House File 336 - IntroducedA Bill ForAn Act 1authorizing cities and counties to establish energy
2investment districts and district boards and providing for
3financing of energy investments.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  NEW SECTION.  385.1  Definitions.
   2As used in this chapter, unless the context otherwise
3requires:
   41.  “Board” means an energy investment district board
5appointed pursuant to this chapter.
   62.  “Energy investment” means an acquisition, installation,
7or modification benefitting private property, except
8residential property with fewer than three residential units,
9that is intended to reduce energy consumption or energy costs,
10or both, or is intended to provide or allow for the use of
11alternate and renewable energy. The term includes but is not
12limited to the following measures:
   13a.  Insulating walls, roofs, attics, floors, foundations, and
14heating and cooling distribution systems.
   15b.  Repairing, replacing, or installing storm windows
16and doors, multiglazed windows and doors, heat-absorbing or
17heat-reflective windows and doors, and other window and door
18improvements designed to reduce energy consumption.
   19c.  Constructing or reconstructing roofs designed to reduce
20energy consumption or support additional loads necessitated by
21other energy investments.
   22d.  Installing energy control and measurement devices.
   23e.  Heating, ventilating, or air conditioning distribution
24system modifications and replacements.
   25f.  Caulking and weatherstripping.
   26g.  Installing lighting fixtures that result in increased
27energy efficiency of the lighting system.
   28h.  Installing water heating systems, elevators, and
29escalators that result in increased energy efficiency.
   30i.  Repairing, replacing, or installing energy recovery
31systems.
   32j.  Repairing, replacing, or installing daylighting systems.
   33k.  Repairing, replacing, or installing energy systems that
34provide energy from alternate or renewable energy, including
35solar, wind, biomass, geothermal, or cogeneration.
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   1l.  Repairing, replacing, or installing facilities or
2fixtures providing for water conservation or pollutant control.
   3m.  Repairing, replacing, or installing an energy investment
4related item so long as the cost of the energy investment
5related item does not exceed twenty-five percent of the total
6cost of the project.
   73.  “Energy investment related item” means a repair,
8replacement, improvement, or modification to real property
9that is necessary or desirable in conjunction with an energy
10investment. The term includes but is not limited to structural
11support improvements and the repair or replacement of any
12building components, paved surfaces, or fixtures disrupted or
13altered by the installation of an energy investment.
   144.  “Project” means one or more energy investments to be
15installed on a property.
16   Sec. 2.  NEW SECTION.  385.2  Energy investment district
17created.
   181.  A county or city may create an energy investment district
19pursuant to this chapter in order to provide financing for
20energy investment projects to benefit real property in the
21district.
   222.  One or more counties and one or more cities within
23those counties may create, by chapter 28E agreement, an energy
24investment district pursuant to this chapter in order to
25provide financing for energy investment projects to benefit
26real property in the district. The agreement creating the
27energy investment district shall specify the geographic
28boundaries of the district.
29   Sec. 3.  NEW SECTION.  385.3  Energy investment district board
30— membership — powers.
   311.  The governing bodies of the counties and cities
32participating in an energy investment district shall appoint a
33board to manage and administer the energy investment district.
34An energy investment district board shall consist of at least
35three members, but if the district is created pursuant to
-2-1section 385.2, subsection 2, in no case shall there be fewer
2members than the number of participating cities and counties.
3The agreement creating the energy investment district shall set
4the term length of board members.
   52.  A board shall have and may exercise the powers and duties
6necessary for management and administration of the energy
7investment district as such powers and duties are described
8in the agreement, including but not limited to the following
9express powers and duties:
   10a.  To adopt, amend, and repeal bylaws consistent with the
11provisions of this chapter.
   12b.  To adopt an official seal.
   13c.  To sue and be sued in all courts.
   14d.  To make and enter into contracts with public and private
15entities.
   16e.  To accept grants, guarantees, and donations of property,
17labor, services, and other items of value from a public or
18private source.
   19f.  To employ or contract for such managerial, legal,
20technical, clerical, accounting, or other assistance it
21deems advisable. However, the board shall not enter into any
22arrangement that results in an exclusive lender, underwriter,
23or other funding partner for all projects funded by the board.
   24g.  To finance projects under assessment contracts.
   25h.  To levy and collect special assessments under an
26assessment contract with a property owner.
   27i.  To borrow money from a public or private source and issue
28bonds and provide security for the repayment of such bonds.
   29j.  To charge and collect fees pursuant to section 385.5.
   30k.  To invest funds not required for immediate disbursement,
31subject to section 28E.5, subsection 2.
   323.  A board shall exist for a minimum duration necessary to
33finance any assessment contracts that the board enters into
34pursuant to section 385.4.
35   Sec. 4.  NEW SECTION.  385.4  Project financing requirements
-3-1— assessment contracts.
   21.  A board may finance a project if the following criteria
3are met:
   4a.  There are sufficient resources to complete the project.
   5b.  The estimated monetary benefit, as determined by the
6board after consultation with an outside expert, and including
7but not limited to energy cost savings, maintenance, and other
8property operating savings expected from the project during the
9financing period is equal to or greater than the principal and
10interest cost of the project, including special assessments and
11any applicable fees.
   12c.  The project complies with the ordinances and regulations
13of the county or city where the property is located, including
14but not limited to such ordinances and regulations concerning
15zoning, subdivision of property, building, fire safety, and
16historic or architectural review.
   172.  A board shall finance a project under an assessment
18contract. An assessment contract shall be executed by the
19board and the property owner or owners and shall include the
20following components:
   21a.  A description of the project, including the estimated
22cost of the project and a description of the estimated savings,
23prepared in accordance with standards accepted by the board.
   24b.  A mechanism for verifying the final costs of the project
25upon its completion and ensuring that any amounts advanced,
26financed, or otherwise provided by the board will not exceed
27the final cost of the project.
   28c.  An agreement by the property owner to pay special
29assessments and any applicable fees for a period not to exceed
30the weighted average useful life of the project, as specified
31in the assessment contract.
   32d.  An assessment schedule adopted by the board by
33resolution, stating the number of annual installments due,
34stating the time when assessments and any applicable fees are
35payable, and providing for interest on all unpaid installments
-4-1and fees at a rate not exceeding that permitted by chapter 74A.
   2e.  A statement that the obligations provided in the
3assessment contract, including the obligation to pay special
4assessments and any applicable fees charged, are a covenant
5that shall run with the land and be obligations upon future
6owners of such property.
   7f.  An acknowledgment that the subdivision of property
8subject to the assessment contract shall require the assessment
9contract or an amendment to the contract to divide the total
10special assessment and any applicable fees charged due between
11the newly subdivided parcels in proportion to the benefit
12realized by each subdivided parcel.
   13g.  An acknowledgment from all entities holding mortgages on
14the real property, or the contract seller under a real estate
15contract, to be assessed under the assessment contract that
16such interest holders have consented to the levy and collection
17of the special assessments and any applicable fees charged, as
18described in the assessment contract.
   193.  a.  A board shall provide a copy of a signed assessment
20contract to the county or city assessor, as appropriate, and to
21the county auditor of the county where the property is located
22and shall file for recording a copy of the assessment contract
23with the county recorder.
   24b.  The city clerk or county auditor, as appropriate, shall
25certify the assessment schedule to the treasurer of each county
26where the property is located. The county treasurer shall
27enter on the county system the amounts to be assessed against
28the property, as certified.
   294.  A board may enter into more than one assessment contract
30with respect to a single parcel of real property, so long as
31each assessment contract relates to a separate project.
   325.  A board shall determine an inspection procedure to
33be utilized upon completion of an energy investment financed
34pursuant to this chapter.
35   Sec. 5.  NEW SECTION.  385.5  Special assessments — fees —
-5-1delinquency.
   21.  The total special assessments levied by a board under an
3assessment contract shall not exceed the sum of the cost of the
4project, including any energy audits or inspections or portions
5thereof financed by the board, plus interest.
   62.  In addition to special assessments provided under
7subsection 1, a board may also charge a fee of up to one percent
8of the total cost of a project, which fee may not exceed twenty
9thousand dollars per project. Such fee shall be charged in
10connection with administration of the assessment contract
11and with any technical, consultative, or project assistance
12services required. A fee charged under this subsection shall
13be included in an assessment contract provided under section
14385.4.
   153.  Special assessments levied and any applicable fees
16charged by a board under an assessment contract shall be
17levied, charged, and collected in the manner as provided in the
18assessment contract and with the same priority as ad valorem
19property taxes.
   204.  a.  If special assessments and any applicable fees are
21not paid within the time period set forth in the assessment
22contract, such special assessments and fees shall be considered
23delinquent. Delinquent special assessments and fees shall
24become a lien on the property against which the special
25assessments were levied and the fees charged. A board may
26collect delinquent special assessments and fees as if the board
27were a county treasurer pursuant to sections 445.3 and 445.4,
28except that the property shall not be subject to sale for
29delinquent taxes under chapter 446.
   30b.  Special assessments and any applicable fees that are not
31delinquent shall not be accelerated as part of any action or
32proceeding to collect delinquent special assessments or fees.
33Upon the sale of the real property subject to an assessment
34contract, any remaining special assessments and applicable fees
35shall be collected for the remainder of the assessment contract
-6-1term from a subsequent owner of the real property, including
2an owner that is the state or any political subdivision of the
3state.
4   Sec. 6.  NEW SECTION.  385.6  Bonds issued.
   51.  A board may, by resolution, authorize and issue bonds
6payable from the proceeds of the special assessments and any
7other revenues collected. Such bonds may bear dates, bear
8interest at rates not exceeding those permitted by chapter 74A,
9mature in one or more installments, be in either coupon or
10registered form, carry registration and conversion privileges,
11be payable as to principal and interest at times and places,
12be subject to terms of redemption prior to maturity with or
13without premium, and be in one or more denominations, all as
14provided by the resolution of the board authorizing their
15issuance.
   162.  Bonds issued under this section shall not constitute a
17debt of the state or of the city or county where the property is
18located, and the form of such bonds shall contain a statement
19to that effect.
20   Sec. 7.  NEW SECTION.  385.7  Annual reporting.
   21A board shall submit to the governing body of each
22participating county and city an annual report for the
23preceding calendar year that includes the following
24information:
   251.  A description of each project completed, including the
26physical address of the benefitted property, the name or names
27of the property owners, an itemized list of the costs incurred
28under the project, and the name of any contractors used to
29complete the project.
   302.  For each project in subsection 1, the amount of special
31assessments due and the amount collected for the fiscal year
32ending during the preceding calendar year.
   333.  A summary of the public benefits resulting from the
34projects listed in subsection 1, including, without limitation,
35estimated cumulative energy savings resulting from the
-7-1projects.
   24.  A description of each assessment contract entered into by
3the board, including a description of the project and a summary
4of the assessment schedule.
   55.  The amount of administrative costs incurred by the board.
6EXPLANATION
7The inclusion of this explanation does not constitute agreement with
8the explanation’s substance by the members of the general assembly.
   9This bill authorizes a county or city, or one or more
10counties and one or more cities within those counties to create
11an energy investment district to finance energy investment
12projects for the benefit of property within the district.
   13The bill defines an “energy investment” to mean an
14acquisition, installation, or modification benefitting
15private property, except residential property with fewer than
16three residential units, that is intended to reduce energy
17consumption or energy costs, or both, or to allow for the use
18of alternate and renewable energy. The bill specifies measures
19that are considered energy investments.
   20The bill requires the governing bodies of the counties
21and cities participating in an energy investment district
22to appoint an energy investment district board to manage
23and administer the district. The board must consist of at
24least three members, but in no case fewer than the number of
25participating cities and counties, and the agreement creating
26the district must set the term length of board members.
   27The bill authorizes a board to exercise all powers and
28duties necessary to manage and administer the energy investment
29district, as provided in the agreement, including the power to
30adopt bylaws, adopt an official seal, sue and be sued, make and
31enter into contracts with public and private entities, employ
32staff, levy and collect special assessments, borrow money from
33a public or private source and issue bonds, finance energy
34investment projects, collect fees, and invest funds. A board
35must exist for a minimum duration necessary to finance any
-8-1assessment contracts that the board enters into.
   2The bill requires a board to enter into an assessment
3contract with a property owner to finance a project if the
4board finds that there are sufficient resources for the
5project, the estimated monetary benefit, as determined by the
6board after consulting with an outside expert, is equal to or
7greater than the total cost of the project, and the project
8complies with all applicable ordinances and regulations in the
9county or city where the property is located. An assessment
10contract executed between a board and a property owner must
11include a description of the project, a mechanism for verifying
12the final costs of the project and ensuring that financing
13provided does not exceed the final costs of the project, an
14agreement by the property owner to pay special assessments and
15any applicable fees for a specified period and a schedule of
16assessments, a statement that the obligations provided in the
17assessment contract are a covenant that run with the land,
18an acknowledgment that subdividing property subject to the
19contract requires the contract or an amendment to the contract
20to divide the total special assessments due, and written
21consent to the levy and collection of special assessments and
22any applicable fees charged from all entities holding mortgages
23on the property or contract sellers of the property.
   24The bill requires a board to provide a copy of a signed
25assessment contract to the local assessor and county auditor
26of the county where the property is located, as well as filing
27the agreement with the county recorder. A board is authorized
28to enter into more than one assessment contract for a single
29property so long as each contract relates to a separate
30project. A board shall determine an inspection procedure for
31completed energy investments financed pursuant to the bill.
   32The bill provides that the total special assessments levied
33by a board cannot exceed the sum of the cost of the project,
34including all incidental costs and fees. A board may also
35charge a fee of up to 1 percent of the total cost of the
-9-1project, not to exceed $20,000. A board must levy and collect
2special assessments in the manner as provided in the assessment
3contract and with the same priority as real property taxes.
4Special assessments and fees not paid within the time period
5set forth in the assessment contract are delinquent and become
6a lien on the property. A board may collect such delinquent
7assessments and fees in the manner of property taxes pursuant
8to Code sections 445.3 and 445.4.
   9The bill authorizes a board to issue bonds payable from the
10special assessments. The board must authorize an issuance of
11bonds by resolution and may determine the form of the bonds,
12so long as any interest rates do not exceed those permitted by
13Code chapter 74A. The bonds do not constitute a debt of the
14state or of the city or county where the property is located,
15and must contain a statement to that effect.
   16The bill requires a board to submit an annual report to
17the governing body of each participating county and city in
18the district, which must include, for the preceding year, a
19description of each project completed, the amount of special
20assessments due and the amount collected for the fiscal year
21ending during the preceding year, a summary of the public
22benefits resulting from the projects completed, a description
23of assessment contracts entered into, and the amount of
24administrative costs incurred by the board.
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