S.F. _____ Section 1. NEW SECTION . 385.1 Definitions. 1 As used in this chapter, unless the context otherwise 2 requires: 3 1. “Board” means an energy efficiency improvement district 4 board appointed pursuant to this chapter. 5 2. “Energy efficiency improvement” means an acquisition, 6 installation, or modification benefitting private property, 7 except residential property with fewer than three residential 8 units, that is intended to reduce energy consumption or 9 energy costs, or both, or is intended to allow for the use of 10 alternate and renewable energy. The term includes but is not 11 limited to the following measures: 12 a. Insulating walls, roofs, attics, floors, foundations, and 13 heating and cooling distribution systems. 14 b. Repairing, replacing, or installing storm windows 15 and doors, multiglazed windows and doors, heat-absorbing or 16 heat-reflective windows and doors, and other window and door 17 improvements designed to reduce energy consumption. 18 c. Constructing or reconstructing roofs designed to reduce 19 energy consumption or support additional loads necessitated by 20 other efficiency improvements. 21 d. Installing energy control and measurement devices. 22 e. Heating, ventilating, or air conditioning distribution 23 system modifications and replacements. 24 f. Caulking and weatherstripping. 25 g. Installing lighting fixtures that result in increased 26 energy efficiency of the lighting system. 27 h. Installing water heating systems that result in increased 28 energy efficiency. 29 i. Repairing, replacing, or installing energy recovery 30 systems. 31 j. Repairing, replacing, or installing daylighting systems. 32 k. Repairing, replacing, or installing energy systems that 33 provide energy from alternate or renewable energy, including 34 solar, wind, biomass, geothermal, or cogeneration. 35 -1- LSB 5519XC (3) 86 gh/sc 1/ 9

S.F. _____ l. Repairing, replacing, or installing facilities or 1 fixtures providing for water conservation or pollutant control. 2 m. Repairing, replacing, or installing an energy efficiency 3 related item so long as the cost of the energy efficiency 4 related item does not exceed twenty-five percent of the total 5 cost of the project. 6 3. “Energy efficiency related item” means a repair, 7 replacement, improvement, or modification to real property 8 that is necessary or desirable in conjunction with an 9 energy efficiency improvement. The term includes but is not 10 limited to structural support improvements and the repair or 11 replacement of any building components, paved surfaces, or 12 fixtures disrupted or altered by the installation of an energy 13 efficiency improvement. 14 4. “Project” means one or more energy efficiency 15 improvements to be installed on a property. 16 Sec. 2. NEW SECTION . 385.2 Energy efficiency improvement 17 district created. 18 One or more counties and one or more cities within those 19 counties may create, by chapter 28E agreement, an energy 20 efficiency improvement district pursuant to this chapter in 21 order to provide financing for energy efficiency improvement 22 projects to benefit real property in the district. 23 Sec. 3. NEW SECTION . 385.3 Energy efficiency improvement 24 district board —— membership —— powers. 25 1. The governing bodies of the counties and cities 26 participating in an energy efficiency improvement district 27 shall appoint a board to manage and administer the energy 28 efficiency improvement district. An energy efficiency 29 improvement board shall consist of at least three members, 30 but in no case shall there be fewer members than the number 31 of participating cities and counties. The agreement creating 32 the energy efficiency improvement district shall set the term 33 length of board members. 34 2. A board shall have and may exercise the powers and duties 35 -2- LSB 5519XC (3) 86 gh/sc 2/ 9

S.F. _____ necessary for management and administration of the energy 1 efficiency improvement district as such powers and duties are 2 described in the agreement, including but not limited to the 3 following express powers and duties: 4 a. To adopt, amend, and repeal bylaws consistent with the 5 provisions of this chapter. 6 b. To adopt an official seal. 7 c. To sue and be sued in all courts. 8 d. To make and enter into contracts with public and private 9 entities. 10 e. To accept grants, guarantees, and donations of property, 11 labor, services, and other items of value from a public or 12 private source. 13 f. To employ or contract for such managerial, legal, 14 technical, clerical, accounting, or other assistance it deems 15 advisable. However, the board shall only employ or contract 16 with nonprofit organizations for the administration of the 17 board and the board shall not enter into any arrangement that 18 results in an exclusive lender, underwriter, or other funding 19 partner for all projects funded by the board. 20 g. To finance projects under assessment contracts. 21 h. To levy and collect special assessments under an 22 assessment contract with a property owner. 23 i. To borrow money from a public or private source and issue 24 bonds and provide security for the repayment of such bonds. 25 j. To collect reasonable fees and charges in connection with 26 making and servicing assessment contracts and in connection 27 with technical, consultative, or project assistance services 28 offered. 29 k. To invest funds not required for immediate disbursement, 30 subject to section 28E.5, subsection 2. 31 3. A board shall exist for a minimum duration necessary to 32 finance any assessment contracts that the board enters into 33 pursuant to section 385.4. 34 Sec. 4. NEW SECTION . 385.4 Project financing requirements 35 -3- LSB 5519XC (3) 86 gh/sc 3/ 9

S.F. _____ —— assessment contracts. 1 1. A board shall finance a project if the following criteria 2 are met: 3 a. There are sufficient resources to complete the project. 4 b. The estimated economic benefit, including but not 5 limited to energy cost savings, maintenance, and other 6 property operating savings expected from the project during the 7 financing period is equal to or greater than the principal cost 8 of the project. 9 c. The project complies with the ordinances and regulations 10 of the county or city where the property is located, including 11 but not limited to such ordinances and regulations concerning 12 zoning, subdivision of property, building, fire safety, and 13 historic or architectural review. 14 2. A board shall finance a project under an assessment 15 contract. An assessment contract shall be executed by the 16 board and the property owner or owners and shall include the 17 following components: 18 a. A description of the project, including the estimated 19 cost of the project and a description of the estimated savings 20 prepared in accordance with standards accepted by the board. 21 b. A mechanism for verifying the final costs of the project 22 upon its completion and ensuring that any amounts advanced, 23 financed, or otherwise provided by the board will not exceed 24 the final cost of the project. 25 c. An agreement by the property owner to pay special 26 assessments for a period not to exceed the weighted average 27 useful life of the project, as specified in the assessment 28 contract. 29 d. An assessment schedule adopted by the board by 30 resolution, stating the number of annual installments due, 31 stating the time when assessments are payable, and providing 32 for interest on all unpaid installments at a rate not exceeding 33 that permitted by chapter 74A. 34 e. A statement that the obligations provided in the 35 -4- LSB 5519XC (3) 86 gh/sc 4/ 9

S.F. _____ assessment contract, including the obligation to pay special 1 assessments, are a covenant that shall run with the land and be 2 obligations upon future owners of such property. 3 f. An acknowledgment that the subdivision of property 4 subject to the assessment contract shall require the assessment 5 contract or an amendment to the contract to divide the total 6 special assessment due between the newly subdivided parcels in 7 proportion to the benefit realized by each subdivided parcel. 8 g. A written acknowledgment from all entities holding 9 mortgages on the real property, or the contract seller under 10 a real estate contract, to be assessed under the assessment 11 contract that such interest holders have consented to the levy 12 and collection of the special assessments as described in the 13 assessment contract. 14 3. a. A board shall provide a copy of a signed assessment 15 contract to the county or city assessor, as appropriate, and to 16 the county auditor of the county where the property is located 17 and shall file for recording a copy of the assessment contract 18 with the county recorder. 19 b. The city clerk or county auditor, as appropriate, shall 20 certify the assessment schedule to the treasurer of each county 21 where the property is located. The county treasurer shall 22 enter on the county system the amounts to be assessed against 23 the property, as certified. 24 4. A board may enter into more than one assessment contract 25 with respect to a single parcel of real property, so long as 26 each assessment contract relates to a separate project. 27 5. A board shall determine an inspection procedure to be 28 utilized upon completion of an energy efficiency improvement 29 financed pursuant to this chapter. 30 Sec. 5. NEW SECTION . 385.5 Special assessments. 31 1. The total special assessments levied by a board under an 32 assessment contract shall not exceed the sum of the cost of the 33 project, including any energy audits or inspections or portion 34 thereof financed by the board, plus such administration fees, 35 -5- LSB 5519XC (3) 86 gh/sc 5/ 9

S.F. _____ interest, and other financing costs reasonably required by the 1 board. 2 2. Special assessments levied by a board under an assessment 3 contract shall be levied and collected in the same manner as 4 provided in section 384.65 for public improvement special 5 assessments levied by a city. 6 3. From the date of certification of the assessment schedule 7 under section 385.4, subsection 3, the special assessments 8 with all interest become and remain a lien on the benefitted 9 property until paid and have equal precedence with ordinary 10 taxes, and are not divested by any judicial sale. 11 Sec. 6. NEW SECTION . 385.6 Bonds issued. 12 1. A board may, by resolution, authorize and issue bonds 13 payable from the proceeds of the special assessments and any 14 other revenues collected. Such bonds may bear dates, bear 15 interest at rates not exceeding those permitted by chapter 74A, 16 mature in one or more installments, be in either coupon or 17 registered form, carry registration and conversion privileges, 18 be payable as to principal and interest at times and places, 19 be subject to terms of redemption prior to maturity with or 20 without premium, and be in one or more denominations, all as 21 provided by the resolution of the board authorizing their 22 issuance. 23 2. Bonds issued under this section shall not constitute a 24 debt of the state or of the city or county where the property is 25 located, and the form of such bonds shall contain a statement 26 to that effect. 27 Sec. 7. NEW SECTION . 385.7 Annual reporting. 28 A board shall submit to the governing body of each 29 participating county and city an annual report for the 30 preceding calendar year that includes the following 31 information: 32 1. A description of each project completed, including the 33 physical address of the benefitted property, the name or names 34 of the property owners, an itemized list of the costs incurred 35 -6- LSB 5519XC (3) 86 gh/sc 6/ 9

S.F. _____ under the project, and the name of any contractors used to 1 complete the project. 2 2. For each project in subsection 1, the amount of special 3 assessments due and the amount collected for the fiscal year 4 ending during the preceding calendar year. 5 3. A summary of the public benefits resulting from the 6 projects listed in subsection 1, including, without limitation, 7 estimated cumulative energy savings resulting from the 8 projects. 9 4. A description of each assessment contract entered into by 10 the board, including a description of the project and a summary 11 of the assessment schedule. 12 5. The amount of administrative costs incurred by the board. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill authorizes one or more counties and one or more 17 cities within those counties to create an energy efficiency 18 improvement district to finance energy efficiency improvement 19 projects for the benefit of property within the district. 20 The bill defines an “energy efficiency improvement” to mean 21 an acquisition, installation, or modification benefitting 22 private property, except residential property with three or 23 fewer residential units, that is intended to reduce energy 24 consumption or energy costs, or both, or to allow for the use 25 of alternate and renewable energy. The bill specifies measures 26 that are considered energy efficiency improvements. 27 The bill requires the governing bodies of the counties 28 and cities participating in an energy efficiency improvement 29 district to appoint an energy efficiency improvement board to 30 manage and administer the district. The board must consist of 31 at least three members, but in no case fewer than the number of 32 participating cities and counties, and the agreement creating 33 the district must set the term length of board members. 34 The bill authorizes the district board to exercise all 35 -7- LSB 5519XC (3) 86 gh/sc 7/ 9

S.F. _____ powers and duties necessary to manage and administer the energy 1 efficiency improvement district, as provided in the agreement, 2 including the power to adopt bylaws, adopt an official seal, 3 sue and be sued, make and enter into contracts with public 4 and private entities, employ staff, levy and collect special 5 assessments, borrow money from a public or private source and 6 issue bonds, finance energy efficiency improvement projects, 7 collect reasonable fees and charges, and invest funds. A board 8 must exist for a minimum duration necessary to finance any 9 assessment contracts that the board enters into. 10 The bill requires a board to enter into an assessment 11 contract with a property owner to finance a project if the 12 board finds that there are sufficient resources for the 13 project, the estimated economic benefit is equal to or greater 14 than the cost of the project, and the project complies with 15 all applicable ordinances and regulations in the county or 16 city where the property is located. An assessment contract 17 executed between a board and a property owner must include a 18 description of the project, a mechanism for verifying the final 19 costs of the project and ensuring that financing provided does 20 not exceed the final costs of the project, an agreement by 21 the property owner to pay special assessments for a specified 22 period and a schedule of assessments, a statement that the 23 obligations provided in the assessment contract are a covenant 24 that run with the land, an acknowledgment that subdividing 25 property subject to the contract requires the contract or 26 an amendment to the contract to divide the total special 27 assessments due, and written consent to the levy and collection 28 of special assessments from all entities holding mortgages on 29 the property or contract sellers of the property. 30 The bill requires a board to provide a copy of a signed 31 assessment contract to the local assessor and county auditor 32 of the county where the property is located, as well as filing 33 the agreement with the county recorder. A board is authorized 34 to enter into more than one assessment contract for a single 35 -8- LSB 5519XC (3) 86 gh/sc 8/ 9

S.F. _____ property so long as each contract relates to a separate 1 project. A board shall determine an inspection procedure for 2 completed energy improvements financed pursuant to the bill. 3 The bill provides that the total special assessments levied 4 by a board cannot exceed the sum of the cost of the project, 5 including all incidental costs and fees. A board must levy 6 and collect special assessments in the same manner as provided 7 in Code section 384.65 for city public improvement special 8 assessments. Special assessments, including all interest, 9 become and remain a lien on the property until paid and have 10 equal precedence with ordinary taxes. 11 The bill authorizes a board to issue bonds payable from the 12 special assessments. The board must authorize an issuance of 13 bonds by resolution and may determine the form of the bonds, 14 so long as any interest rates do not exceed those permitted by 15 Code chapter 74A. The bonds do not constitute a debt of the 16 state or of the city or county where the property is located, 17 and must contain a statement to that effect. 18 The bill requires a board to submit an annual report to 19 the governing body of each participating county and city in 20 the district, which must include, for the preceding year, a 21 description of each project completed, the amount of special 22 assessments due and the amount collected for the fiscal year 23 ending during the preceding year, a summary of the public 24 benefits resulting from the projects completed, a description 25 of assessment contracts entered into, and the amount of 26 administrative costs incurred by the board. 27 -9- LSB 5519XC (3) 86 gh/sc 9/ 9