House File 655 H-1457 Amend House File 655 as follows: 1 1. Page 1, before line 1 by inserting: 2 < DIVISION ___ 3 LOCAL OPTION SALES AND SERVICES TAXES > 4 2. Page 13, line 23, after < this > by inserting < division of 5 this > 6 3. Page 14, line 5, after < This > by inserting < division of 7 this > 8 4. Page 14, line 7, after < this > by inserting < division of 9 this > 10 5. Page 14, after line 10 by inserting: 11 < DIVISION ___ 12 GOVERNANCE OF CERTAIN WATER UTILITIES 13 Sec. ___. NEW SECTION . 388.12 Water utility board 14 discontinuance and dissolution —— governing body provisions. 15 1. Notwithstanding the provisions of section 388.2 to the 16 contrary, upon the effective date of this division of this 17 Act, the board of water works trustees of a water utility 18 in cities in a statistical area described in subsection 19 5, with a population greater than thirty-nine thousand as 20 determined by the most recent federal decennial census, shall 21 be discontinued, dissolved, and shall cease to be the governing 22 body of the water utility and the city councils of the cities 23 described in this subsection shall thereafter be the governing 24 bodies of the water utilities and the city councils of the 25 cities shall have all the powers and authorities of the city 26 with respect to the acquisition by purchase, condemnation, or 27 otherwise lease, sale, or other disposition of the property and 28 facilities of the water utility, and the management, control, 29 and operation of all facets of the water utility, subject to 30 the requirements, terms, covenants, conditions, and provisions 31 of any resolutions authorizing the issuance of revenue bonds, 32 pledge orders, or other obligations which are payable from the 33 revenues of the water utility which are then outstanding. Any 34 property not held in the name of the city as required under 35 -1- HF655.2507 (5) 87 md/rn 1/ 7 #1. #2. #3. #4. #5.

section 388.4, subsection 2, shall be retitled in the name of 1 the appropriate city as soon as legally practicable. 2 2. The city managers employed by the city councils that 3 set the compensation of the members of a board of a water 4 utility under this section shall designate the administrator 5 of a department or administrative division of that city to be 6 the manager of the water supply system in that city subject 7 to the approval of the city council. The administrator 8 designated under this subsection shall not be considered a 9 civil service employee under section 400.17 and shall serve 10 under the control and direction of the city manager of that 11 city. The administrator may be terminated at will, subject to 12 any contract in place on the effective date of this division 13 of this Act. 14 3. On and after the effective date of this division of this 15 Act and continuing until January 1, 2018, a water utility of 16 any city subject to this section is prohibited from expending 17 any moneys or staff time to plan, design, or construct any 18 new water plant or other water-producing facility other than 19 a facility currently under contract for construction or a 20 distribution facility that will transport or store treated 21 water but not produce water. 22 4. Notwithstanding any provision of this section to the 23 contrary, no provision or application of this section shall 24 in any manner restrict or otherwise impair a water utility 25 from performing its obligations and complying with the terms, 26 conditions, covenants, requirements, restrictions of federal 27 or state laws, regulations, or rules, bond resolutions, 28 obligations, or agreements relating to outstanding indebtedness 29 of the water utility, existing chapter 28E agreements and 30 contracts, including without limitation contracts related to 31 the operations, maintenance, repair, or improvements of the 32 water utility. 33 5. The city councils described in this section shall honor 34 all existing water purchase arrangements with the cities and 35 -2- HF655.2507 (5) 87 md/rn 2/ 7

rural water districts which are purchasing water from the water 1 utility prior to the effective date of this division of this 2 Act. 3 6. For the purposes of this section, “water utility” means 4 a city utility that provides water services, that is located in 5 a federally designated standard metropolitan statistical area 6 that has a population greater than five hundred thousand, as 7 shown by the most recent federal decennial census, and that is 8 located entirely within the state. 9 Sec. ___. REGIONAL WATER PRODUCTION UTILITY STUDY 10 COMMITTEE. 11 1. A regional water production utility study committee 12 shall be convened on or before May 1, 2017, to begin 13 discussions regarding the potential for creating a regional 14 water production utility. 15 2. a. The committee shall be comprised of the following 16 members: 17 (1) The mayor of each city that is a member of a waste water 18 reclamation authority. 19 (2) The city manager or city administrator of each city that 20 is a member of a waste water reclamation authority. 21 (3) The general manager of each rural water district that, 22 as of the effective date of this Act, purchases bulk water from 23 water utilities impacted by the Act. 24 (4) The mayor and city manager of a city, if the city’s 25 sanitary sewer district is a member of a waste water 26 reclamation authority. 27 b. For the purposes of this subsection, “waste water 28 reclamation authority” shall refer to a waste water reclamation 29 authority that is located in a federally designated standard 30 metropolitan statistical area that has a population greater 31 than five hundred thousand, as shown by the most recent federal 32 decennial census, and that is located entirely within the 33 state. 34 3. An executive committee consisting of one member from each 35 -3- HF655.2507 (5) 87 md/rn 3/ 7

city serving on the study committee with a population in excess 1 of thirty-nine thousand, as determined by the most recent 2 federal decennial census, shall be responsible for developing 3 recommendations on the governance structure and operations of 4 a regional water production utility for consideration by the 5 study committee. 6 4. The study committee shall use all good faith efforts to 7 agree on the governance structure and operation of a potential 8 regional water production utility by December 31, 2017. 9 5. If a city council described in this Act determines that 10 a rate increase is required after the effective date of this 11 Act but before a regional water production utility has been 12 formed and is operating, any such rate increase which is not 13 the same percentage increase for all cities and rural water 14 districts with purchase arrangements shall be calculated by the 15 executive committee prior to presentation to the city council 16 for approval. 17 6. The executive committee of the study committee shall 18 submit a report to the general assembly and the legislative 19 council by January 15, 2018, regarding the status of agreeing 20 to a governance structure and the operation of a potential 21 regional water production utility. 22 7. If a regional water production utility has not been 23 established by the cities described in this Act prior to 24 January 1, 2019, the water production assets of the water 25 utility shall revert to the water utility governance and 26 operation structure in existence prior to the effective date 27 of this Act. 28 Sec. ___. SEVERABILITY. If any word, phrase, clause, 29 sentence, paragraph, or provision of this division of 30 this Act or the application of such to any person or 31 circumstance is declared invalid, illegal, or unenforceable, or 32 unconstitutional for any reason, the remaining provisions or 33 applications of this division of this Act shall not be affected 34 by such declaration and to this end, the provisions of this 35 -4- HF655.2507 (5) 87 md/rn 4/ 7

division of this Act are severable. 1 Sec. ___. EFFECTIVE UPON ENACTMENT. This division of this 2 Act, being deemed of immediate importance, takes effect upon 3 enactment. > 4 6. Title page, line 1, after < to > by inserting < local 5 government matters, including > 6 7. Title page, line 2, after < taxes > by inserting < and the 7 governance of certain water utilities, and including effective 8 date provisions > 9 8. By renumbering, redesignating, and correcting internal 10 references as necessary. 11 ______________________________ KLEIN of Washington ______________________________ PAUSTIAN of Scott ______________________________ HOLZ of Plymouth ______________________________ MOMMSEN of Clinton ______________________________ HEIN of Jones ______________________________ WILLS of Dickinson -5- HF655.2507 (5) 87 md/rn 5/ 7 #6. #7. #8.

______________________________ KERR of Louisa ______________________________ BAUDLER of Adair ______________________________ WORTHAN of Buena Vista ______________________________ DEYOE of Story ______________________________ WHEELER of Sioux ______________________________ MAXWELL of Poweshiek ______________________________ BEST of Carroll ______________________________ SIECK of Mills ______________________________ MOHR of Scott -6- HF655.2507 (5) 87 md/rn 6/ 7