HB 1724 — An Act amending Title 62 (Procurement) of the Pennsylvania Consolidated Statutes, in contract clauses and preference provisions, providing for sustainable capital improvement project contract.

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
 1   Amending Title 62 (Procurement) of the Pennsylvania Consolidated
 2      Statutes, in contract clauses and preference provisions,
 3      providing for sustainable capital improvement project
 4      contract.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.      Chapter 37 of Title 62 of the Pennsylvania
 8   Consolidated Statutes is amended by adding a subchapter to read:
 9                                 SUBCHAPTER F
10             SUSTAINABLE CAPITAL IMPROVEMENT PROJECT CONTRACT
11   Sec.
12   3761.   Short title of subchapter.
13   3762.   Definitions.
14   3763.   Contracting procedures.
15   3764.   Contract provisions.
16   3765.   Funding.
17   3766.   Construction.
18   § 3761.   Short title of subchapter.
 1      This subchapter shall be known and may be cited as the
 2   Sustainable Capital Improvement Project Contract Act.
 3   § 3762.   Definitions.
 4      The following words and phrases when used in this subchapter
 5   shall have the meanings given to them in this section unless the
 6   context clearly indicates otherwise:
 7      "Facility."    A building, transportation, distribution system,
 8   water system or other structure or technologies associated with
 9   a governmental unit that advances the purposes of this
10   subchapter.
11      "Financing."   Private sector capital that supports the
12   sustainable capital improvement project as provided by a
13   qualified provider.
14      "Governmental unit."   Any officer, employee, authority,
15   board, bureau, commission, department, agency or institution of
16   a government agency, including, but not limited to, any
17   Commonwealth agency, State-aided institution or any county,
18   city, district, municipal corporation, municipality, municipal
19   authority, political subdivision, school district, educational
20   institution, borough, incorporated town, township, poor
21   district, county institution district, other incorporated
22   district or other public instrumentality which has the authority
23   to contract for the construction, reconstruction, alteration or
24   repair of any public facility.
25      "Key performance indicator."    A quantifiable indicator that
26   measures how effectively a qualified provider is achieving the
27   objectives of a sustainable capital improvement project. The
28   term includes, but is not limited to, system efficiency, system
29   availability and service response times.
30      "Project."    A sustainable capital improvement project

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 1   developed pursuant to this subchapter.
 2      "Project development agreement."    An interim agreement
 3   entered into between a qualified provider and a governmental
 4   unit to finalize project design and cost, structure private
 5   project financing and establish the terms and conditions of a
 6   sustainable capital improvement project contract.
 7      "Qualified provider."    An individual or business which is
 8   responsible and capable of evaluating, recommending, designing,
 9   implementing, installing and operating and maintaining equipment
10   to reduce deferred maintenance and improve energy efficiency,
11   sustainability and resilience as determined by the governmental
12   unit.
13      "Services."   Provisions that address energy and water
14   infrastructure, environmental infrastructure, efficiency,
15   resiliency, electric and other clean vehicle charging, renewable
16   energy, energy technology and other facility needs or
17   requirements.
18      "Sustainable capital improvement project."    An individual
19   project or projects developed by a governmental unit under this
20   subchapter.
21      "Sustainable capital improvement project contract."      A
22   contract for the design, construction, financing, asset
23   ownership, operations and maintenance of energy, water,
24   environment, resilience, distribution and sustainability assets
25   and capital project scope elements.
26   § 3763.   Contracting procedures.
27      (a)    Entrance.--A governmental unit may enter into a
28   sustainable capital improvement contract with a qualified
29   provider under this subchapter or in accordance with another
30   statutorily authorized procurement process.

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 1      (b)   Sustainable capital improvement contract.--If, in
 2   accordance with applicable law, the award of a contract by a
 3   governmental unit requires action at a public meeting, a
 4   governmental unit may award a sustainable capital improvement
 5   contract at a public meeting if the governmental unit has
 6   provided public notice, including the purpose of and names of
 7   the parties to the contract, in the manner prescribed under 65
 8   Pa.C.S. Ch. 7 (relating to open meetings). For governmental
 9   units that are not required to take actions on contracts at
10   public meetings, the governmental unit may award a sustainable
11   capital improvement contract in accordance with the procedures
12   adopted by the governmental unit and the requirements of
13   applicable law.
14      (c)   Competitive sealed proposals.--For the purpose of
15   entering into a sustainable capital improvement contract, all
16   governmental units shall be authorized to utilize the
17   competitive sealed proposal method of procurement. The
18   governmental unit shall evaluate any proposal that meets the
19   requirements of the governmental unit and is timely submitted by
20   a qualified provider. The request for proposals shall be
21   announced through a public notice from the governmental unit
22   which shall administer the program. The request for proposals
23   shall provide all interested parties with sufficient information
24   necessary to submit a timely and responsive proposal.
25      (d)   Selection and notice.--The governmental unit shall
26   select the qualified provider that best meets the needs of the
27   governmental unit in accordance with criteria established by the
28   governmental unit. For governmental units that are not required
29   to take actions on contracts at public meetings, the
30   governmental unit shall transmit notice of the award of the

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 1   sustainable capital improvement contract to the Legislative
 2   Reference Bureau within 30 days for publication in the next
 3   available issue of the Pennsylvania Bulletin. The notice shall
 4   include the names of the parties to the contract and the purpose
 5   of the contract. For governmental units that are required to
 6   take actions on contracts at public meetings, the public notice
 7   shall be made at least 10 days prior to the meeting.
 8      (e)   Report.--
 9            (1)   Before the award of a sustainable capital
10      improvement contract, the qualified provider shall provide a
11      report as part of the proposal, which shall be available for
12      public inspection, summarizing estimates of all costs of
13      installation, maintenance, repairs and debt service.
14            (2)   The report shall contain a listing of contractors
15      and subcontractors to be used by the qualified provider with
16      respect to the sustainable capital improvement project.
17      (f)   Bond.--A qualified provider to whom a contract is
18   awarded shall give a sufficient bond to the governmental unit
19   for faithful performance. Commonwealth agencies shall obtain
20   bonds in accordance with the provisions of section 533 (relating
21   to security and performance bonds). All other governmental units
22   shall obtain bonds in accordance with the act of December 20,
23   1967 (P.L.869, No.385), known as the Public Works Contractors'
24   Bond Law of 1967.
25      (g)   Award of contract.--A governmental unit may enter into a
26   single sustainable capital improvement contract with each
27   responsible provider selected in accordance with the provisions
28   of this subchapter.
29      (h)   Project development agreement.--Prior to the execution
30   of a sustainable capital improvement project contract, a

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 1   governmental unit and a qualified provider may enter into a
 2   project development agreement under which the project design,
 3   project costs, project financing structure, key performance
 4   indicators and other applicable terms and conditions shall be
 5   finalized.
 6      (i)   Prevailing wage.--For any sustainable capital
 7   improvement project contract, the qualified provider and any
 8   contractor or subcontractor performing services as part of the
 9   sustainable capital improvement project contract shall ensure
10   that all contractors and subcontractors engaged during the on-
11   site construction, renovation, rehabilitation, reconstruction,
12   demolition, alteration and repair work, other than maintenance
13   work, on any segment of work at the facility, pay to workers not
14   less than the prevailing minimum wage and benefit rates for all
15   crafts or classifications, as determined by the Department of
16   Labor and Industry under the act of August 15, 1961 (P.L.987,
17   No.442), known as the Pennsylvania Prevailing Wage Act.
18      (j)   Qualifications.--Before the qualified provider enters
19   into a sustainable capital improvement project contract, the
20   qualified provider shall submit an affidavit to the governmental
21   unit to ensure that any contractor or subcontractor performing
22   services as part of the sustainable capital improvement project
23   contract meets all of the following requirements:
24            (1)   Maintains all valid licenses, registrations or
25      certificates required by the Federal Government, the
26      Commonwealth or a local government entity that are necessary
27      to do business or perform applicable work.
28            (2)   Maintains compliance with the act of June 2, 1915
29      (P.L.736, No.338), known as the Workers' Compensation Act,
30      the act of December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897,

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 1      No.1), known as the Unemployment Compensation Law, and
 2      bonding and liability insurance requirements as specified in
 3      the sustainable capital improvement project contract.
 4             (3)   Has not defaulted on a project, declared bankruptcy,
 5      been debarred or suspended on a project by the Federal
 6      Government, the Commonwealth or a government entity within
 7      the previous three years.
 8             (4)   Has not been convicted of a misdemeanor or felony
 9      relating to the performance or operation of the business of
10      the contractor or subcontractor within the previous 10 years.
11             (5)   Has completed a minimum of the United States
12      Occupational Safety and Health Administration's 10-hour
13      safety training course or similar training sufficient to
14      prepare workers for any hazards that may be encountered
15      during their work.
16   § 3764.    Contract provisions.
17      (a)    Payment time.--A sustainable capital improvement project
18   contract may provide that all payments, except obligations on
19   termination of the contract before expiration, shall be made
20   over a period of time.
21      (b)    Key performance indices.--A sustainable capital
22   improvement project contract shall include key performance
23   indicators for the services requested by the governmental unit.
24      (c)    Payments.--A sustainable capital improvement project
25   contract may provide for payments over a period of time not to
26   exceed 35 years and for the evaluation, recommendation, design,
27   implementation, installation and operation and maintenance of
28   services provided for under this subchapter and in accordance
29   with the following:
30             (1)   Payments to a qualified provider who does not meet

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 1      obligations under the key performance indicators shall be
 2      adjusted according to the terms of the sustainable capital
 3      improvement project contract.
 4            (2)   A governmental unit shall not be required to make
 5      payments under a sustainable capital improvement project
 6      contract until project construction is completed and the
 7      assets are performing.
 8      (d)   Improvements not causally connected to a sustainable
 9   capital improvement project.--An improvement that is not
10   causally connected to a sustainable capital improvement project
11   may be included in a sustainable capital improvement project if:
12            (1)   the total value of the improvement does not exceed
13      15% of the total value of the sustainable capital improvement
14      project contract; and
15            (2)   either:
16                  (i)    the improvement is necessary to conform to a
17            law, rule or ordinance; or
18                  (ii)    an analysis within the sustainable capital
19            improvement project contract demonstrates that there is
20            an economic advantage to the governmental unit
21            implementing an improvement as part of the sustainable
22            capital improvement project and the savings justification
23            for the improvement is documented by industry engineering
24            standards.
25      (e)   Other expenditures.--A facility alteration which
26   includes expenditures that are required to properly implement a
27   sustainable capital improvement project may be included as part
28   of a sustainable capital improvement project contract, in which
29   case the installation of additional measures may be supervised
30   by the contractor performing the sustainable capital improvement

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 1   project.
 2   § 3765.    Funding.
 3      (a)     Termination.--Sustainable capital improvement project
 4   contracts that have terms which extend beyond one fiscal year of
 5   the governmental unit must include a provision that allows the
 6   governmental unit to terminate the contract if in any fiscal
 7   year during the term of the contract the governmental unit does
 8   not receive sufficient funds in its annual appropriations to
 9   make the payments required under the contract.
10      (b)     Funds.--A governmental unit may use funds designated for
11   operating, utilities or capital expenditures for any sustainable
12   capital improvement project contract, including, without
13   limitation, for purchases on an installment payment or lease
14   purchase basis.
15      (c)     Grants, subsidies or other payments.--Grants, subsidies
16   or other payments from the Commonwealth to a governmental unit
17   shall not be reduced as a result of use of a sustainable capital
18   improvement project contract during the life of the contract.
19   § 3766.    Construction.
20      Nothing in this subchapter shall be construed to abrogate any
21   duty to comply with prevailing wage or residency requirements
22   contained in any other act.
23      Section 2.     This act shall take effect in 60 days.




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