commercial buildings and the energy rating system values for new buildings for which energy ratings were performed.

C. For the purposes of this section and for purposes of reporting energy efficient buildings pursuant to section 41-1511, "energy efficient building" means new residential and commercial buildings that meet or exceed the energy efficiencies prescribed by the United States environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the united states green building council, or an equivalent green building standard, or that are at least fifteen per cent more energy efficient than the 2006 international energy conservation code. END_STATUTE

Sec. 2. Title 11, chapter 2, article 9, Arizona Revised Statutes, is amended by adding section 11-324, to read:

START_STATUTE11-324. Energy efficiency construction; report; definition

A. A county shall report to the department of commerce energy office information collected as part of the building permit application and approval process whether the building will meet the requirements of an energy efficient residential or commercial building and shall report the energy rating system value for the building if the building receives an energy rating.

B. On or before February 1, 2010 and each year through 2021, each county shall report to the department of commerce energy office:

1. The total number of building permits issued in the county in the preceding calendar year for all new residential buildings and for all new commercial buildings.

C. For the purposes of this section and for purposes of reporting energy efficient buildings pursuant to section 41-1511, "energy efficient building" means new residential and commercial buildings that meet or exceed the energy efficiencies prescribed by the United States environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the United States green building council, or an equivalent green building standard, or that are at least fifteen per cent more energy efficient than the 2006 international energy conservation code. END_STATUTE

Sec. 3. Section 15-213, Arizona Revised Statutes, is amended to read:

START_STATUTE15-213. Procurement practices of school districts and charter schools; definitions

A. The state board of education shall adopt rules prescribing procurement practices for all school districts in this state as follows:

1. The state board shall submit to the auditor general proposed rules consistent with the procurement practices prescribed in title 41, chapter 23, modifying the provisions for public notice of invitation for bids, requests for proposals and requests for qualifications to allow a governing board to give public notice of the invitation for bids, requests for proposals and requests for qualifications by publication in the official newspaper of the county as defined in section 11‑255, modifying the provisions relating to disposal of materials to comply with section 15‑342, paragraph 18, providing for governing board delegation of procurement authority and modifying as necessary other provisions which the state board determines are not appropriate for school districts. The rules shall include provisions specifying that school districts are not required to engage in competitive bidding in order to make the decision to participate in programs pursuant to section 15‑382 and that a program authorized by section 15‑382 is not required to engage in competitive bidding for the services necessary to administer the program or for purchase of insurance or reinsurance. The rules for procurement of construction projects shall include provisions specifying that surety bonds furnished as bid security and performance and payment bonds shall be executed and furnished as required by title 34, chapter 2 or 6, as applicable. The rules shall specify the total cost of a procurement that is subject to invitations for bids, requests for proposals and requests for clarification. The state board shall not exceed the aggregate dollar amount limits for procurements prescribed in section 41‑2535.

2. The state board of education shall adopt rules for procurements involving construction not exceeding one hundred fifty thousand dollars which shall be known as the simplified school construction procurement program. At a minimum, the rules for a simplified construction procurement program shall require that:

(a) A list be maintained by each county school superintendent of persons who desire to receive solicitations to bid on construction projects to which additions shall be permitted throughout the year.

(b) The list of persons be available for public inspection.

(c) A performance bond and a payment bond as required by this section be provided for contracts for construction by contractors.

(d) All bids for construction be opened at a public opening and the bids shall remain confidential until the public opening.

(e) All persons desiring to submit bids be treated equitably and the information related to each project be available to all eligible persons.

(f) Competition for construction projects under the simplified school construction procurement program be encouraged to the maximum extent possible. At a minimum, a school district shall submit information on each project to all persons listed with the county school superintendent by any school district within that county.

(g) A provision, covenant, clause or understanding in, collateral to or affecting a construction contract that makes the contract subject to the laws of another state or that requires any litigation, arbitration or other dispute resolution proceeding arising from the contract to be conducted in another state is against this state's public policy and is void and unenforceable.

3. In lieu of the procurement rules under paragraph 2 of this subsection, the state board of education shall adopt rules for a school construction procurement program for energy performance contracts and renewable energy power purchase contracts to purchase energy saving and renewable energy measures.

3. 4. On or before December 31, 2004, The state board of education shall adopt rules for the procurement of goods and information services by school districts and charter schools using electronic, on‑line online bidding. The rules adopted by the state board shall include the use of reverse auctions and shall be consistent with the procurement practices prescribed in title 41, chapter 23, article 13, modifying as necessary those provisions and the rules adopted pursuant to that article that the state board determines are not appropriate for school districts and charter schools. Until the rules are adopted school districts and charter schools may procure goods and information services pursuant to title 41, chapter 23, article 13 using the rules adopted by the department of administration in implementing that article.

4. 5. The auditor general shall review the proposed rules to determine whether the rules are consistent with the procurement practices prescribed in title 41, chapter 23 and any modifications are required to adapt the procedures for school districts.

5. 6. If the auditor general approves the proposed rules, the auditor general shall notify the state board in writing and the state board shall adopt such rules.

6. 7. If the auditor general objects to the proposed rules, the auditor general shall notify the state board of the objections in writing and the state board, in adopting the rules, shall conform the proposed rules to meet the objections of the auditor general or revise the proposed rules to which an objection has been made and submit the revisions to the auditor general for approval.

B. After the bids submitted in response to an invitation for bids are opened and the award is made or after the proposals or qualifications are submitted in response to a request for proposals or a request for qualifications and the award is made, the governing board shall make available for public inspection all information, all bids, proposals and qualifications submitted and all findings and other information considered in determining whose bid conforms to the invitation for bids and will be the most advantageous with respect to price, conformity to the specifications and other factors or whose proposal or qualifications are to be selected for the award. The invitation for bids, request for proposals or request for qualifications shall include a notice that all information and bids, proposals and qualifications submitted will be made available for public inspection. The rules adopted by the state board shall prohibit the use in connection with procurement of specifications in any way proprietary to one supplier unless the specification includes all of the following:

1. A statement of the reasons why no other specification is practicable.

2. A description of the essential characteristics of the specified product.

3. A statement specifically permitting an acceptable alternative product to be supplied.

C. No project or purchase may be divided or sequenced into separate projects or purchases in order to avoid the limits prescribed by the state board under subsection A of this section.

D. A contract for the procurement of construction or construction services shall include a provision which provides for negotiations between the school district and the contractor for the recovery of damages related to expenses incurred by the contractor for a delay for which the school district is responsible, which is unreasonable under the circumstances and which was not within the contemplation of the parties to the contract. This subsection shall not be construed to void any provision in the contract which requires notice of delays, provides for arbitration or other procedure for settlement or provides for liquidated damages.

E. The auditor general may conduct discretionary reviews, investigations and audits of the financial and operational procurement activities of school districts, nonexempt charter schools and school purchasing cooperatives. The auditor general has final review and approval authority over all school district, nonexempt charter school and school purchasing cooperative audit contracts and any audit reports issued in accordance with this section.

F. In addition to the requirements of sections 15‑914 and 15‑914.01, school districts, nonexempt charter schools and school purchasing cooperatives, in connection with any audit conducted by a certified public accountant, shall contract for a systematic review of purchasing practices using methodology consistent with sampling guidelines established by the auditor general. The auditor general shall consider cost when establishing guidelines pursuant to this subsection and to the extent possible shall attempt to minimize the cost of the review. The purpose of the review is to determine whether the school district, nonexempt charter school or school purchasing cooperative is in compliance with the procurement laws and applicable procurement rules of this state. A copy of the review shall be submitted upon completion to the auditor general. The auditor general may conduct discretionary reviews of school districts, nonexempt charter schools and school purchasing cooperatives not required to contract for independent audits.

G. The attorney general or county attorney has jurisdiction to enforce this section. The attorney general or county attorney may seek relief for any violation of this section through an appropriate civil or criminal action in superior court including an action to enjoin a threatened or pending violation of this section and including an action to enforce compliance with any request for documents made by the auditor general pursuant to this section.

H. The department of education shall enact policies and procedures for the acceptance and disposition of complaints from the public regarding school procurement practices and shall forward all school procurement complaints to the attorney general.

I. The state board of education shall adopt, and the auditor general shall review, rules authorizing school districts to procure construction services by construction‑manager‑at‑risk, design‑build, qualified select bidders list and job‑order‑contracting methods of project delivery. The rules adopted shall require each school district that uses construction‑manager‑at‑risk, design‑build, qualified select bidders list or job‑order‑contracting to procure construction services to submit, on or before January 15 of each year, a report to the secretary of state on the benefits associated with the use of such procurement methods. The report shall include the number of projects completed in the preceding calendar year using that procurement method, the cost and description of each project and an estimate of any cost savings or other benefits realized through the use of that procurement method.

J. A school district or charter school may evaluate United States general services administration contracts for materials and services. The governing board or governing body may authorize purchases under a current contract for materials or services without complying with the requirements of the procurement rules adopted by the state board of education if the governing board or governing body determines in writing that all of the following apply:

1. The price for materials or services is equal to or less than the contractor's current federal supply contract price with the general services administration.

2. The contractor has indicated in writing that the contractor is willing to extend the current federal supply contract pricing, terms and conditions to the school district or charter school.

3. The purchase order adequately identifies the federal supply contract on which the order is based.

4. The purchase contract is cost effective and is in the best interests of the school district or charter school.

K. For the purposes of this section:

1. "Nonexempt charter school" means a charter school that is not exempted from procurement laws pursuant to section 15‑183, subsection E, paragraph 6.

2. "School purchasing cooperative" means an entity engaged in cooperative purchasing as defined in section 41‑2631.

3. "Total cost" means the cost of all materials and services, including the cost of labor performed by employees of the school district, for all construction as provided in subsection A of this section. END_STATUTE

Sec. 4. Section 15-213.01, Arizona Revised Statutes, is amended to read:

START_STATUTE15-213.01. Procurement practices; guaranteed energy cost savings contracts; definitions

A. Notwithstanding section 15‑213, subsection A, a school district may contract for the procurement of a guaranteed energy cost savings contract with a qualified provider through a competitive sealed proposal process as provided by the procurement practices adopted by the state board of education. To the extent the qualified provider subcontracts with contractors who will be involved in any construction associated with the guaranteed energy cost savings contract, the qualified provider must follow the provisions of section 41‑2533 in selecting these contractors.

B. A school district may enter into a guaranteed energy cost savings contract with a qualified provider if it determines that the amount it would spend on the energy cost savings measures recommended in the proposal would not exceed the amount to be saved in energy and operational costs over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter, after the date installation or implementation is complete, if the recommendations in the proposal are followed. The school district shall retain the cost savings achieved by a guaranteed energy cost saving contract, and these cost savings may be used to pay for the contract and project implementation. A school district shall not use excess utilities monies for the contract or for project implementation.

C. The school district shall use objective criteria in selecting the qualified provider, including the cost of the contract, the energy and operational cost savings, the net projected energy savings, the quality of the technical approach, the quality of the project management plan, the financial solvency of the qualified provider and the experience of the qualified provider with projects of similar size and scope. The school district shall set forth each criterion with its respective numerical weighting in the request for proposal.

D. In selecting a contractor to perform any construction work related to performing the guaranteed energy cost savings contract, the qualified provider may develop and use a prequalification process for contractors wishing to bid on this work. These prequalifications may require the contractor to demonstrate that the contractor is adequately bonded to perform the work and that the contractor has not failed to perform on a prior job. The qualified provider may use performance specifications in soliciting bids from contractors.

E. An in‑depth feasibility A study shall be performed by the selected qualified provider in order to establish the exact scope of the guaranteed energy cost savings contract, the fixed cost savings guarantee amount and the methodology for determining actual savings. This report shall be reviewed and approved by the school district prior to before the actual installation of any equipment. The qualified provider shall transmit a copy of the approved in‑depth feasibility study to the superintendent of public instruction and the department of commerce energy office.

F. The guaranteed energy cost savings contract shall require that a qualified provider perform an energy audit of the facility or facilities one year after the energy cost savings measures are installed or implemented and every three years thereafter for the length of the contract. The qualified provider shall transmit a copy of the audit to the superintendent of public instruction. The qualified provider shall pay the cost of the audit. in determining whether the projected energy savings calculations have been met, the energy or operational cost savings shall be computed by comparing the energy baseline before installation or implementation of the energy cost savings measures with the energy consumed and operational costs avoided after installation or implementation of the energy cost savings measures. The qualified provider and the school district may agree to make modifications to the energy baseline only for any of the following:

1. Changes in utility rates.

2. Changes in the number of days in the utility billing cycle.

3. Changes in the square footage of the facility.

4. Changes in the operational schedule of the facility.

5. Changes in facility temperature.

6. Significant changes in the weather.

7. Significant changes in the amount of equipment or lighting utilized in the facility.

G. The information to develop the energy baseline shall be derived from actual energy measurements or shall be calculated from energy measurements at the facility where energy cost savings measures are to be installed or implemented. The measurements shall be taken in the year preceding the installation or implementation of energy cost savings measures.

H. When submitting a proposal for the installation of equipment, the qualified provider shall include information on the projected energy savings associated with each proposed energy cost savings measure.

I. A school district, or two or more school districts, may enter into an installment payment contract or lease‑purchase agreement with a qualified provider for the purchase and installation or implementation of energy cost savings measures. The guaranteed energy cost savings contract may provide for payments over a period of not more than the expected life of the energy cost savings measures implemented or twenty‑five years, whichever is shorter. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, shall be made over time.

J. The guaranteed energy cost savings contract shall include a written guarantee of the qualified provider that either the energy or operational costs savings, or both, will meet or exceed the costs of the energy cost savings measures over the expected life of the energy cost savings measures implemented or within twenty-five years, whichever is shorter. The qualified provider shall:

1. Prepare a measurement and verification report on an annual basis in addition to an annual reconciliation of savings.

2. Reimburse the school district for any shortfall of guaranteed energy cost savings on an annual basis.

K. The school district may obtain any required financing as part of the original competitive sealed proposal process from the qualified provider or a third-party financing institution.

L. A qualified provider that is awarded the contract shall give a sufficient bond to the school district for its faithful performance of the equipment installment.

M. When selecting subcontractors to perform construction work, the qualified provider is required to make public information in the subcontractor's bids only if the qualified provider is awarded the guaranteed energy cost savings contract by the school district.

N. For all projects carried out under this section, the district shall report to the department of commerce energy office:

1. The name of the project.

2. The qualified provider.

3. The total cost of the project.

4. The expected energy and cost savings.

N. O. This section does not apply to the construction of new buildings, except that guaranteed energy cost savings contracts may be used to finance or implement energy cost savings measures installed during construction of new buildings.

O. P. For the purposes of this section:

1. "Construction" means the process of building, altering, repairing, improving or demolishing any school district structure or building, or other public improvements of any kind to any school district real property. Construction does not include the routine operation, routine repair or routine maintenance of existing structures, buildings or real property.

2. "Energy baseline" means a calculation of the amount of energy used in an existing facility before the installation or implementation of the energy cost savings measures.

3. "Energy cost savings measure" means a training program or facility alteration designed to reduce energy consumption or operating costs and may include one or more of the following:

(a) Insulating the building structure or systems in the building.

(b) Storm windows or doors, caulking or weather stripping, multi‑glazed multiglazed windows or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.

(d) Heating, ventilating or air conditioning system modifications or replacements.

(e) Replacing or modifying lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility unless an increase in illumination is necessary to conform to the applicable state or local building code for the lighting system after the proposed modifications are made.

(f) Indoor air quality improvements to increase air quality that conform to the applicable state or local building code requirements.

(g) Energy recovery systems.

(h) Installing a new or retrofitting an existing day lighting system.

(i) Any life safety measures that provide long‑term operating cost reductions and that comply with state and local codes.

(j) Implementing operation programs through education, training and software that reduce the operating costs.

(k) Procurement of low-cost utility supplies of all types, including electricity, natural gas, propane and water.

(l) Devices that reduce water consumption and water costs or that reduce sewer charges.

(m) Rainwater harvesting systems.

(n) Combined heat and power systems.

(o) Renewable and alternative energy projects and renewable energy power purchase contracts.

(p) Self-generation systems.

(q) Any additional building systems and infrastructure that produce energy, or that provide utility or operational cost savings not specifically mentioned in this paragraph, if the improvements meet the life cycle cost requirement and enhance building system performance or occupant comfort and safety.

4. "Guaranteed energy cost savings contract" means a contract for implementing one or more energy cost savings measures.

5. "Life cycle cost" means the sum of present values of investment costs, capital costs, installation costs, energy costs, operating costs, maintenance costs and disposal costs over the life of the project, product or measure as provided by federal life cycle cost rules, regulations and criteria contained in the United States department of energy federal energy management program "guidance on life-cycle cost analysis" required by executive order 13122, April 2005.

5. 6. "Operational savings" means reductions in actual budget line items currently being expended or savings realized from the implementation or installation of energy cost savings measures.

6. 7. "Qualified provider" means a person or a business experienced in designing, implementing or installing energy cost savings measures. END_STATUTE

Sec. 5. Section 15-342, Arizona Revised Statutes, is amended to read:

START_STATUTE15-342. Discretionary powers

The governing board may:

1. Expel pupils for misconduct.

2. Exclude from grades one through eight children under six years of age.

3. Make such separation of groups of pupils as it deems advisable.

4. Maintain such special schools during vacation as deemed necessary for the benefit of the pupils of the school district.

5. Permit a superintendent or principal or representatives of the superintendent or principal to travel for a school purpose, as determined by a majority vote of the board. The board may permit members and members‑elect of the board to travel within or without the school district for a school purpose and receive reimbursement. Any expenditure for travel and subsistence pursuant to this paragraph shall be as provided in title 38, chapter 4, article 2. The designated post of duty referred to in section 38‑621 shall be construed, for school district governing board members, to be the member's actual place of residence, as opposed to the school district office or the school district boundaries. Such expenditures shall be a charge against the budgeted school district funds. The governing board of a school district shall prescribe procedures and amounts for reimbursement of lodging and subsistence expenses. Reimbursement amounts shall not exceed the maximum amounts established pursuant to section 38‑624, subsection C.

6. Construct or provide in rural districts housing facilities for teachers and other school employees which the board determines are necessary for the operation of the school.

7. Sell or lease to the state, a county, a city or a tribal government agency, any school property required for a public purpose, provided the sale or lease of the property will not affect the normal operations of a school within the school district.

8. Annually budget and expend funds for membership in an association of school districts within this state.

9. Enter into leases or lease‑purchase agreements for school buildings or grounds, or both, as lessor or as lessee, for periods of less than five years subject to voter approval for construction of school buildings as prescribed in section 15‑341, subsection A, paragraph 8.

10. Subject to chapter 16 of this title, sell school sites or enter into leases or lease‑purchase agreements for school buildings and grounds, as lessor or as lessee, for a period of five years or more, but not to exceed ninety‑nine years, if authorized by a vote of the school district electors in an election called by the governing board as provided in section 15‑491, except that authorization by the school district electors in an election is not required if one of the following requirements is met:

(a) The market value of the school property is less than fifty thousand dollars or the property is procured through an energy performance contract or renewable energy power purchase contract pursuant to section 15‑213 or 15-213.01.

(b) The buildings and sites are completely funded with monies distributed by the school facilities board.

(c) The transaction involves the sale of improved or unimproved property pursuant to an agreement with the school facilities board in which the school district agrees to sell the improved or unimproved property and transfer the proceeds of the sale to the school facilities board in exchange for monies from the school facilities board for the acquisition of a more suitable school site. For a sale of property acquired by a school district prior to July 9, 1998, a school district shall transfer to the school facilities board that portion of the proceeds that equals the cost of the acquisition of a more suitable school site. If there are any remaining proceeds after the transfer of monies to the school facilities board, a school district shall only use those remaining proceeds for future land purchases approved by the school facilities board, or for capital improvements not funded by the school facilities board for any existing or future facility.

(d) The transaction involves the sale of improved or unimproved property pursuant to a formally adopted plan and the school district uses the proceeds of this sale to purchase other property that will be used for similar purposes as the property that was originally sold, provided that the sale proceeds of the improved or unimproved property are used within two years after the date of the original sale to purchase the replacement property. If the sale proceeds of the improved or unimproved property are not used within two years after the date of the original sale to purchase replacement property, the sale proceeds shall be used towards payment of any outstanding bonded indebtedness. If any sale proceeds remain after paying for outstanding bonded indebtedness, or if the district has no outstanding bonded indebtedness, sale proceeds shall be used to reduce the district's primary tax levy. A school district shall not use the provisions of this subdivision unless all of the following conditions exist:

(i) The school district is the sole owner of the improved or unimproved property that the school district intends to sell.

(ii) The school district did not purchase the improved or unimproved property that the school district intends to sell with monies that were distributed pursuant to chapter 16 of this title.

(iii) The transaction does not violate section 15‑341, subsection G.

11. Review the decision of a teacher to promote a pupil to a grade or retain a pupil in a grade in a common school or to pass or fail a pupil in a course in high school. The pupil has the burden of proof to overturn the decision of a teacher to promote, retain, pass or fail the pupil. In order to sustain the burden of proof, the pupil shall demonstrate to the governing board that the pupil has mastered the academic standards adopted by the state board of education pursuant to sections 15‑701 and 15‑701.01. If the governing board overturns the decision of a teacher pursuant to this paragraph, the governing board shall adopt a written finding that the pupil has mastered the academic standards. Notwithstanding title 38, chapter 3, article 3.1, the governing board shall review the decision of a teacher to promote a pupil to a grade or retain a pupil in a grade in a common school or to pass or fail a pupil in a course in high school in executive session unless a parent or legal guardian of the pupil or the pupil, if emancipated, disagrees that the review should be conducted in executive session and then the review shall be conducted in an open meeting. If the review is conducted in executive session, the board shall notify the teacher of the date, time and place of the review and shall allow the teacher to be present at the review. If the teacher is not present at the review, the board shall consult with the teacher before making its decision. Any request, including the written request as provided in section 15‑341, the written evidence presented at the review and the written record of the review, including the decision of the governing board to accept or reject the teacher's decision, shall be retained by the governing board as part of its permanent records.

12. Provide transportation or site transportation loading and unloading areas for any child or children if deemed for the best interest of the district, whether within or without the district, county or state.

13. Enter into intergovernmental agreements and contracts with school districts or other governing bodies as provided in section 11‑952.

14. Include in the curricula which it prescribes for high schools in the school district career and technical education, vocational education and technology education programs and career and technical, vocational and technology program improvement services for the high schools, subject to approval by the state board of education. The governing board may contract for the provision of career and technical, vocational and technology education as provided in section 15‑789.

15. Suspend a teacher or administrator from the teacher's or administrator's duties without pay for a period of time of not to exceed ten school days, if the board determines that suspension is warranted pursuant to section 15‑341, subsection A, paragraphs 23 and 24.

16. Dedicate school property within an incorporated city or town to such city or town or within a county to that county for use as a public right‑of‑way if both of the following apply:

(a) Pursuant to an ordinance adopted by such city, town or county, there will be conferred upon the school district privileges and benefits which may include benefits related to zoning.

(b) The dedication will not affect the normal operation of any school within the district.

17. Enter into option agreements for the purchase of school sites.

18. Donate surplus or outdated learning materials to nonprofit community organizations where the governing board determines that the anticipated cost of selling the learning materials equals or exceeds the estimated market value of the materials.

19. Prescribe policies for the assessment of reasonable fees for students to use district‑provided parking facilities. The fees are to be applied by the district solely against costs incurred in operating or securing the parking facilities. Any policy adopted by the governing board pursuant to this paragraph shall include a fee waiver provision in appropriate cases of need or economic hardship.

20. Establish alternative educational programs that are consistent with the laws of this state to educate pupils, including pupils who have been reassigned pursuant to section 15‑841, subsection E or F.

21. Require a period of silence to be observed at the commencement of the first class of the day in the schools. If a governing board chooses to require a period of silence to be observed, the teacher in charge of the room in which the first class is held shall announce that a period of silence not to exceed one minute in duration will be observed for meditation, and during that time no activities shall take place and silence shall be maintained.

22. Require students to wear uniforms.

23. Exchange unimproved property or improved property, including school sites, where the governing board determines that the improved property is unnecessary for the continued operation of the school district without requesting authorization by a vote of the school district electors if the governing board determines that the exchange is necessary to protect the health, safety or welfare of pupils or when the governing board determines that the exchange is based on sound business principles for either:

(a) Unimproved or improved property of equal or greater value.

(b) Unimproved property that the owner contracts to improve if the value of the property ultimately received by the school district is of equal or greater value.

24. For common and high school pupils, assess reasonable fees for optional extracurricular activities and programs conducted when the common or high school is not in session, except that no fees shall be charged for pupils' access to or use of computers or related materials. For high school pupils, the governing board may assess reasonable fees for fine arts and vocational education courses and for optional services, equipment and materials offered to the pupils beyond those required to successfully complete the basic requirements of any other course, except that no fees shall be charged for pupils' access to or use of computers or related materials. Fees assessed pursuant to this paragraph shall be adopted at a public meeting after notice has been given to all parents of pupils enrolled at schools in the district and shall not exceed the actual costs of the activities, programs, services, equipment or materials. The governing board shall authorize principals to waive the assessment of all or part of a fee assessed pursuant to this paragraph if it creates an economic hardship for a pupil. For the purposes of this paragraph, "extracurricular activity" means any optional, noncredit, educational or recreational activity which supplements the education program of the school, whether offered before, during or after regular school hours.

25. Notwithstanding section 15‑341, subsection A, paragraphs 8 and 10, construct school buildings and purchase or lease school sites, without a vote of the school district electors, if the buildings and sites are totally funded from one or more of the following:

(a) Monies in the unrestricted capital outlay fund, except that the estimated cost shall not exceed two hundred fifty thousand dollars for a district that utilizes the provisions of section 15‑949.

(b) Monies distributed from the school facilities board established by section 15‑2001.

Nothing in this paragraph shall be construed to eliminate the requirement for an election to raise revenues for a capital outlay override pursuant to section 15‑481 or a bond election pursuant to section 15‑491.

26. Conduct a background investigation that includes a fingerprint check conducted pursuant to section 41‑1750, subsection G for certificated personnel and personnel who are not paid employees of the school district, as a condition of employment. A school district may release the results of a background check to another school district for employment purposes. The school district may charge the costs of fingerprint checks to its fingerprinted employee, except that the school district may not charge the costs of fingerprint checks for personnel who are not paid employees of the school district.

27. Sell advertising space on the exterior of school buses as follows:

(a) Advertisements shall be age appropriate and not contain promotion of any substance that is illegal for minors such as alcohol, tobacco and drugs or gambling. Advertisements shall comply with the state sex education policy of abstinence.

(b) Advertising approved by the governing board may appear only on the sides of the bus in the following areas:

(i) The signs shall be below the seat level rub rail and not extend above the bottom of the side windows.

(ii) The signs shall be at least three inches from any required lettering, lamp, wheel well or reflector behind the service door or stop signal arm.

(iii) The signs shall not extend from the body of the bus so as to allow a handhold or present a danger to pedestrians.

(iv) The signs shall not interfere with the operation of any door or window.

(v) The signs shall not be placed on any emergency doors.

(c) Establish a school bus advertisement fund that is comprised of revenues from the sale of advertising space on school buses. The monies in a school bus advertisement fund are not subject to reversion and shall be used for the following purposes:

(i) To comply with the energy conservation measures prescribed in section 15‑349 in school districts that are in area A as defined in section 49‑541, and any remaining monies shall be used to purchase alternative fuel support vehicles and any other pupil related costs as determined by the governing board.

(ii) For any pupil related costs as determined by the governing board in school districts not subject to the provisions of item (i) of this subdivision.

28. Assess reasonable damage deposits to pupils in grades seven through twelve for the use of textbooks, musical instruments, band uniforms or other equipment required for academic courses. The governing board shall adopt policies on any damage deposits assessed pursuant to this paragraph at a public meeting called for this purpose after providing notice to all parents of pupils in grades seven through twelve in the school district. Principals of individual schools within the district may waive the damage deposit requirement for any textbook or other item if the payment of the damage deposit would create an economic hardship for the pupil. The school district shall return the full amount of the damage deposit for any textbook or other item if the pupil returns the textbook or other item in reasonably good condition within the time period prescribed by the governing board. For the purposes of this paragraph, "in reasonably good condition" means the textbook or other item is in the same or a similar condition as it was when the pupil received it, plus ordinary wear and tear.

29. Notwithstanding section 15‑1105, expend surplus monies in the civic center school fund for maintenance and operations or unrestricted capital outlay, if sufficient monies are available in the fund after meeting the needs of programs established pursuant to section 15‑1105.

30. Notwithstanding section 15‑1143, expend surplus monies in the community school program fund for maintenance and operations or unrestricted capital outlay, if sufficient monies are available in the fund after meeting the needs of programs established pursuant to section 15‑1142.

31. Adopt guidelines for standardization of the format of the school report cards required by section 15‑746 for schools within the district.

32. Adopt policies that require parental notification when a law enforcement officer interviews a pupil on school grounds. Policies adopted pursuant to this paragraph shall not impede a peace officer from the performance of the peace officer's duties. If the school district governing board adopts a policy that requires parental notification:

(a) The policy may provide reasonable exceptions to the parental notification requirement.

(b) The policy shall set forth whether and under what circumstances a parent may be present when a law enforcement officer interviews the pupil, including reasonable exceptions to the circumstances under which a parent may be present when a law enforcement officer interviews the pupil, and shall specify a reasonable maximum time after a parent is notified that an interview of a pupil by a law enforcement officer may be delayed to allow the parent to be present.

33. Enter into voluntary partnerships with any party to finance with funds other than school district funds and cooperatively design school facilities that comply with the adequacy standards prescribed in section 15‑2011 and the square footage per pupil requirements pursuant to section 15‑2041, subsection D, paragraph 3, subdivision (b). The design plans and location of any such school facility shall be submitted to the school facilities board for approval pursuant to section 15‑2041, subsection 0. If the school facilities board approves the design plans and location of any such school facility, the party in partnership with the school district may cause to be constructed and the district may begin operating the school facility before monies are distributed from the school facilities board pursuant to section 15‑2041. Monies distributed from the new school facilities fund to a school district in a partnership with another party to finance and design the school facility shall be paid to the school district pursuant to section 15‑2041. The school district shall reimburse the party in partnership with the school district from the monies paid to the school district pursuant to section 15‑2041, in accordance with the voluntary partnership agreement. Before the school facilities board distributes any monies pursuant to this subsection, the school district shall demonstrate to the school facilities board that the facilities to be funded pursuant to section 15‑2041, subsection O meet the minimum adequacy standards prescribed in section 15‑2011. If the cost to construct the school facility exceeds the amount that the school district receives from the new school facilities fund, the partnership agreement between the school district and the other party shall specify that, except as otherwise provided by the other party, any such excess costs shall be the responsibility of the school district. The school district governing board shall adopt a resolution in a public meeting that an analysis has been conducted on the prospective effects of the decision to operate a new school with existing monies from the school district's maintenance and operations budget and how this decision may affect other schools in the school district. If a school district acquires land by donation at an appropriate school site approved by the school facilities board and a school facility is financed and built on the land pursuant to this paragraph, the school facilities board shall distribute an amount equal to twenty per cent of the fair market value of the land that can be used for academic purposes. The school district shall place the monies in the unrestricted capital outlay fund and increase the unrestricted capital budget limit by the amount of the monies placed in the fund. Monies distributed under this paragraph shall be distributed from the new school facilities fund pursuant to section 15-2041. If a school district acquires land by donation at an appropriate school site approved by the school facilities board and a school facility is financed and built on the land pursuant to this paragraph, the school district shall not receive monies from the school facilities board for the donation of real property pursuant to section 15-2041, subsection F. It is unlawful for:

(a) A county, city or town to require as a condition of any land use approval that a landowner or landowners that entered into a partnership pursuant to this paragraph provide any contribution, donation or gift, other than a site donation, to a school district. This subdivision only applies to the property in the voluntary partnership agreement pursuant to this paragraph.

(b) A county, city or town to require as a condition of any land use approval that the landowner or landowners located within the geographic boundaries of the school subject to the voluntary partnership pursuant to this paragraph provide any donation or gift to the school district except as provided in the voluntary partnership agreement pursuant to this paragraph.

(c) A community facilities district established pursuant to title 48, chapter 4, article 6 to be used for reimbursement of financing the construction of a school pursuant to this paragraph.

(d) For A school district to enter into an agreement pursuant to this paragraph with any party other than a master planned community party. Any land area consisting of at least three hundred twenty acres that is the subject of a development agreement with a county, city or town entered into pursuant to section 9‑500.05 or 11‑1101 shall be deemed to be a master planned community. For the purposes of this subdivision, "master planned community" means a land area consisting of at least three hundred twenty acres, which may be noncontiguous, that is the subject of a zoning ordinance approved by the governing body of the county, city or town in which the land is located that establishes the use of the land area as a planned area development or district, planned community development or district, planned unit development or district or other land use category or district that is recognized in the local ordinance of such county, city or town and that specifies the use of such land is for a master planned development. END_STATUTE

Sec. 6. Title 15, chapter 9, article 1, Arizona Revised Statutes, is amended by adding section 15-910.02, to read:

START_STATUTE15-910.02. Energy and water savings accounts

A. Each school district and charter school may establish an energy and water savings account that consists of a designated pool of capital investment monies to fund energy or water saving projects in school facilities. A school district or charter school may deposit in the account monies from one or more companies that provide utility, energy or water services to the school district or charter school pursuant to contracts that are executed between the companies and the school district or charter school and that are designed to save energy or water in school facilities. A school district or charter school may use monies in the energy and water savings account for payments under a performance contract entered into pursuant to section 15‑213 or 15‑213.01.

B. The auditor general and the department of education shall prescribe the appropriate designation of the energy and water savings accounts in the uniform system of financial records and shall prescribe reporting requirements on the appropriate budget forms and annual financial report forms.

C. Monies deposited in an energy and water savings account shall be used as a designated pool of capital investment monies to pay for the incremental cost of energy or water savings measures in school facilities that are owned or operated by the school district or charter school. Any contract entered into pursuant to this section shall contain an agreement between the qualified provider or utility, energy or water services company and the school district or charter school that each party has performed a reasonable investigation to determine that the measures contemplated by the contract will result in stated energy or water savings. Contract terms may extend the period of the capital investment repayment schedule prescribed in subsection G of this section up to the expected life of the energy or water savings measures, or twenty-five years, whichever is shorter.

D. Expenditures from an energy and water savings account shall be used only for the following:

1. Projects or measures pursuant to a contract pursuant to this section that save energy or water in school facilities that are owned or operated by the school district or charter school. Monies may be used pursuant to this paragraph to provide technical assistance regarding energy or water savings to school districts and charter schools by a qualified provider or a utility, energy or water services company.

2. The repayment to the qualified provider or utility, energy or water services company of capital investment monies deposited in the account plus reasonable carrying charges pursuant to the terms of the contract.

E. School districts and charter schools shall procure energy or water savings measures or services with monies distributed from the energy and water savings accounts.

F. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company shall compute, and the school district or charter school shall review and approve, the estimated amount of the energy or water savings and the associated impact on energy or water costs to be achieved by the school district or charter school on an annual and monthly basis over the expected life of the measures and shall include these estimates in the contract. The qualified provider or utility, energy or water services company and the school district or charter school shall update the annual and monthly energy or water savings and associated cost impact estimates annually based on actual experience.

G. Before the implementation of the energy or water savings measures or services, the qualified provider or utility, energy or water services company and the school district or charter school shall jointly develop a schedule of monthly payments for repayment of the capital investment monies to the qualified provider or utility, energy or water services company. The repayment schedule shall result in lower energy or water costs, which shall include the cost of the installed energy or water savings measures for the school district or charter school over the life of the installed measures that the school district or charter school would have experienced without the installation of the measures. The repayment schedule shall be included in the contract.

H. The school district or charter school shall transfer on a monthly basis the amount of the monthly payment prescribed pursuant to subsection G of this section to the energy and water savings account from the maintenance and operation portion of the school district's or charter school's budget to repay any unpaid balance of the capital investment previously deposited in the energy and water savings account from the qualified provider or utility, energy or water services company plus a reasonable carrying charge. For the period of time that the company's capital investment monies and reasonable carrying charge remain unpaid, the qualified provider or utility, energy or water services company shall provide a separate billing or billing component to repay the capital investment on a monthly basis, pursuant to the repayment schedule prescribed pursuant to subsection G of this section, which shall be paid by the school district or charter school from the energy and water savings account. The school district's general budget limit shall be reduced by the amount of monies transferred to the energy and water savings account pursuant to this section.

I. After the balance of the qualified provider or utility, energy or water services company's capital investment monies deposited in the energy and water savings account plus a reasonable carrying charge are repaid in full by the school district or charter school, the school district or charter school may discontinue the deposit in the energy and water savings account of amounts that are prescribed in subsection H of this section.

J. Any monies associated with an energy or water savings project remaining in the energy and water savings account after the capital investment monies of the qualified provider or utility, energy or water services company plus a reasonable carrying charge are repaid in full may be transferred to the maintenance and operation portion of the school district's or charter school's budget, and the general budget limit may be increased by the amount transferred.

K. School districts or charter schools may deposit energy‑related rebate or grant monies in the energy and water savings account to assist in funding energy or water savings projects. These rebate or grant monies shall be used to reduce the total cost of energy or water savings projects and to reduce the amount of capital investment monies received from and repaid to utility, energy or water services companies. School districts or charter schools are not required to repay the rebate or grant monies in the manner described in subsection H of this section, pursuant to the agreements with the providers of rebate or grant funds.

L. School districts shall not use or deposit any excess utilities monies budgeted pursuant to section 15-910 or 15-910.04 in the energy and water savings account.

M. School districts or charter schools may deposit monies from other funding sources, including from clean renewable energy bonds, in the energy and water savings account to fund energy or water saving projects in school facilities. These monies shall be repaid in a manner consistent with this section and pursuant to the contract between the school district or charter school and the provider of the funding.

N. This section does not impose an obligation on any energy utility, water utility, public service corporation or agricultural improvement district to invest monies or contract with any school district or charter school. END_STATUTE

Sec. 7. Section 34-201, Arizona Revised Statutes, is amended to read:

START_STATUTE34-201. Notice of intention to receive bids and enter contract; procedure; doing work without advertising for bids; county compliance

A. Except as provided in subsections B through G and L of this section, every agent shall, upon on acceptance and approval of the working drawings and specifications, shall publish a notice to contractors of intention to receive bids and contract for the proposed work. This notice shall be published by advertising in a newspaper of general circulation in the county in which the agent is located for two consecutive publications if it is a weekly newspaper or for two publications that are at least six but no more than ten days apart if it is a daily newspaper. The notice shall state:

1. The nature of the work required, the type, purpose and location of the proposed building, and where the plans, specifications and full information as to the proposed work may be obtained.

2. That contractors desiring to submit proposals may obtain copies of full or partial sets of plans and specifications for estimate on request or by appointment. The return of such plans and specifications shall be guaranteed by a deposit of a designated amount which shall be refunded on return of the plans and specifications in good order.

3. That every proposal shall be accompanied by a certified check, cashier's check or surety bond for ten per cent of the amount of the bid included in the proposal as a guarantee that the contractor will enter into a contract to perform the proposal in accordance with the plans and specifications. Notwithstanding the provisions of any other statute, the surety bond shall be executed solely by a surety company or companies holding a certificate of authority to transact surety business in this state issued by the director of the department of insurance pursuant to title 20, chapter 2, article 1. The surety bond shall not be executed by an individual surety or sureties, even if the requirements of section 7‑101 are satisfied. The certified check, cashier's check or surety bond shall be returned to the contractors whose proposals are not accepted, and to the successful contractor upon on the execution of a satisfactory bond and contract as provided in this article. The conditions and provisions of the surety bid bond regarding the surety's obligations shall follow the following form:

Now, therefore, if the obligee accepts the proposal of the principal and the principal enters into a contract with the obligee in accordance with the terms of the proposal and gives the bonds and certificates of insurance as specified in the standard specifications with good and sufficient surety for the faithful performance of the contract and for the prompt payment of labor and materials furnished in the prosecution of the contract, or in the event of the failure of the principal to enter into the contract and give the bonds and certificates of insurance, if the principal pays to the obligee the difference not to exceed the penalty of the bond between the amount specified in the proposal and such larger amount for which the obligee may in good faith contract with another party to perform the work covered by the proposal then this obligation is void. Otherwise it remains in full force and effect provided, however, that this bond is executed pursuant to the provisions of section 34‑201, Arizona Revised Statutes, and all liabilities on this bond shall be determined in accordance with the provisions of the section to the extent as if it were copied at length herein.

4. That the right is reserved to reject any or all proposals or to withhold the award for any reason the agent determines.

B. If the agent believes that any construction, building addition or alteration contemplated at a public institution can be advantageously done by the inmates of the public institution and regularly employed help, the agent may cause the work to be done without advertising for bids.

C. Any building, structure, addition or alteration may be constructed either with or without the use of the agent's regularly employed personnel without advertising for bids, provided that the total cost of the work, excluding materials and equipment previously acquired by bid, does not exceed:

1. In fiscal year 1994‑1995, fourteen thousand dollars.

2. In fiscal year 1995‑1996 and each fiscal year thereafter, the amount provided in paragraph 1 of this subsection adjusted by the annual percentage change in the GDP price deflator as defined in section 41‑563.

D. Notwithstanding the provisions of subsection C of this section, any street, road, bridge, water or sewer work, other than a water or sewer treatment plant or building, may be constructed either with or without the use of the agent's regularly employed personnel without advertising for bids, provided that the total cost of the work does not exceed:

1. In fiscal year 1994‑1995, one hundred fifty thousand dollars.

E. For the purposes of subsection D of this section, the total cost of water or sewer work does not include services provided by volunteers or donations made for the water or sewer project.

F. Notwithstanding the provisions of this section, an agent may:

1. Construct, reconstruct, install or repair a natural gas or electric utility and distribution system, owned or operated by such agent, with regularly employed personnel of the agent without advertising for bids, unless otherwise prohibited by charter or ordinance.

2. Construct recreational projects, including trails, playgrounds, ballparks and other similar facilities and excluding buildings, structures, building additions and alterations to buildings, structures and building additions, with volunteer workers or workers provided by a nonprofit organization without advertising for bids for labor and materials, provided that the total cost of the work does not exceed:

(a) In fiscal year 2001‑2002, one hundred fifty thousand dollars.

(b) In fiscal year 2002‑2003 and each fiscal year thereafter, the amount provided in subdivision (a) of this paragraph adjusted by the annual percentage change in the GDP price deflator as defined in section 41‑563.

G. A contribution by an agent for the financing of public infrastructure made pursuant to a development agreement is exempt from the provisions of this section if such contribution for any single development does not exceed:

1. In fiscal year 1994‑1995, one hundred thousand dollars.

H. In addition to other state or local requirements relating to the publication of bids, each agent shall provide at least one set of all plans and specifications to any construction news reporting service that files an annual request with the agent. For the purposes of this subsection, "construction news reporting service" means a service that researches, gathers and disseminates news and reports either in print or electronically, on at least a weekly basis for building projects, construction bids, the purchasing of materials, supplies or services and other construction bidding or planned activity to the allied construction industry. The allied construction industry includes both general and specialty contractors, builders, material and service suppliers, architects and engineers, owners, developers and government agencies.

I. Any construction by a county under this section shall comply with the uniform accounting system prescribed for counties by the auditor general under section 41‑1279.21. Any construction by a city or town under this section shall comply with generally accepted accounting principles.

J. Any construction, building addition or alteration project which that is financed by monies of this state or its political subdivisions shall not use endangered wood species unless an exemption is granted by the director of the department of administration. The director shall only grant an exemption if the use of endangered wood species is deemed necessary for historical restoration or to repair existing facilities and the use of any substitute material is not practical. Any lease‑purchase agreement entered into by this state or its political subdivisions for construction shall specify that no endangered wood species may be used in the construction unless an exemption is granted by the director. As used in For the purposes of this subsection, "endangered wood species" includes those listed in appendix I of the convention on international trade in endangered species of wild flora and fauna.

K. All bonds given by a contractor and surety pursuant to the provisions of this article, regardless of their actual form, will be deemed by law to be the form required and set forth in this article and no other.

L. Any building, structure, addition or alteration may be constructed without complying with this article if the construction, including construction of buildings or structures on public or private property, is required as a condition of development of private property and is authorized by section 9‑463.01 or 11‑806.01. For the purposes of this subsection, building does not include police, fire, school, library, or other public buildings.

M. Notwithstanding section 34‑221, any agent may enter into a guaranteed energy cost savings contract with a qualified provider, as those terms are defined in section 15‑213.01, for the purchase of energy cost savings measures without complying with this article and may procure a guaranteed energy cost savings contract through the competitive sealed proposal process prescribed in title 41, chapter 23, article 3 or any similar competitive proposal process adopted by the agent. as long as the agent follows any additional requirements set forth in section 15‑213.01. END_STATUTE

Sec. 8. Section 34-451, Arizona Revised Statutes, is amended to read:

START_STATUTE34-451. Energy conservation standards for public buildings; energy sources

A. The department of commerce energy office in consultation with persons responsible for building systems shall adopt and publish energy conservation standards for construction of all new capital projects as defined in section 41‑790, including buildings designed and constructed by the school facilities board, school districts, community college districts and universities. These standards shall be consistent with the recommended energy conservation standards of the American society of heating, refrigerating and air conditioning engineers and the international energy conservation code.

B. The standards shall be adopted to achieve energy conservation and shall allow for design flexibility.

C. The following state agencies through the use of energy performance contracting or other similar procurement mechanisms shall reduce energy use in public buildings that they administer by ten per cent per square foot of floor area on or before July 1, 2008, and by fifteen per cent per square foot of floor area on or before July 1, 2011, by twenty per cent per square foot of floor area on or before July 1, 2015 and by thirty per cent per square foot of floor area on or before July 1, 2020, using July 1, 2001 through June 30, 2002 as the baseline year:

1. The department of administration for its building systems.

2. The Arizona board of regents for its building systems.

3. The department of transportation for its building systems.

D. All school districts through the use of energy performance contracting or other similar procurement mechanisms shall achieve the goal of reducing school district-wide average energy use in buildings that they administer by ten per cent per square foot of floor area on or before July 1, 2012, by fifteen per cent per square foot of floor area on or before July 1, 2016 and by twenty per cent per square foot of floor area on or before July 1, 2019, using the school district‑wide average for July 1, 2001 through June 30, 2002 as the baseline year.

D. E. The state department of commerce energy office shall provide technical assistance to the state agencies prescribed in subsection C of this section and to school districts. On or before July October 1 of each year, the state department of commerce energy office shall measure compliance with subsection subsections C and D of this section, compile the results of that monitoring and report to the speaker of the house of representatives and the president of the senate as to the progress of attaining the goals prescribed in subsection subsections C and D of this section. The state department of commerce energy office shall include in its report an explanation of the reasons for any failure to achieve energy reductions in specific building systems as prescribed in subsection subsections C and D of this section.

E. F. All state agencies, school districts, community colleges and universities shall procure energy efficient products that are certified by the United States department of energy or the United States environmental protection agency as energy star or that are certified under the federal energy management program in all categories that are available unless the products are shown not to be cost‑effective on a life cycle cost basis.

G. On or before July 1, 2015, through the use of renewable energy power purchase contracts or other mechanisms, all state agencies, universities and school districts shall use or purchase at least ten per cent of their energy requirements in public buildings that they administer from renewable sources and nonpolluting energy sources that include solar, wind, biomass, geothermal, agricultural waste, combined heat and power, landfill gas and low impact hydroelectric generation plants. The department of commerce energy office shall include in its report prescribed by subsection E of this section an explanation of the reasons for any failure to achieve the energy requirements in specific building systems as prescribed in this subsection.

H. All state agency buildings constructed on or after July 1, 2010 shall conform to the leadership in energy and environmental design green building rating standards developed by the united states green building council or an equivalent green building rating standard in a manner prescribed by the department of commerce energy office, unless the standard can be shown not to be cost-effective on a life cycle cost basis. The department of commerce energy office shall monitor the United States green building council and developers of equivalent green building rating standards for changes to the rating standards that impact state buildings. END_STATUTE

Sec. 9. Repeal

Section 34-453, Arizona Revised Statutes, is repealed.

Sec. 10. Section 34-454, Arizona Revised Statutes, is amended to read:

START_STATUTE34-454. Establishment and use of life cycle cost methods and procedures; definition

A. The director of the department of administration, in consultation with the department of commerce energy office, shall establish practical and effective present value methods for estimating and comparing life cycle costs for state capital projects, using the sum of all capital and operating expenses associated with the energy system of the building involved over the expected life of the system or during a period of twenty-five years, whichever is shorter, and using average fuel costs and a discount rate determined by the director. The director shall develop and prescribe the procedures to be followed in applying and implementing the methods and procedures established by this subsection.

B. The director of the school facilities board, in consultation with the department of commerce energy office, shall use the life cycle cost methods established in subsection A, or shall establish practical and effective methods for estimating and comparing life cycle costs consistent with the standards prescribed in subsection A, for capital projects for the school facilities board under title 15, chapter 16 solely for purposes of school districts entering into guaranteed energy cost savings contracts under title 15 for measures that provide dollar savings in excess of the cost of the measure in a time period greater than eight years from installation.

B. C. The design of new capital projects and the application of energy conservation savings and renewable energy measures to existing capital projects shall be made using life cycle cost methods and procedures established pursuant to subsection A.

C. D. In leasing buildings preference shall be given to buildings which that minimize life cycle costs.

D. E. For the purposes of this section, "life cycle cost" means the total cost of owning, operating and maintaining a building over its useful life, including such costs as fuel, energy, labor and replacement components determined on the basis of a systematic evaluation and comparison of alternative building systems, except that in the case of leased buildings, the life cycle costs shall be calculated over the effective remaining term of the lease. END_STATUTE

Sec. 11. Section 34-455, Arizona Revised Statutes, is amended to read:

START_STATUTE34-455. Performance contracting; definitions

A. The department of administration, with technical support from the department of commerce energy office, shall develop and implement a program to enter into energy performance contracts solely for the purpose of achieving energy or cost savings as measured in dollars and benefits ancillary to that purpose and for the purpose of implementing renewable energy projects or contracts. Performance contracts may also be used to reduce water consumption and water costs, to reduce sewer costs and for rainwater harvesting systems. Water and sewer measures may be combined with energy measures in the same performance contract, or water and sewer measures may be included in a separate water savings performance contract.

B. Pursuant to title 41, chapter 23, each contract may be for a period of not more than the expected life of the energy savings or renewable energy measures implemented or twenty‑five years, whichever is shorter. The contract shall provide that the energy and operational savings generated cover all costs, after accounting for any financial incentives or assistance provided by utilities, associated with implementation of energy conservation savings or renewable energy measures to include audits, design equipment, purchase and installation, metering, interest on monies borrowed and training, and the contract shall include contractor profit. The contractor shall recover an amount not to exceed the summation of these costs and the agreed upon profit. Energy dollar savings realized as a result of a performance contract under this section shall be shared at a negotiated rate between the state and the contractor, until such time as the contractor has recovered the amount specified in the contract, at which time all savings shall accrue to the state. Interest rates charged on each contract shall be mutually agreed upon by the department of administration and the contractor. Contracts shall contain contingency provisions agreed upon by the department and the contractor for cases where measured energy dollar savings do not meet predicted energy dollar savings.

B. C. For the purposes of this section:

1. "Combined heat and power" means any system that simultaneously or sequentially generates both electric or mechanical energy and useful thermal energy using the same unit of fuel.

2. "Energy dollar or cost savings" means a reduction in the cost of energy, from a base energy cost established through a methodology set forth in the contract, utilized in an existing or new state owned or leased building as a result of either any of the following:

(a) The lease or purchase of operating equipment by the state or contractor, improvements made, altered operation and maintenance, technical services provided or renewable energy sources utilized.

(b) The increased efficient use of existing energy sources by cogeneration or combined heat and power.

Sec. 12. Repeal

Section 34-456, Arizona Revised Statutes, is repealed.

Sec. 13. Title 41, chapter 10, article 1, Arizona Revised Statutes, is amended by adding section 41-1511, to read:

START_STATUTE41-1511. Energy efficient buildings; report; definition

A. It is the policy of this state to promote the construction of energy efficient buildings. In order to accomplish the construction of energy efficient residential and commercial buildings, the following voluntary statewide goals are established:

Year Percentage by which new

buildings on average are

more energy efficient

than the 2006 international

energy conservation code

2012 15%

2016 30%

2020 50%

B. The department of commerce energy office shall track the number of energy efficient buildings that are constructed in this state.

C. Municipalities and counties that compile data on energy efficient buildings pursuant to sections 9-469 and 11-324 shall provide that information to the energy office on or before February 1 of each year as prescribed by the energy office.

D. Beginning in 2010, the energy office shall submit to the legislature an annual report of information collected pursuant to subsections B and C of this section, a determination of the number and percentage of energy efficient buildings constructed in the preceding year and an estimate of the percentage that all new residential buildings in the aggregate on average were more energy efficient and an estimate of the percentage that all new commercial buildings in the aggregate on average were more energy efficient than the 2006 international energy conservation code. The report may include only aggregate information with respect to specific builders.

E. In addition to the report required by subsection D of this section, the energy office shall make an annual presentation to the house of representatives committee on water and energy and the senate committee on natural resources, infrastructure and public debt, or their successor committees.

F. For the purposes of this section, "energy efficient buildings" means new residential and commercial buildings that meet or exceed the energy efficiencies prescribed by the united states environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the united states green building council, or an equivalent green building standard, or that are at least fifteen per cent more energy efficient than the 2006 international energy conservation code. END_STATUTE

Sec. 14. Title 41, chapter 23, article 3, Arizona Revised Statutes, is amended by adding section 41-2560, to read:

START_STATUTE41-2560. Energy performance contracts; joint legislative budget committee consultation

A. The director shall enter into Energy performance contracts to finance energy efficiency and renewable energy projects or contracts for the purchasing agency pursuant to section 34-455. Energy efficient and renewable energy projects or contracts to be funded under this section shall use generally available and market proven commercial technologies as defined programmatically by the department of commerce energy office. The funding for services under an energy performance contract entered into pursuant to this section may include appropriate lease-purchase or other third-party agreements. Funding for an energy performance contract entered into pursuant to this section may include appropriate lease-purchase financing agreements or third‑party agreements and shall not exceed ten million dollars for any single project. The qualified provider or qualified energy service company shall guarantee that the energy or cost savings to be generated will be at least sufficient to cover any debt service and fees associated with the project financing.

B. If an energy performance contract has been executed, operating and utilities appropriations for a state agency to fund energy performance contracts shall not be decreased over the contract term on the exclusive basis that the project has been implemented.

C. Before an energy performance contract is awarded pursuant to this section, the joint legislative budget committee staff shall be consulted with regard to the potential fiscal impact of the contract to the state. At the beginning of this consultation and no later than fifteen days after a request from the joint legislative budget committee staff, the department of commerce energy office shall provide an opinion to the joint legislative budget committee as to whether the cost of the project, including all interest, costs and fees related to lease-purchase or third-party agreements, can be repaid entirely from project savings. On request from the joint legislative budget committee staff and within fifteen days after the date of the request, the state agency shall provide any additional information to the joint legislative budget committee staff to complete its findings. The joint legislative budget committee staff shall provide the state agency with its assessment within forty-five days after receipt of the requested information. If the joint legislative budget committee staff finds a significant negative fiscal impact to the state, the staff shall report its findings to the joint legislative budget committee. END_STATUTE

Sec. 15. Section 42-11054, Arizona Revised Statutes, is amended to read:

START_STATUTE42-11054. Standard appraisal methods and techniques

A. Subject to subsection B of this section, the department shall:

1. Prescribe guidelines for applying standard appraisal methods and techniques that shall be used by the department and county assessors in determining the valuation of property.

2. Prepare and maintain manuals and other necessary guidelines, consistent with this section, reflecting the standard methods and techniques to perpetuate a current inventory of taxable property and the valuation of that property.

B. Before they are adopted, the department shall submit each substantive proposed guideline, table and manual that is developed, amended or otherwise modified from and after December 31, 2006 to the joint legislative oversight committee on property tax assessment and appeals. The department shall not finally adopt, amend or otherwise modify a substantive guideline, table or manual for at least thirty days after submitting the measure to the committee. The committee may hold one or more informational hearings on the proposed measure within thirty days after submission. In adopting, amending or modifying the measure the department shall consider the committee's comments. If the committee fails to hold a hearing within thirty days after submission, the department may adopt, amend or modify the measure without further consideration.

C. In applying prescribed standard appraisal methods and techniques:

1. Current usage shall be included in the formula for reaching a determination of full cash value.

2. Solar energy devices, as defined in section 44-1761, grid‑tide solar photovoltaic systems and any other device or system designed for the production of solar energy primarily for on-site consumption are considered to add no value to the property.

3. Energy efficient building components, renewable energy equipment and combined heat and power systems are considered to add no value to the property, if the property owner provides the county assessor with documentation of all elements that qualify pursuant to this paragraph, including documents showing actual acquisition and installation costs. The documentation must be submitted to the county assessor no later than six months before the notice of full cash value is issued for the initial evaluation year pursuant to section 42-15101 or, if the component is added after September 30 of the preceding year, no later than March 31 of the initial valuation year. For the purposes of this paragraph:

(a) "Combined heat and power system" means a process for the simultaneous or sequential generation of electrical or mechanical energy and useful thermal energy using the same unit of fuel, with a total fuel efficiency of seventy per cent or greater. The equipment or system must demonstrate, or be certified to be capable of, at least seventy per cent total fuel efficiency capability.

(b) "Energy efficient building components" means high performance sustainable building components installed so that the buildings or building components meet or exceed the energy efficiencies prescribed by the United States environmental protection agency energy star program or by a leadership in energy and environmental design green building rating standard developed by the united states green building council, or an equivalent green building standard, or that are at least fifteen per cent more energy efficient than the 2006 international energy conservation code.

(c) "Renewable energy equipment" means equipment that is used to produce energy primarily for on-site consumption from renewable resources, including wind, forest thinnings, agricultural waste, landfill gas, biogas, geothermal, low-impact hydropower and solar energy not included under paragraph 2 of this subsection.

D. If the methods and techniques prescribe using market data as an indication of market value, the price paid for future anticipated property value increments shall be excluded.

E. For purposes of determining full cash value, the department and county assessors shall use and apply the ratio standard guidelines issued by the department for tax year 1993 in the same manner as they were applied in tax year 1993. This subsection does not apply to property that is valued according to prescribed statutory methods or to property for which values are determined in the year after an appeal pursuant to section 42‑16002.END_STATUTE

Sec. 16. Repeal

Section 42-12056, Arizona Revised Statutes, is repealed.

Sec. 17. Section 44-1375, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1375. Definitions

In this article, unless the context otherwise requires:

1. "Automatic commercial icemaker" means a factory made assembly that is shipped in one or more packages, that consists of a condensing unit and icemaking section operating as an integrated unit, that makes and harvests ice cubes and that may store or dispense ice. Automatic commercial icemaker includes machines with capacities between fifty and two thousand five hundred pounds per twenty-four hours.

2. "Ballast" means a device used with an electric discharge lamp to obtain necessary circuit conditions such as voltage, current and waveform for starting and operating the lamp.

3. "Commercial clothes washer" means a soft mount horizontal or vertical axis clothes washer that both:

(a) Has a clothes container compartment no greater than three and one‑half cubic feet in the case of a horizontal axis product or no greater than four cubic feet in the case of a vertical axis product.

(b) Is designed for use by more than one household, such as in multifamily housing, apartments or coin laundries.

4. "Commercial prerinse spray valve" means a handheld device designed to spray water on dishes, flatware and other food service items for the purpose of removing food residue prior to cleaning.

5. "Commercial refrigerator, freezer and refrigerator freezer" means self-contained refrigeration equipment that:

(a) Is not a consumer product as regulated pursuant to 42 United States Code chapter 77.

(b) Operates at a chilled, frozen, combination chilled‑frozen or variable temperature for the purpose of storing or merchandising food, beverages or ice.

(c) May have transparent or solid or both transparent and solid hinged doors, sliding doors or a combination of hinged and sliding doors.

(d) Incorporates most components involved in the vapor-compression cycle and the refrigerated compartment in a single cabinet.

(e) Does not include:

(i) Units with eighty-five cubic feet or more of internal volume.

(ii) Walk-in refrigerators or freezers.

(iii) Units with no doors.

(iv) Freezers specifically designed for ice cream.

6. "High-intensity discharge lamp" means a lamp in which light is produced by the passage of an electric current through a vapor or gas and in which the light producing arc is stabilized by bulb wall temperature and the arc tube has a bulb wall loading in excess of three watts per square centimeter.

7. "Illuminated exit sign" means an internally illuminated sign that is designed to be permanently fixed in place to identify a building exit and that consists of an electrically powered integral light source that both illuminates the legend "exit" and any directional indicators and provides contrast between the legend, any directional indicators and the background.

8. "Large packaged air conditioning equipment" means electrically operated, air cooled air conditioning and air conditioning heat pump equipment that has cooling capacity greater than or equal to two hundred forty thousand Btu per hour but less than seven hundred sixty thousand BTU per hour and that is built as a package and shipped as a whole to end user sites.

9. "Low voltage dry type distribution transformer" means a transformer to which all of the following apply:

(a) Has an input voltage of six hundred volts or less.

(b) Is air cooled.

(d) Is rated for operation at a frequency of sixty hertz.

10. "Metal halide lamp" means a high intensity discharge lamp in which the major portion of the light is produced by radiation of metal halides and their products of dissociation, possibly in combination with metallic vapors.

11. "Metal halide lamp fixture" means a light fixture designed to be operated with a metal halide lamp and a ballast for a metal halide lamp.

12. "Portable electric spa" means a factory-built electric spa or hot tub that is supplied with equipment for heating and circulating water.

12. 13. "Probe start metal halide ballast" means a ballast used to operate metal halide lamps that does not contain an ignitor and which instead starts lamps by using a third starting electrode probe in the arc tube.

13. 14. "Pulldown refrigerator" means a commercial refrigerator specifically designed to rapidly reduce all integrated product temperatures from ninety degrees fahrenheit to thirty-eight degrees fahrenheit over a twelve hour period when fully loaded with beverage containers.

15. "Residential pool pump" means a pump that is used to circulate and filter pool water in order to maintain clarity and sanitation.

14. 16. "Single voltage external AC to DC power supply" means a device that:

(a) Is designed to convert line voltage AC input into lower voltage DC output.

(b) Is able to convert to only one DC output voltage at a time.

(d) Is contained within a separate physical enclosure from the end use product.

(e) Is connected to the end use product via a removable or hard wired male/female electrical connection, cable, cord or other wiring.

(f) Does not have batteries or battery packs, including those that are removable and that physically attach directly to the power supply unit.

(g) Does not have a battery chemistry or type selector switch and indicator light or does not have a battery chemistry or type selector switch and a state of charge meter.

(h) Has a nameplate output power less than or equal to two hundred fifty watts.

15. 17. "Torchiere" means a portable electric lighting fixture with a reflective bowl that directs light upward onto a ceiling so as to produce indirect illumination on the surfaces below. A torchiere may include downward directed lamps in addition to the upward, indirect illumination.

16. 18. "Traffic signal module" means a standard eight inch or twelve inch traffic signal indication, consisting of a light source, a lens and all other parts necessary for operation.

17. 19. "Transformer" means a device that consists of two or more coils of insulated wire and that is designed to transfer alternating current by electromagnetic induction from one coil to another to change the original voltage or current value. Transformer does not include:

(a) Transformers with multiple voltage taps, with the highest voltage tap equaling at least twenty per cent more than the lowest voltage tap.

(b) Transformers, such as those commonly known as drive transformers, rectifier transformers, auto transformers, uninterruptible power system transformers, impedance transformers, regulating transformers, sealed and nonventilating transformers, machine tool transformers, welding transformers, grounding transformers or testing transformers, that are designed to be used in a special purpose application and that are unlikely to be used in general purpose applications.

18. 20. "Unit heater" means a self-contained, vented fan type commercial space heater that uses natural gas or propane and that is designed to be installed without ducts within a heated space, except that unit heater does not include any products covered by federal standards established pursuant to 42 United States Code chapter 77 or any product that is a direct vent, forced flue heater with a sealed combustion burner. END_STATUTE

Sec. 18. Section 44-1375.01, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1375.01. Applicability

A. This article applies to the following types of new products sold, offered for sale or installed in this state:

1. Automatic commercial icemakers.

2. Commercial clothes washers.

3. Commercial prerinse spray valves.

4. Commercial refrigerators, freezers and refrigerator freezers.

5. Illuminated exit signs.

6. Large packaged air conditioning equipment.

7. Low voltage dry type distribution transformers.

8. Metal halide lamp fixtures.

9. Single voltage external AC to DC power supplies.

10. Torchieres.

11. Traffic signal modules.

12. Unit heaters.

13. Portable electric spas.

14. Residential pool pumps.

B. This article does not apply to:

1. New products manufactured in this state and sold outside this state.

2. New products manufactured outside this state and sold at wholesale inside this state for final retail sale and installation outside this state.

3. Products installed in mobile manufactured homes at the time of construction.

4. Products designed expressly for installation and use in recreational vehicles.

5. Products installed in a laundry facility located within an apartment complex or mobile home park at the time of construction or replacement. For the purposes of this paragraph, "apartment complex" means any real property that has one or more structures and that contains four or more dwelling units for rent or lease that are subject to the Arizona residential landlord and tenant act prescribed by title 33, chapter 10.END_STATUTE

Sec. 19. Section 44-1375.02, Arizona Revised Statutes, is amended to read:

START_STATUTE44-1375.02. Standards

A. Except as provided in subsection B C, the following standards apply beginning January 1, 2008:

1. Automatic commercial icemakers shall meet the requirements of section 1605.3 of the California Code of Regulations, title 20: division 2, chapter 4, article 4, in effect on the effective date of this article August 12, 2005.

2. Commercial clothes washers shall meet the requirements of section 1605.3 of the California Code of Regulations, title 20: division 2, chapter 4, article 4, in effect on the effective date of this article August 12, 2005.

3. Commercial prerinse spray valves shall have a flow rate equal to or less than 1.6 gallons per minute.

4. Commercial refrigerators, freezers and refrigerator freezers shall meet the requirements of section 1605.3 of the California Code of Regulations, title 20: division 2, chapter 4, article 4, in effect on the effective date of this article August 12, 2005, except that pulldown refrigerators with transparent doors shall meet a requirement five per cent less stringent than shown in the California regulations.

5. Illuminated exit signs shall have an input power demand of five watts or less per illuminated face and shall either have a power factor of at least 0.70 or meet the power factor product specification of the energy star program requirements, whichever is higher.

6. Large packaged air conditioning equipment shall meet a minimum energy efficiency ratio of 10.0 for air conditioning without an integrated heating component or with electric resistance heating integrated into the unit, 9.8 for air conditioning with heating other than electric resistance integrated into the unit, 9.5 for air conditioning heat pumps without an integrated heating component or with electric resistance heating integrated into the unit and 9.3 for air conditioning heat pump equipment with heating other than electric resistance integrated into the unit. Large packaged air conditioning heat pumps shall meet a minimum coefficient of performance in the heating mode of 3.2 measured at a high temperature rating of forty-seven degrees Fahrenheit.

7. Through December 31, 2010, low voltage dry type distribution transformers shall meet the class 1 efficiency levels for low voltage distribution transformers specified in table 4-2 of the guide for determining energy efficiency for distribution transformers, published by the national electrical manufacturers association (NEMA standard TP-1-2002), in effect on the effective date of this article August 12, 2005.

8. Metal halide lamp fixtures designed to be operated with lamps rated greater than or equal to one hundred fifty watts but less than or equal to five hundred watts shall not contain a probe start metal halid halide lamp ballast.

9. Single voltage external AC to DC power supplies shall meet the tier one energy efficiency requirements of section 1605.3 of the California Code of Regulations, title 20: division 2, chapter 4, article 4, in effect on the effective date of this article August 12, 2005. This standard applies to single voltage AC to DC power supplies that are sold individually and to those that are sold as a component of or in conjunction with another product.

10. Torchieres shall not use more than one hundred ninety watts. A torchiere shall be deemed to use more than one hundred ninety watts if any commercially available lamp or combination of lamps can be inserted in its socket and cause the torchiere to draw more than one hundred ninety watts when operated at full brightness.

11. Traffic signal modules shall meet the product specification of the energy star program requirements for traffic signals developed by the United States environmental protection agency that took effect in February 2001, shall have a power factor of at least 0.90 and shall be installed with compatible, electrically connected signal control interface devices and conflict monitoring systems.

12. Unit heaters shall be equipped with an intermittent ignition device and shall have either power venting or an automatic flue damper.

B. Beginning January 1, 2012, the following standards apply:

1. Portable electric spas shall not have a standby power greater than five times the spa's volume in gallons raised to the two-thirds power.

2. Residential pool pump motors shall not be split-phase or capacitor start-induction run type. Pool pump motors with a capacity of one horsepower or more shall have the capability of operating at two or more speeds with a low speed having a rotation rate that is no more than one-half of the motor's maximum rotation rate. Pool pump motor controls shall have the capability of operating the pool pump in at least two speeds. The default circulation speed shall be the lowest speed, with a high speed override capability being for a temporary period not to exceed one normal cycle.

B. C. The standards prescribed by subsection A apply beginning January 1, 2010, if the product is a commercial refrigerator, freezer or refrigerator freezer or large packaged air conditioning equipment.

C. D. Beginning on May 31, 2008, and every three years thereafter, the department of commerce energy office shall conduct a comparative review and assessment of the standards prescribed by subsection A and energy efficiency standards adopted in other states. The department of commerce energy office shall:

1. Submit a report of its findings and recommendations to the speaker of the house of representatives and president of the senate.

2. Provide a copy of the report to the director of the Arizona state library, archives and public records.END_STATUTE