S.F. 2294 Section 1. Section 8.55, subsection 2, paragraph a, Code 1 2009, is amended to read as follows: 2 a. The maximum balance of the fund is the amount equal 3 to two and one-half percent of the adjusted revenue estimate 4 for the fiscal year. If the amount of moneys in the Iowa 5 economic emergency fund is equal to the maximum balance, 6 moneys in excess of this amount shall be transferred to the 7 general disaster recovery fund created in section 8.56A . 8 Sec. 2. NEW SECTION . 8.56A Disaster recovery fund. 9 1. A disaster recovery fund is created. The fund shall be 10 separate from the general fund of the state and the balance in 11 the fund shall not be considered part of the balance of the 12 general fund of the state. The moneys credited to the fund 13 are not subject to section 8.33, and shall not be transferred, 14 used, obligated, appropriated, or otherwise encumbered except 15 as provided in this section. 16 2. The maximum balance of the fund is the amount equal to 17 ten percent of the adjusted revenue estimate for the fiscal 18 year. If the amount of moneys in the disaster recovery fund is 19 equal to the maximum balance, moneys in excess of this amount 20 shall be transferred to the general fund of the state. 21 3. Except as authorized in subsection 4, moneys in the 22 fund shall only be used pursuant to an appropriation made 23 by the general assembly for purposes of disaster relief and 24 recovery. In order to become law, the bill or joint resolution 25 containing the appropriation must be approved by vote of at 26 least three-fifths of the members of both chambers of the 27 general assembly and signed by the governor. 28 4. a. Moneys in the fund may be used for cash flow purposes 29 during a fiscal year provided that any moneys so allocated are 30 returned to the fund by the end of that fiscal year. 31 b. Except as provided in section 8.58, the disaster recovery 32 fund shall be considered a special account for the purposes of 33 section 8.53 in determining the cash position of the general 34 fund of the state for the payment of state obligations. 35 -1- LSB 6069SV (2) 83 jp/rj 1/ 4

S.F. 2294 5. Notwithstanding section 12C.7, subsection 2, interest 1 or earnings on moneys deposited in the disaster recovery fund 2 shall be credited to the fund. Such credited moneys, if 3 appropriated, may be used for the expenses of providing ongoing 4 training and staffing for disaster response and recovery by 5 the department of human services, department of economic 6 development, Iowa finance authority, or division of homeland 7 security and emergency management of the department of public 8 safety. 9 Sec. 3. Section 8.58, Code 2009, is amended to read as 10 follows: 11 8.58 Exemption from automatic application. 12 1. To the extent that moneys appropriated under section 13 8.57 do not result in moneys being credited to the general 14 fund under section 8.55, subsection 2, moneys appropriated 15 under section 8.57 and moneys contained in the cash reserve 16 fund, rebuild Iowa infrastructure fund, environment first 17 fund, disaster recovery fund, and Iowa economic emergency fund 18 shall not be considered in the application of any formula, 19 index, or other statutory triggering mechanism which would 20 affect appropriations, payments, or taxation rates, contrary 21 provisions of the Code notwithstanding. 22 2. To the extent that moneys appropriated under section 23 8.57 do not result in moneys being credited to the general 24 fund under section 8.55, subsection 2, moneys appropriated 25 under section 8.57 and moneys contained in the cash reserve 26 fund, rebuild Iowa infrastructure fund, environment first fund, 27 disaster recovery fund, and Iowa economic emergency fund shall 28 not be considered by an arbitrator or in negotiations under 29 chapter 20. 30 Sec. 4. EFFECTIVE UPON ENACTMENT AND APPLICABILITY. This 31 Act, being deemed of immediate importance, takes effect upon 32 enactment and is applicable to moneys transferred from the Iowa 33 economic emergency fund pursuant to section 8.55, subsection 2, 34 paragraph “a” , as amended by this Act, beginning with the close 35 -2- LSB 6069SV (2) 83 jp/rj 2/ 4

S.F. 2294 of the fiscal year ending on June 30, 2010. 1 EXPLANATION 2 This bill creates a disaster recovery fund in new Code 3 section 8.56A. 4 Under current state financing law, surplus state general 5 fund moneys are first credited to the cash reserve until 6 it reaches its maximum balance equal to 7.5 percent of the 7 adjusted revenue estimate for the applicable fiscal year, then 8 surplus moneys are credited to the Iowa economic emergency 9 fund until it reaches its maximum balance equal to 2.5 percent 10 of the adjusted revenue estimate. The bill provides for the 11 surplus moneys to flow to the disaster recovery fund once 12 the first two funds have reached the maximum balance. Under 13 current law, the surplus funding is transferred to the general 14 fund of the state. The bill provides that if the disaster 15 recovery fund reaches its maximum balance equal to 10 percent 16 of the adjusted revenue estimate, surplus moneys then flow to 17 the general fund. 18 Moneys credited to the new fund may only be used pursuant 19 to an appropriation made for purposes of disaster relief and 20 recovery but are otherwise not subject to transfer, use, 21 obligation, appropriation, or other encumbrance except for 22 disaster relief and recovery. However, during the course of 23 a fiscal year moneys in the fund may be used for cash flow 24 purposes provided that any moneys so allocated are returned 25 to the fund by the end of that fiscal year. In order for an 26 appropriation to become law it must be approved by a vote of at 27 least three-fifths of the members of each chamber and approved 28 by the governor. 29 Interest or earnings on moneys in the fund are retained by 30 the fund instead of the general fund as otherwise provided in 31 Code section 12C.7. These retained moneys may be appropriated 32 for training and staffing of disaster and recovery functions 33 of the state agencies listed in the bill as providing those 34 functions. 35 -3- LSB 6069SV (2) 83 jp/rj 3/ 4

S.F. 2294 Code section 8.58 is amended to include the disaster 1 recovery fund in the list of various reserve funds that are 2 exempted from being considered to be available for any formula, 3 index, or other statutory triggering mechanism which would 4 affect appropriations, payments, or taxation rates or being 5 considered by an arbitrator or in negotiations under Code 6 chapter 20, relating to public employee collective bargaining. 7 The bill takes effect upon enactment and applies to 8 transfers of surplus moneys from the Iowa economic emergency 9 fund beginning with the close of the fiscal year ending on June 10 30, 2010. 11 -4- LSB 6069SV (2) 83 jp/rj 4/ 4