H.F. _____ Section 1. Section 331.441, subsection 2, paragraph b, 1 Code Supplement 2009, is amended by adding the following new 2 subparagraph: 3 NEW SUBPARAGRAPH . (20) The establishment or funding of 4 an energy finance program to finance energy improvements in a 5 county pursuant to chapter 385. 6 Sec. 2. Section 384.24, subsection 3, Code Supplement 2009, 7 is amended by adding the following new paragraph: 8 NEW PARAGRAPH . y. The establishment or funding of an energy 9 finance program to finance energy improvements within a city 10 pursuant to chapter 385. 11 Sec. 3. NEW SECTION . 385.1 Legislative findings —— purpose. 12 The general assembly finds all of the following: 13 1. Renewable energy production and energy efficiency 14 improvements to residential, commercial, and industrial real 15 property, are necessary to address the issue of energy bill 16 stabilization. 17 2. The initial investment required to make residential, 18 commercial, or industrial real property more energy-efficient 19 or to utilize renewable energy prevents many property owners 20 from making such improvements. To make energy improvements 21 more affordable and to promote their installation, it is 22 necessary to authorize an alternative procedure for owners of a 23 residence or business to finance such improvements. 24 3. The general assembly declares that a public purpose 25 shall be served by authorizing cities and counties to establish 26 energy finance programs and authorizing the governing body 27 of any city or county to assist property owners in financing 28 the installation of renewable energy improvements and energy 29 efficiency improvements by offering financial terms that are 30 beneficial to the property owner. 31 Sec. 4. NEW SECTION . 385.2 Definitions. 32 As used in this chapter, unless the context otherwise 33 requires: 34 1. “Energy analysis” means a written report summarizing the 35 -1- LSB 5241YC (1) 83 rn/sc 1/ 14

H.F. _____ results of a physical inspection of a residential, commercial, 1 or industrial building conducted by a public utility or other 2 agency or entity approved by the office. The report shall 3 document deficiencies in energy efficiency operation and 4 recommend specified energy improvements. 5 2. “Energy improvement” means the installation of one 6 or more appliances or heating and cooling systems, physical 7 alteration to a building, or installation of a renewable energy 8 production facility which has been identified in an energy 9 analysis as improving the energy-efficient operation of a 10 building or as decreasing the amount of energy consumed by that 11 building, or both. 12 3. “Office” means the office of energy independence 13 established in section 469.2. 14 Sec. 5. NEW SECTION . 385.3 Energy finance program 15 established. 16 1. A city or county may adopt an ordinance establishing an 17 energy finance program in order to allow the city or county 18 to offer to assess to residential, commercial, or industrial 19 property within the city or county the cost of purchasing or 20 installing energy improvements. The office shall advise cities 21 and counties in administering the program. 22 2. An energy finance program shall be limited to energy 23 improvements that will be permanently affixed to real property 24 that has already been developed or upon which buildings have 25 already been constructed. Property owners participating in the 26 program may receive funding for the improvements in advance 27 of installation, or as a reimbursement of amounts expended by 28 the property owner for completed installations. However, the 29 amount advanced or reimbursed shall not exceed the total amount 30 identified in the petition submitted by the property owner 31 pursuant to section 385.6. 32 3. Petitions for participation in an energy finance program 33 adopted by a city or county may be submitted, considered, 34 and approved or denied either individually or aggregated by 35 -2- LSB 5241YC (1) 83 rn/sc 2/ 14

H.F. _____ neighborhood, district, region, or other basis. 1 Sec. 6. NEW SECTION . 385.4 Resolution of intent. 2 1. The governing body of a city or county may not consider 3 an ordinance establishing an energy finance program until 4 after the governing body has adopted a resolution of intent 5 indicating or including the following: 6 a. That the city or county considers it in the public 7 interest to finance the installation of energy improvements. 8 b. That the city or county proposes to make special 9 assessment financing or other financing available to property 10 owners seeking to install or make energy improvements. 11 c. A nonexclusive list of examples of energy improvements 12 which may be included in the proposed ordinance and financed 13 pursuant to the program. 14 d. A brief description of the proposed arrangements for 15 financing the program. 16 2. The city or county shall hold a public hearing on the 17 resolution at which interested persons may inquire about or 18 object to the proposed program. Notice of the hearing shall 19 be published as provided in section 331.305 or 362.3, as 20 applicable. 21 Sec. 7. NEW SECTION . 385.5 Program requirements —— 22 ordinance. 23 1. An ordinance establishing an energy finance program 24 shall include the following regarding implementation of the 25 program: 26 a. A schedule for packaging assessments for program finance 27 purposes and city council or board of supervisors approval. 28 b. A method for prioritizing approved applications in the 29 event the number of applications received for a year exceeds 30 program funds. 31 c. Energy analysis requirements. 32 2. After adoption of an ordinance establishing an energy 33 finance program, a plan for raising a capital amount required 34 to pay for work performed pursuant to contractual assessments 35 -3- LSB 5241YC (1) 83 rn/sc 3/ 14

H.F. _____ shall be established by a city or county. A city or county 1 shall be authorized to advance funds available to it from any 2 source, including the sale of bonds as provided in section 3 385.11 and in section 331.441 or 384.24, as applicable. The 4 plan shall specify the source of financing contemplated by the 5 city or county. The plan shall also provide for a reserve 6 fund and for apportionment of all or any portion of the costs 7 incidental to financing, administration, and collection of the 8 special assessments between or among property owners and the 9 city or county. 10 3. The ordinance establishing an energy finance program 11 shall provide for the establishment of an energy finance 12 program fund into which bond proceeds and other funds to be 13 utilized in administering the program shall be deposited. 14 4. If a county has adopted a countywide ordinance, a city 15 cannot adopt an ordinance establishing an energy finance 16 program applicable to that portion of the city located within 17 the county. 18 Sec. 8. NEW SECTION . 385.6 Petition by property owners. 19 1. The office shall develop and make available to a city or 20 county that has established an energy finance program petitions 21 for distribution to prospective program participants. 22 2. Program participation shall be initiated solely by 23 petition of the property owner, or by a representative of 24 several related or adjoining lots or parcels who has obtained 25 written permission and a copy of an energy analysis from each 26 owner. If a property is in the name of more than one owner, the 27 petition shall be signed by each owner. 28 3. The petition shall state that a copy of a completed 29 energy analysis shall be required for participation in the 30 program and must be attached to the petition. The petition 31 shall contain space for the printed name, signature, and 32 address of the petitioner. For each petitioner, the petition 33 shall contain space for identification of energy improvements 34 identified in the energy analysis for which energy finance 35 -4- LSB 5241YC (1) 83 rn/sc 4/ 14

H.F. _____ program financing is sought, a cost estimate for each 1 improvement so identified, and a proposed time frame within 2 which the improvements shall be undertaken and completed. 3 4. Within thirty days following submission of a petition 4 and accompanying energy analysis, a petitioner shall receive 5 notification from the city or county of approval pending 6 adoption of a resolution pursuant to section 385.7 by the city 7 council or county board of supervisors, or of denial of the 8 petition. Following adoption of a resolution, an approved 9 petitioner shall receive notification from the city or county 10 regarding funding amounts, authorization to purchase directly 11 any equipment and materials for the installation of energy 12 improvements and to contract directly for such installation, 13 and verification requirements regarding completion of 14 improvements. 15 5. Special assessments for energy improvements shall be 16 levied only upon the free and willing consent of the owner of 17 each lot or parcel on which an assessment is levied at the time 18 of levy. 19 Sec. 9. NEW SECTION . 385.7 Resolution and filing. 20 1. Approved petitions, whether submitted on an individual 21 or aggregate basis, shall be grouped either by date of approval 22 or property location, identified by legal description, and 23 submitted to a city council or county board of supervisors in 24 the form of a resolution for approval by majority vote. 25 2. An adopted resolution shall be forwarded to the city 26 clerk, or the county auditor in the case of a county, along 27 with a schedule including a description and parcel number of 28 each lot, the name of the property owner, and the total amount 29 to be assessed to each lot. In counties in which taxes are 30 collected in two or more places, certification shall be to the 31 office of county treasurer where the special assessments are 32 collected. The county treasurer shall preserve the resolution 33 and schedule as a part of the records of the office until the 34 city clerk or county auditor certifies the final assessment 35 -5- LSB 5241YC (1) 83 rn/sc 5/ 14

H.F. _____ schedule as provided in section 385.8 or certifies that the 1 petition has been abandoned. 2 Sec. 10. NEW SECTION . 385.8 Adoption of schedule. 3 1. Within ten days after filing of the resolution and 4 schedule pursuant to section 385.7, a city council or county 5 board of supervisors shall meet, consider, and adopt or amend 6 and adopt, by resolution, a final assessment schedule. The 7 resolution must: 8 a. Confirm and levy assessments. 9 b. State the number of annual installments, not exceeding 10 fifteen, into which assessments of one hundred dollars or more 11 are divided. 12 c. Provide for interest on all unpaid installments at a rate 13 not exceeding that permitted by chapter 74A. 14 d. State the time when assessments are payable. 15 e. Direct the city clerk or county auditor, as appropriate, 16 to certify the final schedule to the treasurer of each county 17 in which the assessed property is located. 18 2. The city clerk or county auditor shall send written 19 notice by regular mail to each property owner whose petition 20 has been approved and whose property has been included on the 21 schedule. The notice shall contain all the information and 22 statements required to be included in notices under section 23 384.60, subsection 2. 24 3. The county treasurer shall enter on the county system the 25 amounts to be assessed against each lot, as certified. 26 Sec. 11. NEW SECTION . 385.9 Installments due —— lien 27 created. 28 1. Special assessments levied by a city or county pursuant 29 to this chapter shall be levied and collected in the same 30 manner as provided in section 384.65 for public improvement 31 special assessments levied by a city. 32 2. From the date of filing of certification of the 33 resolution and schedule pursuant to section 385.7, the special 34 assessments with all interest become and remain a lien on the 35 -6- LSB 5241YC (1) 83 rn/sc 6/ 14

H.F. _____ benefited property until paid, and have equal precedence with 1 ordinary taxes, and are not divested by any judicial sale. 2 Sec. 12. NEW SECTION . 385.10 Payment to county treasurer. 3 Assessments levied and certified under this chapter, 4 including installments and interest, are payable at the office 5 of the county treasurer of the county where the property 6 assessed is located, except that assessments may be paid 7 in full or in part and without interest within thirty days 8 after the date of certification, at the office of the county 9 treasurer, if the property being assessed is located in an 10 unincorporated area, or the city clerk, if the property being 11 assessed is located in an incorporated area. 12 Sec. 13. NEW SECTION . 385.11 Bonds issued. 13 1. After certification of the final assessment schedule, a 14 city or county may, by resolution, authorize and issue bonds in 15 anticipation of the collection of unpaid special assessments. 16 However, the total principal amount of bonds issued may not 17 exceed the total amount of unpaid special assessments. 18 2. All special assessment bonds are negotiable, must state 19 on their face that they are issued under the provisions of this 20 chapter, and are payable as to both principal and interest from 21 the proceeds of the special assessments. Such bonds may bear 22 interest at a rate not exceeding that permitted by chapter 23 74A payable annually or semiannually, must mature serially 24 on December 1 of the years in which any of the principal is 25 scheduled to become due, and may contain a provision that the 26 city or county reserves the right and option of calling and 27 redeeming any or all of the bonds prior to maturity on any 28 interest payment date or within forty-five days thereafter 29 upon the terms specified therein. Such bonds must be called 30 “improvement bonds”, must designate the general type of 31 improvement or improvements for which issued, and may be issued 32 in any denomination. The bonds must be named in a way to 33 distinguish them from other improvement bonds of the city or 34 county, and to designate the property specially assessed for 35 -7- LSB 5241YC (1) 83 rn/sc 7/ 14

H.F. _____ the improvement. Improvement bonds issued for any one levy 1 must bear the same date and be divided into as many series as 2 there are years in which installments of the special assessment 3 mature, and each series must be as nearly equal in amount as 4 practicable. 5 3. The proceeds of the special assessments and interest 6 collected thereon must be used and applied by the city or 7 county to the payment of the interest on the bonds and to 8 the retirement of the principal as rapidly as proceeds are 9 collected. Such bonds and coupons do not make the city or 10 county liable in any way, except for the proper application of 11 special assessments. If interest becomes due on any of the 12 bonds when there is no fund from which to pay it, the council 13 or board of supervisors may make a temporary loan for payment 14 of the interest, which loan must be repaid from the special 15 assessments and interest pledged to secure the bonds, but in 16 case of purchase by the city or county at tax sale of the 17 property on which a special assessment under this chapter is 18 levied, from the general fund. 19 4. Special assessment bonds issued under this section 20 must be sold at public or private sale in the manner provided 21 by chapter 75, and may not be sold for less than par value 22 with accrued interest from date to the time of delivery. The 23 proceeds of the sale must be applied to the payment of the 24 cost of financing the energy improvements approved under this 25 chapter. 26 5. Any excess of proceeds from special assessments 27 remaining after all of the bonds have been paid with interest 28 may be credited to the energy finance program fund established 29 pursuant to ordinance or returned to the applicable property 30 owners on a proportionate basis. 31 6. Cities or counties may issue refunding bonds to pay off 32 and take up special assessment bonds issued pursuant to this 33 chapter, or to refund any part thereof, as follows: 34 a. Refunding bonds must substantially conform to the 35 -8- LSB 5241YC (1) 83 rn/sc 8/ 14

H.F. _____ provisions of this chapter, and the face value is limited to 1 the amount of the unpaid special assessments with the interest 2 thereon of the particular issue of bonds to be refunded. 3 b. Refunding bonds or their proceeds may be used only to pay 4 improvement bonds taken up. 5 c. The expense of refunding bonds must be paid out of the 6 energy finance program fund of the city or county. 7 d. When refunding bonds are issued to pay improvement 8 bonds, all special assessments and sinking funds applicable to 9 the payment of the improvement bonds previously issued must 10 be applied in the same manner and to the same extent to the 11 payment of the refunding bonds, and all the powers and duties 12 to levy and to carry special assessments and taxes, to create 13 liens upon property, and to establish sinking funds in respect 14 to the bonds previously issued continue until refunding bonds 15 are paid. 16 e. The city or county shall collect the special assessment 17 out of which the refunding bonds are payable and hold the 18 proceeds in trust for the payment of the refunding bonds, but 19 it is not liable except for the proper application of the 20 assessments. 21 7. No action shall be brought questioning the legality 22 of the bonds authorized by this section from and after sixty 23 days from the date the bonds are ordered issued by the city or 24 county. 25 Sec. 14. NEW SECTION . 385.12 Verification —— penalty. 26 1. The office shall determine an inspection procedure to 27 be utilized by a city or county upon completion of an energy 28 improvement financed pursuant to the energy finance program. 29 2. The city council or board of supervisors may impose a 30 civil penalty against a property owner for failure to complete 31 an energy improvement for which a petition was submitted by the 32 property owner and approved and financing was received. The 33 penalty may be in an amount up to but not exceeding the amount 34 of financing received. 35 -9- LSB 5241YC (1) 83 rn/sc 9/ 14

H.F. _____ Sec. 15. NEW SECTION . 385.13 Report. 1 The results of the program including but not limited to the 2 number of petitions received, the number of petitions approved, 3 types of energy improvements for which special assessments are 4 sought, and average special assessment size, shall be submitted 5 by a city or county participating in the program to the office 6 by December 1 annually. The office shall make available on its 7 internet site all information received under this subsection. 8 Sec. 16. Section 403.19, subsection 2, Code 2009, is amended 9 to read as follows: 10 2. That portion of the taxes each year in excess of such 11 amount shall be allocated to and when collected be paid into 12 a special fund of the municipality to pay the principal of 13 and interest on loans, moneys advanced to, or indebtedness, 14 whether funded, refunded, assumed, or otherwise, including 15 bonds issued under the authority of section 403.9, subsection 16 1, incurred by the municipality to finance or refinance, in 17 whole or in part, an urban renewal project within the area, 18 and to provide assistance for low and moderate income family 19 housing as provided in section 403.22, and to provide funding 20 for an energy finance program adopted pursuant to chapter 385 21 with regard to property within the urban renewal area, except 22 that taxes for the regular and voter-approved physical plant 23 and equipment levy of a school district imposed pursuant to 24 section 298.2 and taxes for the payment of bonds and interest 25 of each taxing district must be collected against all taxable 26 property within the taxing district without limitation by the 27 provisions of this subsection. However, all or a portion of 28 the taxes for the physical plant and equipment levy shall be 29 paid by the school district to the municipality if the auditor 30 certifies to the school district by July 1 the amount of such 31 levy that is necessary to pay the principal and interest 32 on bonds issued by the municipality to finance an urban 33 renewal project, which bonds were issued before July 1, 2001. 34 Indebtedness incurred to refund bonds issued prior to July 1, 35 -10- LSB 5241YC (1) 83 rn/sc 10/ 14

H.F. _____ 2001, shall not be included in the certification. Such school 1 district shall pay over the amount certified by November 1 2 and May 1 of the fiscal year following certification to the 3 school district. Unless and until the total assessed valuation 4 of the taxable property in an urban renewal area exceeds the 5 total assessed value of the taxable property in such area as 6 shown by the last equalized assessment roll referred to in 7 subsection 1, all of the taxes levied and collected upon the 8 taxable property in the urban renewal area shall be paid into 9 the funds for the respective taxing districts as taxes by 10 or for the taxing districts in the same manner as all other 11 property taxes. When such loans, advances, indebtedness, and 12 bonds, if any, and interest thereon, have been paid, all moneys 13 thereafter received from taxes upon the taxable property in 14 such urban renewal area shall be paid into the funds for the 15 respective taxing districts in the same manner as taxes on all 16 other property. In those instances where a school district 17 has entered into an agreement pursuant to section 279.64 for 18 sharing of school district taxes levied and collected from 19 valuation described in this subsection and released to the 20 school district, the school district shall transfer the taxes 21 as provided in the agreement. 22 EXPLANATION 23 This bill authorizes cities and counties to establish an 24 energy finance program to finance energy improvements for the 25 benefit of property owners within the city or county. 26 The bill defines an “energy improvement” as the installation 27 of one or more appliances or heating and cooling systems, 28 physical alteration to a building, or installation of a 29 renewable energy production facility which has been identified 30 in an energy analysis as improving the energy-efficient 31 operation of a building or as decreasing the amount of energy 32 consumed by that building, or both. The bill defines an 33 “energy analysis” as a written report summarizing the results 34 of a physical inspection of a residential, commercial, or 35 -11- LSB 5241YC (1) 83 rn/sc 11/ 14

H.F. _____ industrial building conducted by a public utility or other 1 agency or entity approved by the office of energy independence 2 documenting deficiencies in energy efficiency operation and 3 recommending specified energy improvements. 4 Pursuant to the program, a city or county may offer to assess 5 to residential, commercial, or industrial property within the 6 city or county the cost of purchasing or installing energy 7 improvements. The office of energy independence shall serve in 8 an advisory capacity. The bill states that the program shall 9 be limited to energy improvements that will be permanently 10 affixed to real property which has already been developed 11 or upon which buildings have already been constructed, and 12 that property owners participating in the program may receive 13 advance funding for the improvements or reimbursement after the 14 fact. 15 The bill provides that the governing body of a city or county 16 initiates participation in the program by adopting a resolution 17 of intent indicating that it is in the public interest to 18 finance the installation of energy improvements, that special 19 assessment financing or other financing shall be available to 20 property owners, examples of energy improvements which may be 21 financed and a brief description of financing arrangements. 22 The bill provides for notice regarding the time and place of a 23 public hearing on the resolution. 24 The bill directs a city or county wishing to establish 25 an energy finance program to adopt an ordinance which 26 shall include a schedule for packaging assessments for 27 program finance purposes and city council or county board 28 of supervisors approval, a method for prioritizing approved 29 applications, and energy analysis requirements. After adoption 30 of the ordinance, the city or county is also directed to 31 establish a plan for raising the capital to pay for work 32 performed pursuant to the special assessments and shall be 33 authorized to advance funds available to it from any source. 34 The bill states that if a county has adopted a countywide 35 -12- LSB 5241YC (1) 83 rn/sc 12/ 14

H.F. _____ ordinance, a city cannot adopt an ordinance in that portion of 1 the city located within the county. 2 The bill provides that the office shall develop petitions 3 for use by property owners applying for the program, informing 4 the property owner of the need to complete an energy analysis, 5 containing space for property owner identifying information and 6 for a listing of energy improvements and cost estimates for 7 which a special assessment is sought, and requesting a proposed 8 time frame within which the improvements shall be undertaken 9 and completed. Program participation shall be initiated solely 10 by petition of the property owner or by a representative of 11 several related or adjoining lots or parcels who has obtained 12 written permission, a petition signature, and a copy of an 13 energy analysis from each owner. The bill provides that within 14 30 days following submission of a petition and accompanying 15 energy analysis, a petitioner shall receive notification 16 from the city or county of approval or denial, and that if 17 approved the petitioner shall receive subsequent notification 18 regarding funding amounts, authorization to purchase directly 19 any equipment and materials for the installation of energy 20 improvements and to contract directly for such installation, 21 and verification requirements regarding completion of 22 improvements. 23 The bill provides that approved petitions, whether submitted 24 on an individual or aggregate basis, shall be grouped either 25 by date of approval or property location, identified by legal 26 description, and submitted to a city council or county board 27 of supervisors in the form of a resolution for approval by 28 majority vote. The bill directs a city council or county board 29 of supervisors to forward an approved resolution to the city 30 clerk or county auditor, along with a schedule including a 31 description and parcel number of each lot, the name of the 32 property owner, the valuation of each lot as determined by the 33 council, and the total amount proposed to be assessed to each 34 lot. 35 -13- LSB 5241YC (1) 83 rn/sc 13/ 14

H.F. _____ The bill then specifies procedures for adoption of the 1 schedule by the city council or county board of supervisors, 2 certification to the county treasurer, and property owner 3 notification provisions. The bill provides that the special 4 assessments shall be levied and collected in the same manner as 5 provided in Code section 384.65 for public improvement special 6 assessments levied by a city. Bonding provisions are set forth 7 which closely correspond to provisions applicable to special 8 assessment bonds authorized in Code section 384.68. 9 The bill authorizes utilization of tax increment financing 10 moneys to fund special assessments under the program 11 for property in an urban renewal area, and includes the 12 establishment of the energy finance program within the 13 definition of “essential corporate purpose” and “essential 14 county purpose” contained in Code chapters 384 and 331, 15 respectively, and applicable to the issuance of general 16 obligation bonds. 17 The bill requires the office of energy independence to 18 determine an inspection procedure to verify completion of an 19 energy improvement financed pursuant to the program. The 20 office is also required to make available on its internet site 21 the results of the program based upon information required 22 to be submitted on an annual basis by a city or county 23 participating in the program. 24 The bill provides that a city or county may impose a civil 25 penalty in an amount not to exceed the amount financed for 26 failure to complete an energy improvement for which a petition 27 was submitted and approved and financing was received. 28 -14- LSB 5241YC (1) 83 rn/sc 14/ 14