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PRINTER'S NO. 2124
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1724
Session of
2025
INTRODUCED BY STEELE, GIRAL, VENKAT, PROBST, SANCHEZ, FRANKEL,
CEPEDA-FREYTIZ, SAPPEY, MAYES, FLEMING, WEBSTER, SHUSTERMAN
AND INGLIS, JULY 11, 2025
REFERRED TO COMMITTEE ON FINANCE, JULY 14, 2025
AN ACT
Amending Title 62 (Procurement) of the Pennsylvania Consolidated
Statutes, in contract clauses and preference provisions,
providing for sustainable capital improvement project
contract.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Chapter 37 of Title 62 of the Pennsylvania
Consolidated Statutes is amended by adding a subchapter to read:
SUBCHAPTER F
SUSTAINABLE CAPITAL IMPROVEMENT PROJECT CONTRACT
Sec.
3761. Short title of subchapter.
3762. Definitions.
3763. Contracting procedures.
3764. Contract provisions.
3765. Funding.
3766. Construction.
§ 3761. Short title of subchapter.
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This subchapter shall be known and may be cited as the
Sustainable Capital Improvement Project Contract Act.
§ 3762. Definitions.
The following words and phrases when used in this subchapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Facility." A building, transportation, distribution system,
water system or other structure or technologies associated with
a governmental unit that advances the purposes of this
subchapter.
"Financing." Private sector capital that supports the
sustainable capital improvement project as provided by a
qualified provider.
"Governmental unit." Any officer, employee, authority,
board, bureau, commission, department, agency or institution of
a government agency, including, but not limited to, any
Commonwealth agency, State-aided institution or any county,
city, district, municipal corporation, municipality, municipal
authority, political subdivision, school district, educational
institution, borough, incorporated town, township, poor
district, county institution district, other incorporated
district or other public instrumentality which has the authority
to contract for the construction, reconstruction, alteration or
repair of any public facility.
"Key performance indicator." A quantifiable indicator that
measures how effectively a qualified provider is achieving the
objectives of a sustainable capital improvement project. The
term includes, but is not limited to, system efficiency, system
availability and service response times.
"Project." A sustainable capital improvement project
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developed pursuant to this subchapter.
"Project development agreement." An interim agreement
entered into between a qualified provider and a governmental
unit to finalize project design and cost, structure private
project financing and establish the terms and conditions of a
sustainable capital improvement project contract.
"Qualified provider." An individual or business which is
responsible and capable of evaluating, recommending, designing,
implementing, installing and operating and maintaining equipment
to reduce deferred maintenance and improve energy efficiency,
sustainability and resilience as determined by the governmental
unit.
"Services." Provisions that address energy and water
infrastructure, environmental infrastructure, efficiency,
resiliency, electric and other clean vehicle charging, renewable
energy, energy technology and other facility needs or
requirements.
"Sustainable capital improvement project." An individual
project or projects developed by a governmental unit under this
subchapter.
"Sustainable capital improvement project contract." A
contract for the design, construction, financing, asset
ownership, operations and maintenance of energy, water,
environment, resilience, distribution and sustainability assets
and capital project scope elements.
§ 3763. Contracting procedures.
(a) Entrance.--A governmental unit may enter into a
sustainable capital improvement contract with a qualified
provider under this subchapter or in accordance with another
statutorily authorized procurement process.
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(b) Sustainable capital improvement contract.--If, in
accordance with applicable law, the award of a contract by a
governmental unit requires action at a public meeting, a
governmental unit may award a sustainable capital improvement
contract at a public meeting if the governmental unit has
provided public notice, including the purpose of and names of
the parties to the contract, in the manner prescribed under 65
Pa.C.S. Ch. 7 (relating to open meetings). For governmental
units that are not required to take actions on contracts at
public meetings, the governmental unit may award a sustainable
capital improvement contract in accordance with the procedures
adopted by the governmental unit and the requirements of
applicable law.
(c) Competitive sealed proposals.--For the purpose of
entering into a sustainable capital improvement contract, all
governmental units shall be authorized to utilize the
competitive sealed proposal method of procurement. The
governmental unit shall evaluate any proposal that meets the
requirements of the governmental unit and is timely submitted by
a qualified provider. The request for proposals shall be
announced through a public notice from the governmental unit
which shall administer the program. The request for proposals
shall provide all interested parties with sufficient information
necessary to submit a timely and responsive proposal.
(d) Selection and notice.--The governmental unit shall
select the qualified provider that best meets the needs of the
governmental unit in accordance with criteria established by the
governmental unit. For governmental units that are not required
to take actions on contracts at public meetings, the
governmental unit shall transmit notice of the award of the
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sustainable capital improvement contract to the Legislative
Reference Bureau within 30 days for publication in the next
available issue of the Pennsylvania Bulletin. The notice shall
include the names of the parties to the contract and the purpose
of the contract. For governmental units that are required to
take actions on contracts at public meetings, the public notice
shall be made at least 10 days prior to the meeting.
(e) Report.--
(1) Before the award of a sustainable capital
improvement contract, the qualified provider shall provide a
report as part of the proposal, which shall be available for
public inspection, summarizing estimates of all costs of
installation, maintenance, repairs and debt service.
(2) The report shall contain a listing of contractors
and subcontractors to be used by the qualified provider with
respect to the sustainable capital improvement project.
(f) Bond.--A qualified provider to whom a contract is
awarded shall give a sufficient bond to the governmental unit
for faithful performance. Commonwealth agencies shall obtain
bonds in accordance with the provisions of section 533 (relating
to security and performance bonds). All other governmental units
shall obtain bonds in accordance with the act of December 20,
1967 (P.L.869, No.385), known as the Public Works Contractors'
Bond Law of 1967.
(g) Award of contract.--A governmental unit may enter into a
single sustainable capital improvement contract with each
responsible provider selected in accordance with the provisions
of this subchapter.
(h) Project development agreement.--Prior to the execution
of a sustainable capital improvement project contract, a
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governmental unit and a qualified provider may enter into a
project development agreement under which the project design,
project costs, project financing structure, key performance
indicators and other applicable terms and conditions shall be
finalized.
(i) Prevailing wage.--For any sustainable capital
improvement project contract, the qualified provider and any
contractor or subcontractor performing services as part of the
sustainable capital improvement project contract shall ensure
that all contractors and subcontractors engaged during the on-
site construction, renovation, rehabilitation, reconstruction,
demolition, alteration and repair work, other than maintenance
work, on any segment of work at the facility, pay to workers not
less than the prevailing minimum wage and benefit rates for all
crafts or classifications, as determined by the Department of
Labor and Industry under the act of August 15, 1961 (P.L.987,
No.442), known as the Pennsylvania Prevailing Wage Act.
(j) Qualifications.--Before the qualified provider enters
into a sustainable capital improvement project contract, the
qualified provider shall submit an affidavit to the governmental
unit to ensure that any contractor or subcontractor performing
services as part of the sustainable capital improvement project
contract meets all of the following requirements:
(1) Maintains all valid licenses, registrations or
certificates required by the Federal Government, the
Commonwealth or a local government entity that are necessary
to do business or perform applicable work.
(2) Maintains compliance with the act of June 2, 1915
(P.L.736, No.338), known as the Workers' Compensation Act,
the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897,
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No.1), known as the Unemployment Compensation Law, and
bonding and liability insurance requirements as specified in
the sustainable capital improvement project contract.
(3) Has not defaulted on a project, declared bankruptcy,
been debarred or suspended on a project by the Federal
Government, the Commonwealth or a government entity within
the previous three years.
(4) Has not been convicted of a misdemeanor or felony
relating to the performance or operation of the business of
the contractor or subcontractor within the previous 10 years.
(5) Has completed a minimum of the United States
Occupational Safety and Health Administration's 10-hour
safety training course or similar training sufficient to
prepare workers for any hazards that may be encountered
during their work.
§ 3764. Contract provisions.
(a) Payment time.--A sustainable capital improvement project
contract may provide that all payments, except obligations on
termination of the contract before expiration, shall be made
over a period of time.
(b) Key performance indices.--A sustainable capital
improvement project contract shall include key performance
indicators for the services requested by the governmental unit.
(c) Payments.--A sustainable capital improvement project
contract may provide for payments over a period of time not to
exceed 35 years and for the evaluation, recommendation, design,
implementation, installation and operation and maintenance of
services provided for under this subchapter and in accordance
with the following:
(1) Payments to a qualified provider who does not meet
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obligations under the key performance indicators shall be
adjusted according to the terms of the sustainable capital
improvement project contract.
(2) A governmental unit shall not be required to make
payments under a sustainable capital improvement project
contract until project construction is completed and the
assets are performing.
(d) Improvements not causally connected to a sustainable
capital improvement project.--An improvement that is not
causally connected to a sustainable capital improvement project
may be included in a sustainable capital improvement project if:
(1) the total value of the improvement does not exceed
15% of the total value of the sustainable capital improvement
project contract; and
(2) either:
(i) the improvement is necessary to conform to a
law, rule or ordinance; or
(ii) an analysis within the sustainable capital
improvement project contract demonstrates that there is
an economic advantage to the governmental unit
implementing an improvement as part of the sustainable
capital improvement project and the savings justification
for the improvement is documented by industry engineering
standards.
(e) Other expenditures.--A facility alteration which
includes expenditures that are required to properly implement a
sustainable capital improvement project may be included as part
of a sustainable capital improvement project contract, in which
case the installation of additional measures may be supervised
by the contractor performing the sustainable capital improvement
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project.
§ 3765. Funding.
(a) Termination.--Sustainable capital improvement project
contracts that have terms which extend beyond one fiscal year of
the governmental unit must include a provision that allows the
governmental unit to terminate the contract if in any fiscal
year during the term of the contract the governmental unit does
not receive sufficient funds in its annual appropriations to
make the payments required under the contract.
(b) Funds.--A governmental unit may use funds designated for
operating, utilities or capital expenditures for any sustainable
capital improvement project contract, including, without
limitation, for purchases on an installment payment or lease
purchase basis.
(c) Grants, subsidies or other payments.--Grants, subsidies
or other payments from the Commonwealth to a governmental unit
shall not be reduced as a result of use of a sustainable capital
improvement project contract during the life of the contract.
§ 3766. Construction.
Nothing in this subchapter shall be construed to abrogate any
duty to comply with prevailing wage or residency requirements
contained in any other act.
Section 2. This act shall take effect in 60 days.
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