Senate File 512 H-1440 Amend Senate File 512, as amended, passed, and reprinted by 1 the Senate, as follows: 2 1. By striking everything after the enacting clause and 3 inserting: 4 < Section 1. NEW SECTION . 8.57B Water quality 5 infrastructure fund —— creation —— appropriations. 6 1. A water quality infrastructure fund is created within 7 the division of soil conservation and water quality of the 8 department of agriculture and land stewardship. The fund shall 9 consist of all of the following: 10 a. (1) Moneys transferred to the fund pursuant to section 11 423G.6. 12 (2) This paragraph “a” is repealed upon the date on which 13 chapter 423G is repealed pursuant to section 423G.7. 14 b. Appropriations made to the fund and transfers of 15 interest, earnings, and moneys from other funds as provided by 16 law. 17 2. The fund shall be separate from the general fund of the 18 state and the balance in the fund shall not be considered part 19 of the balance of the general fund of the state. However, the 20 fund shall be considered a special account for the purposes 21 of section 8.53, relating to generally accepted accounting 22 principles. 23 3. Moneys in the fund are appropriated to the division 24 of soil conservation and water quality of the department of 25 agriculture and land stewardship for the exclusive purpose of 26 supporting water quality agriculture infrastructure programs 27 created in section 466B.43. 28 4. Notwithstanding section 8.33, moneys in the fund 29 that remain unencumbered or unobligated at the close of a 30 fiscal year shall not revert but shall remain available for 31 expenditure for the purposes designated. Notwithstanding 32 section 12C.7, subsection 2, interest or earnings on moneys in 33 the fund shall be credited to the fund. 34 Sec. 2. NEW SECTION . 16.140 Water quality protection and 35 -1- SF512.2632 (2) 87 mm/rj 1/ 33 #1.

wastewater treatment grant program —— fund. 1 1. As used in this section, unless the context otherwise 2 requires: 3 a. “Clean Water Act” means the same as defined in section 4 16.131A. 5 b. “Eligible entity” means either of the following: 6 (1) An entity engaged in an industry identified in the Iowa 7 nutrient reduction strategy, as determined by the authority, 8 which industry is or will be required pursuant to the Iowa 9 nutrient reduction strategy to collect data on the source, 10 concentration, and mass of total nitrogen or total phosphorus 11 in its effluent, and to evaluate alternatives for reducing the 12 amount of nutrients in its discharge. 13 (2) An entity implementing technology or operational 14 improvements to reduce nutrients in its discharge. 15 c. “Iowa nutrient reduction strategy” means a water 16 quality initiative developed and updated by the department of 17 agriculture and land stewardship, the department of natural 18 resources, and the college of agriculture and life sciences at 19 Iowa state university of science and technology in order to 20 assess and reduce nutrients in this state’s watersheds that 21 utilizes a pragmatic, strategic, and coordinated approach with 22 the goal of accomplishing reductions over time. 23 d. “Municipality” means a city or a rural water district or 24 association empowered by law to provide sewage collection and 25 treatment services or drinking water, or a public utility as 26 defined in section 476.1. 27 e. “Program” means the water quality protection and 28 wastewater treatment grant program created in this section. 29 f. “Safe Drinking Water Act” means the same as defined in 30 section 16.131A. 31 g. “Source water protection project” means a project or 32 activity designed to prevent pollutants from entering public 33 drinking water sources. 34 h. “Wastewater infrastructure improvement” includes 35 -2- SF512.2632 (2) 87 mm/rj 2/ 33

the acquisition, construction, reconstruction, extension, 1 equipping, improvement, or rehabilitation of any works or 2 facilities useful for the collection, treatment, and disposal 3 of sewage or industrial waste in a sanitary manner, including 4 treatment works as defined in section 212 of the Clean Water 5 Act, and including the implementation and development of 6 sponsor projects under section 455B.199. 7 i. “Water infrastructure improvement” includes the 8 acquisition, construction, reconstruction, extending, 9 remodeling, improving, repairing, or equipping of waterworks, 10 water mains, extensions, or treatment facilities useful 11 for providing potable water to residents served by a water 12 system, including the acquisition of real property needed 13 for such purposes, and such other purposes and programs as 14 may be authorized under the Safe Drinking Water Act. “Water 15 infrastructure improvement” does not include the acquisition of 16 real property through the use of eminent domain. 17 2. The Iowa finance authority shall establish and 18 administer a water quality protection and wastewater treatment 19 grant program for the purpose of providing financial assistance 20 in the form of grants to enhance water quality, upgrade water 21 and wastewater infrastructure, and to implement the Iowa 22 nutrient reduction strategy. The program shall be administered 23 in accordance with rules adopted by the authority pursuant to 24 chapter 17A. 25 3. a. A water quality protection and wastewater treatment 26 grant fund is created in the state treasury and shall consist 27 of appropriations made to the fund, transfers of interest, 28 earnings, moneys from other funds as provided by law, and 29 moneys accepted by the authority for deposit in the fund 30 from other public or private sources. Moneys credited 31 or transferred to the fund pursuant to section 16.198 are 32 appropriated to the authority for purposes of the program. 33 Moneys in the fund shall be used exclusively for purposes of 34 the program. 35 -3- SF512.2632 (2) 87 mm/rj 3/ 33

b. Notwithstanding section 8.33, moneys in the fund 1 that remain unencumbered or unobligated at the close of a 2 fiscal year shall not revert but shall remain available for 3 expenditure for the purposes designated. Notwithstanding 4 section 12C.7, subsection 2, interest or earnings on moneys in 5 the fund shall be credited to the fund. 6 4. Grants may be awarded under the program for any of the 7 following: 8 a. To a municipality or an eligible entity participating in 9 a nutrient reduction exchange, for the purpose of purchasing 10 nutrient reduction credits or for implementing water quality 11 practices as described in the Iowa nutrient reduction strategy. 12 For purposes of this paragraph, “nutrient reduction credit” and 13 “nutrient reduction exchange” both mean the same as defined in 14 section 16.206, section 1, paragraph “d” . 15 b. To a municipality or an eligible entity for up to fifty 16 percent of the costs associated with conducting economic and 17 technical feasibility studies or developing implementation 18 plans and reports required by the Iowa nutrient reduction 19 strategy. 20 c. To a municipality for a source water protection project. 21 d. To a municipality or an eligible entity for water 22 infrastructure improvements or for wastewater infrastructure 23 improvements. 24 5. Priority for grants shall be given to projects or 25 activities that will provide improvement to water quality in 26 the relevant watershed. 27 6. Priority for grants shall be given to projects or 28 activities that also have private financing, or financing 29 pursuant to section 16.131 under the water pollution control 30 works and drinking water facilities financing program created 31 pursuant to section 455B.294, or other federal or state 32 financing. 33 7. Priority for grants shall be given to projects or 34 activities that are part of a project receiving financing under 35 -4- SF512.2632 (2) 87 mm/rj 4/ 33

the water quality project financial assistance program under 1 sections 16.201 through 16.206. 2 8. Grants awarded under the program shall not exceed five 3 hundred thousand dollars per recipient. 4 9. By October 1 of each year, the authority shall submit 5 a report to the governor and the general assembly itemizing 6 expenditures under the program during the previous fiscal year, 7 if any. 8 10. a. Beginning September 1, 2027, and every ten years 9 thereafter, a program review committee is established for 10 purposes of reviewing the program. By December 1 of the 11 same year, the review committee shall file a report with 12 the governor and the general assembly that reviews the 13 effectiveness of the program during the previous ten fiscal 14 years. 15 b. The program review committee shall consist of the 16 following members: 17 (1) The governor or the governor’s designee. 18 (2) The secretary of agriculture or the secretary’s 19 designee. 20 (3) The executive director of the authority or the executive 21 director’s designee. 22 (4) The director of the department of natural resources or 23 the director’s designee. 24 (5) Four members of the general assembly, with two from the 25 senate and two from the house of representatives and not more 26 than one member from each chamber being from the same political 27 party. The two senators shall be designated one member each 28 by the president of the senate, after consultation with the 29 majority leader of the senate, and by the minority leader of 30 the senate. The two representatives shall be designated one 31 member each by the speaker of the house of representatives, 32 after consultation with the majority leader of the house of 33 representatives, and by the minority leader of the house of 34 representatives. 35 -5- SF512.2632 (2) 87 mm/rj 5/ 33 #9.

c. Staffing services shall be provided by the authority. 1 Sec. 3. NEW SECTION . 16.198 Water quality financial 2 assistance fund. 3 1. A water quality financial assistance fund is created in 4 the state treasury. 5 2. The fund shall consist of all of the following: 6 a. (1) Moneys transferred to the fund pursuant to section 7 423G.6. 8 (2) This paragraph “a” is repealed upon the date on which 9 chapter 423G is repealed pursuant to section 423G.7. 10 b. Appropriations made to the fund and transfers of 11 interest, earnings, and moneys from other funds as provided by 12 law. 13 3. For each fiscal year in the period beginning July 1, 14 2018, and ending when chapter 423G is repealed pursuant to 15 section 423G.7, there is appropriated the following amounts of 16 the balance of the fund for the following purposes: 17 a. One-sixth of the balance of the fund to the Iowa finance 18 authority to be credited to the water quality protection and 19 wastewater treatment grant fund created pursuant to section 20 16.140, subsection 3. 21 b. Five-sixths of the balance of the fund to the Iowa 22 finance authority to be credited to the water quality project 23 financial assistance fund created pursuant to section 16.204. 24 4. Moneys in the fund are not subject to section 8.33. 25 Notwithstanding section 12C.7, subsection 2, interest or 26 earnings on moneys in the fund shall be credited to the fund. 27 Sec. 4. NEW SECTION . 16.201 Definitions. 28 As used in this part, unless the context otherwise requires: 29 1. “Committee” means the water quality project financing 30 committee created in section 16.205, subsection 4. 31 2. “Eligible entity” means a financing entity meeting the 32 requirements of section 16.206, as determined by the committee. 33 3. “Financing entity” means two or more persons that have 34 entered into an agreement for purposes of joint financing of a 35 -6- SF512.2632 (2) 87 mm/rj 6/ 33

project under the program. A financing entity may include but 1 is not limited to a governmental body such as a state agency or 2 a political subdivision of the state, a city or a city utility, 3 a public utility as defined in section 476.1 that furnishes 4 drinking water, sanitary sewage, or storm water services to the 5 public for compensation, a county, a rural water district or 6 association, a soil and water conservation district, a sanitary 7 district, a subdistrict of any of the foregoing districts, a 8 governmental body or corporation empowered to provide sewage 9 collection and treatment services or drinking water, an entity 10 jointly exercising governmental powers pursuant to chapter 28E 11 or 28F, or any other combination of two or more public agencies 12 or private agencies as defined in section 28E.2, acting jointly 13 under Iowa law in connection with a project. 14 4. “Iowa nutrient reduction strategy” means a water 15 quality initiative developed and updated by the department of 16 agriculture and land stewardship, the department of natural 17 resources, and the college of agriculture and life sciences at 18 Iowa state university of science and technology in order to 19 assess and reduce nutrients in this state’s watersheds that 20 utilizes a pragmatic, strategic, and coordinated approach with 21 the goal of accomplishing reductions over time. 22 5. “Loan recipient” means an eligible entity that has 23 received a loan under the program. 24 6. “Program” means the water quality project financial 25 assistance program created in this part. 26 7. “Project” means any combination of works, facilities, 27 improvements, structures, developments, tasks, activities, 28 constructions, modifications, operations, or practices designed 29 to improve water quality or water resource management that are 30 proposed by an eligible entity and approved by the committee. 31 “Project” includes but is not limited to the following: 32 a. A project meeting the requirements of part 2 of this 33 subchapter. 34 b. A project, operation, or practice undertaken or carried 35 -7- SF512.2632 (2) 87 mm/rj 7/ 33

out pursuant to chapter 161A, 161C, 161E, or 161F. 1 c. A project meeting the requirements of a sponsor project 2 under section 455B.199. 3 d. Other water resource restoration projects as defined in 4 section 384.80, including ones financed pursuant to section 5 28F.1. 6 e. An agricultural nonpoint source project eligible for a 7 water quality agriculture infrastructure program under section 8 466B.43. 9 8. “Revolving fund” means the fund created in section 10 16.204. 11 Sec. 5. NEW SECTION . 16.202 Water quality project financial 12 assistance program —— funding —— bonds and notes. 13 1. The authority shall cooperate with the department of 14 natural resources and the department of agriculture and land 15 stewardship in the creation, administration, and financing of 16 the program established in this part. 17 2. The authority may issue its bonds and notes until June 18 30, 2042, for the purposes of this part, including for the 19 purposes of funding the program established under section 20 16.205 and of funding any fund or account created under section 21 16.204. 22 3. The authority may enter into one or more loan agreements 23 or purchase agreements with one or more bondholders or 24 noteholders containing the terms and conditions of the 25 repayment of and the security for the bonds or notes. The 26 authority and the bondholders or noteholders or a trustee 27 agent designated by the authority may enter into agreements to 28 provide for any of the following: 29 a. That the proceeds of the bonds and notes and the 30 investments of the proceeds may be received, held, and 31 disbursed by the authority or by a trustee or agent designated 32 by the authority. 33 b. That the bondholders or noteholders or a trustee or 34 agent designated by the authority may collect, invest, and 35 -8- SF512.2632 (2) 87 mm/rj 8/ 33

apply the amount payable under the loan agreements or any 1 other instruments securing the debt obligations under the loan 2 agreements. 3 c. That the bondholders or noteholders may enforce the 4 remedies provided in the loan agreements or other instruments 5 on their own behalf without the appointment or designation of a 6 trustee. If there is a default in the principal of or interest 7 on the bonds or notes or in the performance of any agreement 8 contained in the loan agreements or other instruments, the 9 payment or performance may be enforced in accordance with the 10 loan agreement or other instrument. 11 d. Other terms and conditions as deemed necessary or 12 appropriate by the authority. 13 4. The powers granted the authority under this section 14 are in addition to other powers contained in this chapter. 15 All other provisions of this chapter, except section 16.28, 16 subsection 4, apply to bonds or notes issued and powers granted 17 to the authority under this section except to the extent they 18 are inconsistent with this section. 19 5. All bonds or notes issued by the authority in connection 20 with the program are exempt from taxation by this state and the 21 interest on the bonds or notes is exempt from state income tax. 22 Sec. 6. NEW SECTION . 16.203 Security —— reserve funds —— 23 pledges —— nonliability —— irrevocable contracts. 24 1. The authority may provide in the resolution, trust 25 agreement, or other instrument authorizing the issuance of its 26 bonds or notes pursuant to section 16.202 that the principal 27 of, premium, and interest on the bonds or notes are payable 28 from any of the following and may pledge the same to its bonds 29 and notes: 30 a. The income and receipts or other moneys derived from the 31 projects financed with the proceeds of the bonds or notes. 32 b. The income and receipts or other moneys derived from 33 designated projects whether or not the projects are financed in 34 whole or in part with the proceeds of the bonds or notes. 35 -9- SF512.2632 (2) 87 mm/rj 9/ 33

c. The amounts on deposit in the revolving fund. 1 d. The amounts payable to the authority by eligible entities 2 pursuant to loan agreements with eligible entities. 3 e. Any other funds or accounts established by the authority 4 in connection with the program or the sale and issuance of its 5 bonds or notes. 6 2. The authority may establish reserve funds to secure 7 one or more issues of its bonds or notes. The authority may 8 deposit in a reserve fund established under this subsection the 9 proceeds of the sale of its bonds or notes and other moneys 10 that are made available from any other source. 11 3. It is the intention of the general assembly that a pledge 12 made in respect of bonds or notes issued under this part shall 13 be valid and binding from the time the pledge is made, that the 14 moneys or property so pledged and received after the pledge 15 by the authority shall immediately be subject to the lien of 16 the pledge without physical delivery or further act, and that 17 the lien of the pledge shall be valid and binding as against 18 all parties having claims of any kind in tort, contract, or 19 otherwise against the authority whether or not the parties have 20 notice of the lien. Neither the resolution, trust agreement, 21 nor any other instrument by which a pledge is created needs to 22 be recorded or filed under the Iowa uniform commercial code, 23 chapter 554, to be valid, binding, or effective against the 24 parties. 25 4. Neither the members of the authority nor persons 26 executing the bonds or notes are liable personally on the bonds 27 or notes or are subject to personal liability or accountability 28 by reason of the issuance of the bonds or notes. 29 5. The bonds or notes issued by the authority are not 30 an indebtedness or other liability of the state or of a 31 political subdivision of the state within the meaning of 32 any constitutional or statutory debt limitations but are 33 special obligations of the authority, and are payable solely 34 from the income and receipts or other funds or property of 35 -10- SF512.2632 (2) 87 mm/rj 10/ 33

the authority, and the amounts on deposit in the revolving 1 fund, and the amounts payable to the authority under its loan 2 agreements with eligible entities to the extent that the 3 amounts are designated in the resolution, trust agreement, or 4 other instrument of the authority authorizing the issuance of 5 the bonds or notes as being available as security for such 6 bonds or notes. The authority shall not pledge the faith or 7 credit of the state or of a political subdivision of the state 8 to the payment of any bonds or notes. The issuance of any bonds 9 or notes by the authority does not directly, indirectly, or 10 contingently obligate the state or a political subdivision of 11 the state to apply moneys from, or levy or pledge any form of 12 taxation whatever to, the payment of the bonds or notes. 13 6. It is the intent of the general assembly, and the state 14 hereby pledges to the holders of bonds or notes issued under 15 this part, that the state will not limit or alter the rights 16 and powers vested in the authority to fulfill the terms of a 17 contract made by the authority with respect to the bonds or 18 notes, or in any way impair the rights and remedies of the 19 holders until the bonds or notes, together with the interest on 20 the bonds or notes, including interest on unpaid installments 21 of interest, and all costs and expenses in connection with an 22 action or proceeding by or on behalf of the holders, are fully 23 met and discharged. The authority is authorized to include 24 this pledge and agreement of the state, as it refers to holders 25 of bonds or notes of the authority, in a contract with the 26 holders. 27 Sec. 7. NEW SECTION . 16.204 Water quality project financial 28 assistance fund —— other funds and accounts. 29 1. a. A water quality project financial assistance 30 fund is created in the state treasury and shall consist of 31 appropriations made to the fund, moneys credited or transferred 32 to the fund pursuant to section 16.198, and transfers of 33 interest, earnings, and moneys from other funds as provided 34 by law. The fund shall be administered by the authority as a 35 -11- SF512.2632 (2) 87 mm/rj 11/ 33

revolving fund. 1 b. Moneys in the fund are not subject to section 8.33. 2 Notwithstanding section 12C.7, subsection 2, interest or 3 earnings on moneys in the fund shall be credited to the fund. 4 c. The authority shall use the moneys in the fund to provide 5 financial assistance to eligible entities under the program 6 pursuant to section 16.205. 7 d. The authority may use an amount of not more than one 8 percent of the moneys in the fund for administrative purposes. 9 2. The authority may establish and maintain other funds 10 and accounts determined to be necessary to carry out the 11 purposes of the program and shall provide for the funding, 12 administration, investment, restrictions, and disposition of 13 the funds and accounts. 14 3. Moneys appropriated to and used by the authority for 15 purposes of paying the costs and expenses associated with 16 the administration of the program shall be administered as 17 determined by the authority. 18 4. The funds or accounts held by the authority, or a trustee 19 acting on behalf of the authority pursuant to a trust agreement 20 related to the program, shall not be considered part of the 21 general fund of the state, are not subject to appropriation for 22 any other purpose by the general assembly, and in determining 23 a general fund balance shall not be included in the general 24 fund of the state, but shall remain in the funds and accounts 25 maintained by the authority or trustee pursuant to a trust 26 agreement. Funds and accounts held by the authority, or a 27 trustee acting on behalf of the authority pursuant to a trust 28 agreement related to the program, are separate dedicated funds 29 and accounts under the administration and control of the 30 authority and subject to section 16.31. 31 Sec. 8. NEW SECTION . 16.205 Water quality project financial 32 assistance program —— committee created —— rules —— use of funds. 33 1. The authority, in cooperation with the department of 34 natural resources and the department of agriculture and land 35 -12- SF512.2632 (2) 87 mm/rj 12/ 33

stewardship, shall establish and administer a water quality 1 project financial assistance program. The purpose of the 2 program shall be to provide financial assistance to enhance 3 the quality of surface water and groundwater, particularly 4 by providing financial assistance for projects designed to 5 improve water quality through collaboration between point 6 and nonpoint sources. The authority may provide financial 7 assistance in the form deemed most convenient for the efficient 8 financing of projects, including loans, forgivable loans, and 9 grants. However, the authority shall administer the fund and 10 the program in such a manner as to provide a permanent source 11 of water quality project financial assistance to eligible 12 entities. 13 2. The program shall be administered by the authority 14 in accordance with rules adopted by the authority pursuant 15 to chapter 17A. In adopting such rules, the authority shall 16 consult with the department of natural resources and the 17 department of agriculture and land stewardship. 18 3. The authority shall process and review financial 19 assistance applications and make recommendations to the 20 committee. 21 4. a. A water quality project financing committee is 22 created to consider applications for financial assistance from 23 eligible entities and approve awards of financial assistance 24 under the program. The committee shall consist of three 25 members, one appointed by the executive director of the 26 authority, one appointed by the director of the department 27 of natural resources, and one appointed by the secretary of 28 agriculture. 29 b. The committee shall review project plans submitted 30 pursuant to section 16.206, negotiate project details with 31 eligible entities, and make financial assistance awards. The 32 provision of financial assistance under the program shall take 33 into account the number of persons comprising an eligible 34 entity and the eligible entity’s financing capacity as well as 35 -13- SF512.2632 (2) 87 mm/rj 13/ 33

the extent to which the proposed projects will improve water 1 quality. 2 c. The committee shall score applications for financial 3 assistance according to rules adopted pursuant to this part. 4 The committee shall only provide financial assistance to 5 eligible entities that have sufficient financing capacity and 6 that propose a plan likely to make progress toward achieving 7 the goals for agricultural and nonpoint sources described in 8 the Iowa nutrient reduction strategy. 9 5. The authority shall determine the interest rate 10 and repayment terms for loans made under the program, in 11 cooperation with the department of natural resources and 12 the department of agriculture and land stewardship, and the 13 authority shall enter into loan agreements with eligible 14 entities in compliance with and subject to the terms and 15 conditions of the program. 16 6. The authority shall adopt rules relating to the 17 proportional liability, if any, of members of an eligible 18 entity when such eligible entity enters into a loan agreement 19 under the program. 20 7. The authority may charge loan recipients fees and assess 21 costs against such recipients necessary for the continued 22 operation of the program. Such fees and costs shall not exceed 23 the costs directly associated with the administration of the 24 program. Fees and costs collected pursuant to this subsection 25 shall be deposited in the appropriate fund or account created 26 in section 16.204. 27 8. Financial assistance under the program shall be used by 28 eligible entities to fund projects designed to improve water 29 quality. 30 9. Notwithstanding any other provision in this part to the 31 contrary, beginning on July 1, 2018, the authority may use any 32 amount available to support the water quality project financial 33 assistance program to instead extend and support the three-year 34 data collection of in-field agricultural practices project as 35 -14- SF512.2632 (2) 87 mm/rj 14/ 33

enacted in 2015 Iowa Acts, ch. 132, §18. 1 Sec. 9. NEW SECTION . 16.206 Eligible entities —— project 2 plans —— agreements required. 3 1. A financing entity may apply to the authority for 4 financial assistance under the program. To be eligible, a 5 financing entity shall meet the following requirements: 6 a. The financing entity shall include two or more entities 7 acting jointly to propose a project plan designed to improve 8 water quality in a local area or watershed. 9 b. The plan shall include one or more projects that 10 substantially improve water quality in the local area or 11 watershed. Preference shall be given to projects that will 12 have the greatest impact on achieving the goals of the Iowa 13 nutrient reduction strategy, and plans designed to achieve 14 those goals shall be presumed to substantially improve water 15 quality in the local area or watershed. 16 c. The plan shall describe in detail the manner in which 17 the projects will be financed and undertaken, including the 18 sources of financing for the projects as well as the public or 19 private entities that will be receiving the revenues and how 20 such revenues will be spent on the projects. In describing the 21 projects and financing, the plan should attempt to quantify 22 the amount of nutrient reduction to be achieved under the 23 plan and should provide a reasonable means for verification 24 of the amount of nutrient reduction after the projects have 25 been financed and completed. Preference shall be given to 26 a financing entity that has had its plan evaluated by the 27 Iowa nutrient research center established in section 466B.47. 28 Preference shall also be given to a financing entity that has 29 contracted with the Iowa nutrient research center to verify 30 the amount of nutrient reduction achieved by the project upon 31 project completion. 32 d. (1) The plan may include a nutrient reduction exchange 33 between two or more members of the financing entity. A plan 34 that includes a nutrient reduction exchange shall be presumed 35 -15- SF512.2632 (2) 87 mm/rj 15/ 33

to substantially improve water quality in the local area or 1 watershed. 2 (2) For purposes of this paragraph: 3 (a) “Nutrient reduction” means a reduction in nitrogen or 4 phosphorus as measured against standards or goals established 5 or adopted by the committee. 6 (b) “Nutrient reduction credit” means an amount of nutrient 7 reduction expressed as a unit of measurement that is calculated 8 using research-based modeling or other methods established or 9 adopted by the committee. 10 (c) “Nutrient reduction exchange” means an agreement between 11 one or more point source or nonpoint source contributors 12 and one or more other parties whereby nutrient reduction 13 credits are purchased, sold, traded, or exchanged for legal 14 consideration through a trading system approved by the 15 department of natural resources and approved in an Act of the 16 general assembly. 17 2. Any eligible entity receiving financial assistance under 18 the program shall enter into an agreement with the authority. 19 The agreement shall include standard terms for the receipt of 20 program funds and any other terms the authority deems necessary 21 and convenient for the efficient administration of the program. 22 Sec. 10. Section 28F.1, subsection 1, Code 2017, is amended 23 to read as follows: 24 1. This chapter provides a means for the joint financing 25 by public agencies of works or facilities useful and necessary 26 for the collection, treatment, purification, and disposal 27 in a sanitary manner of liquid and solid waste, sewage, and 28 industrial waste, facilities used for the conversion of solid 29 waste to energy, facilities, improvements, or projects in a 30 watershed useful for flood control, erosion control, or water 31 quality restoration by a water utility, wastewater utility, 32 or storm water utility, whether located within or without the 33 corporate boundaries of a municipal corporation, and also 34 electric power facilities constructed within the state of 35 -16- SF512.2632 (2) 87 mm/rj 16/ 33

Iowa, except that hydroelectric power facilities may also be 1 located in the waters and on the dams of or on land adjacent 2 to either side of the Mississippi or Missouri river bordering 3 the state of Iowa, water supply systems, swimming pools 4 or golf courses. This chapter applies to the acquisition, 5 construction, reconstruction, ownership, operation, repair, 6 extension, or improvement of such works or facilities, by a 7 separate administrative or legal entity created pursuant to 8 chapter 28E or chapter 389 . When the legal entity created 9 under this chapter is comprised solely of cities, counties, 10 and sanitary districts established under chapter 358 , or any 11 combination thereof or any combination of the foregoing with 12 other public agencies, the entity shall be both a corporation 13 and a political subdivision with the name under which it was 14 organized. The legal entity may sue and be sued, contract, 15 acquire and hold real and personal property necessary for 16 corporate purposes, adopt a corporate seal and alter the seal 17 at pleasure, and execute all the powers conferred in this 18 chapter. This section shall not be construed or interpreted to 19 create or expand the authority to acquire real property through 20 the use of eminent domain. 21 Sec. 11. Section 161A.7, subsection 1, paragraph d, Code 22 2017, is amended to read as follows: 23 d. To cooperate, or enter into agreements with, and within 24 the limits of appropriations duly made available to it by law, 25 to furnish financial or other aid to any agency, governmental 26 or otherwise, or any owner or occupier of lands within the 27 district, in the carrying on of erosion-control and watershed 28 protection and flood prevention operations , or in the carrying 29 out of projects pursuant to paragraph “q” , within the district, 30 subject to such conditions as the commissioners may deem 31 necessary to advance the purposes of this chapter . 32 Sec. 12. Section 161A.7, subsection 1, Code 2017, is amended 33 by adding the following new paragraphs: 34 NEW PARAGRAPH . p. To apply for financial assistance under 35 -17- SF512.2632 (2) 87 mm/rj 17/ 33

the water quality project financial assistance program under 1 sections 16.201 through 16.206. 2 NEW PARAGRAPH . q. To carry out soil erosion control, 3 watershed protection or improvement, flood prevention, and 4 water quality protection projects and operations within the 5 district, including but not limited to projects and operations 6 to support water protection practices, to protect this 7 state’s groundwater and surface water from point and nonpoint 8 sources of pollution, including but not limited to pollution 9 by agricultural drainage wells, sinkholes, sedimentation, 10 or chemical pollutants, to reduce or remove nutrients and 11 pollution in or from surface water and groundwater, to reduce 12 or eliminate nutrient loads to surface water and groundwater 13 from both point and nonpoint sources, to maintain, protect, 14 and improve the quality of surface water and groundwater, and 15 to achieve or further any of the goals and targets described 16 in the Iowa nutrient reduction strategy as defined in section 17 16.201. 18 Sec. 13. Section 161C.1, Code 2017, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 4A. “Financing entity” means the same as 21 defined in section 16.201. 22 Sec. 14. Section 161C.2, subsection 1, paragraph a, Code 23 2017, is amended to read as follows: 24 a. Each soil and water conservation district, alone and 25 whenever practical in conjunction with other districts, shall 26 financing entities, or political subdivisions of the state, 27 or other local agencies, may carry out district-wide and 28 multiple-district projects to support soil erosion control, 29 water resource restoration projects, watershed protection, 30 flood prevention, and water quality protection practices , 31 projects, and operations in the district or districts, 32 including but not limited to projects carried out in order to 33 protect this state’s groundwater and surface water from point 34 and nonpoint sources of contamination pollution , including but 35 -18- SF512.2632 (2) 87 mm/rj 18/ 33

not limited to contamination pollution by agricultural drainage 1 wells, sinkholes, sedimentation, or chemical pollutants , as 2 described in the Iowa nutrient reduction strategy as defined 3 in section 16.201 . 4 Sec. 15. Section 161C.3, Code 2017, is amended to read as 5 follows: 6 161C.3 Cooperation with other agencies. 7 Soil and water conservation districts may enter into 8 agreements with the United States, as provided by state law, 9 or with the state of Iowa or any agency of the state, any 10 other soil and water conservation district, or other political 11 subdivision of this state, or any financing entity, or other 12 local agency, for cooperation in preventing, controlling, or 13 attempting to prevent or control contamination pollution of 14 groundwater or surface water by point and nonpoint sources 15 of pollution. Soil and water conservation districts may 16 accept, as provided by state law, any money disbursed for water 17 quality preservation purposes by the federal government or any 18 agency of the federal government, and expend the money for the 19 purposes for which it was received. 20 Sec. 16. Section 161E.1, Code 2017, is amended to read as 21 follows: 22 161E.1 Authority of board. 23 1. If a county, soil and water conservation district, 24 subdistrict of a soil and water conservation district, 25 financing entity, or political subdivision of the state, or 26 other local agency engages or participates in or carries out 27 a project for flood or soil erosion control, a water resource 28 restoration project, watershed protection or improvement 29 project, flood prevention, water quality protection project or 30 operation, including but not limited to a project or operation 31 described in the Iowa nutrient reduction strategy as defined 32 in section 16.201, within a county, or engages or participates 33 in the conservation, development, utilization, and disposal 34 of water, in cooperation with the federal government, or a 35 -19- SF512.2632 (2) 87 mm/rj 19/ 33