H.F. 447 Section 1. Section 273.3, Code 2017, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 20A. Be authorized to implement an energy 3 management improvement as provided in section 279.48A. 4 Sec. 2. Section 279.48, subsection 2, Code 2017, is amended 5 to read as follows: 6 2. The total of scheduled annual payments of principal or 7 interest due and payable from current budgeted receipts or 8 future budgeted receipts with respect to all loan agreements 9 authorized under this section , section 279.48A, or section 10 285.10, subsection 7 , paragraph “b” , must not exceed ten percent 11 of the last authorized budget of the school corporation. 12 Sec. 3. NEW SECTION . 279.48A Energy management improvements 13 —— implementation. 14 1. The board of directors of a school corporation may 15 implement an energy management improvement, as defined in 16 section 473.19 and identified in an energy analysis, and may 17 negotiate and enter into a loan agreement and issue a note 18 to pay for the energy management improvement, subject to the 19 following terms and procedures: 20 a. The note must mature within ten years, or the useful life 21 of the energy management improvement, whichever is less. 22 b. The note may bear interest at a rate to be determined by 23 the board of directors in the manner provided in section 74A.3, 24 subsection 1, paragraph “a” . Chapter 75 is not applicable. 25 c. The board of directors shall provide for the form of the 26 agreement and note. 27 d. Principal and interest on the note must be payable from 28 budgeted receipts in the debt service fund for each year of a 29 period of up to ten years. 30 2. The total of scheduled annual payments of principal or 31 interest due and payable from current budgeted receipts or 32 future budgeted receipts with respect to all loan agreements 33 authorized under this section, section 279.48, or section 34 285.10, subsection 7, paragraph “b” , must not exceed ten percent 35 -1- LSB 2547YH (2) 87 gh/rn/nh 1/ 3

H.F. 447 of the last authorized budget of the school corporation. 1 3. Before entering into a loan agreement for an energy 2 management improvement, the school corporation must publish a 3 notice, including a statement of the amount and purpose of the 4 agreement, at least once in a newspaper of general circulation 5 within the school corporation at least ten days before the 6 meeting at which the loan agreement is to be approved. 7 4. This section shall not preclude a school corporation 8 from obtaining a loan, lease, or other method of alternative 9 financing under the energy loan program created in section 10 479.19 to implement energy management improvements or energy 11 analyses in addition to entering into a loan agreement as 12 provided in this section. 13 Sec. 4. Section 279.53, Code 2017, is amended to read as 14 follows: 15 279.53 Loan proceeds. 16 The proceeds of loans issued to school districts pursuant to 17 section 279.48 , 279.48A, 279.52 , or 473.20 shall be deposited 18 into either the general fund of a school district or the 19 physical plant and equipment levy fund. The board of directors 20 shall expend the amount of the principal and interest due 21 each year to maturity from the same fund into which the loan 22 proceeds were deposited. 23 EXPLANATION 24 The inclusion of this explanation does not constitute agreement with 25 the explanation’s substance by the members of the general assembly. 26 This bill provides that a board of directors of a school 27 corporation may negotiate and enter into a loan agreement and 28 issue a note to pay for an energy management improvement, as 29 defined in Code section 473.19. A note must meet the following 30 requirements: the note must mature within the lesser of 10 31 years or the useful life of the energy management improvement; 32 the note may bear interest at a rate determined by the board 33 pursuant to Code section 74A.3(1)(a); the board must provide 34 for the form of the agreement and note; and the principal and 35 -2- LSB 2547YH (2) 87 gh/rn/nh 2/ 3

H.F. 447 interest on the note must be payable from budgeted receipts in 1 the debt service fund for each year of a period of up to 10 2 years. Code chapter 75, relating to the authorization and sale 3 of public bonds, does not apply to such a note. 4 The bill provides that the total annual payments of 5 principal or interest due and payable from current or future 6 budgeted receipts with respect to all loan agreements entered 7 into under the bill, Code section 279.48 (equipment) or 8 285.10(7)(b) (buses) cannot exceed 10 percent of the last 9 authorized budget of the school corporation. 10 The bill requires a school corporation to publish a notice 11 before entering into a loan agreement, including the amount 12 and purpose of such agreement, at least once in a newspaper 13 of general circulation within the school corporation at least 14 10 days before the meeting at which the agreement is to be 15 approved. 16 The bill does not preclude a school corporation from 17 obtaining financing under the energy loan program established 18 in Code section 479.19 to implement energy management 19 improvements. 20 The bill requires the proceeds of loans issued to school 21 districts pursuant to the bill to be deposited into either 22 the school district’s general fund or the physical plant and 23 equipment levy fund. 24 The bill makes conforming changes in Code sections 273.3 and 25 279.48(2). The bill’s provisions are in substantial conformity 26 with equipment purchase loan provisions contained in current 27 Code section 279.48. 28 -3- LSB 2547YH (2) 87 gh/rn/nh 3/ 3