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, elevators, and 28 escalators that result in increased 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 6038XC (2) 86 gh/sc 1/ 10

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 6038XC (2) 86 gh/sc 2/ 10

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 charge and collect fees pursuant to section 385.5. 26 k. To invest funds not required for immediate disbursement, 27 subject to section 28E.5, subsection 2. 28 3. A board shall exist for a minimum duration necessary to 29 finance any assessment contracts that the board enters into 30 pursuant to section 385.4. 31 Sec. 4. NEW SECTION . 385.4 Project financing requirements 32 —— assessment contracts. 33 1. A board shall finance a project if the following criteria 34 are met: 35 -3- LSB 6038XC (2) 86 gh/sc 3/ 10

S.F. _____ a. There are sufficient resources to complete the project. 1 b. The estimated economic benefit, including but not 2 limited to energy cost savings, maintenance, and other 3 property operating savings expected from the project during the 4 financing period is equal to or greater than the principal cost 5 of the project. 6 c. The project complies with the ordinances and regulations 7 of the county or city where the property is located, including 8 but not limited to such ordinances and regulations concerning 9 zoning, subdivision of property, building, fire safety, and 10 historic or architectural review. 11 2. A board shall finance a project under an assessment 12 contract. An assessment contract shall be executed by the 13 board and the property owner or owners and shall include the 14 following components: 15 a. A description of the project, including the estimated 16 cost of the project and a description of the estimated savings, 17 prepared in accordance with standards accepted by the board. 18 b. A mechanism for verifying the final costs of the project 19 upon its completion and ensuring that any amounts advanced, 20 financed, or otherwise provided by the board will not exceed 21 the final cost of the project. 22 c. An agreement by the property owner to pay special 23 assessments and any applicable fees for a period not to exceed 24 the weighted average useful life of the project, as specified 25 in the assessment contract. 26 d. An assessment schedule adopted by the board by 27 resolution, stating the number of annual installments due, 28 stating the time when assessments and any applicable fees are 29 payable, and providing for interest on all unpaid installments 30 and fees at a rate not exceeding that permitted by chapter 74A. 31 e. A statement that the obligations provided in the 32 assessment contract, including the obligation to pay special 33 assessments and any applicable fees charged, are a covenant 34 that shall run with the land and be obligations upon future 35 -4- LSB 6038XC (2) 86 gh/sc 4/ 10

S.F. _____ owners of such property. 1 f. An acknowledgment that the subdivision of property 2 subject to the assessment contract shall require the assessment 3 contract or an amendment to the contract to divide the total 4 special assessment and any applicable fees charged due between 5 the newly subdivided parcels in proportion to the benefit 6 realized by each subdivided parcel. 7 g. A written acknowledgment from all entities holding 8 mortgages on the real property, or the contract seller under 9 a real estate contract, to be assessed under the assessment 10 contract that such interest holders have consented to the levy 11 and collection of the special assessments and any applicable 12 fees charged, as described in the assessment contract. 13 3. a. A board shall provide a copy of a signed assessment 14 contract to the county or city assessor, as appropriate, and to 15 the county auditor of the county where the property is located 16 and shall file for recording a copy of the assessment contract 17 with the county recorder. 18 b. The city clerk or county auditor, as appropriate, shall 19 certify the assessment schedule to the treasurer of each county 20 where the property is located. The county treasurer shall 21 enter on the county system the amounts to be assessed against 22 the property, as certified. 23 4. A board may enter into more than one assessment contract 24 with respect to a single parcel of real property, so long as 25 each assessment contract relates to a separate project. 26 5. A board shall determine an inspection procedure to be 27 utilized upon completion of an energy efficiency improvement 28 financed pursuant to this chapter. 29 Sec. 5. NEW SECTION . 385.5 Special assessments —— fees —— 30 delinquency. 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 interest. 35 -5- LSB 6038XC (2) 86 gh/sc 5/ 10

S.F. _____ 2. In addition to special assessments provided under 1 subsection 1, a board may also charge a fee of up to one percent 2 of the total cost of a project, which fee may not exceed twenty 3 thousand dollars per project. Such fee shall be charged in 4 connection with administration of the assessment contract 5 and with any technical, consultative, or project assistance 6 services required. A fee charged under this subsection shall 7 be included in an assessment contract provided under section 8 385.4. 9 3. Special assessments levied and any applicable fees 10 charged by a board under an assessment contract shall be 11 levied, charged, and collected in the manner as provided in the 12 assessment contract and with the same priority as ad valorem 13 property taxes. 14 4. a. If special assessments and any applicable fees are 15 not paid within the time period set forth in the assessment 16 contract, such special assessments and fees shall be considered 17 delinquent. Delinquent special assessments and fees shall 18 become a lien on the property against which the special 19 assessments were levied and the fees charged. A board may 20 collect delinquent special assessments and fees as if the board 21 were a county treasurer pursuant to sections 445.3 and 445.4, 22 except that the property shall not be subject to sale for 23 delinquent taxes under chapter 446. 24 b. Special assessments and any applicable fees that are not 25 delinquent shall not be accelerated as part of any action or 26 proceeding to collect delinquent special assessments or fees. 27 Upon the sale of the real property subject to an assessment 28 contract, any remaining special assessments and applicable fees 29 shall be collected for the remainder of the assessment contract 30 term from a subsequent owner of the real property, including 31 the state and any political subdivision of the state. 32 Sec. 6. NEW SECTION . 385.6 Bonds issued. 33 1. A board may, by resolution, authorize and issue bonds 34 payable from the proceeds of the special assessments and any 35 -6- LSB 6038XC (2) 86 gh/sc 6/ 10

S.F. _____ other revenues collected. Such bonds may bear dates, bear 1 interest at rates not exceeding those permitted by chapter 74A, 2 mature in one or more installments, be in either coupon or 3 registered form, carry registration and conversion privileges, 4 be payable as to principal and interest at times and places, 5 be subject to terms of redemption prior to maturity with or 6 without premium, and be in one or more denominations, all as 7 provided by the resolution of the board authorizing their 8 issuance. 9 2. Bonds issued under this section shall not constitute a 10 debt of the state or of the city or county where the property is 11 located, and the form of such bonds shall contain a statement 12 to that effect. 13 Sec. 7. NEW SECTION . 385.7 Annual reporting. 14 A board shall submit to the governing body of each 15 participating county and city an annual report for the 16 preceding calendar year that includes the following 17 information: 18 1. A description of each project completed, including the 19 physical address of the benefitted property, the name or names 20 of the property owners, an itemized list of the costs incurred 21 under the project, and the name of any contractors used to 22 complete the project. 23 2. For each project in subsection 1, the amount of special 24 assessments due and the amount collected for the fiscal year 25 ending during the preceding calendar year. 26 3. A summary of the public benefits resulting from the 27 projects listed in subsection 1, including, without limitation, 28 estimated cumulative energy savings resulting from the 29 projects. 30 4. A description of each assessment contract entered into by 31 the board, including a description of the project and a summary 32 of the assessment schedule. 33 5. The amount of administrative costs incurred by the board. 34 EXPLANATION 35 -7- LSB 6038XC (2) 86 gh/sc 7/ 10

S.F. _____ 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 one or more counties and one or more 3 cities within those counties to create an energy efficiency 4 improvement district to finance energy efficiency improvement 5 projects for the benefit of property within the district. 6 The bill defines an “energy efficiency improvement” to mean 7 an acquisition, installation, or modification benefitting 8 private property, except residential property with three or 9 fewer residential units, that is intended to reduce energy 10 consumption or energy costs, or both, or to allow for the use 11 of alternate and renewable energy. The bill specifies measures 12 that are considered energy efficiency improvements. 13 The bill requires the governing bodies of the counties 14 and cities participating in an energy efficiency improvement 15 district to appoint an energy efficiency improvement board to 16 manage and administer the district. The board must consist of 17 at least three members, but in no case fewer than the number of 18 participating cities and counties, and the agreement creating 19 the district must set the term length of board members. 20 The bill authorizes the district board to exercise all 21 powers and duties necessary to manage and administer the energy 22 efficiency improvement district, as provided in the agreement, 23 including the power to adopt bylaws, adopt an official seal, 24 sue and be sued, make and enter into contracts with public 25 and private entities, employ staff, levy and collect special 26 assessments, borrow money from a public or private source and 27 issue bonds, finance energy efficiency improvement projects, 28 collect fees, and invest funds. A board must exist for a 29 minimum duration necessary to finance any assessment contracts 30 that the board enters into. 31 The bill requires a board to enter into an assessment 32 contract with a property owner to finance a project if the 33 board finds that there are sufficient resources for the 34 project, the estimated economic benefit is equal to or greater 35 -8- LSB 6038XC (2) 86 gh/sc 8/ 10

S.F. _____ than the cost of the project, and the project complies with 1 all applicable ordinances and regulations in the county or 2 city where the property is located. An assessment contract 3 executed between a board and a property owner must include 4 a description of the project, a mechanism for verifying 5 the final costs of the project and ensuring that financing 6 provided does not exceed the final costs of the project, an 7 agreement by the property owner to pay special assessments and 8 any applicable fees for a specified period and a schedule of 9 assessments, a statement that the obligations provided in the 10 assessment contract are a covenant that run with the land, 11 an acknowledgment that subdividing property subject to the 12 contract requires the contract or an amendment to the contract 13 to divide the total special assessments due, and written 14 consent to the levy and collection of special assessments and 15 any applicable fees charged from all entities holding mortgages 16 on the property or contract sellers of the property. 17 The bill requires a board to provide a copy of a signed 18 assessment contract to the local assessor and county auditor 19 of the county where the property is located, as well as filing 20 the agreement with the county recorder. A board is authorized 21 to enter into more than one assessment contract for a single 22 property so long as each contract relates to a separate 23 project. A board shall determine an inspection procedure for 24 completed energy improvements financed pursuant to the bill. 25 The bill provides that the total special assessments levied 26 by a board cannot exceed the sum of the cost of the project, 27 including all incidental costs and fees. A board may also 28 charge a fee of up to 1 percent of the total cost of the 29 project, not to exceed $20,000. A board must levy and collect 30 special assessments in the manner as provided in the assessment 31 contract and with the same priority as real property taxes. 32 Special assessments and fees not paid within the time period 33 set forth in the assessment contract are delinquent and become 34 a lien on the property. A board may collect such delinquent 35 -9- LSB 6038XC (2) 86 gh/sc 9/ 10

S.F. _____ assessments and fees pursuant to Code sections 445.3 and 445.4. 1 The bill authorizes a board to issue bonds payable from the 2 special assessments. The board must authorize an issuance of 3 bonds by resolution and may determine the form of the bonds, 4 so long as any interest rates do not exceed those permitted by 5 Code chapter 74A. The bonds do not constitute a debt of the 6 state or of the city or county where the property is located, 7 and must contain a statement to that effect. 8 The bill requires a board to submit an annual report to 9 the governing body of each participating county and city in 10 the district, which must include, for the preceding year, a 11 description of each project completed, the amount of special 12 assessments due and the amount collected for the fiscal year 13 ending during the preceding year, a summary of the public 14 benefits resulting from the projects completed, a description 15 of assessment contracts entered into, and the amount of 16 administrative costs incurred by the board. 17 -10- LSB 6038XC (2) 86 gh/sc 10/ 10