Background Information
Pilot Program Summary
The Texas Comptroller’s State Energy Conservation Office (SECO) Small School Cool
District Pilot HVAC Loan Program finances HVAC upgrades at public school district facilities.
Low interest rate loans are provided to assist those public school districts. Up to $20 million will
be made available in this pilot program. The program’s revolving loan mechanism allows
Applicants to repay loans through the stream of energy cost savings realized from the projects.
Application Summary
Applications must be submitted through the NOLFA/RFA process.
 The maximum loan amount shall not exceed $250,000.
 The interest rate is 0.25%.
 The loan repayment term is eight (8) years.
 Each ISD is eligible for one loan. A single loan can cover multiple HVAC projects on
different campuses within the district.
 Project expenses will be reimbursed on a “cost reimbursement” basis.
 Borrower will be required to comply with federal Solid Waste Disposal Act.
 SECO may conduct periodic on-site monitoring visits on all building retrofit projects.
 All improvements financed through the Small School Cool District Pilot HVAC Loan
Program shall meet minimum efficiency standards (as prescribed by applicable building
energy codes).
Applicant Eligibility Requirements
The Texas Comptroller of Public Accounts (CPA) and the State Energy Conservation Office
(SECO) administer the Small School Cool District Pilot Loan Program. Applicants must meet
eligibility requirements before submitting a loan application.
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Public, taxpayer-supported Texas ISDs.
Open enrollment charter schools, county juvenile detention centers and Juvenile Justice
Alternative Education Program facilities are not eligible.
The public independent school districts must own and occupy the facilities where the
retrofit projects will take place.
Each ISD is eligible for one loan. A single loan can cover multiple HVAC projects on
different campuses within the district.
Project Eligibility
The following projects are eligible for funding, as are labor and materials directly related to proper
installation. The new equipment must replace existing equipment at existing buildings and
facilities. Projects and/or equipment not specifically listed are not eligible.
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New Direct Expansion (DX) Air Conditioning Systems
o The minimum age of the equipment to be replaced is ten (10) years.
o Unitary systems that provide both heating and cooling operations from one
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product.
 Related materials: electrical contacts/disconnects, gas piping/connections,
condensate lines and pumps, unit or wall mounted thermostats, control
valves, supply air and return air grills
o Rooftop package units (constant air volume or variable air volume systems)
 Related materials: roof curb, roof curb adapters, condensate lines, gas
piping/connections, control components, heavy duty coil guards, Variable
Frequency Drives, supply/return/outside air ductwork and grills
o Split system units (constant air volume or variable air volume systems)
 Related materials: condensing unit mounting pad, refrigerant lines and
insulation, electrical disconnect, furnace, DX coils, control components,
supply/return/outside air grills, connecting ductwork and insulation
Energy Efficiency Improvements to New HVAC Systems
o Retro-commissioning of control systems where HVAC systems have been
replaced
o Projects and/or equipment not specifically listed are ineligible for funding.
All projects must affect building spaces where academic classes are regularly held.
o Administration buildings, field houses and auxiliary buildings are not eligible.
Restrictions and Ineligible Projects
 Buildings that require Texas Historical Commission review or approval
 Buildings 44 years old or older
 Projects and/or equipment not specifically listed are not eligible.
 Equipment cannot be purchased prior to the loan agreement being fully executed.
 Indirect costs, such as general administration and overhead costs, are not allowable
expenses for loan funding.
Installation Requirements
 An air conditioning and refrigeration contractor licensed by the Texas Department of Licensing
and Regulation must install eligible HVAC equipment, certify its proper installation and
provide a TACL number with reimbursement requests.
 All contractors must certify the following:
o Proper installation in accordance with manufacturer’s recommendations
o Proper disposal of existing equipment and refrigerants pursuant to Texas Administrative
Code, Chapter 335
o No conflicts of interest
Application Review Process
 SECO will establish an Evaluation Committee for the full review and evaluation of eligible
applications. The Evaluation Committee shall include employees of the Comptroller and may
include other impartial individuals who are non-Comptroller employees.
 A Loan Application, submitted through a NOLFA/RFA process, must be reviewed by the
SECO legal counsel before a loan can be considered. SECO’s legal counsel checks the
applications for eligibility, for compliance with the terms of this NOLFA/RFA, and for
thoroughness. The applications that meet minimum qualifications and meet eligibility
requirements are then distributed to the members of the Evaluation Committee for their
independent review and evaluation.
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SECO may request additional information at any time prior to loan commitment of funds to
evaluate the application more effectively.
The SECO Evaluation Committee will evaluate applications based on the criteria established in
the score sheet. The applicant should complete the application and score sheet.
The SECO Evaluation Committee will review the score sheets to validate scores. Final scoring
may not be appealed.
The SECO Evaluation Committee will rank submissions by score and allocate funding
commitments to the highest-scoring projects until all funding is allocated.
If the budget allocation is exhausted, SECO may at its discretion offer an applicant partial
funding.
SECO will contact applicants who receive preliminary acceptance for grant awards by email.