A. Prior to the award of a capital outlay construction contract for any improvement project set out in Part 2 of this act which has an energy-related component, the responsible agency must notify the Director of the Department of Planning and Budget. The Department of Planning and Budget, with the assistance of the Department of Mines, Minerals and Energy, shall review the project to determine if it meets the guidelines in Item 549 of this act for funding from the Oil Overcharge Expendable Trust Fund. If an application for funding the project is approved by the United States Department of Energy, the Director of the Department of Planning and Budget is authorized to transfer nongeneral funds from this Item to the project.

B. The Director of the Department of Planning and Budget shall withhold from agency appropriations and transfer to this Item an amount estimated at $1,340,000 $1,959,000 from those capital projects that are found to meet the criteria for funding from the Oil Overcharge Expendable Trust Fund and are approved for funding by the United States Department of Energy.

C.1. Out of this appropriation, $1,000,000 from special funds is designated to establish the Energy Efficiency Fund, as a nonreverting, nongeneral Fund.

2. The Fund shall be used to fund energy efficiency projects at state agencies and institutions of higher education and to purchase electrical submetering equipment. The Department of Planning and Budget, in consultation with the Department of Mines, Minerals and Energy, shall establish rules and procedures for the use of the fund.

3. The Director of the Department of Planning and Budget is authorized to transfer appropriations from the Energy Efficiency Fund to agencies and institutions to achieve the purpose of the Fund.

D. In addition to the amounts otherwise provided for in this Item, after reserving the amounts required pursuant to Item 547.10 of this act, the Director, Department of Planning and Budget, is authorized to withhold from agency appropriations in the second year up to $1,000,000 which may be expended for the purposes described in this Item. The withholding of such amount shall be based on an estimate and analysis of agency savings which are expected to accrue as a result of electrical utility rate reductions effective March 1, 1999.