H.F. 336 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 investment district board 4 appointed pursuant to this chapter. 5 2. “Energy investment” means an acquisition, installation, 6 or modification benefitting private property, except 7 residential property with fewer than three residential units, 8 that is intended to reduce energy consumption or energy costs, 9 or both, or is intended to provide or 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 energy investments. 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 1447YH (5) 87 gh/sc 1/ 10

H.F. 336 l. Repairing, replacing, or installing facilities or 1 fixtures providing for water conservation or pollutant control. 2 m. Repairing, replacing, or installing an energy investment 3 related item so long as the cost of the energy investment 4 related item does not exceed twenty-five percent of the total 5 cost of the project. 6 3. “Energy investment related item” means a repair, 7 replacement, improvement, or modification to real property 8 that is necessary or desirable in conjunction with an energy 9 investment. The term includes but is not limited to structural 10 support improvements and the repair or replacement of any 11 building components, paved surfaces, or fixtures disrupted or 12 altered by the installation of an energy investment. 13 4. “Project” means one or more energy investments to be 14 installed on a property. 15 Sec. 2. NEW SECTION . 385.2 Energy investment district 16 created. 17 1. A county or city may create an energy investment district 18 pursuant to this chapter in order to provide financing for 19 energy investment projects to benefit real property in the 20 district. 21 2. One or more counties and one or more cities within 22 those counties may create, by chapter 28E agreement, an energy 23 investment district pursuant to this chapter in order to 24 provide financing for energy investment projects to benefit 25 real property in the district. The agreement creating the 26 energy investment district shall specify the geographic 27 boundaries of the district. 28 Sec. 3. NEW SECTION . 385.3 Energy investment district board 29 —— membership —— powers. 30 1. The governing bodies of the counties and cities 31 participating in an energy investment district shall appoint a 32 board to manage and administer the energy investment district. 33 An energy investment district board shall consist of at least 34 three members, but if the district is created pursuant to 35 -2- LSB 1447YH (5) 87 gh/sc 2/ 10

H.F. 336 section 385.2, subsection 2, in no case shall there be fewer 1 members than the number of participating cities and counties. 2 The agreement creating the energy investment district shall set 3 the term length of board members. 4 2. A board shall have and may exercise the powers and duties 5 necessary for management and administration of the energy 6 investment district as such powers and duties are described 7 in the agreement, including but not limited to the following 8 express powers and duties: 9 a. To adopt, amend, and repeal bylaws consistent with the 10 provisions of this chapter. 11 b. To adopt an official seal. 12 c. To sue and be sued in all courts. 13 d. To make and enter into contracts with public and private 14 entities. 15 e. To accept grants, guarantees, and donations of property, 16 labor, services, and other items of value from a public or 17 private source. 18 f. To employ or contract for such managerial, legal, 19 technical, clerical, accounting, or other assistance it 20 deems advisable. However, the board shall not enter into any 21 arrangement that results in an exclusive lender, underwriter, 22 or other funding partner for all projects funded by the board. 23 g. To finance projects under assessment contracts. 24 h. To levy and collect special assessments under an 25 assessment contract with a property owner. 26 i. To borrow money from a public or private source and issue 27 bonds and provide security for the repayment of such bonds. 28 j. To charge and collect fees pursuant to section 385.5. 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 1447YH (5) 87 gh/sc 3/ 10

H.F. 336 —— assessment contracts. 1 1. A board may finance a project if the following criteria 2 are met: 3 a. There are sufficient resources to complete the project. 4 b. The estimated monetary benefit, as determined by the 5 board after consultation with an outside expert, and including 6 but not limited to energy cost savings, maintenance, and other 7 property operating savings expected from the project during the 8 financing period is equal to or greater than the principal and 9 interest cost of the project, including special assessments and 10 any applicable fees. 11 c. The project complies with the ordinances and regulations 12 of the county or city where the property is located, including 13 but not limited to such ordinances and regulations concerning 14 zoning, subdivision of property, building, fire safety, and 15 historic or architectural review. 16 2. A board shall finance a project under an assessment 17 contract. An assessment contract shall be executed by the 18 board and the property owner or owners and shall include the 19 following components: 20 a. A description of the project, including the estimated 21 cost of the project and a description of the estimated savings, 22 prepared in accordance with standards accepted by the board. 23 b. A mechanism for verifying the final costs of the project 24 upon its completion and ensuring that any amounts advanced, 25 financed, or otherwise provided by the board will not exceed 26 the final cost of the project. 27 c. An agreement by the property owner to pay special 28 assessments and any applicable fees for a period not to exceed 29 the weighted average useful life of the project, as specified 30 in the assessment contract. 31 d. An assessment schedule adopted by the board by 32 resolution, stating the number of annual installments due, 33 stating the time when assessments and any applicable fees are 34 payable, and providing for interest on all unpaid installments 35 -4- LSB 1447YH (5) 87 gh/sc 4/ 10

H.F. 336 and fees at a rate not exceeding that permitted by chapter 74A. 1 e. A statement that the obligations provided in the 2 assessment contract, including the obligation to pay special 3 assessments and any applicable fees charged, are a covenant 4 that shall run with the land and be obligations upon future 5 owners of such property. 6 f. An acknowledgment that the subdivision of property 7 subject to the assessment contract shall require the assessment 8 contract or an amendment to the contract to divide the total 9 special assessment and any applicable fees charged due between 10 the newly subdivided parcels in proportion to the benefit 11 realized by each subdivided parcel. 12 g. An acknowledgment from all entities holding mortgages on 13 the real property, or the contract seller under a real estate 14 contract, to be assessed under the assessment contract that 15 such interest holders have consented to the levy and collection 16 of the special assessments and any applicable fees charged, as 17 described in the assessment contract. 18 3. a. A board shall provide a copy of a signed assessment 19 contract to the county or city assessor, as appropriate, and to 20 the county auditor of the county where the property is located 21 and shall file for recording a copy of the assessment contract 22 with the county recorder. 23 b. The city clerk or county auditor, as appropriate, shall 24 certify the assessment schedule to the treasurer of each county 25 where the property is located. The county treasurer shall 26 enter on the county system the amounts to be assessed against 27 the property, as certified. 28 4. A board may enter into more than one assessment contract 29 with respect to a single parcel of real property, so long as 30 each assessment contract relates to a separate project. 31 5. A board shall determine an inspection procedure to 32 be utilized upon completion of an energy investment financed 33 pursuant to this chapter. 34 Sec. 5. NEW SECTION . 385.5 Special assessments —— fees —— 35 -5- LSB 1447YH (5) 87 gh/sc 5/ 10

H.F. 336 delinquency. 1 1. The total special assessments levied by a board under an 2 assessment contract shall not exceed the sum of the cost of the 3 project, including any energy audits or inspections or portions 4 thereof financed by the board, plus interest. 5 2. In addition to special assessments provided under 6 subsection 1, a board may also charge a fee of up to one percent 7 of the total cost of a project, which fee may not exceed twenty 8 thousand dollars per project. Such fee shall be charged in 9 connection with administration of the assessment contract 10 and with any technical, consultative, or project assistance 11 services required. A fee charged under this subsection shall 12 be included in an assessment contract provided under section 13 385.4. 14 3. Special assessments levied and any applicable fees 15 charged by a board under an assessment contract shall be 16 levied, charged, and collected in the manner as provided in the 17 assessment contract and with the same priority as ad valorem 18 property taxes. 19 4. a. If special assessments and any applicable fees are 20 not paid within the time period set forth in the assessment 21 contract, such special assessments and fees shall be considered 22 delinquent. Delinquent special assessments and fees shall 23 become a lien on the property against which the special 24 assessments were levied and the fees charged. A board may 25 collect delinquent special assessments and fees as if the board 26 were a county treasurer pursuant to sections 445.3 and 445.4, 27 except that the property shall not be subject to sale for 28 delinquent taxes under chapter 446. 29 b. Special assessments and any applicable fees that are not 30 delinquent shall not be accelerated as part of any action or 31 proceeding to collect delinquent special assessments or fees. 32 Upon the sale of the real property subject to an assessment 33 contract, any remaining special assessments and applicable fees 34 shall be collected for the remainder of the assessment contract 35 -6- LSB 1447YH (5) 87 gh/sc 6/ 10

H.F. 336 term from a subsequent owner of the real property, including 1 an owner that is the state or any political subdivision of the 2 state. 3 Sec. 6. NEW SECTION . 385.6 Bonds issued. 4 1. A board may, by resolution, authorize and issue bonds 5 payable from the proceeds of the special assessments and any 6 other revenues collected. Such bonds may bear dates, bear 7 interest at rates not exceeding those permitted by chapter 74A, 8 mature in one or more installments, be in either coupon or 9 registered form, carry registration and conversion privileges, 10 be payable as to principal and interest at times and places, 11 be subject to terms of redemption prior to maturity with or 12 without premium, and be in one or more denominations, all as 13 provided by the resolution of the board authorizing their 14 issuance. 15 2. Bonds issued under this section shall not constitute a 16 debt of the state or of the city or county where the property is 17 located, and the form of such bonds shall contain a statement 18 to that effect. 19 Sec. 7. NEW SECTION . 385.7 Annual reporting. 20 A board shall submit to the governing body of each 21 participating county and city an annual report for the 22 preceding calendar year that includes the following 23 information: 24 1. A description of each project completed, including the 25 physical address of the benefitted property, the name or names 26 of the property owners, an itemized list of the costs incurred 27 under the project, and the name of any contractors used to 28 complete the project. 29 2. For each project in subsection 1, the amount of special 30 assessments due and the amount collected for the fiscal year 31 ending during the preceding calendar year. 32 3. A summary of the public benefits resulting from the 33 projects listed in subsection 1, including, without limitation, 34 estimated cumulative energy savings resulting from the 35 -7- LSB 1447YH (5) 87 gh/sc 7/ 10

H.F. 336 projects. 1 4. A description of each assessment contract entered into by 2 the board, including a description of the project and a summary 3 of the assessment schedule. 4 5. The amount of administrative costs incurred by the board. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill authorizes a county or city, or one or more 9 counties and one or more cities within those counties to create 10 an energy investment district to finance energy investment 11 projects for the benefit of property within the district. 12 The bill defines an “energy investment” to mean an 13 acquisition, installation, or modification benefitting 14 private property, except residential property with fewer than 15 three residential units, that is intended to reduce energy 16 consumption or energy costs, or both, or to allow for the use 17 of alternate and renewable energy. The bill specifies measures 18 that are considered energy investments. 19 The bill requires the governing bodies of the counties 20 and cities participating in an energy investment district 21 to appoint an energy investment district board to manage 22 and administer the district. The board must consist of at 23 least three members, but in no case fewer than the number of 24 participating cities and counties, and the agreement creating 25 the district must set the term length of board members. 26 The bill authorizes a board to exercise all powers and 27 duties necessary to manage and administer the energy investment 28 district, as provided in the agreement, including the power to 29 adopt bylaws, adopt an official seal, sue and be sued, make and 30 enter into contracts with public and private entities, employ 31 staff, levy and collect special assessments, borrow money from 32 a public or private source and issue bonds, finance energy 33 investment projects, collect fees, and invest funds. A board 34 must exist for a minimum duration necessary to finance any 35 -8- LSB 1447YH (5) 87 gh/sc 8/ 10

H.F. 336 assessment contracts that the board enters into. 1 The bill requires a board to enter into an assessment 2 contract with a property owner to finance a project if the 3 board finds that there are sufficient resources for the 4 project, the estimated monetary benefit, as determined by the 5 board after consulting with an outside expert, is equal to or 6 greater than the total cost of the project, and the project 7 complies with all applicable ordinances and regulations in the 8 county or city where the property is located. An assessment 9 contract executed between a board and a property owner must 10 include a description of the project, a mechanism for verifying 11 the final costs of the project and ensuring that financing 12 provided does not exceed the final costs of the project, an 13 agreement by the property owner to pay special assessments and 14 any applicable fees for a specified period and a schedule of 15 assessments, a statement that the obligations provided in the 16 assessment contract are a covenant that run with the land, 17 an acknowledgment that subdividing property subject to the 18 contract requires the contract or an amendment to the contract 19 to divide the total special assessments due, and written 20 consent to the levy and collection of special assessments and 21 any applicable fees charged from all entities holding mortgages 22 on the property or contract sellers of the property. 23 The bill requires a board to provide a copy of a signed 24 assessment contract to the local assessor and county auditor 25 of the county where the property is located, as well as filing 26 the agreement with the county recorder. A board is authorized 27 to enter into more than one assessment contract for a single 28 property so long as each contract relates to a separate 29 project. A board shall determine an inspection procedure for 30 completed energy investments financed pursuant to the bill. 31 The bill provides that the total special assessments levied 32 by a board cannot exceed the sum of the cost of the project, 33 including all incidental costs and fees. A board may also 34 charge a fee of up to 1 percent of the total cost of the 35 -9- LSB 1447YH (5) 87 gh/sc 9/ 10

H.F. 336 project, not to exceed $20,000. A board must levy and collect 1 special assessments in the manner as provided in the assessment 2 contract and with the same priority as real property taxes. 3 Special assessments and fees not paid within the time period 4 set forth in the assessment contract are delinquent and become 5 a lien on the property. A board may collect such delinquent 6 assessments and fees in the manner of property taxes pursuant 7 to Code sections 445.3 and 445.4. 8 The bill authorizes a board to issue bonds payable from the 9 special assessments. The board must authorize an issuance of 10 bonds by resolution and may determine the form of the bonds, 11 so long as any interest rates do not exceed those permitted by 12 Code chapter 74A. The bonds do not constitute a debt of the 13 state or of the city or county where the property is located, 14 and must contain a statement to that effect. 15 The bill requires a board to submit an annual report to 16 the governing body of each participating county and city in 17 the district, which must include, for the preceding year, a 18 description of each project completed, the amount of special 19 assessments due and the amount collected for the fiscal year 20 ending during the preceding year, a summary of the public 21 benefits resulting from the projects completed, a description 22 of assessment contracts entered into, and the amount of 23 administrative costs incurred by the board. 24 -10- LSB 1447YH (5) 87 gh/sc 10/ 10