§010.43b HCR71 (House-passed). sec. 309. scoring rule for energy savings performance contracts.

H. Con. Res. 71 (115th Congress)

Concurrent Resolution on the Budget for Fiscal Year 2018

TITLE III—BUDGET ENFORCEMENT IN THE HOUSE OF REPRESENTATIVES

Subtitle A—Budget Enforcement

sec. 309. scoring rule for energy savings performance contracts.

(a) In General.—The Director of the Congressional Budget Office shall estimate provisions of any bill or joint resolution, or amendment thereto or conference report thereon, that provides the authority to enter into or modify any covered energy savings contract on a net present value basis (NPV).

(b) NPV Calculations.—The net present value of any covered energy savings contract shall be calculated as follows:

(1) The discount rate shall reflect market risk.

(2) The cash flows shall include, whether classified as mandatory or discretionary, payments to contractors under the terms of their contracts, payments to contractors for other services, and direct savings in energy and energy-related costs.

(3) The stream of payments shall cover the period covered by the contracts but not to exceed 25 years.

(c) Definition.—As used in this section, the term ‘‘covered energy savings contract’’ means—

(1) an energy savings performance contract authorized under section 801 of the National Energy Conservation Policy Act; or

(2) a utility energy service contract, as described in the Office of Management and Budget Memorandum on Federal Use of Energy Savings Performance Contracting, dated July 25, 1998 (M–98–13), and the Office of Management and Budget Memorandum on the Federal Use of Energy Saving Performance Contracts and Utility Energy Service Contracts, dated September 28, 2015 (M–12–21), or any successor to either memorandum.

(d) Enforcement in the House Of Representatives.—In the House of Representatives, if any net present value of any covered energy savings contract calculated under subsection (b) results in a net savings, then the budgetary effects of such contract shall not be counted for purposes of titles III and IV of the Congressional Budget Act of 1974, this concurrent resolution, or clause 10 of rule XXI of the Rules of the House of Representatives.

(e) Classification of Spending.—For purposes of budget enforcement, the estimated net present value of the budget authority provided by the measure, and outlays flowing therefrom, shall be classified as direct spending.

(f) Sense of the House Of Representatives.—It is the sense of the House of Representatives that—

(1) the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office, should separately identify the cash flows under subsection (b)(2) and include such information in the President’s annual budget submission under section 1105(a) of title 31, United States Code; and

(2) the scoring method used in this section should not be used to score any contracts other than covered energy savings contracts.

House Budget Committee Report on Budget Resolution

(H. Rept. 115-240, Report on H. Con. Res. 71 (115th Congress))

Section 309. Scoring Rule for Energy Savings Performance Contracts.

Section 309 estimates in today’s dollars the net cash flows, both savings and costs, associated with any Energy Performance Contract (ESPC) or Utility Service Contract over the period of the contract, but not to exceed 25 years. This scoring rule would have the effect of capturing any long-term budgetary savings (and costs) resulting from these contracts. Under existing cash-based estimates, much of the savings from these contracts occur outside the budget window.

This section adheres to the principle that costs resulting from such contracts are direct spending if imposed by authorization legislation. It would not change the fact that Federal agencies would continue to cover contractual payments through annual, discretionary appropriations.

Subsection (a) requires the Director of CBO to estimate on a net present value basis any legislation that expands the Federal government’s authority to enter into or modify an existing ESPC or Utility Service Contract.

Subsection (b) stipulates that the net present value is calculated as follows: (1) the discount rate must reflect market risk; (2) cash flows must include, whether mandatory or discretionary spending, payments to contractors under the terms of their contracts, payments to contractors for other services, and direct savings in energy and energy-related costs; and (3) the stream of payments must cover the period of the contracts but not to exceed 25 years.

Subsection (c) defines ‘‘covered energy savings contract’’ as either: (1) an energy savings performance contract authorized under section 801 of the National Energy Conservation Policy Act; or (2) a utility energy service contract as described in the Office of Management and Budget (OMB) Memoranda on Federal Use of Energy Savings Performance Contracting (M–98–13) or Federal Use of Energy Saving Performance Contracts and Utility Energy Service Contracts (M–12–21) or any successor to either memorandum.

Subsection (d) prohibits the House from counting, for purposes of budget enforcement, any savings resulting from the net present value calculation under this section.

Subsection (e) requires the estimated net present value of the budget authority provided by the legislation and outlays flowing therefrom to be classified as direct spending for budget enforcement purposes.

Subsection (f) expresses the sense of the House that the Director of OMB, in consultation with the Director of CBO, should separately identify the cash flows under subsection (b)(2) and include such information in the President’s annual budget submission to Congress. It further clarifies that the Committee on the Budget should not apply this scoring methodology to other types of contracts.

Budget Counsel

A Reference for the Laws and Rules of the Congressional Budget Process