(1) As used in this section, unless the context otherwise requires, "utility cost-savings contract" shall have the same meaning as set forth in section 24-30-2001 (6).

(2) (a) In order to make state government more energy efficient in accordance with section 24-38.5-102, the Colorado energy office may propose a prioritized list of projects associated with current utility cost-savings contracts that will improve the energy efficiency of state buildings or facilities and that are proposed to be constructed or improved using financing provided in accordance with subsection (3) of this section. If the Colorado energy office creates a prioritized list, the prioritized list shall include an estimate of the total amount of annual utility cost savings expected if all of the projects on the prioritized list are completed; descriptions of the projects, the affected buildings, and the impact of the projects on tenants; a timeline for implementation; a detailed budget for each project; a list of properties recommended for use as collateral, which shall include only properties operated and maintained by agencies that are responsible for the operation and maintenance of at least one state building or facility for which a project is being financed in accordance with subsection (3) of this section; estimates of the amount of annual utility cost savings expected for each of the projects; and expected annual payments for each project, including the expected funding sources for such payments. The Colorado energy office shall submit the prioritized list and referenced supporting documents to the office of state planning and budgeting for review and approval or disapproval. Except as otherwise provided in paragraph (b) of this subsection (2), the office of state planning and budgeting shall submit any projects on the prioritized list that it approves to the capital development committee of the general assembly for review and approval or disapproval. Subject to the limitations specified in subsection (3) of this section, if the capital development committee determines after reviewing the projects submitted to it for its review and approval or disapproval that it is appropriate to authorize the state treasurer to pursue financing provided in accordance with subsection (3) of this section to fund some or all of the projects or if the office of state planning and budgeting has approved projects for buildings or facilities operated and maintained by the department of transportation and submitted such projects to the committee for informational purposes only pursuant to paragraph (b) of this subsection (2), the committee shall provide a letter to the Colorado energy office, the office of state planning and budgeting, the joint budget committee of the general assembly, and the state treasurer that specifies the final approved priority of the projects.

(b) Notwithstanding the provisions of paragraph (a) of this subsection (2), any projects on the prioritized list proposed by the Colorado energy office and approved by the office of state planning and budgeting for buildings or facilities operated and maintained by the department of transportation shall be deemed to be finally approved and shall be included on the prioritized list submitted to the capital development committee for informational purposes only.

(3) (a) Upon receipt of the letter from the capital development committee regarding its review pursuant to subsection (2) of this section, the state treasurer may enter into one or more lease-purchase agreements on behalf of the state in order to generate the proceeds needed to complete the projects. A lease-purchase agreement:

(I) May be entered into with any for-profit or nonprofit corporation, trust, or commercial bank as a trustee, as lessor;

(II) Shall be limited to a total par value, including costs of issuance, of all such instruments issued, distributed, and sold of no more than seventy-three million dollars;

(III) Shall include provisions that:

(A) Specify that all payment obligations of the state under the lease-purchase agreement are subject to annual appropriation by the general assembly and that obligations shall not be deemed or construed as creating an indebtedness of the state within the meaning of any provision of the state constitution or the laws of the state concerning or limiting the creation of indebtedness by the state;

(B) Indicate that if the state does not renew the agreement, the sole security available to the lessor shall be the property that is the subject of the nonrenewed agreement; and

(C) Allow the state to receive title to the real and personal property that is the subject of the agreement on or prior to the expiration of the entire term of the agreement, including all optional renewal terms;

(IV) May include:

(A) Provisions for the issuance, distribution, and sale of instruments evidencing rights to receive rentals and other payments made and to be made under the agreement. Such instruments shall not be notes, bonds, or any other evidence of indebtedness of the state within the meaning of any provision of the state constitution or the laws of the state concerning or limiting the creation of indebtedness by the state.

(B) Such other terms, provisions, and conditions as the state treasurer may deem appropriate.

(b) Only a building or facility subject to an energy performance contract, as defined in section 24-30-2001 (1), that is under consideration by the office of the state architect as of thirty days following June 10, 2010, may be the subject of a lease-purchase agreement entered into by the state treasurer pursuant to this subsection (3).

(c) The state, acting by and through the state treasurer, may enter into ancillary agreements and instruments deemed necessary or appropriate in connection with a lease-purchase agreement authorized pursuant to this subsection (3), including but not limited to deeds, leases, subleases, easements, or other instruments relating to the real property on which the facilities are located.

(d) The provisions of section 24-30-202 (5)(b) shall not apply to a lease-purchase agreement or any ancillary agreement or instrument authorized pursuant to this subsection (3). Any provision of the fiscal rules promulgated pursuant to section 24-30-202 (1) and (13) that the state controller deems to be incompatible or inapplicable with respect to such a lease-purchase agreement or ancillary agreement or instrument may be waived by the controller or his or her designee within the office of the state controller.

(e) Interest paid under a lease-purchase agreement, including interest represented by such instruments, shall be exempt from state income tax.

(f) Notwithstanding the authority of the capital development committee of the general assembly to authorize, after approval by the office of state planning and budgeting, the state treasurer to enter into lease-purchase agreements on behalf of the state, in order to ensure that lease-purchase agreements are entered into under favorable financial market conditions, the state treasurer shall have sole discretion to determine the timing of the state treasurer's entry into any lease-purchase agreement on behalf of the state pursuant to this subsection (3).

(g) The state treasurer shall coordinate with the office of state planning and budgeting in regard to the schedule of lease payments required in connection with any lease-purchase agreement.

(h) Once a lease-purchase agreement has been executed, the state treasurer shall submit the schedule for annual payments to the office of state planning and budgeting and the joint budget committee of the general assembly. The office of state planning and budgeting shall submit a budget request to the joint budget committee to reduce any corresponding operating appropriations for state capital facilities realizing utility cost savings from projects financed by lease-purchase agreements and to appropriate annual payments in the capital construction section of the budget for those facilities for which operation and maintenance is funded in whole or in part with moneys that are subject to state appropriation. Upon receipt of the budget request from the office of state planning and budgeting, the joint budget committee shall recommend to the general assembly an appropriation for annual payments in the capital construction section of the budget and a reduction of the same amount in the applicable utilities line item of the operating budget. The office of state planning and budgeting and the joint budget committee recommendation shall also include an appropriation of the original funding sources of the utility line item equal to the identified savings for transfer to the energy efficiency project proceeds fund created in subsection (4) of this section unless such transfer is prohibited by the requirements of the original funding source. It is the intent of the general assembly that the utilities line item reduction be permanent, and that any future appropriated increases be defended in relation to the balance for utilities that remain in the line.

(4) The energy efficiency project proceeds fund is hereby created in the state treasury. The principal of the fund shall consist of moneys received by the state in connection with any lease-purchase agreements entered into pursuant to subsection (3) of this section and any other legally available moneys that may be appropriated or transferred to the fund. All interest and income derived from the deposit and investment of moneys in the fund shall be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or any other fund. Moneys in the fund that were received by the state in connection with any lease-purchase agreement and that are trustee funds may be expended by the state treasurer, and other moneys in the fund not identified for funding annual payments or to be used to defray any incremental costs incurred by the state controller in managing accounting and reporting requirements related to lease-purchase agreements entered into pursuant to subsection (3) of this section are hereby continuously appropriated to the state treasurer, for the purpose of making disbursements necessary to complete projects associated with current utility cost-savings contracts that are authorized to be financed through lease-purchase agreements entered into by the state treasurer on behalf of the state pursuant to subsection (3) of this section. Moneys in the fund shall also be subject to appropriation by the general assembly for the purpose of paying the principal of and interest on and defraying any incremental costs incurred by the state controller in managing accounting and reporting requirements related to such lease-purchase agreements.