HF 447 (LSB 2547YH (2) 87)

HOUSE FILE 447

BY  CARLIN

A BILL FOR

An Act relating to the implementation and financing of energy management improvements by school corporations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 273.3, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  20A.  Be authorized to implement an energy management improvement as provided in section 279.48A.
    Sec. 2.  Section 279.48, subsection 2, Code 2017, is amended to read as follows:
   2.  The total of scheduled annual payments of principal or interest due and payable from current budgeted receipts or future budgeted receipts with respect to all loan agreements authorized under this section, section 279.48A, or section 285.10, subsection 7, paragraph “b”, must not exceed ten percent of the last authorized budget of the school corporation.
    Sec. 3.  NEW SECTION.  279.48A  Energy management improvements —— implementation.
   1.  The board of directors of a school corporation may implement an energy management improvement, as defined in section 473.19 and identified in an energy analysis, and may negotiate and enter into a loan agreement and issue a note to pay for the energy management improvement, subject to the following terms and procedures:
   a.  The note must mature within ten years, or the useful life of the energy management improvement, whichever is less.
   b.  The note may bear interest at a rate to be determined by the board of directors in the manner provided in section 74A.3, subsection 1, paragraph “a”. Chapter 75 is not applicable.
   c.  The board of directors shall provide for the form of the agreement and note.
   d.  Principal and interest on the note must be payable from budgeted receipts in the debt service fund for each year of a period of up to ten years.
   2.  The total of scheduled annual payments of principal or interest due and payable from current budgeted receipts or future budgeted receipts with respect to all loan agreements authorized under this section, section 279.48, or section 285.10, subsection 7, paragraph “b”, must not exceed ten percent of the last authorized budget of the school corporation.
   3.  Before entering into a loan agreement for an energy management improvement, the school corporation must publish a notice, including a statement of the amount and purpose of the agreement, at least once in a newspaper of general circulation within the school corporation at least ten days before the meeting at which the loan agreement is to be approved. 
   4.  This section shall not preclude a school corporation from obtaining a loan, lease, or other method of alternative financing under the energy loan program created in section 479.19 to implement energy management improvements or energy analyses in addition to entering into a loan agreement as provided in this section.
    Sec. 4.  Section 279.53, Code 2017, is amended to read as follows:
   279.53  Loan proceeds.
   The proceeds of loans issued to school districts pursuant to section 279.48, 279.48A, 279.52, or 473.20 shall be deposited into either the general fund of a school district or the physical plant and equipment levy fund. The board of directors shall expend the amount of the principal and interest due each year to maturity from the same fund into which the loan proceeds were deposited.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that a board of directors of a school corporation may negotiate and enter into a loan agreement and issue a note to pay for an energy management improvement, as defined in Code section 473.19. A note must meet the following requirements: the note must mature within the lesser of 10 years or the useful life of the energy management improvement; the note may bear interest at a rate determined by the board pursuant to Code section 74A.3(1)(a); the board must provide for the form of the agreement and note; and the principal and interest on the note must be payable from budgeted receipts in the debt service fund for each year of a period of up to 10 years. Code chapter 75, relating to the authorization and sale of public bonds, does not apply to such a note. 
   The bill provides that the total annual payments of principal or interest due and payable from current or future budgeted receipts with respect to all loan agreements entered into under the bill, Code section 279.48 (equipment) or 285.10(7)(b) (buses) cannot exceed 10 percent of the last authorized budget of the school corporation. 
   The bill requires a school corporation to publish a notice before entering into a loan agreement, including the amount and purpose of such agreement, at least once in a newspaper of general circulation within the school corporation at least 10 days before the meeting at which the agreement is to be approved. 
   The bill does not preclude a school corporation from obtaining financing under the energy loan program established in Code section 479.19 to implement energy management improvements.
   The bill requires the proceeds of loans issued to school districts pursuant to the bill to be deposited into either the school district’s general fund or the physical plant and equipment levy fund. 
   The bill makes conforming changes in Code sections 273.3 and 279.48(2). The bill’s provisions are in substantial conformity with equipment purchase loan provisions contained in current Code section 279.48.