Senate Study Bill 1209 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON APPROPRIATIONS BILL BY CHAIRPERSON DVORSKY) A BILL FOR An Act relating to flood mitigation by establishing a flood 1 mitigation program, establishing a flood mitigation board, 2 authorizing the use of certain sales tax revenue and 3 other financial assistance for flood mitigation projects, 4 establishing a flood mitigation fund, authorizing the 5 issuance of bonds for certain flood mitigation projects, and 6 including effective date provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2776XC (6) 84 md/sc

S.F. _____ Section 1. Section 29C.8, subsection 3, Code 2011, is 1 amended by adding the following new paragraph: 2 NEW PARAGRAPH . h. Carry out duties related to the flood 3 mitigation program and the flood mitigation board under chapter 4 418. 5 Sec. 2. Section 331.430, subsection 2, Code 2011, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . d. Payments required to be made from the 8 debt service fund to a flood project fund under section 418.14, 9 subsection 5. 10 Sec. 3. Section 384.4, subsection 1, Code 2011, is amended 11 by adding the following new paragraph: 12 NEW PARAGRAPH . e. Payments required to be made from the 13 debt service fund to a flood project fund under section 418.14, 14 subsection 5. 15 Sec. 4. NEW SECTION . 418.1 Definitions. 16 For purposes of this chapter, unless the context otherwise 17 requires: 18 1. “Base year” means the fiscal year ending during the 19 calendar year in which the governmental entity’s project is 20 approved by the board under section 418.9. 21 2. “Board” means the flood mitigation board as created in 22 section 418.5. 23 3. “Division” means the homeland security and emergency 24 management division of the department of public defense. 25 4. “Governmental entity” means any of the following: 26 a. A county. 27 b. A joint board or other legal or administrative entity 28 established or designated in an agreement pursuant to chapter 29 28E between a county and one or more cities located within the 30 county. 31 5. “Project” means the construction and reconstruction 32 of levees, embankments, impounding reservoirs, or conduits 33 that are necessary for the protection of property from the 34 effects of floodwaters and may include the deepening, widening, 35 -1- LSB 2776XC (6) 84 md/sc 1/ 23

S.F. _____ alteration, change, diversion, or other improvement of 1 watercourses if necessary for the protection of such property 2 from the effects of floodwaters. 3 6. “Retail establishment” means a business operated by a 4 retailer as defined in section 423.1. 5 7. “Sales tax” means the sales and services tax imposed 6 pursuant to section 423.2. 7 Sec. 5. NEW SECTION . 418.4 Projects. 8 1. A governmental entity may use the moneys in its flood 9 project fund established pursuant to section 418.13 to fund 10 projects that meet the requirements of this section. 11 2. Prior to undertaking a project, the governmental entity 12 shall adopt a project plan. The project plan shall include 13 a detailed description of the project, clearly state the 14 cost of the project and the amount of debt to be incurred 15 for purposes of funding the project, and include a detailed 16 description of all funding sources for the project, including 17 information relating to either the proposed use of financial 18 assistance from the flood mitigation fund under section 418.10 19 or the proposed use of sales tax increment revenues received 20 under section 418.12. The project plan shall also include 21 information related to the approval criteria in section 418.9, 22 subsection 2. 23 3. A governmental entity shall not undertake a project under 24 this chapter unless all of the following conditions are met: 25 a. Bidding for the project has been completed. 26 b. The project has been awarded financial assistance under 27 the federal Water Resources Development Act or has been awarded 28 other federal financial assistance specifically for hazard 29 mitigation. 30 c. The project plan has been approved by the board under 31 section 418.9. 32 d. Following approval of the project plan by the board, 33 the governmental entity has adopted a resolution authorizing 34 the use of sales tax increment revenue from the governmental 35 -2- LSB 2776XC (6) 84 md/sc 2/ 23

S.F. _____ entity’s flood project fund, if sales tax increment revenue 1 was approved by the board as a funding source for the project. 2 Within ten days of adoption, the governmental entity shall 3 provide a copy of the resolution to the department of revenue. 4 4. A governmental entity shall not seek approval from the 5 board for a project if the governmental entity previously 6 had a project approved pursuant to section 418.9 or if the 7 governmental entity previously was part of a governmental 8 entity as defined in section 418.1, subsection 4, paragraph “b”, 9 that had a project approved pursuant to section 418.9. 10 5. Following approval of a project under section 418.9, the 11 governmental entity shall on or before December 15 of each year 12 submit a report to the board detailing all of the following: 13 a. The current status of the project. 14 b. Total expenditures and the types of expenditures that 15 have been made related to the project. 16 c. The amount of the total project cost remaining as of the 17 date the report is submitted. 18 d. The amounts, types, and sources of funding being used. 19 e. The amount of bonds issued or other indebtedness incurred 20 for the project, including information related to the rate of 21 interest, length of term, costs of issuance, and net proceeds. 22 The report shall also include the amounts and types of moneys 23 used for payment of such bonds or indebtedness. 24 6. A governmental entity may contract with a council of 25 governments to perform any duty or power authorized under this 26 chapter or for the completion of a project. 27 Sec. 6. NEW SECTION . 418.5 Flood mitigation board. 28 1. The flood mitigation board is established consisting of 29 nine voting members and four ex officio, nonvoting members, and 30 is located for administrative purposes within the division. 31 The administrator of the division shall provide office space, 32 staff assistance, and necessary supplies and equipment for 33 the board. The administrator shall budget funds to pay the 34 necessary expenses of the board. In performing its functions, 35 -3- LSB 2776XC (6) 84 md/sc 3/ 23

S.F. _____ the board is performing a public function on behalf of the 1 state and is a public instrumentality of the state. 2 2. The voting membership of the board shall include all of 3 the following: 4 a. Four members of the general public. Each general public 5 member of the board shall have demonstrable experience or 6 expertise in the field of natural disaster or flood mitigation. 7 b. The director of the department of natural resources or 8 the director’s designee. 9 c. The secretary of agriculture or the secretary’s designee. 10 d. The treasurer of state or the treasurer’s designee. 11 e. The administrator of the division or the administrator’s 12 designee. 13 f. The executive director of the Iowa finance authority or 14 the executive director’s designee. 15 3. The general public members shall be appointed by 16 the governor, subject to confirmation by the senate. The 17 appointments shall comply with sections 69.16 and 69.16A. 18 4. The chairperson and vice chairperson of the board shall 19 be designated by the governor from the board members listed 20 in subsection 2. In case of the absence or disability of the 21 chairperson and vice chairperson, the members of the board 22 shall elect a temporary chairperson by a majority vote of those 23 members who are present and voting. 24 5. The members appointed under subsection 2, paragraph 25 “a” , shall be appointed to three-year staggered terms and the 26 terms shall commence and end as provided by section 69.19. If 27 a vacancy occurs, a successor shall be appointed to serve the 28 unexpired term. A successor shall be appointed in the same 29 manner and subject to the same qualifications as the original 30 appointment. 31 6. The board’s ex officio membership shall include four 32 members of the general assembly with one each appointed by 33 the majority leader of the senate, the minority leader of the 34 senate, the speaker of the house of representatives, and the 35 -4- LSB 2776XC (6) 84 md/sc 4/ 23

S.F. _____ minority leader of the house of representatives. A legislative 1 member serves for a term as provided in section 69.16B in an ex 2 officio, nonvoting capacity and is eligible for per diem and 3 expenses as provided in section 2.10. 4 7. A majority of the board constitutes a quorum. 5 Sec. 7. NEW SECTION . 418.6 Expenses of board members. 6 The voting members of the board are entitled to receive 7 reimbursement for actual expenses incurred while engaged in the 8 performance of official duties. A member of the board is not 9 eligible to receive the additional expense allowance provided 10 in section 7E.6, subsection 2. 11 Sec. 8. NEW SECTION . 418.7 Division duties. 12 The division, subject to approval by the board, shall 13 adopt administrative rules pursuant to chapter 17A necessary 14 to administer the flood mitigation program. The division 15 shall provide the board with assistance in implementing 16 administrative functions and providing technical assistance and 17 application assistance to applicants under the program. 18 Sec. 9. NEW SECTION . 418.8 Flood mitigation program. 19 1. The board shall establish and the division, subject 20 to direction and approval by the board, shall administer a 21 flood mitigation program to assist governmental entities 22 in undertaking projects approved under this chapter. The 23 flood mitigation program shall include projects approved 24 by the board to utilize either financial assistance from 25 the flood mitigation fund created under section 418.10 or 26 sales tax revenues remitted to the governmental entity under 27 section 418.12. A governmental entity shall not be approved 28 by the board to utilize both financial assistance from the 29 flood mitigation fund and sales tax revenues remitted to the 30 governmental entity. 31 2. The board shall, by rules adopted under section 32 418.7, prescribe application instructions, forms, and other 33 requirements deemed necessary to operate the flood mitigation 34 program. 35 -5- LSB 2776XC (6) 84 md/sc 5/ 23

S.F. _____ 3. The board may contract with or otherwise consult with the 1 Iowa flood center, established under section 466C.1, to assist 2 the board in administering the flood mitigation program. 3 4. The board shall submit a written report to the governor 4 and the general assembly on or before January 15 of each year. 5 The report shall include information relating to all projects 6 approved by the board for inclusion in the flood mitigation 7 program, the status of such projects, summaries of each report 8 submitted to the board under section 418.4, subsection 5, 9 information relating to the types of funding being used for 10 each approved project, including all indebtedness incurred by 11 the applicable governmental entities, and any recommendations 12 for legislative action to modify the provisions of this 13 chapter. 14 Sec. 10. NEW SECTION . 418.9 Project application review. 15 1. a. A governmental entity shall submit an application 16 to the board for approval of a project plan. The board shall 17 not approve a project for inclusion in the program if the 18 application is submitted after January 1, 2016. 19 b. The application shall specify whether the governmental 20 entity is requesting financial assistance from the flood 21 mitigation fund or approval for the use of sales tax revenues. 22 Applications for financial assistance from the flood mitigation 23 fund shall describe the type and amount of assistance 24 requested. Applications for the use of sales tax revenues 25 shall state the amount of sales tax revenues necessary for 26 completion of the project. 27 2. Each application shall include or have attached to 28 the application, the governmental entity’s project plan 29 adopted under section 418.4, subsection 2. When reviewing 30 applications, in addition to the project plan, the board shall 31 consider, at a minimum, all of the following: 32 a. Whether the project is designed to mitigate future 33 flooding of property that has sustained significant flood 34 damage and is likely to sustain significant flood damage in the 35 -6- LSB 2776XC (6) 84 md/sc 6/ 23

S.F. _____ future. 1 b. Whether the project plan addresses the impact of flooding 2 both upstream and downstream from the area where the project is 3 to be undertaken. 4 c. Whether the area that would benefit from the project’s 5 flood mitigation efforts is valuable to the economic viability 6 of the state or is of historic value to the state. 7 d. The extent to which the project would utilize local 8 matching funds. The board shall not approve a project unless 9 at least fifty percent of the total cost of the project is 10 funded using public and nonpublic local matching funds. Of the 11 required amount of local matching funds under this paragraph, 12 not less than fifty percent of the local matching funds shall 13 be from nonpublic sources. 14 e. The extent of nonfinancial support committed to the 15 project from public and nonpublic sources. 16 f. The net number of new jobs proposed to be created as a 17 direct result of the project and its completion in the area for 18 which the project is designed to mitigate future flooding. 19 g. Whether the project plan is consistent with the 20 applicable comprehensive, countywide emergency operations plan 21 in effect. 22 h. Whether financial assistance through the flood mitigation 23 program is essential to meet the necessary expenses or serious 24 needs of the governmental entity related to flood mitigation. 25 3. Upon review of the applications, the board, following 26 consultation with the department of economic development, shall 27 approve, defer, or deny the applications. If a project plan 28 is denied, the board shall state the reasons for the denial 29 and the governmental entity may resubmit the application so 30 long as the application is filed on or before January 1, 2016. 31 If a project plan application is approved, the board shall 32 specify whether the governmental entity is approved for the 33 use of sales tax revenues under section 418.12 or whether the 34 governmental entity is approved to receive financial assistance 35 -7- LSB 2776XC (6) 84 md/sc 7/ 23

S.F. _____ from the flood mitigation fund under section 418.10. If 1 the board approves a project plan application that includes 2 financial assistance from the flood mitigation fund, the board 3 shall negotiate and execute on behalf of the division all 4 necessary agreements to provide such financial assistance. 5 4. The board shall not approve a project plan application 6 that includes financial assistance from the flood mitigation 7 fund or the use of sales tax revenue to pay principal and 8 interest on or to refinance any debt or other obligation 9 existing prior to the approval of the project. 10 5. Upon approval of an application for financial assistance 11 under the program, the board shall notify the treasurer of 12 state regarding the amount of moneys needed to satisfy the 13 award of financial assistance and the terms of the award. The 14 treasurer of state shall notify the division any time moneys 15 are disbursed to a recipient of financial assistance under the 16 program. 17 6. If, following approval of a project application under the 18 program, it is determined that the amount of federal financial 19 assistance under section 418.4, subsection 3, paragraph “b” , 20 exceeds the amount of federal financial assistance specified in 21 the application, the board shall reduce the award of financial 22 assistance from the flood mitigation fund or reduce the amount 23 of sales tax revenue to be received for the project by a 24 corresponding amount. 25 Sec. 11. NEW SECTION . 418.10 Flood mitigation fund. 26 1. A flood mitigation fund is created as a separate and 27 distinct fund in the state treasury under the control of the 28 board and consists of moneys appropriated by the general 29 assembly and any other moneys available to and obtained or 30 accepted by the board for placement in the fund. Moneys in the 31 fund shall only be used for the purposes of this section. 32 2. Payments of interest, repayments of moneys loaned 33 pursuant to this chapter, and recaptures of grants, if provided 34 for in the financial assistance agreements, shall be deposited 35 -8- LSB 2776XC (6) 84 md/sc 8/ 23

S.F. _____ in the fund. 1 3. The moneys in the fund shall be used to provide 2 assistance in the form of grants, loans, and forgivable loans. 3 The use of moneys in the fund for such assistance shall be on 4 a first-come, first-served basis. The board may only provide 5 financial assistance from moneys in the fund. 6 4. Moneys in the fund are not subject to section 8.33. 7 Notwithstanding section 12C.7, subsection 2, interest or 8 earnings on moneys in the fund shall be credited to the fund. 9 5. If any portion of the moneys appropriated for deposit 10 in the fund have not been awarded during the fiscal year for 11 which the appropriation is made, the portion which has not 12 been awarded may be utilized by the board to provide financial 13 assistance under the program in subsequent fiscal years. 14 6. The board may make a multiyear commitment to a 15 governmental entity of up to four million dollars in any one 16 fiscal year. 17 7. Moneys received by a governmental entity from the fund 18 shall be deposited in the governmental entity’s flood project 19 fund under section 418.13. 20 8. The board is not required to award financial assistance 21 pursuant to this section unless moneys are appropriated to and 22 available from the fund. 23 9. Following completion of all projects approved to utilize 24 financial assistance from the fund and upon a determination 25 by the board that remaining moneys in the fund are no longer 26 needed for the program, all moneys remaining in the fund or 27 subsequently deposited in the fund shall be credited for 28 deposit in the general fund of the state. 29 Sec. 12. NEW SECTION . 418.11 Sales tax increment 30 calculation. 31 1. The department of revenue shall calculate quarterly the 32 amount of increased sales tax revenues to be deposited in the 33 sales tax increment fund pursuant to section 423.2, subsection 34 11, paragraph “a” , subparagraph (2). 35 -9- LSB 2776XC (6) 84 md/sc 9/ 23

S.F. _____ 2. The department of revenue shall calculate the amount of 1 the increase for purposes of subsection 1 as follows: 2 a. Determine the amount of sales tax revenue collected by 3 the department in each applicable area specified in subsection 4 3, during the corresponding quarter in the base year from 5 retail establishments located in such areas. 6 b. Determine the amount of sales tax revenue collected by 7 the department in each applicable area specified in subsection 8 3, during the corresponding quarter in each subsequent calendar 9 year from retail establishments located in such areas. 10 c. Subtract the base year quarterly amount determined in 11 paragraph “a” from the subsequent calendar year quarterly 12 amount determined in paragraph “b” . 13 d. The result of the calculation in paragraph “c” , to 14 the extent that the amount of revenue in the quarter of the 15 subsequent year exceeds the total amount of revenue in the 16 corresponding quarter of the base year, shall constitute the 17 amount of increased revenues for purposes of subsection 1. 18 3. a. For projects approved for a governmental entity as 19 defined in section 418.1, subsection 4, paragraph “a” , the area 20 used to determine the sales tax increment shall include only 21 the unincorporated areas of the county. 22 b. For projects approved for a governmental entity as 23 defined in section 418.1, subsection 4, paragraph “b” , the 24 area used to determine the sales tax increment shall include 25 the incorporated areas of each city that is participating in 26 the chapter 28E agreement and the unincorporated areas of the 27 county. 28 4. Each governmental entity shall assist the department 29 of revenue in identifying retail establishments in the 30 governmental entity’s applicable area that are collecting sales 31 tax. This process shall be ongoing until the governmental 32 entity ceases to utilize sales tax revenue under this chapter. 33 Sec. 13. NEW SECTION . 418.12 Sales tax increment fund. 34 1. A sales tax increment fund is established as a separate 35 -10- LSB 2776XC (6) 84 md/sc 10/ 23

S.F. _____ and distinct fund in the state treasury under the control of 1 the department of revenue consisting of the amount of the 2 increased state sales and services tax revenues collected by 3 the department of revenue within each applicable area specified 4 in section 418.11, subsection 3, and deposited in the fund 5 pursuant to section 423.2, subsection 11, paragraph “a” , 6 subparagraph (2). Moneys in the fund shall only be used for 7 the purposes of this section. 8 2. An account is created within the fund for each 9 governmental entity that has adopted a resolution under section 10 418.4, subsection 3, paragraph “d” . 11 3. The department of revenue shall credit to the fund the 12 moneys described in subsection 1 beginning the first day of the 13 quarter following receipt of a resolution under section 418.4, 14 subsection 3, paragraph “d” . 15 4. a. A governmental entity may request remittance of 16 the moneys in the governmental entity’s account within the 17 fund. Such requests shall be made not more than quarterly. 18 Requests for remittance shall be submitted on forms prescribed 19 by the department of revenue. Requests for remittance shall 20 be made for the amount of moneys in the governmental entity’s 21 account necessary to pay the governmental entity’s costs or 22 obligations related to the project, according to the sales 23 tax revenue funding needs specified in the approved project 24 plan. A governmental entity shall not, however, during any 25 fiscal year receive remittances under this section exceeding 26 fifteen million dollars or the total yearly amount of increased 27 revenue in the governmental entity’s applicable area, whichever 28 is less. The total amount of remittances during any fiscal 29 year for all governmental entities approved to use sales tax 30 revenues under this chapter shall not exceed, in the aggregate, 31 thirty million dollars. Remittances from the department of 32 revenue shall be deposited in the governmental entity’s flood 33 project fund under section 418.13. 34 b. The department of revenue shall adopt rules for the 35 -11- LSB 2776XC (6) 84 md/sc 11/ 23

S.F. _____ remittance of moneys to governmental entities. 1 5. If the department of revenue determines that the revenue 2 accruing to the fund or accounts within the fund exceeds 3 thirty million dollars or exceeds the amount necessary for 4 the purposes of this chapter if the amount necessary is less 5 than thirty million dollars, then those excess moneys shall 6 be credited by the department of revenue for deposit in the 7 general fund of the state. 8 Sec. 14. NEW SECTION . 418.13 Flood project fund. 9 1. Sales tax revenue remitted by the department of revenue 10 to a governmental entity under section 418.12 or financial 11 assistance received by a governmental entity pursuant to 12 section 418.10 shall be deposited in the governmental entity’s 13 flood project fund created for purposes of this chapter and 14 shall be used to fund the governmental entity’s approved 15 project and to pay principal and interest on bonds issued 16 pursuant to section 418.14, if applicable. 17 2. In addition to the moneys received pursuant to section 18 418.10 or 418.12, a governmental entity may deposit in the 19 flood project fund any other moneys lawfully received by the 20 governmental entity. 21 Sec. 15. NEW SECTION . 418.14 Bond issuance. 22 1. a. A governmental entity receiving sales tax revenues 23 pursuant to this chapter is authorized to issue bonds that are 24 payable from revenues deposited in the governmental entity’s 25 flood project fund created pursuant to section 418.13 for the 26 purpose of funding a project in the area from which sales tax 27 revenues will be utilized. 28 b. A governmental entity shall have the authority to pledge 29 irrevocably to the payment of the bonds an amount of revenue 30 derived from the sales tax revenue received by the governmental 31 entity pursuant to section 418.12 for each of the years the 32 bonds remain outstanding. 33 2. a. If a governmental entity elects to authorize the 34 issuance of bonds payable as provided in this section, the 35 -12- LSB 2776XC (6) 84 md/sc 12/ 23

S.F. _____ governmental entity shall follow the authorization procedures 1 for cities set forth in section 384.83. 2 b. A governmental entity shall have the authority to issue 3 bonds for the purpose of refunding outstanding bonds issued 4 under this section without otherwise complying with the notice 5 and hearing provisions of section 384.83. 6 3. If less than four calendar quarters have elapsed 7 following the submission of the resolution to the department of 8 revenue under section 418.4, subsection 3, paragraph “d” , the 9 sales tax collected within the shorter period may be adjusted 10 to project the collections of the designated portion for the 11 full year for the purpose of determining the amount of the 12 bonds which may be issued. 13 4. a. Except as otherwise provided in this section, 14 bonds issued pursuant to this section shall not be subject to 15 the provisions of any other law or charter relating to the 16 authorization, issuance, or sale of bonds. 17 b. The bonds may be issued in one or more series and shall 18 comply with all of the following: 19 (1) The bonds shall bear the date of issuance. 20 (2) The bonds shall specify whether they are payable on 21 demand or the time of maturity. 22 (3) The bonds shall bear interest at a rate not exceeding 23 that permitted by chapter 74A. 24 (4) The bonds shall be in a denomination or denominations, 25 be in the form, have the rank or priority, be executed in 26 the manner, be payable in the medium of payment, at the 27 place or places, be subject to the terms of redemption, with 28 or without premium, be secured in the manner, and have the 29 other characteristics, as may be provided by the resolution 30 authorizing their issuance. 31 c. The bonds may be sold at public or private sale at a 32 price as may be determined by the governmental entity. 33 5. a. Bonds, notes, or other obligations issued by a 34 governmental entity for purposes of financing a project under 35 -13- LSB 2776XC (6) 84 md/sc 13/ 23

S.F. _____ this chapter are not an obligation of this state. Except as 1 provided in paragraph “b” , bonds, notes, or other obligations 2 issued by a governmental entity for purposes of financing 3 a project under this chapter are not an obligation of any 4 political subdivision of this state other than the governmental 5 entity. A governmental entity shall not pledge the credit or 6 taxing power of this state. Except as provided in paragraph 7 “b” , a governmental entity shall not pledge the credit or taxing 8 power of any political subdivision of this state other than the 9 governmental entity or make its debts payable out of any of the 10 moneys except those in the governmental entity’s flood project 11 fund. 12 b. If the moneys in the governmental entity’s flood project 13 fund are insufficient to pay the governmental entity’s costs 14 related to bonds, notes, or other obligations issued under 15 this chapter, the amounts necessary to pay such costs shall 16 be transferred for deposit in the governmental entity’s flood 17 project fund from the debt service fund of the county or the 18 debt service fund of the city or county for a governmental 19 entity as defined in section 418.1, subsection 4, paragraph 20 “b” , as provided in the chapter 28E agreement. The chapter 21 28E agreement for a governmental entity as defined in 22 section 418.1, subsection 4, paragraph “b” , shall specify the 23 participating city or county responsible for any payment from a 24 debt service fund required under this paragraph. 25 Sec. 16. NEW SECTION . 418.15 Durational limitation on use 26 of revenues —— property disposition. 27 1. A governmental entity shall not utilize sales tax revenue 28 under this chapter after twenty-five years from the date the 29 governmental entity’s project was approved by the board. 30 2. If the governmental entity ceases to need the sales 31 tax revenues prior to the expiration of the limitation under 32 subsection 1, the governmental entity shall notify the director 33 of revenue. 34 3. Upon the receipt of a notification pursuant to subsection 35 -14- LSB 2776XC (6) 84 md/sc 14/ 23

S.F. _____ 2, or the expiration of the limitation under subsection 1, the 1 department of revenue shall cease to credit revenues to the 2 governmental entity’s account in the sales tax increment fund. 3 4. All property and improvements acquired by a governmental 4 entity as defined in section 418.1, subsection 4, paragraph 5 “b” , relating to a project shall be transferred to the county 6 or city designated in the chapter 28E agreement to receive 7 such property and improvements. The city or county to which 8 such property or improvements are transferred shall, unless 9 otherwise provided in the chapter 28E agreement, be solely 10 responsible for the ongoing maintenance and support of such 11 property and improvements. 12 Sec. 17. Section 423.2, subsection 11, Code 2011, is amended 13 to read as follows: 14 11. a. (1) All revenues arising under the operation of the 15 provisions of this section shall be deposited into the general 16 fund of the state. 17 (2) Subsequent to the deposit into the general fund of 18 the state, the director shall credit an amount equal to 19 six cents of every dollar of the amount of the increase 20 in sales subject to the tax imposed under this section and 21 made in the applicable area of a governmental entity that is 22 approved to use sales tax revenues under chapter 418 into an 23 account created for that governmental entity in the sales 24 tax increment fund created in section 418.12. The director 25 shall credit the moneys beginning the first day of the quarter 26 following adoption of the resolution pursuant to section 418.4, 27 subsection 3, paragraph “d” . 28 b. Subsequent to the deposit into the general fund of the 29 state and after the transfer of such pursuant to paragraph “a” , 30 the department shall do the following in the order prescribed: 31 (1) Transfer the revenues collected under chapter 423B , the 32 department shall transfer . 33 (2) Transfer one-sixth of such the remaining revenues to the 34 secure an advanced vision for education fund created in section 35 -15- LSB 2776XC (6) 84 md/sc 15/ 23

S.F. _____ 423F.2 . This paragraph subparagraph (2) is repealed December 1 31, 2029. 2 (3) Credit that portion of the sales tax receipts described 3 in paragraph “a” , subparagraph (2). 4 Sec. 18. EFFECTIVE UPON ENACTMENT. This Act, being deemed 5 of immediate importance, takes effect upon enactment. 6 EXPLANATION 7 This bill relates to flood mitigation by establishing a 8 flood mitigation program, establishing a flood mitigation 9 board, authorizing the use of certain sales tax revenue and 10 other financial assistance for certain flood-related projects, 11 establishing a flood mitigation fund, and authorizing the 12 issuance of bonds for certain flood mitigation projects. 13 The bill authorizes certain governmental entities to 14 undertake flood-related projects. The bill defines “project” 15 to mean the construction and reconstruction of levees, 16 embankments, impounding reservoirs, or conduits that are 17 necessary for the protection of property from the effects 18 of floodwaters and may include the deepening, widening, 19 alteration, change, diversion, or other improvement of 20 watercourses if necessary for the protection of such property 21 from the effects of floodwaters. The bill requires a project 22 to be preceded by adoption of a project plan that includes a 23 detailed description of the project, clearly states the cost of 24 the project and the amount of debt to be incurred for purposes 25 of funding the project, and includes a description of all 26 funding sources for the project. The project plan must also 27 include information related to the approval criteria used by 28 the flood mitigation board. 29 The bill prohibits a governmental entity from undertaking 30 a project unless bidding for the project is complete, the 31 project has been awarded certain federal financial assistance, 32 the project plan has been approved by the flood mitigation 33 board, and the governmental entity has adopted and filed with 34 the department of revenue a resolution authorizing the use of 35 -16- LSB 2776XC (6) 84 md/sc 16/ 23

S.F. _____ sales tax increment revenue, if sales tax increment revenue 1 was designated as a funding source for the project. The bill 2 authorizes a governmental entity to contract with a council of 3 governments to perform any duty or power authorized in the bill 4 or for the completion of the project. 5 The bill provides that a governmental entity may not seek 6 approval from the board for a project if the governmental 7 entity previously had a project approved under the flood 8 mitigation program or was part of a governmental entity that 9 previously had a project approved by the board under the flood 10 mitigation program. 11 The bill requires a governmental entity that has a project 12 approved by the flood mitigation board to prepare and submit an 13 annual report on or before December 15 to the board detailing 14 the status and progress of the project 15 The bill establishes a flood mitigation board within the 16 homeland security and emergency management division of the 17 department of public defense consisting of nine voting members 18 and four ex offico, nonvoting legislative members. The voting 19 membership of the board includes four members of the general 20 public having demonstrable experience or expertise in the field 21 of natural disaster or flood mitigation, the director of the 22 department of natural resources or the director’s designee, 23 the secretary of agriculture or the secretary’s designee, 24 the treasurer of state or the treasurer’s designee, the 25 administrator of the homeland security and emergency management 26 division or the administrator’s designee, and the executive 27 director of the Iowa finance authority or the executive 28 director’s designee. Appointment of the general public members 29 shall be made by the governor, shall be subject to confirmation 30 by the senate, and shall be for three-year staggered terms. 31 The members of the board are entitled to receive reimbursement 32 for actual expenses incurred while engaged in the performance 33 of official duties. 34 The bill requires the board to establish and administer a 35 -17- LSB 2776XC (6) 84 md/sc 17/ 23

S.F. _____ flood mitigation program to assist governmental entities in 1 undertaking approved projects. The flood mitigation program 2 includes projects approved by the board to utilize either 3 financial assistance from the flood mitigation fund created 4 in the bill or sales tax increment revenues remitted to the 5 governmental entity. The bill prohibits a project from being 6 approved by the board to utilize both financial assistance from 7 the flood mitigation fund and sales tax increment revenues for 8 the same project. The bill authorizes the board to consult 9 with the Iowa flood center to assist the board in administering 10 the flood mitigation program. 11 Governmental subdivisions must submit project applications 12 to the flood mitigation board for approval. The board is 13 prohibited from approving applications submitted after 14 January 1, 2016. The application shall specify whether the 15 governmental entity is requesting financial assistance from 16 the flood mitigation fund or approval for the use of sales tax 17 increment revenues. Applications for financial assistance 18 from the flood mitigation fund are required to describe the 19 type and amount of assistance requested. Applications for the 20 use of sales tax increment revenues shall state the amount of 21 such revenues necessary for completion of the project. Each 22 application shall include, or have attached to the application, 23 the governmental entity’s project plan. 24 The bill requires the board, when reviewing applications, 25 in addition to the governmental entity’s project plan, to 26 consider, at a minimum, whether the project is designed 27 to mitigate future flooding of property that has sustained 28 significant flood damage and is likely to sustain significant 29 flood damage in the future, whether the project addresses 30 the impact of flooding both upstream and downstream from 31 the area where the project is to be undertaken, whether the 32 area that would benefit from the project’s flood mitigation 33 efforts is valuable to the economic viability of the state or 34 is of historic value to the state, the extent to which the 35 -18- LSB 2776XC (6) 84 md/sc 18/ 23

S.F. _____ project would utilize local matching funds including whether 1 the project meets specific local matching funds requirements, 2 the extent of nonfinancial support from public and nonpublic 3 sources, the net number of new jobs proposed to be created 4 as a direct result of the project and its completion in the 5 area for which the project is designed to mitigate future 6 flooding, whether the project is consistent with the applicable 7 comprehensive, countywide emergency operations plan, and 8 whether financial assistance through the flood mitigation 9 program is essential to meet the necessary expenses or serious 10 needs of the governmental entity related to flood mitigation. 11 Upon review of the applications, the flood mitigation 12 board, following consultation with the department of economic 13 development, shall approve, defer, or deny the applications. 14 If a project plan is denied, the board shall state the reasons 15 for the denial and the governmental entity may resubmit the 16 application so long as the application is filed on or before 17 January 1, 2016. 18 If a project plan application is approved, the board shall 19 specify whether the governmental entity is approved for the use 20 of sales tax increment revenues or whether the governmental 21 entity is approved to receive financial assistance from the 22 flood mitigation fund. If the board approves a project plan 23 application that includes financial assistance from the flood 24 mitigation fund, the board shall negotiate and execute on 25 behalf of the division all necessary agreements to provide such 26 financial assistance. The bill provides for the reduction of 27 an award of financial assistance from the flood mitigation fund 28 or a reduction in the amount of sales tax increment revenues 29 to be received for the project if federal financial assistance 30 exceeds the amount stated in the project plan application. 31 The bill requires the flood mitigation board to prepare 32 and submit an annual report to the governor and the general 33 assembly on or before January 15 containing certain information 34 relating to the projects approved by the board, certain 35 -19- LSB 2776XC (6) 84 md/sc 19/ 23