S.F. _____ H.F. _____ DIVISION I 1 STATE DEBT COLLECTION SETOFF PROCEDURES 2 Section 1. Section 8A.504, subsection 2, paragraph f, 3 subparagraph (1), Code Supplement 2011, is amended to read as 4 follows: 5 (1) Upon notice of entitlement to a payment, the state 6 agency shall send written notification to that person of the 7 state agency’s assertion of its rights to all or a portion of 8 the payment and of the state agency’s entitlement to recover 9 the liability through the setoff procedure, the basis of 10 the assertion, the opportunity to request that a jointly or 11 commonly owned right to payment be divided among owners, and 12 the person’s opportunity to give written notice of intent 13 to contest the amount of the allegation. The state agency 14 shall send a copy of the notice to the collection entity. A 15 state agency subject to chapter 17A shall give notice, conduct 16 hearings, and allow appeals in conformity with chapter 17A . 17 DIVISION II 18 ENERGY DEVELOPMENT AND CONSERVATION 19 Sec. 2. Section 8A.301, Code 2011, is amended by adding the 20 following new subsections: 21 NEW SUBSECTION . 01. “Alternative and renewable energy” 22 means the same as in section 473.1. 23 NEW SUBSECTION . 2A. “Energy” or “energy sources” means the 24 same as in section 473.1. 25 Sec. 3. NEW SECTION . 8A.381 Energy development and 26 conservation —— duties —— report. 27 1. The department shall do all of the following relating to 28 energy development and conservation: 29 a. Administer and coordinate federal funds for energy 30 conservation, energy management, and alternative and renewable 31 energy programs. 32 b. Administer and coordinate the building energy management 33 program including projects funded through private financing. 34 2. The department shall submit a report by January 1 35 -1- LSB 5304DP (4) 84 ec/nh 1/ 12

S.F. _____ H.F. _____ annually to the governor and the general assembly detailing 1 services provided and assistance rendered pursuant to the 2 building energy management program created in section 8A.383, 3 and pursuant to sections 8A.385 and 8A.386, and regarding 4 receipts and disbursements in relation to the building energy 5 management fund created in section 8A.384. 6 Sec. 4. NEW SECTION . 8A.382 Energy management improvements 7 identified and implemented. 8 The state, state agencies, political subdivisions of the 9 state, school districts, area education agencies, and community 10 colleges may identify and implement, through energy audits 11 and engineering analyses, all energy management improvements 12 identified for which financing is facilitated by the department 13 for the entity. The energy management improvement financings 14 shall be supported through payments from energy savings. 15 Sec. 5. NEW SECTION . 8A.383 Building energy management 16 program. 17 1. The building energy management program shall be 18 administered by the department. The building energy management 19 program consists of the following forms of assistance for the 20 state, state agencies, political subdivisions of the state, 21 school districts, area education agencies, community colleges, 22 and nonprofit organizations: 23 a. Promoting program availability. 24 b. Developing or identifying guidelines and model energy 25 techniques for the completion of energy analyses for state 26 agencies, political subdivisions of the state, school 27 districts, area education agencies, community colleges, and 28 nonprofit organizations. 29 c. Providing technical assistance for conducting or 30 evaluating energy analyses for state agencies, political 31 subdivisions of the state, school districts, area education 32 agencies, community colleges, and nonprofit organizations. 33 d. Providing or facilitating loans, leases, and other 34 methods of alternative financing under the energy loan program 35 -2- LSB 5304DP (4) 84 ec/nh 2/ 12

S.F. _____ H.F. _____ for the state, state agencies, political subdivisions of the 1 state, school districts, area education agencies, community 2 colleges, and nonprofit organizations to implement energy 3 management improvements or energy analyses. In providing 4 financing under this paragraph, the department may set interest 5 rates and fees corresponding to administrative and operational 6 costs. 7 e. Providing assistance for obtaining insurance or a 8 guarantee on the energy savings expected to be realized from 9 the implementation of energy management improvements. 10 f. Facilitating and providing self-liquidating financing for 11 the state, state agencies, political subdivisions of the state, 12 school districts, area education agencies, community colleges, 13 and nonprofit organizations pursuant to section 8A.386. 14 g. Assisting the treasurer of state with financing 15 agreements entered into by the treasurer of state on behalf 16 of state agencies to finance energy management improvements 17 pursuant to section 12.28. 18 2. For the purpose of this section, section 8A.385, 19 and section 8A.386, “energy management improvement” means 20 construction, rehabilitation, acquisition, or modification of 21 an installation in a facility or vehicle which is intended to 22 reduce energy consumption, or energy costs, or both, or to 23 allow the use of alternative and renewable energy. “Energy 24 management improvement” may include control and measurement 25 devices. “Nonprofit organization” means an organization exempt 26 from federal income taxation under section 501(c)(3) of the 27 Internal Revenue Code. 28 3. a. Moneys awarded or allocated to the state, its 29 citizens, or its political subdivisions as a result of the 30 federal court decisions and United States department of energy 31 settlements resulting from alleged violations of federal 32 petroleum pricing regulations attributable to or contained 33 within the Stripper Well fund shall be allocated to and remain 34 under the control of the department for utilization for energy 35 -3- LSB 5304DP (4) 84 ec/nh 3/ 12

S.F. _____ H.F. _____ program-related staff support purposes. 1 b. Moneys received by the state under the state energy 2 program of the federal American Recovery and Reinvestment Act 3 of 2009 may be utilized by the department, in addition to any 4 other appropriations, grants, funds, or gifts received by the 5 department, for the purposes of the building energy management 6 program. 7 Sec. 6. NEW SECTION . 8A.384 Building energy management 8 fund. 9 1. The building energy management fund is created within 10 the state treasury under the control of the department. 11 The fund shall be used for the operational expenses and 12 administrative costs incurred by the department in facilitating 13 and administering the building energy management program 14 established in section 8A.383. 15 2. The building energy management fund shall consist of 16 amounts deposited into the fund or allocated from the following 17 sources: 18 a. Any moneys awarded or allocated to the state, its 19 citizens, or its political subdivisions as a result of the 20 federal court decisions and United States department of energy 21 settlements resulting from alleged violations of federal 22 petroleum pricing regulations attributable to or contained 23 within the Exxon fund. Amounts remaining in the oil overcharge 24 account established in section 455E.11, subsection 2, paragraph 25 “e” , Code 2007, and the energy conservation trust established 26 in section 473.11, Code 2007, as of June 30, 2008, shall be 27 deposited into the building energy management fund pursuant to 28 this paragraph, notwithstanding section 8.60, subsection 15, 29 Code 2007. 30 b. (1) Moneys received in the form of fees imposed upon 31 the state, state agencies, political subdivisions of the 32 state, school districts, area education agencies, community 33 colleges, and nonprofit organizations for services performed or 34 assistance rendered pursuant to the building energy management 35 -4- LSB 5304DP (4) 84 ec/nh 4/ 12

S.F. _____ H.F. _____ program. Fees imposed pursuant to this paragraph shall be 1 established by the department in an amount corresponding to 2 the operational expenses or administrative costs incurred by 3 the department in performing services or providing assistance 4 authorized pursuant to the building energy management program, 5 in an amount not to exceed five percent of the total project 6 cost. 7 (2) Any fees imposed shall be retained by the department and 8 are appropriated to the department for purposes of providing 9 services or assistance under the program. 10 c. Moneys appropriated by the general assembly and any 11 other moneys, including grants and gifts from government and 12 nonprofit organizations, available to and obtained or accepted 13 by the department for placement in the fund. 14 d. Moneys contained in the intermodal revolving loan fund 15 administered by the department of transportation for the fiscal 16 year beginning July 1, 2019, and succeeding fiscal years. 17 e. Moneys in the fund are not subject to section 8.33. 18 Notwithstanding section 12C.7, interest or earnings on moneys 19 in the fund shall be credited to the fund. 20 3. The building energy management fund shall be limited to 21 a maximum of one million dollars. Amounts in excess of this 22 maximum limitation shall be transferred to and deposited in 23 the rebuild Iowa infrastructure fund created in section 8.57, 24 subsection 6. 25 Sec. 7. NEW SECTION . 8A.385 Energy loan program. 26 1. An energy loan program is established and shall be 27 administered by the department. 28 2. The department may facilitate the loan process for 29 political subdivisions of the state, school districts, 30 area education agencies, community colleges, and nonprofit 31 organizations for implementation of energy management 32 improvements identified in an energy analysis. Loans shall 33 be facilitated for all cost-effective energy management 34 improvements. For political subdivisions of the state, school 35 -5- LSB 5304DP (4) 84 ec/nh 5/ 12

S.F. _____ H.F. _____ districts, area education agencies, community colleges, and 1 nonprofit organizations to receive loan assistance under the 2 program, the department shall require completion of an energy 3 management plan including an energy analysis. The department 4 shall approve loans facilitated under this section. 5 3. a. Cities and counties shall repay the loans from moneys 6 in their debt service funds. Area education agencies shall 7 repay the loans from any moneys available to them. 8 b. School districts and community colleges may enter 9 into financing arrangements with the department or its duly 10 authorized agents or representatives obligating the school 11 district or community college to make payments on the loans 12 beyond the current budget year of the school district or 13 community college. Chapter 75 shall not be applicable. School 14 districts shall repay the loans from moneys in either their 15 general fund or debt service fund. Community colleges shall 16 repay the loans from their general fund. Other entities 17 receiving loans under this section shall repay the loans from 18 any moneys available to them. 19 4. Political subdivisions of the state, school districts, 20 area education agencies, and community colleges shall design 21 and construct the most energy cost-effective facilities 22 feasible and may use financing facilitated by the department to 23 cover the incremental costs above minimum building code energy 24 efficiency standards of purchasing energy-efficient devices and 25 materials unless other lower cost financing is available. 26 5. The department shall not require the state, state 27 agencies, political subdivisions of the state, school 28 districts, area education agencies, or community colleges to 29 implement a specific energy management improvement identified 30 in an energy analysis if the entity that prepared the analysis 31 demonstrates to the department that the facility which is the 32 subject of the energy management improvement is unlikely to be 33 used or operated for the full period of the expected savings 34 payback of all costs associated with implementing the energy 35 -6- LSB 5304DP (4) 84 ec/nh 6/ 12

S.F. _____ H.F. _____ management improvement, including, without limitation, any fees 1 or charges of the department, engineering firms, financial 2 advisors, attorneys, and other third parties, and all financing 3 costs including interest, if financed. 4 6. As used in this section, unless the context otherwise 5 requires: 6 a. “Facility” means a structure that is heated or cooled by 7 a mechanical or electrical system, or any system of physical 8 operation that consumes energy to carry out a process. 9 b. “Loans” means loans, leases, or alternative financing 10 arrangements. 11 Sec. 8. NEW SECTION . 8A.386 Self-liquidating financing. 12 1. a. The department may facilitate financing agreements 13 that may be entered into with political subdivisions of the 14 state, school districts, area education agencies, community 15 colleges, or nonprofit organizations to finance the costs of 16 energy management improvements on a self-liquidating basis. 17 The provisions of section 8A.385 defining eligible energy 18 management improvements apply to financings under this section. 19 b. The financing agreement may contain provisions, including 20 interest, term, and obligations to make payments on the 21 financing agreement beyond the current budget year, as may 22 be acceptable to political subdivisions of the state, school 23 districts, area education agencies, community colleges, or 24 nonprofit organizations. 25 c. The department shall assist the treasurer of state with 26 financing agreements entered into by the treasurer of state on 27 behalf of state agencies pursuant to section 12.28 to finance 28 energy management improvements being implemented by state 29 agencies. 30 2. Political subdivisions of the state, school districts, 31 area education agencies, community colleges, and nonprofit 32 organizations may enter into financing agreements and issue 33 obligations necessary to carry out the provisions of this part. 34 Chapter 75 shall not be applicable. 35 -7- LSB 5304DP (4) 84 ec/nh 7/ 12

S.F. _____ H.F. _____ Sec. 9. Section 12.28, subsection 6, Code 2011, is amended 1 to read as follows: 2 6. The maximum principal amount of financing agreements 3 which the treasurer of state can enter into shall be one 4 million dollars per state agency in a fiscal year, subject 5 to the requirements of section 8.46 . For the fiscal year, 6 the treasurer of state shall not enter into more than one 7 million dollars of financing agreements per state agency, 8 not considering interest expense. However, the treasurer 9 of state may enter into financing agreements in excess of 10 the one million dollar per agency per fiscal year limit if a 11 constitutional majority of each house of the general assembly, 12 or the legislative council if the general assembly is not in 13 session, and the governor, authorize the treasurer of state 14 to enter into additional financing agreements above the one 15 million dollar authorization contained in this section . The 16 treasurer of state shall not enter into a financing agreement 17 for real or personal property which is to be constructed for 18 use as a prison or prison-related facility without prior 19 authorization by a constitutional majority of each house 20 of the general assembly and approval by the governor of 21 the use, location, and maximum cost, not including interest 22 expense, of the real or personal property to be financed. 23 However, financing agreements for an energy conservation 24 measure, as defined in section 7D.34 , for an energy management 25 improvement, as defined in section 473.19 8A.383 , or for 26 costs associated with projects under section 473.13A 8A.382 , 27 are exempt from the provisions of this subsection , but are 28 subject to the requirements of section 7D.34 . In addition, 29 financing agreements funded through the materials and equipment 30 revolving fund established in section 307.47 are exempt from 31 the provisions of this subsection . 32 Sec. 10. Section 279.53, Code 2011, is amended to read as 33 follows: 34 279.53 Loan proceeds. 35 -8- LSB 5304DP (4) 84 ec/nh 8/ 12

S.F. _____ H.F. _____ The proceeds of loans issued to school districts pursuant 1 to section 8A.385, 279.48 , or 279.52 , or 473.20 shall be 2 deposited into either the general fund of a school district 3 or the physical plant and equipment levy fund. The board of 4 directors shall expend the amount of the principal and interest 5 due each year to maturity from the same fund into which the 6 loan proceeds were deposited. 7 Sec. 11. Section 298.3, subsection 1, paragraph g, Code 8 Supplement 2011, is amended to read as follows: 9 g. Expenditures for energy conservation, including payments 10 made pursuant to a guarantee furnished by a school district 11 entering into a financing agreement for energy management 12 improvements, limited to agreements pursuant to section 473.19 , 13 473.20 8A.383, 8A.385 , or 473.20A 8A.386 . 14 Sec. 12. Section 473.7, subsections 3, 4, 5, 8, 9, and 10, 15 Code Supplement 2011, are amended by striking the subsections. 16 Sec. 13. Section 473.15, Code Supplement 2011, is amended 17 to read as follows: 18 473.15 Annual report. 19 The authority , in cooperation with the department of 20 administrative services, shall complete an annual report 21 to assess the progress of state agencies in implementing 22 energy management improvements, alternative and renewable 23 energy systems, and life cycle cost analyses under chapter 24 470 , and on the use of renewable fuels. The authority shall 25 work with state agencies and with any entity, agency, or 26 organization with which they are associated or involved in 27 such implementation, to use available information to minimize 28 the cost of preparing the report. The authority shall also 29 provide an assessment of the economic and environmental impact 30 of the progress made by state agencies related to energy 31 management and alternative and renewable energy, along with 32 recommendations on technological opportunities and policies 33 necessary for continued improvement in these areas. 34 Sec. 14. REPEAL. Sections 473.13A, 473.19, 473.19A, 35 -9- LSB 5304DP (4) 84 ec/nh 9/ 12

S.F. _____ H.F. _____ 473.20, and 473.20A, Code Supplement 2011, are repealed. 1 Sec. 15. TRANSITION PROVISIONS —— CONTINUATION OF GRANTS. 2 1. Any moneys remaining in any account or fund under 3 the control of the economic development authority relative 4 to the provisions of this Act shall be transferred to the 5 comparable fund or account under the control of the department 6 of administrative services for such purposes. Notwithstanding 7 section 8.33, the moneys transferred in accordance with this 8 subsection shall not revert to the account or fund from which 9 appropriated or transferred. 10 2. Any license, permit, or contract issued or entered 11 into by the office of energy independence or the economic 12 development authority relating to the provisions of this Act in 13 effect on the effective date of this Act shall continue in full 14 force and effect pending transfer of such licenses, permits, or 15 contracts to the department of administrative services. 16 3. Federal funds utilized by the director of the office of 17 energy independence or the economic development authority prior 18 to the effective date of this Act to administer the provisions 19 of a federal grant under the provisions of this Act shall be 20 applicable to the department of administrative services for the 21 same purposes. 22 Sec. 16. ADMINISTRATIVE RULES —— TRANSITION PROVISIONS. 23 1. Any rule, regulation, form, order, or directive 24 promulgated by the economic development authority relative 25 to the provisions of this Act in existence on the effective 26 date of this Act shall continue in full force and effect until 27 amended, repealed, or supplemented by affirmative action of 28 the department of administrative services under the duties 29 and powers established in this Act and under the procedure 30 established in subsection 2. 31 2. In regard to updating references and format in the Iowa 32 administrative code in order to correspond to the transferring 33 of duties as established in this Act, the administrative rules 34 coordinator and the administrative rules review committee, in 35 -10- LSB 5304DP (4) 84 ec/nh 10/ 12

S.F. _____ H.F. _____ consultation with the administrative code editor, shall jointly 1 develop a schedule for the necessary updating of the Iowa 2 administrative code. 3 EXPLANATION 4 This bill concerns the duties and operations of the 5 department of administrative services (DAS) relating to state 6 debt collection setoff procedures and energy development and 7 conservation. 8 STATE DEBT COLLECTION SETOFF PROCEDURES. Code section 9 8A.504(2)(f), concerning setoff procedures, is amended to 10 eliminate the requirement that a copy of a state agency’s 11 notice to a person asserting a right to a payment be also 12 provided to the collection agency. Under current law, the 13 collection agency is DAS or any other state agency that 14 maintains a separate accounting system and elects to establish 15 a debt collection setoff procedure. 16 ENERGY DEVELOPMENT AND CONSERVATION. 2011 Iowa Acts, 17 chapter 118, concerning the establishment of the economic 18 development authority, eliminated the office of energy 19 independence and transferred many of the duties of that office 20 to the economic development authority, including the duties 21 related to energy development and conservation in Code chapter 22 473. The bill transfers some of the duties under Code chapter 23 473 from the economic development authority to DAS. 24 Code section 8A.301, concerning definitions related to the 25 physical resources duties of DAS, is amended to add references 26 to two definitions contained in Code chapter 473 that relate to 27 duties transferred from that Code chapter to Code chapter 8A. 28 New Code section 8A.381 references the duties transferred 29 to DAS from the economic development authority and includes 30 a reporting requirement previously included in Code section 31 473.19. 32 Code section 473.13A (energy management improvements 33 identified and implemented) is repealed and the substance of 34 the Code section transferred to new Code section 8A.382. 35 -11- LSB 5304DP (4) 84 ec/nh 11/ 12

S.F. _____ H.F. _____ Code section 473.19 (building energy management program) 1 is repealed and the substance of the Code section transferred 2 to new Code section 8A.383. In addition, the new Code 3 section provides that moneys received by the state under the 4 state energy program of the federal American Recovery and 5 Reinvestment Act of 2009 can be used for the purpose of the 6 program. 7 Code section 473.19A (building energy management fund) is 8 repealed and the substance of the Code section transferred to 9 new Code section 8A.384. In addition, the new Code section 10 provides that fees imposed by DAS for operational expenses 11 or administrative costs incurred by DAS for a project cannot 12 exceed 5 percent of the total project cost. 13 Code section 473.20 (energy loan program) is repealed and 14 the substance of the Code section transferred to new Code 15 section 8A.385. 16 Code section 473.20A (self-liquidating financing) is 17 repealed and the substance of the Code section transferred to 18 new Code section 8A.386. 19 Code section 473.7, concerning the duties of the economic 20 development authority under Code chapter 473, is amended to 21 strike those duties transferred to DAS. 22 Code section 473.15, concerning annual reports by the 23 economic development authority, is amended to provide that the 24 reports be done in cooperation with DAS. 25 The bill also includes transition provisions so that funds 26 impacted by this bill and previously under the control of the 27 economic development authority are transferred to DAS and any 28 grants, contracts, or loans entered into by the authority or 29 the office of energy independence relative to the provisions 30 of this bill prior to the effective date of the bill remain in 31 force when the duties are transferred to DAS. In addition, 32 the bill provides that any administrative rules entered into 33 by the economic development authority relative to the duties 34 transferred in the bill remain in effect until changed by DAS. 35 -12- LSB 5304DP (4) 84 ec/nh 12/ 12