Energy Performance Contracts - Navigators, Funding, and Requirements

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0119*

HOUSE BILL 119
P2, L6, M5 6lr0739
(PRE–FILED)
By: Delegate Vogel
Requested: August 26, 2025
Introduced and read first time: January 14, 2026
Assigned to: Environment and Transportation

A BILL ENTITLED

AN ACT concerning 1

Energy Performance Contracts – Navigators, Funding, and Requirements 2

FOR the purpose of requiring a public body that enters into an energy performance contract 3
to comply with certain provisions of law regarding energy performance contracts; 4
requiring the Maryland Clean Energy Center to hire or contract with navigators to 5
assist a public body in creating an energy performance contract; altering the Jane E. 6
Lawton Conservation Loan Program and the Jane E. Lawton Conservation Fund to 7
allow for the issuance of certain grants and loans to certain public bodies; requiring 8
the Maryland Energy Administration to work with a navigator assisting a public 9
body in creating an energy performance contract; authorizing the use of the Strategic 10
Energy Investment Fund for the Center to hire or contract with navigators; and 11
generally relating to energy performance contracts. 12

BY repealing and reenacting, without amendments, 13
Article – State Finance and Procurement 14
Section 11–101(a) and (i) and 12–302 15
Annotated Code of Maryland 16
(2021 Replacement Volume and 2025 Supplement) 17

BY adding to 18
Article – State Finance and Procurement 19
Section 17–1001 and 17–1002 to be under the new subtitle “Subtitle 10. Navigators 20
for Energy Performance Contracts” 21
Annotated Code of Maryland 22
(2021 Replacement Volume and 2025 Supplement) 23

BY repealing and reenacting, with amendments, 24
Article – State Government 25
Section 9–20A–01 through 9–20A–07 and 9–20B–05(f)(13) and (14) 26
Annotated Code of Maryland 27
2 HOUSE BILL 119

(2021 Replacement Volume and 2025 Supplement) 1

BY repealing and reenacting, without amendments, 2
Article – State Government 3
Section 9–20B–05(a) 4
Annotated Code of Maryland 5
(2021 Replacement Volume and 2025 Supplement) 6

BY adding to 7
Article – State Government 8
Section 9–20B–05(f)(14) 9
Annotated Code of Maryland 10
(2021 Replacement Volume and 2025 Supplement) 11

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 12
That the Laws of Maryland read as follows: 13

Article – State Finance and Procurement 14

11–101. 15

(a) In this Division II the following words have the meanings indicated unless: 16

(1) the context clearly requires a different meaning; or 17

(2) a different definition is provided for a particular title or provision. 18

(i) “Energy performance contract” means an agreement for the provision of 19
energy services, including electricity, heating, ventilation, cooling, steam, or hot water, in 20
which a person agrees to design, install, finance, maintain, or manage energy systems or 21
equipment to improve the energy efficiency of a building or facility in exchange for a portion 22
of the energy savings. 23

12–302. 24

(a) The Department of General Services shall be responsible for monitoring the 25
status of active energy performance contracts and reporting that status to the Board 26
annually. 27

(b) A unit that has entered into an energy performance contract shall submit to 28
the D epartment of General Services for review any required annual measurement and 29
verification reports. 30

SUBTITLE 10. NAVIGATORS FOR ENERGY PERFORMANCE CONTRACTS. 31

17–1001. 32

HOUSE BILL 119 3

(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 1
INDICATED. 2

(B) “ENERGY PERFORMANCE CONTRACT” HAS THE MEANING STAT ED IN § 3
11–101 OF THIS ARTICLE. 4

(C) “NAVIGATOR” MEANS AN INDIVIDUAL WHO ASSISTS PUBLIC B ODIES IN 5
CREATING ENERGY PERFORMANCE CONTRACTS. 6

(D) “PUBLIC BODY” INCLUDES: 7

(1) A UNIT OF STATE GOVERNMENT; 8

(2) A COUNTY; 9

(3) A MUNICIPAL CORPORATION; 10

(4) A PUBLIC INSTITUTION OF HIGHER EDUCATION; 11

(5) A LOCAL BOARD OF EDUCATION; AND 12

(6) A STATE OR LOCAL HOSPITAL. 13

17–1002. 14

(A) (1) A PUBLIC BODY THAT ENT ERS INTO AN ENERGY P ERFORMANCE 15
CONTRACT SHALL COMPLY WITH TITLE 12, SUBTITLE 3 OF THIS ARTICLE. 16

(2) BEFORE ENTERING INTO AN ENERGY PERFORMANCE CONTRACT 17
A PUBLIC BODY SHALL SUBMIT WRITTEN NOTIF ICATION TO THE NAVIG ATOR FOR 18
THE PUBLIC BODY’S REGION. 19

(B) (1) (I) THE MARYLAND CLEAN ENERGY CENTER SHALL HIRE O R 20
CONTRACT WITH NAVIGATORS TO ASSIST A PUBLIC BODY IN CREATING AN ENERGY 21
PERFORMANCE CONTRACT UNDER THIS SUBTITLE. 22

(II) FOR EACH FISCAL YEAR , THE GOVERNOR SHALL INCLUDE 23
IN THE ANNUAL BUDGET BILL AN APPROPRIATIO N OF $1,500,000 FROM THE 24
STRATEGIC ENERGY INVESTMENT FUND ESTABLISHED UNDER § 9–20B–05 OF THE 25
STATE GOVERNMENT ARTICLE TO THE MARYLAND CLEAN ENERGY CENTER TO 26
HIRE OR CONTRACT WITH NAVIGATORS TO ASSIST PUBLIC BODIES IN CREATING AN 27
ENERGY PERFORMANCE CONTRACT UNDER THIS SUBTITLE. 28

4 HOUSE BILL 119

(2) AT LEAST ONE NAVIGATOR SHALL ASSIST PUBLIC BODIES IN EACH 1
OF THE FOLLOWING REGIONS: 2

(I) ALLEGANY COUNTY, FREDERICK COUNTY, GARRETT 3
COUNTY, AND WASHINGTON COUNTY; 4

(II) CALVERT COUNTY, CHARLES COUNTY, AND ST. MARY’S 5
COUNTY; 6

(III) CAROLINE COUNTY, CECIL COUNTY, DORCHESTER 7
COUNTY, KENT COUNTY, QUEEN ANNE’S COUNTY, SOMERSET COUNTY, TALBOT 8
COUNTY, WICOMICO COUNTY, AND WORCESTER COUNTY; 9

(IV) ANNE ARUNDEL COUNTY, CARROLL COUNTY, HARFORD 10
COUNTY, AND HOWARD COUNTY; 11

(V) MONTGOMERY COUNTY; 12

(VI) PRINCE GEORGE’S COUNTY; 13

(VII) BALTIMORE COUNTY; AND 14

(VIII) BALTIMORE CITY. 15

(C) AFTER RECEIVING NOTIC E UNDER SUBSECTION (A)(2) OF THIS 16
SECTION, A NAVIGATOR SHALL ASSIST A PUBLIC BODY WITH CREATING AN ENERGY 17
PERFORMANCE CONTRACT, INCLUDING: 18

(1) APPLYING FOR FEDERAL, STATE, OR OTHER GRANTS OR LOANS TO 19
CREATE OR EXECUTE ENERGY PERFORMANCE CONTRACTS; 20

(2) REVIEWING AND ESTABLISHING ENERGY EFFICIENCY MEASURES 21
TO REDUCE THE ENERGY COSTS OF A BUILDING; 22

(3) REVIEWING AND ESTABL ISHING CLEAN ENERGY PROJECTS TO 23
REDUCE THE ENERGY COSTS OF A BUILDING; AND 24

(4) WORKING WITH THE MARYLAND ENERGY ADMINISTRATION TO 25
APPLY FOR GRANTS OR LOANS UNDER THE JANE E. LAWTON CONSERVATION 26
GRANT AND LOAN PROGRAM. 27

Article – State Government 28

9–20A–01. 29
HOUSE BILL 119 5

(a) In this subtitle the following words have the meanings indicated. 1

(b) “Administration” means the Maryland Energy Administration. 2

(c) “Borrower” means an eligible State agency, local jurisdiction, nonprofit 3
organization, or eligible business that applies and qualifies for a loan under this Program. 4

(d) “Eligible business” means a commercial enterprise or business that is in good 5
standing with the State Department of Assessments and Taxation and is: 6

(1) incorporated in the State; or 7

(2) registered to do business in the State. 8

(e) “Energy cost savings” means the actual reduction in operating expenses 9
resulting from the installation, operation, and maintenance of a project financed under the 10
Program. 11

(f) “Fund” means the Jane E. Lawton Conservation Fund. 12

(g) “GRANTEE” MEANS A PUBLIC BODY THAT APPLIES FOR A GRANT UNDER 13
THE PROGRAM. 14

(H) (1) “Local jurisdiction” means any county or municipality of the State. 15

(2) “Local jurisdiction” includes: 16

(i) a board of education of a county or municipality; 17

(ii) a special district that is established by State law and that 18
operates within a single county; 19

(iii) a special district that is established by a county under public 20
general law; and 21

(iv) an office, board, or department that is established in a coun ty 22
under State law and that is funded, under State law, at least in part by the county 23
governing body. 24

[(h)] (I) “Municipality” means any municipal corporation in the State that is 25
subject to the provisions of Article XI –E of the Maryland Constitution or any duly 26
authorized agency or instrumentality of the municipality. 27

6 HOUSE BILL 119

[(i)] (J) “Nonprofit organization” means a corporation, foundation, school, 1
hospital, or other legal entity, no part of the net earnings of which inure to the benefit of 2
any private shareholder or individual holding an interest in the entity. 3

[(j)] (K) “Program” means the Jane E. Lawton Conservation GRANT AND Loan 4
Program. 5

[(k)] (L) “Project” means one or more improvements or modifications that 6
enhance the energy efficiency and reduce the operating expenses of a structure located in 7
Maryland. 8

(M) “PUBLIC BODY” HAS THE MEANING STATED IN § 17–1001 OF THE STATE 9
FINANCE AND PROCUREMENT ARTICLE. 10

[(l)] (N) (1) “State agency” means any permanent or temporary State office, 11
department, division or unit, bureau, board, commission, task force, authority, institution, 12
State college or university, and any other unit of State government, whether executive, 13
legislative, or judicial. 14

(2) “State agency” includes any subunits of State governme nt OR PUBLIC 15
BODY. 16

9–20A–02. 17

There is a Jane E. Lawton Conservation GRANT AND Loan Program in the 18
Administration. 19

9–20A–03. 20

The purpose of the Program is to provide financial assistance in the form of GRANTS 21
TO PUBLIC BODIES AND low interest and zero interest loans to nonprofit organizations, 22
local jurisdictions, State agencies, and eligible businesses for projects in order to: 23

(1) promote energy conservation; 24

(2) reduce consumption of fossil fuels; 25

(3) improve energy efficiency; 26

(4) enhance energy –related economic development and stability in the 27
nonprofit, commercial, and industrial sectors; and 28

(5) reduce greenhouse gas emissions. 29

9–20A–04. 30

HOUSE BILL 119 7

The Administration shall: 1

(1) manage, supervise, and administer the Program; 2

(2) adopt regulations to ensure that GRANTS AND loans are provided only 3
to projects that carry out the purpose of the Program; 4

(3) attach [specific terms] to any GRANT OR loan SPECIFIC TERMS that 5
are considered necessary to ensure that the purpose of the Program is fulfilled; [and] 6

(4) develop procedures for monitoring projects to assess whether the 7
improvements or modifications made by an eligible entity or business that had received a 8
GRANT OR loan under the Program have resulted in a measurable reducti on in energy 9
consumption; AND 10

(5) WORK WITH NAVIGATOR S IN ACCORDANCE WITH § 17–1002 OF 11
THE STATE FINANCE AND PROCUREMENT ARTICLE. 12

9–20A–05. 13

(a) (1) To receive a GRANT OR loan under the Program, a GRANTEE OR 14
borrower must file an application with the Administration. 15

(2) If the borrower is an eligible business, the application must be signed 16
by the chief operating officer or an authorized officer of the business. 17

(3) If the GRANTEE OR borrower is a local jurisdiction, the application 18
must be signed by the chief elected officer of the county or municipality, or if none, by the 19
governing body of the county or municipality in which the project is located. 20

(4) If the GRANTEE OR borrower is a public school, the application must 21
be signed by the board of education of the county in which the project is located. 22

(5) If the GRANTEE OR borrower is a State agency, the application must 23
be signed by the head of the State agency. 24

(6) IF THE GRANTEE OR BOR ROWER IS A STATE HOSPITAL , THE 25
APPLICATION MUST BE SIGNED BY THE CHIEF EXECUTIVE OFFICER OR PRESIDENT 26
OF THE HOSPITAL. 27

(b) The application shall contain any information the Administration determines 28
is necessary, including: 29

(1) the projected cost to accomplish a proposed project; 30

8 HOUSE BILL 119

(2) the amount of energy or fuel a proposed project is expected to save over 1
a defined period of time after completion of the project; 2

(3) the anticipated environmental benefits in the form of reduced emissions 3
or pollution attributable to the proposed project; 4

(4) the amount of cost savings expected to be generated over a defined 5
period of time after completion of the proposed project; 6

(5) a description of the borrower’s contribution to a proposed project as 7
required by § 9–20A–06 of this subtitle; and 8

(6) any additional information relating to the GRANTEE, borrower, or [the] 9
proposed project that may be required by the Administration in order to administer the 10
Program. 11

9–20A–06. 12

(a) Loans from the Fund may be used for: 13

(1) the costs of implementing projects, including the costs of all necessary: 14

(i) technical assessments; 15

(ii) studies; 16

(iii) surveys; 17

(iv) plans and specifications; and 18

(v) start–up, architectural, engineering, or other special services; 19

(2) the costs of procu ring necessary technology, equipment, licenses, or 20
materials; and 21

(3) the costs of construction, rehabilitation, or modification, including the 22
purchase and installation of any necessary machinery, equipment, or furnishings. 23

(b) Each borrower shall make a contribution to a project that is of a type and 24
amount acceptable to the Administration. 25

(c) A borrower other than a State agency OR PUBLIC BODY must document that 26
the anticipated energy cost savings to the borrower over a defined period according to a 27
methodology acceptable to the Administration after the completion of the project are 28
greater than the total cost of the project to the borrower. 29

HOUSE BILL 119 9

(d) Loans made under the Program to a borrower other than a State agency OR 1
PUBLIC BODY shall: 2

(1) be repayable by the borrower from specified revenues that may include 3
the energy cost savings generated by a project; 4

(2) bear interest at a rate that the Administration determines to be 5
necessary and reasonable for the project; and 6

(3) be repayable i n accordance with a schedule that the Administration 7
sets, which may be on a deferred payment basis. 8

(e) (1) A borrower other than a State agency OR PUBLIC BODY shall provide 9
assurances for the repayment of a loan. 10

(2) The assurances: 11

(i) shall include a promissory note; and 12

(ii) may include superior or subordinate mortgage liens, guarantees 13
of repayment, or other forms of collateral. 14

(f) Loans may be made in conjunction with, or in addition to, financial assistance 15
provided through other State or federal programs. 16

(G) (1) GRANTS MADE TO PUBLIC BODIES UNDER THE PROGRAM MAY BE 17
USED FOR: 18

(I) THE COSTS OF IMPLEMENTING PROJECTS, INCLUDING THE 19
COSTS OF ALL NECESSARY: 20

1. TECHNICAL ASSESSMENTS; 21

2. STUDIES; 22

3. SURVEYS; 23

4. PLANS AND SPECIFICATIONS; AND 24

5. START–UP, ARCHITECTURAL, ENGINEERING, OR 25
OTHER SPECIAL SERVICES; 26

(II) THE COSTS OF PROCURI NG NECESSARY TECHNOL OGY, 27
EQUIPMENT, LICENSES, OR MATERIALS; AND 28

10 HOUSE BILL 119

(III) THE COSTS OF CONSTRU CTION, REHABILITATION, OR 1
MODIFICATION, INCLUDING THE PURCHASE AND INSTALLATION OF ANY NECESSARY 2
MACHINERY, EQUIPMENT, OR FURNISHINGS. 3

(2) GRANTS MAY BE AWARDED IN CONJUNCTION WITH , OR IN 4
ADDITION TO , FINANCIAL ASSISTANCE PROVIDED THROUGH OTH ER STATE OR 5
FEDERAL PROGRAMS. 6

(3) A RECIPIENT OF A GRANT AWARDED UNDER THE PROGRAM MAY 7
USE THE ENERGY COST SAVINGS ASSOCIATED W ITH THE GRANT TO APPLY FOR 8
ADDITIONAL FEDERAL , STATE, OR PRIVATE PROGRAMS THAT ARE DESIGNED TO 9
INCREASE THE ENERGY EFFICIENCY OF A BUIL DING OR ADD RENEWABL E ENERGY 10
TO A BUILDING. 11

(4) THE ADMINISTRATION SHALL COORDINATE WITH THE 12
MARYLAND CLEAN ENERGY CENTER TO IMPLEMENT T HE PROVISIONS OF THI S 13
SECTION. 14

9–20A–07. 15

(a) There is a Jane E. Lawton Conservation Fund. 16

(b) The Administration shall administer the Fund. 17

(c) (1) The Fund is a special, nonlapsing fund that is not subject to § 7–302 of 18
the State Finance and Procurement Article. 19

(2) The State Treasurer shall hold the Fund and the Comptroller shall 20
account for the Fund. 21

(d) The Fund consists of: 22

(1) money appropriated in the State budget to the Program; 23

(2) money received from any public or private source; 24

(3) interest and investment earnings on the Fund; and 25

(4) repayments and prepayments of principal and interest on loans made 26
from the Fund. 27

(e) The Fund may be used only: 28

(1) to pay the expenses of the Program; 29

HOUSE BILL 119 11

(2) to provide GRANTS AND loans to GRANTEES, eligible borrowers, and 1
projects; and 2

(3) to enhance the credit of a financing offered by eligible banks and other 3
financial institutions for projects. 4

(f) (1) The State Treasurer shall invest and reinvest the money of the Fund in 5
the same manner as other State money may be invested. 6

(2) Any investment earnings of the Fund shall be paid into the Fund. 7

(3) Any repayment of principal and interest on loans made from the Fund 8
shall be paid into the Fund. 9

(g) (1) The Administration shall annually reserve for at least 90 days a portion 10
of the money from the Fund that is available for financial assistance under the Program for 11
GRANTS TO PUBLIC BODIES AND loans to nonprofit organizations. 12

(2) In a fiscal year in which requests for financial assistance from nonprofit 13
organizations are less than the amount of money reserved under paragraph (1) of this 14
subsection for the period determined by the Administration, the Administration may make 15
the unencumbered or noncommitted portion of the reserve available to other GRANTEES 16
OR borrowers in the Program. 17

9–20B–05. 18

(a) There is a Maryland Strategic Energy Investment Fund. 19

(f) The Administration shall use the Fund: 20

(13) notwithstanding subsection (g) of this section, to pay costs associated 21
with the Air and Radiation Administration within the Department of the Environment; 22
[and] 23

(14) TO PROVIDE FUNDING, IN ACCORDANCE WITH § 17–1002 OF THE 24
STATE FINANCE AND PROCUREMENT ARTICLE, TO THE MARYLAND CLEAN ENERGY 25
CENTER TO HIRE OR CONTRACT WITH NAVIGATORS; AND 26

[(14)] (15) to pay the expenses of the Program. 27

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 28
1, 2026. 29