House File 2451 H-8161 Amend House File 2451 as follows: 1 1. Page 1, before line 1 by inserting: 2 < Section 1. Section 8.57, subsection 5, Code 2016, 3 is amended by adding the following new paragraph: 4 NEW PARAGRAPH . 0h. (1) Notwithstanding paragraph 5 “c” of this subsection, there is appropriated from the 6 rebuild Iowa infrastructure fund to the water quality 7 infrastructure fund created in section 8.57B the 8 following amounts: 9 (a) For the fiscal year beginning July 1, 2016, and 10 ending June 30, 2017, five million dollars. 11 (b) For the fiscal year beginning July 1, 2017, and 12 ending June 30, 2018, six million five hundred thousand 13 dollars. 14 (c) For the fiscal year beginning July 1, 2018, 15 and ending June 30, 2019, eleven million five hundred 16 thousand dollars. 17 (d) For the fiscal year beginning July 1, 2019, 18 and ending June 30, 2020, sixteen million five hundred 19 thousand dollars. 20 (e) For the fiscal year beginning July 1, 2020, 21 and ending June 30, 2021, sixteen million five hundred 22 thousand dollars. 23 (f) For the fiscal year beginning July 1, 2021, and 24 ending June 30, 2022, twenty-two million dollars. 25 (g) For the fiscal year beginning July 1, 2022, and 26 ending June 30, 2023, twenty-two million dollars. 27 (h) For the fiscal year beginning July 1, 2023, and 28 ending June 30, 2024, twenty-two million dollars. 29 (i) For the fiscal year beginning July 1, 2024, and 30 ending June 30, 2025, twenty-two million dollars. 31 (j) For the fiscal year beginning July 1, 2025, and 32 ending June 30, 2026, twenty-two million dollars. 33 (k) For the fiscal year beginning July 1, 2026, and 34 ending June 30, 2027, twenty-two million dollars. 35 -1- HF2451.3297 (3) 86 mm/sc 1/ 13 #1.

(l) For the fiscal year beginning July 1, 2027, and 1 ending June 30, 2028, twenty-two million dollars. 2 (m) For the fiscal year beginning July 1, 2028, and 3 ending June 30, 2029, twenty-two million dollars. 4 (2) This paragraph “0h” is repealed on January 1, 5 2030. 6 Sec. ___. NEW SECTION . 8.57B Water quality 7 infrastructure fund —— creation —— appropriations. 8 1. A water quality infrastructure fund is created 9 within the division of soil conservation and water 10 quality of the department of agriculture and land 11 stewardship. The fund shall consist of moneys 12 appropriated from the rebuild Iowa infrastructure fund 13 pursuant to section 8.57, subsection 5, paragraph “0h” . 14 2. The fund shall be separate from the general fund 15 of the state and the balance in the fund shall not be 16 considered part of the balance of the general fund 17 of the state. However, the fund shall be considered 18 a special account for the purposes of section 8.53, 19 relating to generally accepted accounting principles. 20 3. Moneys in the fund are appropriated to the 21 division of soil conservation and water quality of 22 the department of agriculture and land stewardship 23 for the exclusive purpose of supporting water quality 24 agriculture infrastructure programs created in section 25 466B.43. 26 4. Notwithstanding section 8.33, moneys in the fund 27 that remain unencumbered or unobligated at the close 28 of a fiscal year shall not revert but shall remain 29 available for expenditure for the purposes designated. 30 Notwithstanding section 12C.7, subsection 2, interest 31 or earnings on moneys in the fund shall be credited to 32 the fund. 33 5. This section is repealed on January 1, 2030. > 34 2. Page 2, by striking lines 10 and 11 and 35 -2- HF2451.3297 (3) 86 mm/sc 2/ 13

inserting: 1 < c. b. Priority shall be given to projects in 2 which the meeting criteria established in section 3 455B.199B in which the applicant seeks financial 4 assistance is to be used to obtain with financing under 5 the > 6 3. Page 4, after line 8 by inserting: 7 < Sec. ___. NEW SECTION . 16.134A Water quality 8 financial assistance fund. 9 1. A water quality financial assistance fund is 10 created in the state treasury as a revolving fund. 11 2. The fund shall consist of all of the following: 12 a. (1) Moneys transferred to the fund pursuant to 13 section 423G.6. 14 (2) This paragraph “a” is repealed on January 1, 15 2038. 16 b. Appropriations made to the fund and transfers 17 of interest, earnings, and moneys from other funds as 18 provided by law. 19 3. For each fiscal year in the fiscal period 20 beginning July 1, 2017, and ending June 30, 2037, 21 there is appropriated the following percentages of the 22 balance of the fund for the following purposes: 23 a. Forty percent to the Iowa finance authority to 24 support the wastewater and drinking water treatment 25 financial assistance program created in section 16.134. 26 b. Forty-five percent to the Iowa finance authority 27 to be credited to the water quality financing program 28 fund created pursuant to section 16.145. 29 c. Fifteen percent to the division of soil 30 conservation and water quality of the department of 31 agriculture and land stewardship to support the water 32 quality urban infrastructure program created in section 33 466B.44. 34 4. Moneys in the fund are not subject to section 35 -3- HF2451.3297 (3) 86 mm/sc 3/ 13 #3.

8.33. Notwithstanding section 12C.7, subsection 2, 1 interest or earnings on moneys in the fund shall be 2 credited to the fund. 3 Sec. ___. NEW SECTION . 16.143 Definitions. 4 As used in this part, unless the context otherwise 5 requires: 6 1. “Cost” means all costs, charges, expenses, or 7 other indebtedness incurred by a loan recipient and 8 determined by the committee as reasonable and necessary 9 for carrying out all works and undertakings necessary 10 or incidental to the accomplishment of any project. 11 2. “Eligible entity” means a municipality meeting 12 the requirements in section 16.146 or a landowner, 13 as determined by the committee, a public utility as 14 defined in section 476.1, or a rural water district or 15 rural water association as defined in section 357A.1. 16 3. “Loan recipient” means an eligible entity that 17 has received a loan under the program. 18 4. “Municipality” means a governmental body such 19 as a state agency or a political subdivision of the 20 state. Municipality includes but is not limited to a 21 city, city utility, county, soil and water conservation 22 district, drainage district, sanitary district, a 23 subdistrict of any of the foregoing districts, state 24 agency, or other governmental body or corporation 25 empowered to provide sewage collection and treatment 26 services or drinking water, or any entity jointly 27 exercising governmental powers pursuant to chapter 28 28E or 28F, or any other combination of two or more 29 governmental bodies or corporations acting jointly 30 under the laws of this state in connection with a 31 project. 32 5. “Program” means the water quality financing 33 program created in this part. 34 6. “Project” means any combination of improvements, 35 -4- HF2451.3297 (3) 86 mm/sc 4/ 13

structures, developments, tasks, actions, 1 constructions, modifications, operations, or practices 2 designed to improve water quality that are proposed 3 by an eligible entity and approved by the committee. 4 “Project” includes but is not limited to any of the 5 following: 6 a. A project meeting the requirements of part 2 of 7 this subchapter. 8 b. A project, operation, or practice undertaken 9 or carried out to address watershed protection, flood 10 prevention, or water quality improvement. 11 c. A project meeting the requirements of a sponsor 12 project under section 455B.199. 13 Sec. ___. NEW SECTION . 16.144 Water quality 14 financing program. 15 1. The authority, in cooperation with the 16 department of natural resources and the department of 17 agriculture and land stewardship, shall establish and 18 administer a water quality financing program. The 19 purpose of the program shall be to provide financial 20 assistance to enhance the quality of surface water 21 and groundwater, particularly by providing financial 22 assistance for projects designed to improve water 23 quality by addressing point and nonpoint sources, with 24 a higher prioritization provided to collaborative 25 efforts. 26 2. The authority shall determine the interest rate 27 and repayment terms for loans made under the program, 28 in cooperation with the department of natural resources 29 and the department of agriculture and land stewardship, 30 and the authority shall enter into loan agreements with 31 eligible entities in compliance with and subject to 32 the terms and conditions of the program as described 33 in this part. 34 3. The authority may charge loan recipients fees 35 -5- HF2451.3297 (3) 86 mm/sc 5/ 13

and assess costs against such recipients necessary for 1 the continued operation of the program. Such fees and 2 costs shall not exceed the costs directly associated 3 with the administration of the program. Fees and 4 costs collected pursuant to this subsection shall be 5 deposited in the appropriate fund or account created in 6 section 16.145. 7 4. The program shall be administered by the 8 authority in accordance with rules adopted by the 9 authority pursuant to chapter 17A. 10 Sec. ___. NEW SECTION . 16.145 Water quality 11 financing program fund —— appropriation —— other funds. 12 1. a. A water quality financing program fund 13 is created and shall consist of appropriations made 14 to the fund, moneys credited to the fund pursuant to 15 section 16.134A, and transfers of interest, earnings, 16 and moneys from other funds as provided by law. The 17 fund shall be administered by the authority as a 18 revolving fund. Moneys in the fund are appropriated 19 to the authority for purposes of the program. 20 Notwithstanding section 8.33, moneys in the fund 21 that remain unencumbered or unobligated at the close 22 of a fiscal year shall not revert but shall remain 23 available for expenditure for the purposes designated. 24 Notwithstanding section 12C.7, subsection 2, interest 25 or earnings on moneys in the fund shall be credited to 26 the fund. 27 b. The authority shall use the moneys in the fund 28 to provide financial assistance to eligible entities 29 under the program. The authority may provide financial 30 assistance in the form deemed most convenient for the 31 efficient financing of projects, including loans, 32 forgivable loans, or grants. The authority shall 33 administer the fund and the program in such a manner as 34 to provide a permanent source of water quality project 35 -6- HF2451.3297 (3) 86 mm/sc 6/ 13

financial assistance to eligible entities. 1 c. The authority may annually use an amount of not 2 more than one percent of the moneys in the fund for 3 administrative purposes. 4 2. a. The authority may establish and maintain 5 other funds and accounts determined to be necessary 6 to carry out the purposes of the program and shall 7 provide for the funding, administration, investment, 8 restrictions, and disposition of the funds and 9 accounts. 10 b. Moneys appropriated to and used by the authority 11 for purposes of paying the costs and expenses 12 associated with the administration of the program shall 13 be administered as determined by the authority. 14 c. All moneys transferred to the authority shall be 15 deposited and held in a fund or account established and 16 maintained pursuant to this section for purposes of the 17 program. 18 3. The funds or accounts held by the authority, or 19 a trustee acting on behalf of the authority pursuant 20 to a trust agreement related to the program, shall not 21 be considered part of the general fund of the state, 22 are not subject to appropriation for any other purpose 23 by the general assembly, and in determining a general 24 fund balance shall not be included in the general 25 fund of the state, but shall remain in the funds 26 and accounts maintained by the authority or trustee 27 pursuant to a trust agreement. Funds and accounts held 28 by the authority, or a trustee acting on behalf of the 29 authority pursuant to a trust agreement related to the 30 program, are separate dedicated funds and accounts 31 under the administration and control of the authority 32 and subject to section 16.31. 33 4. By October 1, 2018, and by October 1 of each 34 year thereafter, the authority shall submit a report 35 -7- HF2451.3297 (3) 86 mm/sc 7/ 13

to the governor and the general assembly itemizing 1 expenditures from the fund during the previous fiscal 2 year. 3 Sec. ___. NEW SECTION . 16.146 Eligible entities —— 4 agreements required. 5 1. An eligible entity may apply to the authority 6 for financial assistance under the water quality 7 financing program established in section 16.144 8 by submitting a plan that meets the following 9 requirements: 10 a. The plan includes one or more projects that 11 improve water quality in the local area or watershed. 12 Projects using practices identified to practices in 13 the latest version of the document entitled “Iowa 14 Nutrient Reduction Strategy” initially presented in 15 November 2012 by the department of agriculture and land 16 stewardship, the department of natural resources, and 17 Iowa state university of science and technology. A 18 drainage or levee district established under chapter 19 468 shall utilize the installation of edge-of-field 20 infrastructure as described in section 466B.43. 21 b. The plan describes in detail the manner in 22 which the projects will be financed and undertaken, 23 including, as applicable, the sources of revenue 24 directed to financing the improvements as well as the 25 municipalities or landowners that will be receiving the 26 revenues and how such revenues will be spent on the 27 projects. 28 2. The authority shall review and approve or 29 deny applications for financial assistance. The 30 provision of financial assistance under the program 31 shall take into account, as applicable, the number of 32 municipalities or landowners comprising an eligible 33 entity and the eligible entity’s financing capacity. 34 The authority shall score applications for financial 35 -8- HF2451.3297 (3) 86 mm/sc 8/ 13

assistance according to rules adopted pursuant to 1 this part. The authority shall only provide financial 2 assistance to eligible entities that have sufficient 3 financing capacity and that submit an appropriate plan 4 designed to improve water quality. 5 3. An approved eligible entity shall enter into 6 an agreement with the authority for the provision of 7 financial assistance. The agreement shall include 8 standard terms for the receipt of program moneys 9 and any other terms the authority deems necessary or 10 convenient for the efficient administration of the 11 program. > 12 4. Page 6, by striking lines 1 and 2 and inserting 13 < to the water quality financial assistance fund created 14 in section 16.134A: > 15 5. Page 6, after line 16 by inserting: 16 < Sec. ___. NEW SECTION . 466B.43 Water quality 17 agriculture infrastructure programs. 18 1. As part of the water quality initiative 19 established pursuant to section 466B.42, the 20 division shall administer water quality agriculture 21 infrastructure programs created in this section. 22 2. The purpose of the programs is to support 23 projects for the installation of infrastructure, 24 including conservation structures, practices, or other 25 measures that reduce contributing nutrient loads, 26 associated sediment, or contaminants from sources to 27 surface waters. The programs shall be administered in 28 a manner that is consistent with the latest version 29 of the “Iowa Nutrient Reduction Strategy” initially 30 presented in November 2012 by the department of 31 agriculture and land stewardship, the department of 32 natural resources, and Iowa state university of science 33 and technology. 34 3. An edge-of-field infrastructure program is 35 -9- HF2451.3297 (3) 86 mm/sc 9/ 13 #4. #5.

created. The program shall support projects located 1 on agricultural land, which may include demonstration 2 projects, that capture or filter nutrients entering 3 into a surface water. The program’s projects shall be 4 limited to infrastructure designed and installed for 5 use over multiple years, including but not limited to 6 wetlands, bioreactor systems, saturated buffers, or 7 land use changes. The program shall be financed on a 8 cost-share basis. 9 4. An in-field infrastructure program is 10 created. The program shall support projects 11 located on agricultural land, which may include 12 demonstration projects, that decrease erosion and 13 precipitation-induced surface runoff, increase 14 water infiltration rates, and increase soil 15 sustainability. The program’s projects shall be 16 limited to infrastructure designed and installed for 17 use over multiple years, including but not limited to 18 structures, terraces, and waterways located on cropland 19 or pastureland, and including but not limited to soil 20 conservation or erosion control structures or managed 21 drainage systems. The program shall be financed on a 22 cost-share basis. 23 5. Any state moneys used to finance a project 24 under a water quality agriculture infrastructure 25 program shall be administered according to an agreement 26 entered into by the division and the owner of the land 27 where the infrastructure is to be installed. The 28 agreement shall include standard terms and conditions 29 for the receipt of program moneys and any other 30 terms and conditions the division deems necessary or 31 convenient for the efficient administration of the 32 project or program. The division may support multiple 33 installations of infrastructure on a single parcel of 34 land. The division may also combine programs if cost 35 -10- HF2451.3297 (3) 86 mm/sc 10/ 13

effective. The division may annually use an amount 1 of not more than four percent of the moneys used to 2 support a program for administrative purposes. 3 6. By October 1, 2017, and each October 1, 4 thereafter, the division shall submit a report to 5 the governor and the general assembly itemizing 6 expenditures under the program during the previous 7 fiscal year. 8 7. Any information obtained by the division 9 identifying a person holding a legal interest in 10 agricultural land or specific agricultural land shall 11 be a confidential record under section 22.7. 12 Sec. ___. NEW SECTION . 466B.44 Water quality urban 13 infrastructure program. 14 1. As part of the water quality initiative 15 established pursuant to section 466B.42, the division 16 shall administer a water quality urban infrastructure 17 program. 18 2. The purpose of the program is to support 19 watershed projects and advance implementation of 20 the latest version of the “Iowa Nutrient Reduction 21 Strategy” initially presented in November 2012 by 22 the department of agriculture and land stewardship, 23 the department of natural resources, and Iowa state 24 university of science and technology, which program 25 support may include demonstration projects that 26 decrease erosion, precipitation-induced surface 27 runoff, and storm water discharges and increase water 28 infiltration rates. The program’s projects shall be 29 based on Iowa’s storm water management manual published 30 by the department of natural resources. 31 3. The program shall be financed on a cost-share 32 basis or through cooperative agreements with watershed 33 projects funded through section 455B.199 whose project 34 activities fall outside the territorial boundaries of 35 -11- HF2451.3297 (3) 86 mm/sc 11/ 13 #6.

a city. 1 4. Any state moneys used to finance a project under 2 a water quality urban infrastructure program shall be 3 administered according to an agreement entered into 4 by the division and the owner of the land where the 5 infrastructure is to be installed. The agreement shall 6 include standard terms and conditions for the receipt 7 of program moneys and any other terms and conditions 8 the division deems necessary or convenient for the 9 efficient administration of the project or program. 10 The division may support multiple installations 11 of infrastructure on a single parcel of land. The 12 division may annually use an amount of not more than 13 four percent of the moneys used to support a program 14 for administrative purposes. 15 5. Notwithstanding any other provision in this 16 section to the contrary, beginning on July 1, 2018, the 17 division may use any amount available to support the 18 water quality urban infrastructure program to instead 19 support the three-year data collection of in-field 20 practices project as enacted in 2015 Iowa Acts, ch. 21 132, §18. 22 6. By October 1, 2018, and by October 1 of each 23 year thereafter, the division shall submit a report 24 to the governor and the general assembly itemizing 25 expenditures under the program during the previous 26 fiscal year. 27 7. Any information obtained by the division 28 identifying a person holding a legal interest in land 29 or specific land shall be a confidential record under 30 section 22.7. > 31 6. Page 6, by striking lines 17 and 18 and 32 inserting: 33 < Sec. ___. EFFECTIVE DATE. The following 34 provisions of this Act take effect July 1, 2017: 35 -12- HF2451.3297 (3) 86 mm/sc 12/ 13 #6. #6.

1. The section of this Act amending section 16.134. 1 2. The section of this Act enacting section 2 16.134A. 3 3. The sections of this Act enacting sections 4 16.143, 16.144, 16.145, and 16.146. 5 4. The section of this Act amending section 423.3. 6 5. The sections of this Act enacting chapter 423G. 7 6. The section of this Act enacting section 8 466B.44. > 9 7. Title page, line 2, after < program, > by 10 inserting < providing for appropriations from the 11 rebuild Iowa infrastructure fund, creating a water 12 quality infrastructure fund, establishing a water 13 quality financing program, providing for cost-share 14 programs for infrastructure on agricultural and urban 15 land under the water quality initiative, > 16 8. By renumbering as necessary. 17 ______________________________ COMMITTEE ON APPROPRIATIONS GRASSLEY of Butler, Chairperson -13- HF2451.3297 (3) 86 mm/sc 13/ 13 #7. #8.