H.F. 2503 SUBCHAPTER I 1 GENERAL PROVISIONS 2 Section 1. NEW SECTION . 461.1 Title. 3 This Act shall be known and may be cited as the natural 4 resources and outdoor recreation Act. 5 Sec. 2. NEW SECTION . 461.2 Definitions. 6 As used in this chapter, unless the context otherwise 7 requires: 8 1. “Department” means the department of agriculture and 9 land stewardship, the department of natural resources, or the 10 department of transportation. 11 2. “Fiscal year” means the state fiscal year effective as 12 provided in section 3.12. 13 3. “Initiative” includes a program, project, practice, 14 strategy, or plan established or administered by an agency that 15 furthers a constitutional purpose as provided in section 461.3. 16 4. “Recreational purpose” includes hunting, trapping, 17 angling, horseback riding, swimming, boating, camping, 18 picnicking, hiking, bird watching, nature study, water skiing, 19 snowmobiling, other summer and winter sports, and viewing or 20 enjoying historical, archaeological, scenic, or scientific 21 sites. 22 5. “Trust fund” means the natural resources and outdoor 23 recreation trust fund created in section 461.3. 24 6. “Trust fund moneys” means moneys originating from the 25 natural resources and outdoor recreation trust fund. 26 Sec. 3. NEW SECTION . 461.3 Constitutional purpose and 27 implementation. 28 1. This chapter is created for the constitutional purposes 29 of protecting and enhancing water quality and natural areas 30 in this state including parks, trails, and fish and wildlife 31 habitat, and conserving agricultural soils in this state. 32 2. This chapter is intended to implement Article VII, 33 section 10 of the Constitution of the State of Iowa by 34 establishing the natural resources and outdoor recreation 35 -1- LSB 5177HV (2) 83 da/nh 1/ 12

H.F. 2503 trust fund, accounts in the trust fund, and appropriating or 1 allocating trust fund moneys to support initiatives specified 2 in subchapter IV. 3 SUBCHAPTER II 4 PARTICIPATION 5 Sec. 4. NEW SECTION . 461.11 Departmental consultation. 6 1. When making decisions regarding the expenditure of 7 trust fund moneys affecting soil and water conservation, the 8 secretary of agriculture shall regularly consult with the 9 soil conservation committee established in section 161A.4. 10 When making decisions regarding the expenditure of trust fund 11 moneys affecting natural resources and outdoor recreation the 12 director of the department of natural resources shall regularly 13 consult with the natural resource commission established 14 pursuant to section 455A.5. When making decisions regarding 15 the expenditure of trust fund moneys affecting trails, the 16 department of transportation shall consult with the state 17 transportation commission as provided in chapter 307A. 18 2. The heads of each department receiving trust fund moneys 19 shall regularly meet and whenever practicable collaborate in 20 decision-making including by adopting rules, establishing 21 funding priorities, and determining when it is beneficial to 22 provide joint funding of initiatives. 23 SUBCHAPTER III 24 ADMINISTRATION 25 Sec. 5. NEW SECTION . 461.21 Audit. 26 1. The treasurer of state shall certify monthly that trust 27 fund moneys are allocated to the various funds and accounts as 28 provided in subchapter IV. 29 2. The auditor of state or a certified public accounting 30 firm appointed by the auditor of state shall conduct an annual 31 audit of the trust fund and all accounts and transactions of 32 the trust fund and accounts. 33 3. The auditor of state or the certified public accounting 34 firm appointed by the auditor as provided in subsection 2 shall 35 -2- LSB 5177HV (2) 83 da/nh 2/ 12

H.F. 2503 be paid from trust fund moneys without reducing the percentage 1 of trust fund moneys distributed to the Iowa resources 2 enhancement and protection fund or any one account established 3 pursuant to this chapter. 4 Sec. 6. NEW SECTION . 461.22 Report. 5 The three departments together with the treasurer of state 6 and the auditor of state shall jointly prepare and submit to 7 the governor and the general assembly not later than January 8 15 of each year a complete report in an electronic format 9 detailing all of the following: 10 1. The receipts and expenditures of the trust fund and its 11 accounts, a summary of initiatives supported by trust fund 12 moneys, the results of those expenditures, any performance 13 goals or measurements, and plans for future short-term or 14 long-term expenditures. 15 2. Recommendations to the general assembly, including 16 legislation proposed by one or more of the departments. 17 Sec. 7. NEW SECTION . 461.23 Rules. 18 The treasurer of state, the auditor of state, the 19 department of revenue, and the department of agriculture and 20 land stewardship, the department of natural resources, and 21 department of transportation shall adopt rules separately or 22 jointly as necessary in order to implement and administer this 23 chapter. 24 SUBCHAPTER IV 25 NATURAL RESOURCES AND OUTDOOR RECREATION TRUST FUND 26 AND DISTRIBUTIONS TO SUPPORT DEDICATED PURPOSES 27 Sec. 8. NEW SECTION . 461.31 Natural resources and outdoor 28 recreation trust fund —— creation. 29 A natural resources and outdoor recreation trust fund is 30 created within the state treasury. 31 1. The trust fund shall be composed of moneys required to 32 be credited to the trust fund by law and moneys accepted by 33 a department for placement in an account established in this 34 subchapter and from any source. 35 -3- LSB 5177HV (2) 83 da/nh 3/ 12

H.F. 2503 2. Trust fund moneys are exclusively appropriated by law 1 to carry out the constitutional purposes provided in section 2 461.3. 3 3. Trust fund moneys shall supplement and not replace 4 moneys appropriated by the general assembly to support the 5 constitutional purposes provided in section 461.3. 6 4. Trust fund moneys shall only be used to support voluntary 7 initiatives and shall not be used for regulatory efforts, 8 enforcement actions, or litigation. 9 5. In administering a trust fund account, a department 10 may contract, sue and be sued, and authorize payment for 11 costs, fees, commissions, and other reasonable expenses from 12 the account. However, a department shall not in any manner 13 directly or indirectly pledge the credit of this state. 14 6. Notwithstanding section 8.33, any unexpended balance in 15 the trust fund or in an account created within the trust fund 16 at the end of each fiscal year shall be retained in the trust 17 fund or the respective account. Notwithstanding section 12C.7, 18 subsection 2, interest or earnings on investments or time 19 deposits of the moneys in the trust fund and its respective 20 accounts shall be credited to the trust fund and its respective 21 accounts. The recapture of awards originating from an account 22 and other repayments to an account shall be retained in that 23 account. 24 Sec. 9. NEW SECTION . 461.32 Natural resources account 25 —— allocations. 26 A natural resources account is created in the trust fund. 27 Twenty-three percent of the moneys credited to the trust fund 28 shall be allocated to the account. 29 1. The account shall be used by the department of natural 30 resources to support all of the following initiatives: 31 a. The establishment, maintenance, restoration, 32 improvement, or enhancement of state parks, state preserves, 33 state forests, wildlife areas, wildlife habitats, native 34 prairies, and wetlands. 35 -4- LSB 5177HV (2) 83 da/nh 4/ 12

H.F. 2503 b. Wildlife diversity. 1 c. Recreational purposes. 2 d. Technical assistance and financial incentives to private 3 landowners to promote the management of forests, fisheries, 4 wetlands, and wildlife. 5 e. The improvement of water trails, rivers, and streams. 6 f. Education and outreach that provide instruction regarding 7 natural history and the outdoors. The subjects of such 8 instruction may relate to opportunities involving recreational 9 purposes, outdoor safety, and ethics. 10 g. State conservation law enforcement. 11 2. The department of natural resources shall to every extent 12 possible consider its comprehensive plan provided in section 13 456A.31 when making funding decisions. 14 Sec. 10. NEW SECTION . 461.33 Soil conservation and water 15 protection account —— allocations. 16 A soil conservation and water protection account is created 17 in the trust fund. Twenty percent of the moneys credited to 18 the trust fund shall be allocated to the account. 19 1. The account shall be used by the department of 20 agriculture and land stewardship to support all of the 21 following initiatives: 22 a. Soil conservation and watershed protection, including 23 by supporting the soil conservation division of the department 24 of agriculture and land stewardship and soil and water 25 conservation district commissioners. The department may 26 provide for the installation of conservation practices and 27 watershed protection improvements as provided in chapters 161A, 28 161C, 461A, 466, and 466A. 29 b. The conservation of highly erodible land. The department 30 of agriculture and land stewardship may execute contracts with 31 private landowners who agree to reserve such land only for uses 32 that prevent erosion in excess of the applicable soil loss 33 limits as established in section 161A.44. 34 c. Soil conservation or crop management practices used on 35 -5- LSB 5177HV (2) 83 da/nh 5/ 12

H.F. 2503 land producing biomass for biorefineries, including cellulosic 1 ethanol production. 2 2. The department of agriculture and land stewardship may 3 use the account to provide financial incentives or technical 4 assistance to landowners. 5 Sec. 11. NEW SECTION . 461.34 Watershed protection account 6 —— allocations. 7 A watershed protection account is created in the trust fund. 8 Fourteen percent of the moneys credited to the trust fund shall 9 be allocated to the account. 10 1. The account shall be used cooperatively by the department 11 of natural resources and the department of agriculture and land 12 stewardship to support all of the following initiatives: 13 a. Water resource projects administered by the department 14 of natural resources to preserve watersheds, including but not 15 limited to all of the following: 16 (1) Projects to protect, restore, or enhance water quality 17 in the state through the provision of financial assistance to 18 communities for impairment-based, locally directed watershed 19 projects. The department may use the account to support the 20 water resource restoration sponsor program as provided in 21 section 455B.199. 22 (2) Regional and community watershed assessment, planning, 23 and prioritization efforts, including as provided in chapter 24 466B. 25 b. Surface water protection projects and practices 26 administered by the department of agriculture and land 27 stewardship or the department of natural resources, including 28 but not limited to the installation of permanent vegetation 29 cover, filter strips, grass waterways, and riparian forest 30 buffers; dredging; and bank stabilization. The departments 31 of agriculture and land stewardship and natural resources 32 may use the account to support the conservation buffer strip 33 program provided in section 466.4 and the conservation reserve 34 enhancement program as provided in section 466.5. 35 -6- LSB 5177HV (2) 83 da/nh 6/ 12

H.F. 2503 2. The departments’ decision to prioritize initiatives may 1 be based on the priority list of watersheds provided in section 2 456A.33A. 3 Sec. 12. NEW SECTION . 461.35 Iowa resources enhancement and 4 protection fund —— allocation. 5 Thirteen percent of the moneys credited to the trust 6 fund shall be allocated to the Iowa resources enhancement 7 and protection fund created in section 455A.18 for further 8 allocation as provided in section 455A.19. 9 Sec. 13. NEW SECTION . 461.36 Local conservation partnership 10 account —— allocations. 11 A local conservation partnership account is created in the 12 trust fund. Thirteen percent of the moneys credited to the 13 trust fund shall be allocated to the account. 14 1. The department of natural resources shall allocate 15 trust fund moneys in the account to local communities for the 16 following initiatives: 17 a. The maintenance and improvement of parks, preserves, 18 wildlife areas, wildlife habitats, native prairies, and 19 wetlands. 20 b. Wildlife diversity. 21 c. Recreational purposes. 22 d. The improvement of water trails, rivers, and streams. 23 e. Education and outreach programs and projects that provide 24 instruction regarding natural history and the outdoors. The 25 subjects of such instruction may relate to opportunities 26 involving recreational purposes, outdoor safety, and ethics. 27 f. Any other purpose described in section 350.1. 28 2. A local community may cooperate with the state or the 29 federal government to carry out the initiative. Two or more 30 local communities may form an entity if allowed under chapter 31 28E in order to carry out the initiative. 32 3. As used in this section, “local community” means a county 33 conservation board, a city, or a nongovernmental organization 34 operating on a nonprofit basis. 35 -7- LSB 5177HV (2) 83 da/nh 7/ 12

H.F. 2503 Sec. 14. NEW SECTION . 461.37 Trails account —— allocations. 1 A trails account is created in the trust fund. Ten percent 2 of the moneys credited to the trust fund shall be allocated to 3 the account. 4 1. The department of transportation and the department 5 of natural resources shall allocate moneys in the account to 6 support initiatives related to the design, establishment, 7 maintenance, improvement, and expansion of land trails. The 8 land trails may be for equestrian use, bicycles, walking, 9 hiking, nature study, or cross-country skiing. 10 2. The department of natural resources may use the account 11 to support the design, establishment, maintenance, improvement, 12 and expansion of water trails. 13 Sec. 15. NEW SECTION . 461.38 Lake restoration account —— 14 allocations. 15 A lake restoration account is created in the trust fund. 16 Seven percent of the moneys credited to the trust fund shall 17 be deposited to the account. The department of natural 18 resources shall use moneys in the account to support public 19 lake restoration initiatives as follows: 20 1. An initiative shall account for a lake’s recreational, 21 environmental, aesthetic, ecological, and social value. It 22 must improve water quality. 23 2. The department’s decision to prioritize an initiative 24 may be based on the department’s lake restoration plan and 25 report as provided in section 456A.33B. 26 Sec. 16. CONTINGENT IMPLEMENTATION. This Act shall be 27 implemented on January 1, 2011, if the joint resolution 28 proposing an amendment to the Constitution of the State of Iowa 29 to dedicate a portion of state revenue from the tax imposed on 30 certain retail sales of tangible personal property and services 31 for the benefit of the state’s natural resources, as passed for 32 the second time by the general assembly as provided in 2009 33 Iowa Acts, chapter 185, and submitted to the people of the 34 State of Iowa at the general election in November 2010, in the 35 -8- LSB 5177HV (2) 83 da/nh 8/ 12

H.F. 2503 manner required by the Constitution of the State of Iowa and 1 the laws of this state, is ratified. 2 EXPLANATION 3 BACKGROUND. In 2008, the 82nd General Assembly passed 4 Senate Joint Resolution 2002 and in 2009 the 83rd General 5 Assembly passed House Joint Resolution 1 proposing an amendment 6 to the Constitution of the State of Iowa to dedicate a portion 7 of state revenue from the tax imposed on certain retail sales 8 of tangible personal property and services for the benefit 9 of the state’s natural resources. The resolution creates a 10 natural resources and outdoor recreation trust fund within the 11 state treasury and not within the general fund of the state. 12 Moneys in the fund cannot be used for any purpose other than 13 protecting and enhancing water quality and natural areas in 14 this state including parks, trails, and fish and wildlife 15 habitat, and conserving agricultural soils in this state. No 16 revenue is credited to the fund until the sales and use tax 17 rate is increased. Whenever the sales tax is increased, the 18 amount generated by the increase is credited to the fund. If 19 approved by a majority of Iowa voters, the constitution of 20 the state is amended effective as of the date of the general 21 election. 22 GENERAL. The bill creates a new Code chapter referred to 23 as the natural resources and outdoor recreation Act. The bill 24 provides that its purpose is to implement the constitutional 25 purposes of protecting and enhancing water quality and natural 26 areas in this state including parks, trails, and fish and 27 wildlife habitat, and conserving agricultural soils in this 28 state. The fund is administered by the treasurer of state 29 and provides for distributions to support various initiatives 30 to be carried out by the department of natural resources, 31 the department of agriculture and land stewardship, and 32 the department of transportation. An initiative includes a 33 program, project, practice, strategy, or plan established 34 or administered by an agency that furthers a constitutional 35 -9- LSB 5177HV (2) 83 da/nh 9/ 12

H.F. 2503 purpose. 1 PARTICIPATION. The bill requires the heads of the three 2 departments who make decisions regarding the expenditure 3 of trust fund moneys to consult with bodies that oversee 4 policies concerned with natural resources. The director of 5 the department of natural resources must consult with the 6 natural resource commission, the secretary of agriculture must 7 consult with the state soil conservation committee, and the 8 director of the department of transportation must consult with 9 the state transportation commission. The heads of the three 10 departments must regularly meet together and collaborate when 11 making decisions. 12 ADMINISTRATION. The bill requires annual audits by the 13 auditor of state or a private accounting firm. Finally, the 14 three departments together with the treasurer of state and 15 auditor of state must submit an annual report to the governor 16 detailing the management of the trust fund, decision-making, 17 and the results of expenditures from the trust fund. The bill 18 requires those agencies to adopt rules necessary to carry out 19 their responsibilities. 20 TRUST FUND ESTABLISHED. The bill creates the trust 21 fund, provides that moneys may be credited to the fund as 22 provided by law or accepted by a decision-making department 23 for placement in an account under its control. According to 24 the bill, trust fund moneys shall supplement and not replace 25 moneys appropriated by the general assembly to support the 26 constitutional purposes, must be used to support voluntary 27 initiatives, and must not be used for regulatory efforts, 28 enforcement actions, or litigation. Moneys in a fund or 29 account remain in the fund or account until expended and retain 30 all earnings. 31 TRUST FUND ALLOCATIONS —— NATURAL RESOURCES ACCOUNT. The 32 bill creates a natural resources account and provides for the 33 allocation of trust fund moneys to the account for use by the 34 department of natural resources to support initiatives related 35 -10- LSB 5177HV (2) 83 da/nh 10/ 12

H.F. 2503 to state lands, wildlife, recreation, natural habitat, rivers 1 and streams, education, and state conservation law enforcement. 2 SOIL CONSERVATION AND WATER PROTECTION ACCOUNT. The bill 3 creates a soil conservation and water protection account and 4 provides for the allocation of trust fund moneys into the 5 account for use by the department of agriculture and land 6 stewardship to support initiatives related to soil conservation 7 and watershed protection to support the department’s soil 8 conservation division and soil and water conservation 9 district commissioners. The department may also provide for 10 the conservation of highly erodible land and provide for 11 soil conservation or crop management practices used on land 12 producing biomass for biorefineries. 13 WATERSHED PROTECTION ACCOUNT. The bill creates a watershed 14 protection account and provides for the allocation of trust 15 fund moneys into the account for use by the department of 16 natural resources and the department of agriculture and land 17 stewardship to support initiatives related to water resource 18 initiatives, including for the protection, restoration, or 19 enhancement of water quality in the state, and the installation 20 of vegetation as soil or pollution barriers. 21 IOWA RESOURCES ENHANCEMENT AND PROTECTION FUND. The bill 22 provides for the allocation of trust fund moneys to the Iowa 23 resources enhancement and protection fund for allocations as 24 provided by law. 25 LOCAL CONSERVATION PARTNERSHIP ACCOUNT. The bill creates 26 a local conservation partnership account and provides for 27 the allocation of trust fund moneys into the account for use 28 by the department of natural resources to support community 29 initiatives, including for parks, preserves, wildlife areas, 30 wildlife habitats, native prairies, and wetlands; wildlife 31 diversity; recreation; the improvement of water trails, rivers, 32 and streams; and education and outreach. A local community 33 is limited to a county conservation board, a city, or a 34 nongovernmental organization operating on a nonprofit basis; or 35 -11- LSB 5177HV (2) 83 da/nh 11/ 12

H.F. 2503 a city or county allowed to organize under a Code chapter 28E 1 agreement. 2 TRAILS ACCOUNT. The bill creates a trails account and 3 provides for the allocation of trust fund moneys into the 4 account for use by the department of transportation and 5 the department of natural resources to support the design, 6 establishment, maintenance, improvement, and expansion of land 7 trails and water trails. 8 LAKE RESTORATION ACCOUNT. The bill creates a lake 9 restoration account and provides for the allocation of trust 10 fund moneys into the account for use by the department of 11 natural resources to support initiatives related to lake 12 restoration taking into account a lake’s recreational, 13 environmental, aesthetic, ecological, and social value. 14 CONTINGENT IMPLEMENTATION. The bill is to be implemented 15 on January 1, 2011, if the joint resolution proposing the 16 amendment to the Constitution of the State of Iowa is ratified. 17 -12- LSB 5177HV (2) 83 da/nh 12/ 12