H.F. 2299 Section 1. Section 331.441, subsection 2, paragraph b, Code 1 2014, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (20) The establishment or funding of a 3 property-assessed clean energy program to finance improvements 4 related to energy efficiency in a county pursuant to chapter 5 385. 6 Sec. 2. Section 384.24, subsection 3, Code 2014, is amended 7 by adding the following new paragraph: 8 NEW PARAGRAPH . y. The establishment or funding of a 9 property-assessed clean energy program to finance improvements 10 related to energy efficiency within a city pursuant to chapter 11 385. 12 Sec. 3. NEW SECTION . 385.1 Legislative findings —— purpose. 13 The general assembly finds all of the following: 14 1. Renewable energy production and energy efficiency 15 improvements to residential, commercial, and industrial real 16 property, are necessary to address the issue of consumer energy 17 bill stabilization and global climate change. 18 2. The initial investment required to make residential, 19 commercial, or industrial real property more energy-efficient 20 or to utilize renewable energy prevents many property owners 21 from making such improvements. To make renewable energy 22 production or energy efficiency improvements more affordable 23 and to promote their purchase and installation, it is necessary 24 to authorize an alternative procedure for owners of a residence 25 or business to finance such improvements. 26 3. The general assembly declares that a public purpose 27 shall be served by authorizing cities and counties to establish 28 property-assessed clean energy programs and authorizing the 29 governing body of any city or county to assist property owners 30 in financing the purchase and installation of distributed 31 generation renewable energy sources or energy efficiency 32 improvements by offering financial terms that are beneficial 33 to the property owner. 34 Sec. 4. NEW SECTION . 385.2 Definitions. 35 -1- LSB 6049YH (3) 85 rn/sc 1/ 15

H.F. 2299 As used in this chapter, unless the context otherwise 1 requires: 2 1. “Distributed generation renewable energy source” means a 3 wind energy conversion facility or a solar energy conversion 4 facility in which the electricity produced is consumed on-site 5 and which offsets electricity consumption otherwise furnished 6 by an electric public utility. 7 2. “Energy analysis” means a written report summarizing the 8 results of a physical inspection of a residential, commercial, 9 or industrial building conducted by a public utility or other 10 agency or entity approved by a city or county. The report 11 shall document deficiencies in energy efficiency operation and 12 recommend specified improvements related to efficiency. 13 3. “Energy efficiency improvement” means the installation 14 of one or more appliances, heating and cooling systems, or the 15 physical alteration to a building, that has been identified in 16 an energy analysis as improving the energy-efficient operation 17 of a building or as decreasing the amount of energy consumed 18 by a building, or both. 19 Sec. 5. NEW SECTION . 385.3 Property-assessed clean energy 20 program established. 21 1. A city or county may adopt an ordinance establishing a 22 property-assessed clean energy program in order to allow the 23 city or county to offer to assess to residential, commercial, 24 or industrial property within the city or county the cost of 25 purchasing or installing distributed generation renewable 26 energy sources or energy efficiency improvements. 27 2. A property-assessed clean energy program shall be 28 limited to improvements that will be permanently affixed to 29 real property that has already been developed or upon which 30 buildings have already been constructed. Property owners 31 participating in the program may receive funding for the 32 improvements in advance of installation, or as a reimbursement 33 of amounts expended by the property owner for completed 34 installations. However, the amount advanced or reimbursed 35 -2- LSB 6049YH (3) 85 rn/sc 2/ 15

H.F. 2299 shall not exceed the total amount identified in the petition 1 submitted by the property owner pursuant to section 385.6. 2 3. Petitions for participation in a property-assessed clean 3 energy program adopted by a city or county may be submitted, 4 considered, and approved or denied either individually or 5 aggregated by neighborhood, district, region, or other basis. 6 Sec. 6. NEW SECTION . 385.4 Resolution of intent. 7 1. The governing body of a city or county may not consider 8 an ordinance establishing a property-assessed clean energy 9 program until after the governing body has adopted a resolution 10 of intent indicating or including the following: 11 a. That the city or county considers it in the public 12 interest to finance the installation of distributed generation 13 renewable energy sources or energy efficiency improvements. 14 b. That the city or county proposes to make special 15 assessment financing or other financing available to property 16 owners seeking to install distributed generation renewable 17 energy sources or energy efficiency improvements. 18 c. A brief description of the proposed arrangements for 19 financing the program. 20 2. The city or county shall hold a public hearing on the 21 resolution at which interested persons may inquire about or 22 object to the proposed program. Notice of the hearing shall 23 be published as provided in section 331.305 or 362.3, as 24 applicable. 25 Sec. 7. NEW SECTION . 385.5 Program requirements —— 26 ordinance. 27 1. An ordinance establishing a property-assessed clean 28 energy program shall include the following regarding 29 implementation of the program: 30 a. A schedule for packaging assessments for program finance 31 purposes and city council or board of supervisors approval. 32 b. A draft or sample petition specifying the terms and 33 conditions that would be agreed to by a property owner 34 participating in the program. 35 -3- LSB 6049YH (3) 85 rn/sc 3/ 15

H.F. 2299 c. A statement of policies concerning the assessments 1 including all of the following: 2 (1) Identification of distributed generation renewable 3 energy sources or energy efficiency improvements that may be 4 financed pursuant to the program. 5 (2) Identification of a city or county official authorized 6 to enter into contractual assessments on behalf of the city or 7 county. 8 (3) A maximum aggregate dollar amount of assessment funding 9 available pursuant to the program. 10 (4) A method for prioritizing approved applications in the 11 event the number of applications received for a year exceeds 12 program funds. 13 d. Energy analysis requirements. 14 2. After adoption of an ordinance establishing a 15 property-assessed clean energy program, a plan for raising a 16 capital amount required to pay for work performed pursuant 17 to contractual assessments shall be established by a city or 18 county. A city or county shall be authorized to advance funds 19 available to it from any source, including the sale of bonds as 20 provided in section 385.11 and in section 331.441 or 384.24, 21 as applicable. The plan shall specify the source of financing 22 contemplated by the city or county. The plan shall also 23 provide for a reserve fund and for apportionment of all or any 24 portion of the costs incidental to financing, administration, 25 and collection of the special assessments between or among 26 property owners and the city or county. 27 3. The ordinance establishing a property-assessed clean 28 energy program shall provide for the establishment of a 29 property-assessed clean energy program fund into which bond 30 proceeds and other funds to be utilized in administering the 31 program shall be deposited. 32 4. If a county has adopted a countywide ordinance, a city 33 cannot adopt an ordinance establishing a property-assessed 34 clean energy program applicable to that portion of the city 35 -4- LSB 6049YH (3) 85 rn/sc 4/ 15

H.F. 2299 located within the county. If a county has not adopted a 1 countywide ordinance, a city adopting an ordinance may include 2 an area extending up to two miles distance from the city’s 3 boundaries. 4 Sec. 8. NEW SECTION . 385.6 Petition by property owners. 5 1. A city or county that has established a property-assessed 6 clean energy program shall develop and make available petitions 7 for distribution to prospective program participants. 8 2. Program participation shall be initiated solely by 9 petition of the property owner, or by a representative of 10 several related or adjoining lots or parcels who has obtained 11 written permission and a copy of an energy analysis from each 12 owner. If a property is in the name of more than one owner, the 13 petition shall be signed by each owner. 14 3. The petition shall state that a copy of a completed 15 energy analysis shall be required for participation in the 16 program and must be attached to the petition. The petition 17 shall contain space for the printed name, signature, and 18 address of the petitioner. For each petitioner, the petition 19 shall contain space for identification of improvements related 20 to energy efficiency identified in the energy analysis for 21 which property-assessed clean energy program financing is 22 sought, a cost estimate for each improvement so identified, and 23 a proposed time frame within which the improvements shall be 24 undertaken and completed. 25 4. A property owner shall certify on the petition that the 26 property owner possesses clear title to the property and is 27 current on all property taxes and mortgage payments. 28 5. Within thirty days following submission of a petition 29 and accompanying energy analysis, a petitioner shall receive 30 notification from the city or county of approval pending 31 adoption of a resolution pursuant to section 385.7 by the city 32 council or county board of supervisors, or of denial of the 33 petition. Following adoption of a resolution, an approved 34 petitioner shall receive notification from the city or county 35 -5- LSB 6049YH (3) 85 rn/sc 5/ 15

H.F. 2299 regarding funding amounts, authorization to purchase directly 1 any equipment and materials for the installation of distributed 2 generation renewable energy sources or energy efficiency 3 improvements and to contract directly for such installation, 4 and verification requirements regarding completion of 5 improvements. 6 6. Special assessments for distributed generation renewable 7 energy sources or energy efficiency improvements shall be 8 levied only upon the free and willing consent of the owner of 9 each lot or parcel on which an assessment is levied at the time 10 of levy. 11 Sec. 9. NEW SECTION . 385.7 Resolution and filing. 12 1. Approved petitions, whether submitted on an individual 13 or aggregate basis, shall be grouped either by date of approval 14 or property location, identified by legal description, and 15 submitted to a city council or county board of supervisors in 16 the form of a resolution for approval by majority vote. 17 2. An adopted resolution shall be forwarded to the city 18 clerk, or the county auditor in the case of a county, along 19 with a schedule including a description and parcel number of 20 each lot, the name of the property owner, and the total amount 21 to be assessed to each lot. In counties in which taxes are 22 collected in two or more places, certification shall be to the 23 office of county treasurer where the special assessments are 24 collected. The county treasurer shall preserve the resolution 25 and schedule as a part of the records of the office until the 26 city clerk or county auditor certifies the final assessment 27 schedule as provided in section 385.8 or certifies that the 28 petition has been abandoned. 29 Sec. 10. NEW SECTION . 385.8 Adoption of schedule. 30 1. Within ten days after filing of the resolution and 31 schedule pursuant to section 385.7, a city council or county 32 board of supervisors shall meet, consider, and adopt or amend 33 and adopt, by resolution, a final assessment schedule. The 34 resolution must: 35 -6- LSB 6049YH (3) 85 rn/sc 6/ 15

H.F. 2299 a. Confirm and levy assessments. 1 b. State the number of annual installments, not exceeding 2 fifteen, into which assessments of more than five hundred 3 dollars are divided. 4 c. Provide for interest on all unpaid installments at a rate 5 not exceeding that permitted by chapter 74A. 6 d. State the time when assessments are payable. 7 e. Direct the city clerk or county auditor, as appropriate, 8 to certify the final schedule to the treasurer of each county 9 in which the assessed property is located. 10 2. The city clerk or county auditor shall send written 11 notice by regular mail to each property owner whose petition 12 has been approved and whose property has been included on the 13 schedule. The notice shall contain all the information and 14 statements required to be included in notices under section 15 384.60, subsection 2. 16 3. The county treasurer shall enter on the county system the 17 amounts to be assessed against each lot, as certified. 18 Sec. 11. NEW SECTION . 385.9 Installments due —— lien 19 created. 20 1. Special assessments levied by a city or county pursuant 21 to this chapter shall be levied and collected in the same 22 manner as provided in section 384.65 for public improvement 23 special assessments levied by a city. 24 2. From the date of filing of certification of the 25 resolution and schedule pursuant to section 385.7, the special 26 assessments with all interest become and remain a lien on the 27 benefited property until paid, and have equal precedence with 28 ordinary taxes, and are not divested by any judicial sale. 29 Sec. 12. NEW SECTION . 385.10 Payment to county treasurer. 30 Assessments levied and certified under this chapter, 31 including installments and interest, are payable at the office 32 of the county treasurer of the county where the property 33 assessed is located, except that assessments may be paid 34 in full or in part and without interest within thirty days 35 -7- LSB 6049YH (3) 85 rn/sc 7/ 15

H.F. 2299 after the date of certification, at the office of the county 1 treasurer, if the property being assessed is located in an 2 unincorporated area, or the city clerk, if the property being 3 assessed is located in an incorporated area. 4 Sec. 13. NEW SECTION . 385.11 Bonds issued. 5 1. After certification of the final assessment schedule, a 6 city or county may, by resolution, authorize and issue bonds in 7 anticipation of the collection of unpaid special assessments. 8 However, the total principal amount of bonds issued may not 9 exceed the total amount of unpaid special assessments. 10 2. All special assessment bonds are negotiable, must state 11 on their face that they are issued under the provisions of this 12 chapter, and are payable as to both principal and interest from 13 the proceeds of the special assessments. Such bonds may bear 14 interest at a rate not exceeding that permitted by chapter 15 74A payable annually or semiannually, must mature serially 16 on December 1 of the years in which any of the principal is 17 scheduled to become due, and may contain a provision that the 18 city or county reserves the right and option of calling and 19 redeeming any or all of the bonds prior to maturity on any 20 interest payment date or within forty-five days thereafter 21 upon the terms specified therein. Such bonds must be called 22 “improvement bonds”, must designate the general type of 23 improvement or improvements for which issued, and may be issued 24 in any denomination. The bonds must be named in a way to 25 distinguish them from other improvement bonds of the city or 26 county, and to designate the property specially assessed for 27 the improvement. Improvement bonds issued for any one levy 28 must bear the same date and be divided into as many series as 29 there are years in which installments of the special assessment 30 mature, and each series must be as nearly equal in amount as 31 practicable. 32 3. The proceeds of the special assessments and interest 33 collected thereon must be used and applied by the city or 34 county to the payment of the interest on the bonds and to 35 -8- LSB 6049YH (3) 85 rn/sc 8/ 15

H.F. 2299 the retirement of the principal as rapidly as proceeds are 1 collected. Such bonds and coupons do not make the city or 2 county liable in any way, except for the proper application of 3 special assessments. If interest becomes due on any of the 4 bonds when there is no fund from which to pay it, the council 5 or board of supervisors may make a temporary loan for payment 6 of the interest, which loan must be repaid from the special 7 assessments and interest pledged to secure the bonds, but in 8 case of purchase by the city or county at tax sale of the 9 property on which a special assessment under this chapter is 10 levied, from the general fund. 11 4. Special assessment bonds issued under this section 12 must be sold at public or private sale in the manner provided 13 by chapter 75, and may not be sold for less than par value 14 with accrued interest from date to the time of delivery. The 15 proceeds of the sale must be applied to the payment of the 16 cost of financing the distributed generation renewable energy 17 sources or energy efficiency improvements approved under this 18 chapter. 19 5. Any excess of proceeds from special assessments 20 remaining after all of the bonds have been paid with interest 21 may be credited to the property-assessed clean energy program 22 fund established pursuant to ordinance or returned to the 23 applicable property owners on a proportionate basis. 24 6. Cities or counties may issue refunding bonds to pay off 25 and take up special assessment bonds issued pursuant to this 26 chapter, or to refund any part thereof, as follows: 27 a. Refunding bonds must substantially conform to the 28 provisions of this chapter, and the face value is limited to 29 the amount of the unpaid special assessments with the interest 30 thereon of the particular issue of bonds to be refunded. 31 b. Refunding bonds or their proceeds may be used only to pay 32 improvement bonds taken up. 33 c. The expense of refunding bonds must be paid out of the 34 property-assessed clean energy program fund of the city or 35 -9- LSB 6049YH (3) 85 rn/sc 9/ 15

H.F. 2299 county. 1 d. When refunding bonds are issued to pay improvement 2 bonds, all special assessments and sinking funds applicable to 3 the payment of the improvement bonds previously issued must 4 be applied in the same manner and to the same extent to the 5 payment of the refunding bonds, and all the powers and duties 6 to levy and to carry special assessments and taxes, to create 7 liens upon property, and to establish sinking funds in respect 8 to the bonds previously issued continue until refunding bonds 9 are paid. 10 e. The city or county shall collect the special assessment 11 out of which the refunding bonds are payable and hold the 12 proceeds in trust for the payment of the refunding bonds, but 13 it is not liable except for the proper application of the 14 assessments. 15 7. No action shall be brought questioning the legality 16 of the bonds authorized by this section from and after sixty 17 days from the date the bonds are ordered issued by the city or 18 county. 19 Sec. 14. NEW SECTION . 385.12 Verification —— penalty. 20 1. A city or county shall determine an inspection 21 procedure to be utilized upon completion of the installation 22 of a distributed generation renewable energy source or 23 an energy efficiency improvement financed pursuant to the 24 property-assessed clean energy program. 25 2. The city council or board of supervisors may impose a 26 civil penalty against a property owner for failure to complete 27 an energy improvement for which a petition was submitted by the 28 property owner and approved and financing was received. The 29 penalty may be in an amount up to but not exceeding the amount 30 of financing received. 31 Sec. 15. Section 403.19, subsection 2, paragraph a, Code 32 2014, is amended to read as follows: 33 a. That portion of the taxes each year in excess of such 34 amount shall be allocated to and when collected be paid into 35 -10- LSB 6049YH (3) 85 rn/sc 10/ 15

H.F. 2299 a special fund of the municipality to pay the principal of 1 and interest on loans, moneys advanced to, or indebtedness, 2 whether funded, refunded, assumed, or otherwise, including 3 bonds issued under the authority of section 403.9, subsection 4 1 , incurred by the municipality to finance or refinance, in 5 whole or in part, an urban renewal project within the area, 6 and to provide assistance for low and moderate income family 7 housing as provided in section 403.22 , and to provide funding 8 for a property-assessed clean energy program adopted pursuant 9 to chapter 385 with regard to property within the urban renewal 10 area . However, except as provided in paragraph “b” , taxes for 11 the regular and voter-approved physical plant and equipment 12 levy of a school district imposed pursuant to section 298.2 13 and taxes for the instructional support program of a school 14 district imposed pursuant to section 257.19 , taxes for the 15 payment of bonds and interest of each taxing district, and 16 taxes imposed under section 346.27, subsection 22 , related to 17 joint county-city buildings shall be collected against all 18 taxable property within the taxing district without limitation 19 by the provisions of this subsection . 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill authorizes cities and counties to establish 24 a property-assessed clean energy program to finance the 25 installation of distributed generation renewable energy sources 26 or energy efficiency improvements for the benefit of property 27 owners within the city or county. 28 The bill defines a “distributed generation renewable energy 29 source” to mean a wind energy conversion facility or a solar 30 energy conversion facility in which the electricity produced 31 is consumed on-site and which offsets electricity consumption 32 otherwise furnished by an electric public utility. The bill 33 defines an “energy efficiency improvement” as the installation 34 of one or more appliances, heating and cooling systems, or the 35 -11- LSB 6049YH (3) 85 rn/sc 11/ 15

H.F. 2299 physical alteration to a building that has been identified in 1 an energy analysis as improving the energy-efficient operation 2 of a building or as decreasing the amount of energy consumed by 3 that building, or both. The bill defines an “energy analysis” 4 as a written report summarizing the results of a physical 5 inspection of a residential, commercial, or industrial building 6 conducted by a public utility or other agency or entity 7 approved by a city or county documenting deficiencies in energy 8 efficiency operation and recommending specified improvements 9 related to energy efficiency. 10 Pursuant to the program, a city or county may offer to assess 11 to residential, commercial, or industrial property within the 12 city or county the cost of purchasing or installing distributed 13 generation renewable energy sources or energy efficiency 14 improvements. The bill states that the program shall be 15 limited to distributed generation renewable energy sources or 16 energy efficiency improvements that will be permanently affixed 17 to real property which has already been developed or upon which 18 buildings have already been constructed, and that property 19 owners participating in the program may receive advance funding 20 for the improvements or reimbursement after the fact. 21 The bill provides that the governing body of a city or county 22 initiates participation in the program by adopting a resolution 23 of intent indicating that it is in the public interest to 24 finance the installation of distributed generation renewable 25 energy sources or energy efficiency improvements, that special 26 assessment financing or other financing shall be available 27 to property owners, and a brief description of financing 28 arrangements. The bill provides for notice regarding the time 29 and place of a public hearing on the resolution. 30 The bill directs a city or county wishing to establish a 31 property-assessed clean energy program to adopt an ordinance 32 which shall include a schedule for packaging assessments for 33 program finance purposes and city council or county board of 34 supervisors approval, a draft or sample petition specifying 35 -12- LSB 6049YH (3) 85 rn/sc 12/ 15

H.F. 2299 the terms and conditions that would be agreed to by a property 1 owner participating in the program, a statement of policies 2 concerning the assessments, and energy analysis requirements. 3 After adoption of the ordinance, the city or county is also 4 directed to establish a plan for raising the capital to pay for 5 work performed pursuant to the special assessments and shall be 6 authorized to advance funds available to it from any source. 7 The bill states that if a county has adopted a countywide 8 ordinance, a city cannot adopt an ordinance in that portion of 9 the city located within the county. 10 The bill provides that the city or county shall develop 11 petitions for use by property owners applying for the program, 12 informing the property owner of the need to complete an energy 13 analysis, containing space for property owner identifying 14 information and for a listing of improvements related to energy 15 efficiency and cost estimates for which a special assessment 16 is sought, and requesting a proposed time frame within which 17 the improvements shall be undertaken and completed. Program 18 participation shall be initiated solely by petition of the 19 property owner or by a representative of several related or 20 adjoining lots or parcels who has obtained written permission, 21 a petition signature, and a copy of an energy analysis from 22 each owner. The bill provides that a property owner shall 23 certify on the petition that the property owner possesses a 24 clear title to the property and is current on all property 25 taxes and mortgage payments. The bill provides that within 26 30 days following submission of a petition and accompanying 27 energy analysis, a petitioner shall receive notification 28 from the city or county of approval or denial, and that if 29 approved the petitioner shall receive subsequent notification 30 regarding funding amounts, authorization to purchase directly 31 any equipment and materials for the installation of distributed 32 generation renewable energy sources or energy efficiency 33 improvements and to contract directly for such installation, 34 and verification requirements regarding completion of 35 -13- LSB 6049YH (3) 85 rn/sc 13/ 15

H.F. 2299 improvements. 1 The bill provides that approved petitions, whether submitted 2 on an individual or aggregate basis, shall be grouped either 3 by date of approval or property location, identified by legal 4 description, and submitted to a city council or county board 5 of supervisors in the form of a resolution for approval by 6 majority vote. The bill directs a city council or county board 7 of supervisors to forward an approved resolution to the city 8 clerk or county auditor, as applicable, along with a schedule 9 including a description and parcel number of each lot, the name 10 of the property owner, the valuation of each lot as determined 11 by the council, and the total amount proposed to be assessed 12 to each lot. 13 The bill then specifies procedures for adoption of the 14 schedule by the city council or county board of supervisors, 15 certification to the county treasurer, and property owner 16 notification provisions. The bill provides that the special 17 assessments shall be levied and collected in the same manner as 18 provided in Code section 384.65 for public improvement special 19 assessments levied by a city. Bonding provisions are set forth 20 which closely correspond to provisions applicable to special 21 assessment bonds authorized in Code section 384.68. 22 The bill authorizes utilization of tax increment 23 financing moneys to fund special assessments under the 24 program for property in an urban renewal area, and includes 25 the establishment of the program within the definition of 26 “essential corporate purpose” and “essential county purpose” 27 contained in Code chapters 384 and 331, respectively, and 28 applicable to the issuance of general obligation bonds. 29 The bill requires a city or county to determine an inspection 30 procedure to verify completion of an improvement related to 31 energy efficiency financed pursuant to the program. 32 The bill provides that a city or county may impose a civil 33 penalty in an amount not to exceed the amount financed for 34 failure to complete an improvement for which a petition was 35 -14- LSB 6049YH (3) 85 rn/sc 14/ 15