House File 2451 - Reprinted HOUSE FILE 2451 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 654) (As Amended and Passed by the House April 11, 2016 ) A BILL FOR An Act relating to water quality by modifying the wastewater 1 treatment financial assistance program, providing for 2 appropriations from the rebuild Iowa infrastructure fund, 3 creating a water quality infrastructure fund, establishing 4 a water quality financing program, providing for cost-share 5 programs for infrastructure on agricultural and urban 6 land under the water quality initiative, creating a water 7 service excise tax and a related sales tax exemption, making 8 appropriations, and including effective date provisions. 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 10 HF 2451 (2) 86 mm/sc/md

H.F. 2451 Section 1. Section 8.57, subsection 5, Code 2016, is amended 1 by adding the following new paragraph: 2 NEW PARAGRAPH . 0h. (1) Notwithstanding paragraph “c” of 3 this subsection, there is appropriated from the rebuild Iowa 4 infrastructure fund to the water quality infrastructure fund 5 created in section 8.57B the following amounts: 6 (a) For the fiscal year beginning July 1, 2016, and ending 7 June 30, 2017, five million dollars. 8 (b) For the fiscal year beginning July 1, 2017, and ending 9 June 30, 2018, six million five hundred thousand dollars. 10 (c) For the fiscal year beginning July 1, 2018, and ending 11 June 30, 2019, eleven million five hundred thousand dollars. 12 (d) For the fiscal year beginning July 1, 2019, and ending 13 June 30, 2020, sixteen million five hundred thousand dollars. 14 (e) For the fiscal year beginning July 1, 2020, and ending 15 June 30, 2021, sixteen million five hundred thousand dollars. 16 (f) For the fiscal year beginning July 1, 2021, and ending 17 June 30, 2022, twenty-two million dollars. 18 (g) For the fiscal year beginning July 1, 2022, and ending 19 June 30, 2023, twenty-two million dollars. 20 (h) For the fiscal year beginning July 1, 2023, and ending 21 June 30, 2024, twenty-two million dollars. 22 (i) For the fiscal year beginning July 1, 2024, and ending 23 June 30, 2025, twenty-two million dollars. 24 (j) For the fiscal year beginning July 1, 2025, and ending 25 June 30, 2026, twenty-two million dollars. 26 (k) For the fiscal year beginning July 1, 2026, and ending 27 June 30, 2027, twenty-two million dollars. 28 (l) For the fiscal year beginning July 1, 2027, and ending 29 June 30, 2028, twenty-two million dollars. 30 (m) For the fiscal year beginning July 1, 2028, and ending 31 June 30, 2029, twenty-two million dollars. 32 (2) This paragraph “0h” is repealed on January 1, 2030. 33 Sec. 2. NEW SECTION . 8.57B Water quality infrastructure 34 fund —— creation —— appropriations. 35 -1- HF 2451 (2) 86 mm/sc/md 1/ 17

H.F. 2451 1. A water quality infrastructure fund is created within 1 the division of soil conservation and water quality of the 2 department of agriculture and land stewardship. The fund 3 shall consist of moneys appropriated from the rebuild Iowa 4 infrastructure fund pursuant to section 8.57, subsection 5, 5 paragraph “0h” . 6 2. The fund shall be separate from the general fund of the 7 state and the balance in the fund shall not be considered part 8 of the balance of the general fund of the state. However, the 9 fund shall be considered a special account for the purposes 10 of section 8.53, relating to generally accepted accounting 11 principles. 12 3. Moneys in the fund are appropriated to the division 13 of soil conservation and water quality of the department of 14 agriculture and land stewardship for the exclusive purpose of 15 supporting water quality agriculture infrastructure programs 16 created in section 466B.43. 17 4. Notwithstanding section 8.33, moneys in the fund 18 that remain unencumbered or unobligated at the close of a 19 fiscal year shall not revert but shall remain available for 20 expenditure for the purposes designated. Notwithstanding 21 section 12C.7, subsection 2, interest or earnings on moneys in 22 the fund shall be credited to the fund. 23 5. This section is repealed on January 1, 2030. 24 Sec. 3. Section 16.134, Code 2016, is amended to read as 25 follows: 26 16.134 Wastewater and drinking water treatment financial 27 assistance program. 28 1. The Iowa finance authority shall establish and 29 administer a wastewater and drinking water treatment financial 30 assistance program. The purpose of the program shall be to 31 provide financial assistance to enhance water quality. The 32 program shall be administered in accordance with rules adopted 33 by the authority pursuant to chapter 17A . For purposes of 34 this section , “program” means the wastewater and drinking water 35 -2- HF 2451 (2) 86 mm/sc/md 2/ 17

H.F. 2451 treatment financial assistance program and “committee” means the 1 water quality financing review committee created in subsection 2 9 . 3 2. A wastewater and drinking water treatment financial 4 assistance fund is created and shall consist of appropriations 5 made to the fund and transfers of interest, earnings, and 6 moneys from other funds as provided by law. Moneys transferred 7 to the fund pursuant to section 16.134A are appropriated to the 8 authority for purposes of the program. Moneys in the fund are 9 not subject to section 8.33 . Notwithstanding section 12C.7, 10 subsection 2 , interest or earnings on moneys in the fund shall 11 be credited to the fund. 12 3. Financial assistance under the program shall be used 13 to install or upgrade wastewater treatment facilities and 14 systems and drinking water treatment facilities and systems, 15 including source water protection projects , and for engineering 16 or technical assistance for facility planning and design. 17 4. The authority committee shall distribute approve 18 financial assistance in from the fund in accordance with the 19 following: 20 a. The goal of the program shall be to base awards on the 21 impact of the grant combined with other sources of financing to 22 ensure that sewer rates do not exceed one and one-half percent 23 of a community’s median household income. 24 b. a. Communities shall be eligible for financial 25 assistance by qualifying as Priority shall be given for 26 projects in which a disadvantaged community and is seeking 27 financial assistance for the installation or upgrade of 28 wastewater treatment facilities due to regulatory activity 29 by the department of natural resources and drinking water 30 treatment facilities . For purposes of this section , the term 31 “disadvantaged community” means the same as defined by the 32 department. 33 c. b. Priority shall be given to projects in which the 34 meeting criteria established in section 455B.199B in which the 35 -3- HF 2451 (2) 86 mm/sc/md 3/ 17

H.F. 2451 applicant seeks financial assistance is to be used to obtain 1 with financing under the water pollution control works and 2 drinking water facilities financing program pursuant to section 3 16.131 or other federal , or state , or private financing. 4 d. c. Priority shall also be given to projects whose 5 completion will provide significant improvement to water 6 quality in the relevant watershed. 7 e. d. Priority shall also be given to communities that 8 employ an alternative wastewater treatment technology pursuant 9 to section 455B.199C . 10 f. e. Priority shall be also be given to those communities 11 where sewer or water rates are the highest as a percentage of 12 that community’s median household income. 13 g. f. Financial assistance in the form of grants shall be 14 issued on an annual basis. 15 h. g. An applicant shall not receive a grant that exceeds 16 five hundred thousand dollars. 17 h. Priority shall also be given to communities that employ 18 technology to address the latest version of the “Iowa Nutrient 19 Reduction Strategy” initially presented in November 2012 by the 20 department of agriculture and land stewardship, the department 21 of natural resources, and Iowa state university of science and 22 technology. 23 4A. A utility management organization formed under chapter 24 28E or operated by a rural water system organized under chapter 25 357A or chapter 504 shall be considered eligible for financial 26 assistance under the program. 27 5. The authority in cooperation with the department of 28 natural resources shall share provide information and resources 29 to the committee when the committee is determining the 30 qualifications of a community for financial assistance from the 31 fund. 32 6. The authority shall enter into agreements with financial 33 assistance recipients and distribute moneys under the program 34 pursuant to financial assistance determinations made by the 35 -4- HF 2451 (2) 86 mm/sc/md 4/ 17

H.F. 2451 committee. The authority may use an amount of not more than 1 four one percent of any moneys appropriated for deposit in the 2 fund for administration purposes. 3 7. By October 1 of each year, the authority shall submit 4 a report to the governor and the general assembly itemizing 5 expenditures under the program during the previous fiscal year. 6 8. a. Beginning September 1, 2026, and every ten years 7 thereafter, a program review committee is established for 8 purposes of reviewing the wastewater and drinking water 9 treatment financial assistance program. By December 1 of 10 the same year, the review committee shall file a report 11 with the governor and the general assembly that reviews the 12 effectiveness of the program during the prior ten fiscal years. 13 b. The program review committee shall consist of the 14 following members: 15 (1) The governor or the governor’s designee. 16 (2) The secretary of agriculture or the secretary’s 17 designee. 18 (3) The executive director of the authority or the executive 19 director’s designee. 20 (4) The director of the department of natural resources or 21 the director’s designee. 22 (5) Four members of the general assembly, with two from the 23 senate and two from the house of representatives and not more 24 than one member from each chamber being from the same political 25 party. The two senators shall be designated one member each 26 by the president of the senate, after consultation with the 27 majority leader of the senate, and by the minority leader of 28 the senate. The two representatives shall be designated one 29 member each by the speaker of the house of representatives, 30 after consultation with the majority leader of the house of 31 representatives, and by the minority leader of the house of 32 representatives. 33 c. Staffing services shall be provided by the authority. 34 9. a. A water quality financing review committee is 35 -5- HF 2451 (2) 86 mm/sc/md 5/ 17

H.F. 2451 created consisting of the secretary of agriculture or the 1 secretary’s designee, the executive director of the authority 2 or the executive director’s designee, and the director of the 3 department of natural resources or the director’s designee. 4 b. The committee shall review and approve or deny 5 applications for financial assistance under the wastewater 6 and drinking water treatment financial assistance program 7 established in this section. 8 Sec. 4. NEW SECTION . 16.134A Water quality financial 9 assistance fund. 10 1. A water quality financial assistance fund is created in 11 the state treasury as a revolving fund. 12 2. The fund shall consist of all of the following: 13 a. (1) Moneys transferred to the fund pursuant to section 14 423G.6. 15 (2) This paragraph “a” is repealed on January 1, 2030. 16 b. Appropriations made to the fund and transfers of 17 interest, earnings, and moneys from other funds as provided by 18 law. 19 3. For each fiscal year in the fiscal period beginning 20 July 1, 2016, and ending June 30, 2029, there is appropriated 21 the following percentages of the balance of the fund for the 22 following purposes: 23 a. Forty percent to the Iowa finance authority to support 24 the wastewater and drinking water treatment financial 25 assistance program created in section 16.134. 26 b. Forty-five percent to the Iowa finance authority to be 27 credited to the water quality financing program fund created 28 pursuant to section 16.145. 29 c. Fifteen percent to the division of soil conservation 30 and water quality of the department of agriculture and land 31 stewardship to support the water quality urban infrastructure 32 program created in section 466B.44. 33 4. Moneys in the fund are not subject to section 8.33. 34 Notwithstanding section 12C.7, subsection 2, interest or 35 -6- HF 2451 (2) 86 mm/sc/md 6/ 17

H.F. 2451 earnings on moneys in the fund shall be credited to the fund. 1 Sec. 5. NEW SECTION . 16.143 Definitions. 2 As used in this part, unless the context otherwise requires: 3 1. “Cost” means all costs, charges, expenses, or other 4 indebtedness incurred by a loan recipient and determined by 5 the authority as reasonable and necessary for carrying out 6 all works and undertakings necessary or incidental to the 7 accomplishment of any project. 8 2. “Eligible entity” means a municipality meeting the 9 requirements in section 16.146 or a landowner, as determined by 10 the authority, a public utility as defined in section 476.1, or 11 a rural water district or rural water association as defined 12 in section 357A.1. 13 3. “Loan recipient” means an eligible entity that has 14 received a loan under the program. 15 4. “Municipality” means a governmental body such as a state 16 agency or a political subdivision of the state. Municipality 17 includes but is not limited to a city, city utility, county, 18 soil and water conservation district, sanitary district, a 19 subdistrict of any of the foregoing districts, state agency, 20 or other governmental body or corporation empowered to provide 21 sewage collection and treatment services or drinking water, or 22 any entity jointly exercising governmental powers pursuant to 23 chapter 28E or 28F, or any other combination of two or more 24 governmental bodies or corporations acting jointly under the 25 laws of this state in connection with a project. 26 5. “Program” means the water quality financing program 27 created in this part. 28 6. “Project” means any combination of improvements, 29 structures, developments, tasks, actions, constructions, 30 modifications, operations, or practices designed to improve 31 water quality that are proposed by an eligible entity and 32 approved by the authority. “Project” includes but is not 33 limited to any of the following: 34 a. A project meeting the requirements of part 2 of this 35 -7- HF 2451 (2) 86 mm/sc/md 7/ 17

H.F. 2451 subchapter. 1 b. A project, operation, or practice undertaken or carried 2 out to address watershed protection, flood prevention, or water 3 quality improvement. 4 c. A project meeting the requirements of a sponsor project 5 under section 455B.199. 6 Sec. 6. NEW SECTION . 16.144 Water quality financing 7 program. 8 1. The authority, in cooperation with the department of 9 natural resources and the department of agriculture and land 10 stewardship, shall establish and administer a water quality 11 financing program. The purpose of the program shall be to 12 provide financial assistance to enhance the quality of surface 13 water and groundwater, particularly by providing financial 14 assistance for projects designed to improve water quality 15 by addressing point and nonpoint sources, with a higher 16 prioritization provided to collaborative efforts. 17 2. The authority shall determine the interest rate 18 and repayment terms for loans made under the program, in 19 cooperation with the department of natural resources and 20 the department of agriculture and land stewardship, and the 21 authority shall enter into loan agreements with eligible 22 entities in compliance with and subject to the terms and 23 conditions of the program as described in this part. 24 3. The authority may charge loan recipients fees and assess 25 costs against such recipients necessary for the continued 26 operation of the program. Such fees and costs shall not exceed 27 the costs directly associated with the administration of the 28 program. Fees and costs collected pursuant to this subsection 29 shall be deposited in the appropriate fund or account created 30 in section 16.145. 31 4. The program shall be administered by the authority in 32 accordance with rules adopted by the authority pursuant to 33 chapter 17A. 34 Sec. 7. NEW SECTION . 16.145 Water quality financing program 35 -8- HF 2451 (2) 86 mm/sc/md 8/ 17

H.F. 2451 fund —— appropriation —— other funds. 1 1. a. A water quality financing program fund is created 2 and shall consist of appropriations made to the fund, moneys 3 credited to the fund pursuant to section 16.134A, and transfers 4 of interest, earnings, and moneys from other funds as provided 5 by law. The fund shall be administered by the authority as 6 a revolving fund. Moneys in the fund are appropriated to 7 the authority for purposes of the program. Notwithstanding 8 section 8.33, moneys in the fund that remain unencumbered or 9 unobligated at the close of a fiscal year shall not revert 10 but shall remain available for expenditure for the purposes 11 designated. Notwithstanding section 12C.7, subsection 2, 12 interest or earnings on moneys in the fund shall be credited 13 to the fund. 14 b. The authority shall use the moneys in the fund to provide 15 financial assistance to eligible entities under the program. 16 The authority may provide financial assistance in the form 17 deemed most convenient for the efficient financing of projects, 18 including loans, forgivable loans, or grants. The authority 19 shall administer the fund and the program in such a manner 20 as to provide a permanent source of water quality project 21 financial assistance to eligible entities. 22 c. The authority may annually use an amount of not more 23 than one percent of the moneys in the fund for administrative 24 purposes. 25 2. a. The authority may establish and maintain other 26 funds and accounts determined to be necessary to carry out the 27 purposes of the program and shall provide for the funding, 28 administration, investment, restrictions, and disposition of 29 the funds and accounts. 30 b. Moneys appropriated to and used by the authority for 31 purposes of paying the costs and expenses associated with 32 the administration of the program shall be administered as 33 determined by the authority. 34 c. All moneys transferred to the authority shall be 35 -9- HF 2451 (2) 86 mm/sc/md 9/ 17

H.F. 2451 deposited and held in a fund or account established and 1 maintained pursuant to this section for purposes of the 2 program. 3 3. The funds or accounts held by the authority, or a trustee 4 acting on behalf of the authority pursuant to a trust agreement 5 related to the program, shall not be considered part of the 6 general fund of the state, are not subject to appropriation for 7 any other purpose by the general assembly, and in determining 8 a general fund balance shall not be included in the general 9 fund of the state, but shall remain in the funds and accounts 10 maintained by the authority or trustee pursuant to a trust 11 agreement. Funds and accounts held by the authority, or a 12 trustee acting on behalf of the authority pursuant to a trust 13 agreement related to the program, are separate dedicated funds 14 and accounts under the administration and control of the 15 authority and subject to section 16.31. 16 4. By October 1, 2017, and by October 1 of each year 17 thereafter, the authority shall submit a report to the governor 18 and the general assembly itemizing expenditures from the fund 19 during the previous fiscal year. 20 Sec. 8. NEW SECTION . 16.146 Eligible entities —— agreements 21 required. 22 1. An eligible entity may apply to the authority for 23 financial assistance under the water quality financing program 24 established in section 16.144 by submitting a plan that meets 25 the following requirements: 26 a. The plan includes one or more projects that improve 27 water quality in the local area or watershed. Projects shall 28 use practices identified in the latest version of the document 29 entitled “Iowa Nutrient Reduction Strategy” initially presented 30 in November 2012 by the department of agriculture and land 31 stewardship, the department of natural resources, and Iowa 32 state university of science and technology. A drainage or 33 levee district established under chapter 468 shall utilize the 34 installation of edge-of-field infrastructure as described in 35 -10- HF 2451 (2) 86 mm/sc/md 10/ 17

H.F. 2451 section 466B.43. 1 b. The plan describes in detail the manner in which the 2 projects will be financed and undertaken, including, as 3 applicable, the sources of revenue directed to financing the 4 improvements as well as the municipalities or landowners that 5 will be receiving the revenues and how such revenues will be 6 spent on the projects. 7 2. The authority shall review and approve or deny 8 applications for financial assistance. The provision of 9 financial assistance under the program shall take into account, 10 as applicable, the number of municipalities or landowners 11 comprising an eligible entity and the eligible entity’s 12 financing capacity. The authority shall score applications 13 for financial assistance according to rules adopted pursuant 14 to this part. The authority shall only provide financial 15 assistance to eligible entities that have sufficient financing 16 capacity and that submit an appropriate plan designed to 17 improve water quality. 18 3. An approved eligible entity shall enter into an agreement 19 with the authority for the provision of financial assistance. 20 The agreement shall include standard terms for the receipt 21 of program moneys and any other terms the authority deems 22 necessary or convenient for the efficient administration of the 23 program. 24 Sec. 9. Section 423.3, Code 2016, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 103. a. The sales price from the sale or 27 furnishing by a water utility of a water service in the state 28 to consumers or users. 29 b. For purposes of this subsection: 30 (1) “Water service” means the delivery of water by piped 31 distribution system. 32 (2) “Water utility” means a public utility as defined in 33 section 476.1 that furnishes water by piped distribution system 34 to the public for compensation. 35 -11- HF 2451 (2) 86 mm/sc/md 11/ 17

H.F. 2451 Sec. 10. NEW SECTION . 423G.1 Short title. 1 This chapter may be cited as the “Water Service Tax Act” . 2 Sec. 11. NEW SECTION . 423G.2 Definitions. 3 1. All words and phrases used in this chapter and defined in 4 section 423.1 have the same meaning given them by section 423.1 5 for purposes of this chapter. 6 2. As used in this chapter, “water service” and “water 7 utility” mean the same as defined in section 423.3, subsection 8 103. 9 Sec. 12. NEW SECTION . 423G.3 Water service tax. 10 An excise tax at the rate of six percent is imposed on the 11 sales price from the sale or furnishing by a water utility of a 12 water service in the state to consumers or users. 13 Sec. 13. NEW SECTION . 423G.4 Exemptions. 14 The sales price from transactions exempt from state sales 15 tax under section 423.3, except section 423.3, subsection 103, 16 is also exempt from the tax imposed by this chapter. 17 Sec. 14. NEW SECTION . 423G.5 Administration by director. 18 1. The director of revenue shall administer the water 19 service tax as nearly as possible in conjunction with the 20 administration of the state sales and use tax law, except that 21 portion of the law that implements the streamlined sales and 22 use tax agreement. The director shall provide appropriate 23 forms, or provide on the regular state tax forms, for reporting 24 water service tax liability. 25 2. The director may require all persons who are engaged 26 in the business of deriving any sales price or purchase 27 price subject to tax under this chapter to register with 28 the department. The director may also require a tax permit 29 applicable only to this chapter for any retailer not 30 collecting, or any user not paying, taxes under chapter 423. 31 3. Section 422.25, subsection 4, sections 422.30, 422.67, 32 and 422.68, section 422.69, subsection 1, sections 422.70, 33 422.71, 422.72, 422.74, and 422.75, section 423.14, subsection 34 1, and sections 423.23, 423.24, 423.25, 423.31 through 35 -12- HF 2451 (2) 86 mm/sc/md 12/ 17

H.F. 2451 423.35, 423.37 through 423.42, and 423.47, consistent with the 1 provisions of this chapter, shall apply with respect to the tax 2 authorized under this chapter, in the same manner and with the 3 same effect as if the excise taxes on the sale or furnishing of 4 a water service were retail sales taxes within the meaning of 5 those statutes. Notwithstanding this subsection, the director 6 shall provide for quarterly filing of returns and for other 7 than quarterly filing of returns both as prescribed in section 8 423.31. All taxes collected under this chapter by a retailer 9 or any user are deemed to be held in trust for the state of 10 Iowa. 11 Sec. 15. NEW SECTION . 423G.6 Deposit of revenues. 12 1. All moneys received and all refunds shall be deposited in 13 or withdrawn from the general fund of the state. 14 2. Subsequent to the deposit in the general fund of the 15 state, the department shall transfer the following amounts to 16 the water quality financial assistance fund created in section 17 16.134A: 18 a. For revenues collected on or after July 1, 2017, but 19 before August 1, 2018, one-sixth of the revenues. 20 b. For revenues collected on or after August 1, 2018, but 21 before August 1, 2019, one-third of the revenues. 22 c. For revenues collected on or after August 1, 2019, but 23 before August 1, 2020, one-half of the revenues. 24 d. For revenues collected on or after August 1, 2020, but 25 before August 1, 2021, two-thirds of the revenues. 26 e. For revenues collected on or after August 1, 2021, but 27 before August 1, 2022, five-sixths of the revenues. 28 f. For revenues collected on or after August 1, 2022, one 29 hundred percent of the revenues. 30 Sec. 16. NEW SECTION . 423G.7 Future repeal. 31 This chapter is repealed upon the occurrence of one of the 32 following, whichever is earlier: 33 1. The enactment date that the tax rate for the sales 34 tax imposed upon the retail sales price of tangible personal 35 -13- HF 2451 (2) 86 mm/sc/md 13/ 17

H.F. 2451 property and the furnishing of enumerated services sold in this 1 state in effect on July 1, 2015, is increased. 2 2. July 1, 2029. 3 Sec. 17. NEW SECTION . 466B.43 Water quality agriculture 4 infrastructure programs. 5 1. As part of the water quality initiative established 6 pursuant to section 466B.42, the division shall administer 7 water quality agriculture infrastructure programs created in 8 this section. 9 2. The purpose of the programs is to support projects for 10 the installation of infrastructure, including conservation 11 structures, practices, or other measures that reduce 12 contributing nutrient loads, associated sediment, or 13 contaminants from sources to surface waters. The programs 14 shall be administered in a manner that is consistent with 15 the latest version of the “Iowa Nutrient Reduction Strategy” 16 initially presented in November 2012 by the department of 17 agriculture and land stewardship, the department of natural 18 resources, and Iowa state university of science and technology. 19 3. An edge-of-field infrastructure program is created. 20 The program shall support projects located on agricultural 21 land, which may include demonstration projects, that capture 22 or filter nutrients entering into a surface water. The 23 program’s projects shall be limited to infrastructure designed 24 and installed for use over multiple years, including but not 25 limited to wetlands, bioreactor systems, saturated buffers, 26 or land use changes. The program shall be financed on a 27 cost-share basis. 28 4. An in-field infrastructure program is created. The 29 program shall support projects located on agricultural land, 30 which may include demonstration projects, that decrease erosion 31 and precipitation-induced surface runoff, increase water 32 infiltration rates, and increase soil sustainability. The 33 program’s projects shall be limited to infrastructure designed 34 and installed for use over multiple years, including but not 35 -14- HF 2451 (2) 86 mm/sc/md 14/ 17

H.F. 2451 limited to structures, terraces, and waterways located on 1 cropland or pastureland, and including but not limited to soil 2 conservation or erosion control structures or managed drainage 3 systems. The program shall be financed on a cost-share basis. 4 5. Any state moneys used to finance a project under a 5 water quality agriculture infrastructure program shall be 6 administered according to an agreement entered into by the 7 division and the owner of the land where the infrastructure 8 is to be installed. The agreement shall include standard 9 terms and conditions for the receipt of program moneys and 10 any other terms and conditions the division deems necessary 11 or convenient for the efficient administration of the project 12 or program. The division may support multiple installations 13 of infrastructure on a single parcel of land. The division 14 may also combine programs if cost effective. The division may 15 annually use an amount of not more than four percent of the 16 moneys used to support a program for administrative purposes. 17 6. By October 1, 2017, and each October 1, thereafter, the 18 division shall submit a report to the governor and the general 19 assembly itemizing expenditures, by hydrologic unit code 8 20 watershed, under the program during the previous fiscal year. 21 7. Any information obtained by the division identifying 22 a person holding a legal interest in agricultural land or 23 specific agricultural land shall be a confidential record under 24 section 22.7. 25 Sec. 18. NEW SECTION . 466B.44 Water quality urban 26 infrastructure program. 27 1. As part of the water quality initiative established 28 pursuant to section 466B.42, the division shall administer a 29 water quality urban infrastructure program. 30 2. The purpose of the program is to support watershed 31 projects and advance implementation of the latest version of 32 the “Iowa Nutrient Reduction Strategy” initially presented 33 in November 2012 by the department of agriculture and land 34 stewardship, the department of natural resources, and Iowa 35 -15- HF 2451 (2) 86 mm/sc/md 15/ 17

H.F. 2451 state university of science and technology, which program 1 support may include demonstration projects that decrease 2 erosion, precipitation-induced surface runoff, and storm 3 water discharges and increase water infiltration rates. The 4 program’s projects shall be based on Iowa’s storm water 5 management manual published by the department of natural 6 resources. 7 3. The program shall be financed on a cost-share basis or 8 through cooperative agreements with watershed projects funded 9 through section 455B.199 whose project activities fall outside 10 the territorial boundaries of a city. 11 4. Any state moneys used to finance a project under a water 12 quality urban infrastructure program shall be administered 13 according to an agreement entered into by the division and the 14 owner of the land where the infrastructure is to be installed. 15 The agreement shall include standard terms and conditions 16 for the receipt of program moneys and any other terms and 17 conditions the division deems necessary or convenient for 18 the efficient administration of the project or program. The 19 division may support multiple installations of infrastructure 20 on a single parcel of land. The division may annually use an 21 amount of not more than four percent of the moneys used to 22 support a program for administrative purposes. 23 5. Notwithstanding any other provision in this section 24 to the contrary, beginning on July 1, 2018, the division may 25 use any amount available to support the water quality urban 26 infrastructure program to instead support the three-year data 27 collection of in-field practices project as enacted in 2015 28 Iowa Acts, ch. 132, §18. 29 6. Notwithstanding any other provision of this section 30 to the contrary, the division may use any amount available 31 to support the water quality urban infrastructure program to 32 develop and maintain an online resource displaying measurable 33 indicators of desirable change in water quality within the 34 state’s watersheds. These measurable indicators may include 35 -16- HF 2451 (2) 86 mm/sc/md 16/ 17

H.F. 2451 but are not limited to public and private funding inputs, 1 involvement in water quality projects, and improvements, land 2 use, practice adoption, calculated load reduction, and measured 3 loads at existing monitoring stations. 4 7. By October 1, 2017, and by October 1 of each year 5 thereafter, the division shall submit a report to the governor 6 and the general assembly itemizing expenditures under the 7 program during the previous fiscal year. 8 8. Any information obtained by the division identifying a 9 person holding a legal interest in land or specific land shall 10 be a confidential record under section 22.7. 11 Sec. 19. EFFECTIVE DATE. The following provisions of this 12 Act take effect July 1, 2017: 13 1. The section of this Act amending section 423.3. 14 2. The sections of this Act enacting chapter 423G. 15 Sec. 20. EFFECTIVE DATE. The following provisions of this 16 Act take effect January 1, 2017: 17 1. The section of this Act amending section 16.134. 18 2. The section of this Act enacting sections 16.143, 16.144, 19 16.145, and 16.146. 20 3. The section of this Act enacting section 466B.44. 21 -17- HF 2451 (2) 86 mm/sc/md 17/ 17