H.F. 2391 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 3 an energy finance program to finance energy improvements in a 4 county pursuant to chapter 385. 5 Sec. 2. Section 384.24, subsection 3, Code 2014, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . y. The establishment or funding of an energy 8 finance program to finance energy improvements within a city 9 pursuant to chapter 385. 10 Sec. 3. NEW SECTION . 385.1 Legislative findings —— purpose. 11 The general assembly finds all of the following: 12 1. Renewable energy production and energy efficiency 13 improvements to residential, commercial, and industrial real 14 property, are necessary to address the issue of energy bill 15 stabilization. 16 2. The initial investment required to make residential, 17 commercial, or industrial real property more energy-efficient 18 or to utilize renewable energy prevents many property owners 19 from making such improvements. To make energy improvements 20 more affordable and to promote their installation, it is 21 necessary to authorize an alternative procedure for owners of a 22 residence or business to finance such improvements. 23 3. The general assembly declares that a public purpose 24 shall be served by authorizing cities and counties to establish 25 energy finance programs and authorizing the governing body 26 of any city or county to assist property owners in financing 27 the installation of renewable energy improvements and energy 28 efficiency improvements by offering financial terms that are 29 beneficial to the property owner. 30 Sec. 4. NEW SECTION . 385.2 Definitions. 31 As used in this chapter, unless the context otherwise 32 requires: 33 1. “Authority” means the economic development authority 34 created in section 15.105. 35 -1- LSB 6036YH (1) 85 rn/sc 1/ 14

H.F. 2391 2. “Energy analysis” means a written report summarizing the 1 results of a physical inspection of a residential, commercial, 2 or industrial building conducted by a public utility or other 3 agency or entity approved by the authority. The report shall 4 document deficiencies in energy efficiency operation and 5 recommend specified energy improvements. 6 3. “Energy improvement” means the installation of one 7 or more appliances or heating and cooling systems, physical 8 alteration to a building, or installation of a renewable energy 9 production facility that has been identified in an energy 10 analysis as improving the energy-efficient operation of a 11 building or as decreasing the amount of energy consumed by that 12 building, or both. 13 Sec. 5. NEW SECTION . 385.3 Energy finance program 14 established. 15 1. A city or county may adopt an ordinance establishing an 16 energy finance program in order to allow the city or county 17 to offer to assess to residential, commercial, or industrial 18 property within the city or county the cost of purchasing or 19 installing energy improvements. The authority shall advise 20 cities and counties in administering the program. 21 2. An energy finance program shall be limited to energy 22 improvements that will be permanently affixed to real property 23 that has already been developed or upon which buildings have 24 already been constructed. Property owners participating in the 25 program may receive funding for the improvements in advance 26 of installation, or as a reimbursement of amounts expended by 27 the property owner for completed installations. However, the 28 amount advanced or reimbursed shall not exceed the total amount 29 identified in the petition submitted by the property owner 30 pursuant to section 385.6. 31 3. Petitions for participation in an energy finance program 32 adopted by a city or county may be submitted, considered, 33 and approved or denied either individually or aggregated by 34 neighborhood, district, region, or other basis. 35 -2- LSB 6036YH (1) 85 rn/sc 2/ 14

H.F. 2391 Sec. 6. NEW SECTION . 385.4 Resolution of intent. 1 1. The governing body of a city or county may not consider 2 an ordinance establishing an energy finance program until 3 after the governing body has adopted a resolution of intent 4 indicating or including the following: 5 a. That the city or county considers it in the public 6 interest to finance the installation of energy improvements. 7 b. That the city or county proposes to make special 8 assessment financing or other financing available to property 9 owners seeking to install or make energy improvements. 10 c. A nonexclusive list of examples of energy improvements 11 which may be included in the proposed ordinance and financed 12 pursuant to the program. 13 d. A brief description of the proposed arrangements for 14 financing the program. 15 2. The city or county shall hold a public hearing on the 16 resolution at which interested persons may inquire about or 17 object to the proposed program. Notice of the hearing shall 18 be published as provided in section 331.305 or 362.3, as 19 applicable. 20 Sec. 7. NEW SECTION . 385.5 Program requirements —— 21 ordinance. 22 1. An ordinance establishing an energy finance program 23 shall include the following regarding implementation of the 24 program: 25 a. A schedule for packaging assessments for program finance 26 purposes and city council or board of supervisors approval. 27 b. A method for prioritizing approved applications in the 28 event the number of applications received for a year exceeds 29 program funds. 30 c. Energy analysis requirements. 31 2. After adoption of an ordinance establishing an energy 32 finance program, a plan for raising a capital amount required 33 to pay for work performed pursuant to contractual assessments 34 shall be established by a city or county. A city or county 35 -3- LSB 6036YH (1) 85 rn/sc 3/ 14

H.F. 2391 shall be authorized to advance funds available to it from any 1 source, including the sale of bonds as provided in section 2 385.11 and in section 331.441 or 384.24, as applicable. The 3 plan shall specify the source of financing contemplated by the 4 city or county. The plan shall also provide for a reserve 5 fund and for apportionment of all or any portion of the costs 6 incidental to financing, administration, and collection of the 7 special assessments between or among property owners and the 8 city or county. 9 3. The ordinance establishing an energy finance program 10 shall provide for the establishment of an energy finance 11 program fund into which bond proceeds and other funds to be 12 utilized in administering the program shall be deposited. 13 4. If a county has adopted a countywide ordinance, a city 14 cannot adopt an ordinance establishing an energy finance 15 program applicable to that portion of the city located 16 within the county. If a county has not adopted a countywide 17 ordinance, a city adopting an ordinance may include an area 18 extending up to two miles distance from the city’s boundaries. 19 Sec. 8. NEW SECTION . 385.6 Petition by property owners. 20 1. The authority shall develop and make available to a 21 city or county that has established an energy finance program 22 petitions for distribution to prospective program participants. 23 2. Program participation shall be initiated solely by 24 petition of the property owner, or by a representative of 25 several related or adjoining lots or parcels who has obtained 26 written permission and a copy of an energy analysis from each 27 owner. If a property is in the name of more than one owner, the 28 petition shall be signed by each owner. 29 3. The petition shall state that a copy of a completed 30 energy analysis shall be required for participation in the 31 program and must be attached to the petition. The petition 32 shall contain space for the printed name, signature, and 33 address of the petitioner. For each petitioner, the petition 34 shall contain space for identification of energy improvements 35 -4- LSB 6036YH (1) 85 rn/sc 4/ 14

H.F. 2391 identified in the energy analysis for which energy finance 1 program financing is sought, a cost estimate for each 2 improvement so identified, and a proposed time frame within 3 which the improvements shall be undertaken and completed. 4 4. Within thirty days following submission of a petition 5 and accompanying energy analysis, a petitioner shall receive 6 notification from the city or county of approval pending 7 adoption of a resolution pursuant to section 385.7 by the city 8 council or county board of supervisors, or of denial of the 9 petition. Following adoption of a resolution, an approved 10 petitioner shall receive notification from the city or county 11 regarding funding amounts, authorization to purchase directly 12 any equipment and materials for the installation of energy 13 improvements and to contract directly for such installation, 14 and verification requirements regarding completion of 15 improvements. 16 5. Special assessments for energy improvements shall be 17 levied only upon the free and willing consent of the owner of 18 each lot or parcel on which an assessment is levied at the time 19 of levy. 20 Sec. 9. NEW SECTION . 385.7 Resolution and filing. 21 1. Approved petitions, whether submitted on an individual 22 or aggregate basis, shall be grouped either by date of approval 23 or property location, identified by legal description, and 24 submitted to a city council or county board of supervisors in 25 the form of a resolution for approval by majority vote. 26 2. An adopted resolution shall be forwarded to the city 27 clerk, or the county auditor in the case of a county, along 28 with a schedule including a description and parcel number of 29 each lot, the name of the property owner, and the total amount 30 to be assessed to each lot. In counties in which taxes are 31 collected in two or more places, certification shall be to the 32 office of county treasurer where the special assessments are 33 collected. The county treasurer shall preserve the resolution 34 and schedule as a part of the records of the office until the 35 -5- LSB 6036YH (1) 85 rn/sc 5/ 14

H.F. 2391 city clerk or county auditor certifies the final assessment 1 schedule as provided in section 385.8 or certifies that the 2 petition has been abandoned. 3 Sec. 10. NEW SECTION . 385.8 Adoption of schedule. 4 1. Within ten days after filing of the resolution and 5 schedule pursuant to section 385.7, a city council or county 6 board of supervisors shall meet, consider, and adopt or amend 7 and adopt, by resolution, a final assessment schedule. The 8 resolution must: 9 a. Confirm and levy assessments. 10 b. State the number of annual installments, not exceeding 11 fifteen, into which assessments of more than five hundred 12 dollars are divided. 13 c. Provide for interest on all unpaid installments at a rate 14 not exceeding that permitted by chapter 74A. 15 d. State the time when assessments are payable. 16 e. Direct the city clerk or county auditor, as appropriate, 17 to certify the final schedule to the treasurer of each county 18 in which the assessed property is located. 19 2. The city clerk or county auditor shall send written 20 notice by regular mail to each property owner whose petition 21 has been approved and whose property has been included on the 22 schedule. The notice shall contain all the information and 23 statements required to be included in notices under section 24 384.60, subsection 2. 25 3. The county treasurer shall enter on the county system the 26 amounts to be assessed against each lot, as certified. 27 Sec. 11. NEW SECTION . 385.9 Installments due —— lien 28 created. 29 1. Special assessments levied by a city or county pursuant 30 to this chapter shall be levied and collected in the same 31 manner as provided in section 384.65 for public improvement 32 special assessments levied by a city. 33 2. From the date of filing of certification of the 34 resolution and schedule pursuant to section 385.7, the special 35 -6- LSB 6036YH (1) 85 rn/sc 6/ 14

H.F. 2391 assessments with all interest become and remain a lien on the 1 benefited property until paid, and have equal precedence with 2 ordinary taxes, and are not divested by any judicial sale. 3 Sec. 12. NEW SECTION . 385.10 Payment to county treasurer. 4 Assessments levied and certified under this chapter, 5 including installments and interest, are payable at the office 6 of the county treasurer of the county where the property 7 assessed is located, except that assessments may be paid 8 in full or in part and without interest within thirty days 9 after the date of certification, at the office of the county 10 treasurer, if the property being assessed is located in an 11 unincorporated area, or the city clerk, if the property being 12 assessed is located in an incorporated area. 13 Sec. 13. NEW SECTION . 385.11 Bonds issued. 14 1. After certification of the final assessment schedule, a 15 city or county may, by resolution, authorize and issue bonds in 16 anticipation of the collection of unpaid special assessments. 17 However, the total principal amount of bonds issued may not 18 exceed the total amount of unpaid special assessments. 19 2. All special assessment bonds are negotiable, must state 20 on their face that they are issued under the provisions of this 21 chapter, and are payable as to both principal and interest from 22 the proceeds of the special assessments. Such bonds may bear 23 interest at a rate not exceeding that permitted by chapter 24 74A payable annually or semiannually, must mature serially 25 on December 1 of the years in which any of the principal is 26 scheduled to become due, and may contain a provision that the 27 city or county reserves the right and option of calling and 28 redeeming any or all of the bonds prior to maturity on any 29 interest payment date or within forty-five days thereafter 30 upon the terms specified therein. Such bonds must be called 31 “improvement bonds”, must designate the general type of 32 improvement or improvements for which issued, and may be issued 33 in any denomination. The bonds must be named in a way to 34 distinguish them from other improvement bonds of the city or 35 -7- LSB 6036YH (1) 85 rn/sc 7/ 14

H.F. 2391 county, and to designate the property specially assessed for 1 the improvement. Improvement bonds issued for any one levy 2 must bear the same date and be divided into as many series as 3 there are years in which installments of the special assessment 4 mature, and each series must be as nearly equal in amount as 5 practicable. 6 3. The proceeds of the special assessments and interest 7 collected thereon must be used and applied by the city or 8 county to the payment of the interest on the bonds and to 9 the retirement of the principal as rapidly as proceeds are 10 collected. Such bonds and coupons do not make the city or 11 county liable in any way, except for the proper application of 12 special assessments. If interest becomes due on any of the 13 bonds when there is no fund from which to pay it, the council 14 or board of supervisors may make a temporary loan for payment 15 of the interest, which loan must be repaid from the special 16 assessments and interest pledged to secure the bonds, but in 17 case of purchase by the city or county at tax sale of the 18 property on which a special assessment under this chapter is 19 levied, from the general fund. 20 4. Special assessment bonds issued under this section 21 must be sold at public or private sale in the manner provided 22 by chapter 75, and may not be sold for less than par value 23 with accrued interest from date to the time of delivery. The 24 proceeds of the sale must be applied to the payment of the 25 cost of financing the energy improvements approved under this 26 chapter. 27 5. Any excess of proceeds from special assessments 28 remaining after all of the bonds have been paid with interest 29 may be credited to the energy finance program fund established 30 pursuant to ordinance or returned to the applicable property 31 owners on a proportionate basis. 32 6. Cities or counties may issue refunding bonds to pay off 33 and take up special assessment bonds issued pursuant to this 34 chapter, or to refund any part thereof, as follows: 35 -8- LSB 6036YH (1) 85 rn/sc 8/ 14

H.F. 2391 a. Refunding bonds must substantially conform to the 1 provisions of this chapter, and the face value is limited to 2 the amount of the unpaid special assessments with the interest 3 thereon of the particular issue of bonds to be refunded. 4 b. Refunding bonds or their proceeds may be used only to pay 5 improvement bonds taken up. 6 c. The expense of refunding bonds must be paid out of the 7 energy finance program fund of the city or county. 8 d. When refunding bonds are issued to pay improvement 9 bonds, all special assessments and sinking funds applicable to 10 the payment of the improvement bonds previously issued must 11 be applied in the same manner and to the same extent to the 12 payment of the refunding bonds, and all the powers and duties 13 to levy and to carry special assessments and taxes, to create 14 liens upon property, and to establish sinking funds in respect 15 to the bonds previously issued continue until refunding bonds 16 are paid. 17 e. The city or county shall collect the special assessment 18 out of which the refunding bonds are payable and hold the 19 proceeds in trust for the payment of the refunding bonds, but 20 it is not liable except for the proper application of the 21 assessments. 22 7. No action shall be brought questioning the legality 23 of the bonds authorized by this section from and after sixty 24 days from the date the bonds are ordered issued by the city or 25 county. 26 Sec. 14. NEW SECTION . 385.12 Verification —— penalty. 27 1. The authority shall determine an inspection procedure to 28 be utilized by a city or county upon completion of an energy 29 improvement financed pursuant to the energy finance program. 30 2. The city council or board of supervisors may impose a 31 civil penalty against a property owner for failure to complete 32 an energy improvement for which a petition was submitted by the 33 property owner and approved and financing was received. The 34 penalty may be in an amount up to but not exceeding the amount 35 -9- LSB 6036YH (1) 85 rn/sc 9/ 14

H.F. 2391 of financing received. 1 Sec. 15. NEW SECTION . 385.13 Report. 2 The results of the program including but not limited to the 3 number of petitions received, the number of petitions approved, 4 types of energy improvements for which special assessments 5 are sought, and average special assessment size, shall be 6 submitted by a city or county participating in the program to 7 the authority by December 1 annually. The authority shall make 8 available on its internet site all information received under 9 this subsection. 10 Sec. 16. Section 403.19, subsection 2, paragraph a, Code 11 2014, is amended to read as follows: 12 a. That portion of the taxes each year in excess of such 13 amount shall be allocated to and when collected be paid into a 14 special fund of the municipality to pay the principal of and 15 interest on loans, moneys advanced to, or indebtedness, whether 16 funded, refunded, assumed, or otherwise, including bonds 17 issued under the authority of section 403.9, subsection 1 , 18 incurred by the municipality to finance or refinance, in whole 19 or in part, an urban renewal project within the area, and to 20 provide assistance for low and moderate income family housing 21 as provided in section 403.22 , and to provide funding for an 22 energy finance program adopted pursuant to chapter 385 with 23 regard to property within the urban renewal area . However, 24 except as provided in paragraph “b” , taxes for the regular and 25 voter-approved physical plant and equipment levy of a school 26 district imposed pursuant to section 298.2 and taxes for the 27 instructional support program of a school district imposed 28 pursuant to section 257.19 , taxes for the payment of bonds 29 and interest of each taxing district, and taxes imposed under 30 section 346.27, subsection 22 , related to joint county-city 31 buildings shall be collected against all taxable property 32 within the taxing district without limitation by the provisions 33 of this subsection . 34 EXPLANATION 35 -10- LSB 6036YH (1) 85 rn/sc 10/ 14

H.F. 2391 The inclusion of this explanation does not constitute agreement with 1 the explanation’s substance by the members of the general assembly. 2 This bill authorizes cities and counties to establish an 3 energy finance program to finance energy improvements for the 4 benefit of property owners within the city or county. 5 The bill defines an “energy improvement” as the installation 6 of one or more appliances or heating and cooling systems, 7 physical alteration to a building, or installation of a 8 renewable energy production facility which has been identified 9 in an energy analysis as improving the energy-efficient 10 operation of a building or as decreasing the amount of energy 11 consumed by that building, or both. The bill defines an 12 “energy analysis” as a written report summarizing the results 13 of a physical inspection of a residential, commercial, or 14 industrial building conducted by a public utility or other 15 agency or entity approved by the economic development authority 16 documenting deficiencies in energy efficiency operation and 17 recommending specified energy improvements. 18 Pursuant to the program, a city or county may offer to 19 assess to residential, commercial, or industrial property 20 within the city or county the cost of purchasing or installing 21 energy improvements. The economic development authority 22 shall serve in an advisory capacity. The bill states that 23 the program shall be limited to energy improvements that will 24 be permanently affixed to real property which has already 25 been developed or upon which buildings have already been 26 constructed, and that property owners participating in the 27 program may receive advance funding for the improvements or 28 reimbursement after the fact. 29 The bill provides that the governing body of a city or county 30 initiates participation in the program by adopting a resolution 31 of intent indicating that it is in the public interest to 32 finance the installation of energy improvements, that special 33 assessment financing or other financing shall be available to 34 property owners, examples of energy improvements which may be 35 -11- LSB 6036YH (1) 85 rn/sc 11/ 14

H.F. 2391 financed and a brief description of financing arrangements. 1 The bill provides for notice regarding the time and place of a 2 public hearing on the resolution. 3 The bill directs a city or county wishing to establish 4 an energy finance program to adopt an ordinance which 5 shall include a schedule for packaging assessments for 6 program finance purposes and city council or county board 7 of supervisors approval, a method for prioritizing approved 8 applications, and energy analysis requirements. After adoption 9 of the ordinance, the city or county is also directed to 10 establish a plan for raising the capital to pay for work 11 performed pursuant to the special assessments and shall be 12 authorized to advance funds available to it from any source. 13 The bill states that if a county has adopted a countywide 14 ordinance, a city cannot adopt an ordinance in that portion of 15 the city located within the county. 16 The bill provides that the authority shall develop petitions 17 for use by property owners applying for the program, informing 18 the property owner of the need to complete an energy analysis, 19 containing space for property owner identifying information and 20 for a listing of energy improvements and cost estimates for 21 which a special assessment is sought, and requesting a proposed 22 time frame within which the improvements shall be undertaken 23 and completed. Program participation shall be initiated solely 24 by petition of the property owner or by a representative of 25 several related or adjoining lots or parcels who has obtained 26 written permission, a petition signature, and a copy of an 27 energy analysis from each owner. The bill provides that within 28 30 days following submission of a petition and accompanying 29 energy analysis, a petitioner shall receive notification 30 from the city or county of approval or denial, and that if 31 approved the petitioner shall receive subsequent notification 32 regarding funding amounts, authorization to purchase directly 33 any equipment and materials for the installation of energy 34 improvements and to contract directly for such installation, 35 -12- LSB 6036YH (1) 85 rn/sc 12/ 14

H.F. 2391 and verification requirements regarding completion of 1 improvements. 2 The bill provides that approved petitions, whether submitted 3 on an individual or aggregate basis, shall be grouped either 4 by date of approval or property location, identified by legal 5 description, and submitted to a city council or county board 6 of supervisors in the form of a resolution for approval by 7 majority vote. The bill directs a city council or county board 8 of supervisors to forward an approved resolution to the city 9 clerk or county auditor, as applicable, along with a schedule 10 including a description and parcel number of each lot, the name 11 of the property owner, the valuation of each lot as determined 12 by the council, and the total amount proposed to be assessed 13 to each lot. 14 The bill then specifies procedures for adoption of the 15 schedule by the city council or county board of supervisors, 16 certification to the county treasurer, and property owner 17 notification provisions. The bill provides that the special 18 assessments shall be levied and collected in the same manner as 19 provided in Code section 384.65 for public improvement special 20 assessments levied by a city. Bonding provisions are set forth 21 which closely correspond to provisions applicable to special 22 assessment bonds authorized in Code section 384.68. 23 The bill authorizes utilization of tax increment financing 24 moneys to fund special assessments under the program 25 for property in an urban renewal area, and includes the 26 establishment of the energy finance program within the 27 definition of “essential corporate purpose” and “essential 28 county purpose” contained in Code chapters 384 and 331, 29 respectively, and applicable to the issuance of general 30 obligation bonds. 31 The bill requires the economic development authority to 32 determine an inspection procedure to verify completion of an 33 energy improvement financed pursuant to the program. The 34 authority is also required to make available on its internet 35 -13- LSB 6036YH (1) 85 rn/sc 13/ 14

H.F. 2391 site the results of the program based upon information 1 required to be submitted on an annual basis by a city or county 2 participating in the program. 3 The bill provides that a city or county may impose a civil 4 penalty in an amount not to exceed the amount financed for 5 failure to complete an energy improvement for which a petition 6 was submitted and approved and financing was received. 7 -14- LSB 6036YH (1) 85 rn/sc 14/ 14