Senate Study Bill 3130 - 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, 6 providing for appropriations, and including effective date 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 6002XC (8) 84 md/sc

S.F. _____ Section 1. Section 29C.8, subsection 3, Code Supplement 1 2011, is 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 authorized to be made from the 8 debt service fund to a flood project fund under section 418.14, 9 subsection 4. 10 Sec. 3. Section 384.4, subsection 1, Code 2011, is amended 11 by adding the following new paragraph: 12 NEW PARAGRAPH . e. Payments authorized to be made from the 13 debt service fund to a flood project fund under section 418.14, 14 subsection 4. 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 city. 28 c. A joint board or other legal or administrative entity 29 established or designated in an agreement pursuant to chapter 30 28E between any of the following: 31 (1) Two or more cities located within the same county. 32 (2) A county and one or more cities located within the 33 county. 34 (3) A county, one or more cities located within the county, 35 -1- LSB 6002XC (8) 84 md/sc 1/ 27

S.F. _____ and a drainage district formed by mutual agreement under 1 section 468.142. 2 5. “Project” means the construction and reconstruction 3 of levees, embankments, impounding reservoirs, or conduits 4 that are necessary for the protection of property from the 5 effects of floodwaters and may include the deepening, widening, 6 alteration, change, diversion, or other improvement of 7 watercourses if necessary for the protection of such property 8 from the effects of floodwaters. A project may consist of 9 one or more phases of construction or reconstruction that are 10 contracted for separately if the larger project, of which the 11 project is a part, otherwise meets the requirements of this 12 subsection. 13 6. “Retail establishment” means a business operated by a 14 retailer as defined in section 423.1. 15 7. “Sales tax” means the sales and services tax imposed 16 pursuant to section 423.2. 17 Sec. 5. NEW SECTION . 418.4 Projects. 18 1. a. A governmental entity may use the moneys in its flood 19 project fund established pursuant to section 418.13 to fund 20 projects that meet the requirements of this section. 21 b. A governmental entity as defined in section 418.1, 22 subsection 4, paragraph “c” , shall have the power to construct, 23 acquire, own, repair, improve, operate, and maintain a project, 24 may sue and be sued, contract, and acquire and hold real and 25 personal property necessary for the project, and such other 26 powers as may be included in the chapter 28E agreement. Such 27 a governmental entity may contract with a city or the county 28 participating in the chapter 28E agreement to perform any 29 governmental service, activity, or undertaking that the city 30 or county is authorized by law to perform, including but not 31 limited to contracts for administrative services. 32 2. Prior to undertaking a project, the governmental entity 33 shall adopt a project plan. The project plan shall include a 34 detailed description of the project, state the estimated cost 35 -2- LSB 6002XC (8) 84 md/sc 2/ 27

S.F. _____ of the project and the maximum amount of debt to be incurred 1 for purposes of funding the project, and include a detailed 2 description of all anticipated funding sources for the project, 3 including information relating to either the proposed use of 4 financial assistance from the flood mitigation fund under 5 section 418.10 or the proposed use of sales tax increment 6 revenues received under section 418.12. The project plan shall 7 also include information related to the approval criteria in 8 section 418.9, subsection 2. 9 3. A governmental entity shall not award a contract for 10 the construction or reconstruction of or otherwise undertake 11 construction or reconstruction of a project under this chapter 12 unless all of the following conditions are met: 13 a. Bidding for the project has been completed. A 14 governmental entity shall comply with the competitive bid 15 procedures in chapter 26 for the bidding and construction of 16 the project and shall comply with the provisions of chapter 17 573. 18 b. The project or an earlier phase of the project has been 19 approved to receive financial assistance in an amount equal to 20 at least twenty percent of the total project cost or thirty 21 million dollars, whichever is less, under the federal Water 22 Resources Development Act or other federal program providing 23 assistance specifically for hazard mitigation. 24 c. The project plan has been approved by the board under 25 section 418.9. 26 d. Following approval of the project plan by the board, 27 the governmental entity has adopted a resolution authorizing 28 the use of sales tax increment revenue from the governmental 29 entity’s flood project fund, if sales tax increment revenue 30 was approved by the board as a funding source for the project. 31 Within ten days of adoption, the governmental entity shall 32 provide a copy of the resolution to the department of revenue. 33 4. A governmental entity shall not seek approval from the 34 board for a project if the governmental entity previously 35 -3- LSB 6002XC (8) 84 md/sc 3/ 27

S.F. _____ had a project approved pursuant to section 418.9 or if the 1 governmental entity previously was part of a governmental 2 entity as defined in section 418.1, subsection 4, paragraph “c”, 3 that had a project approved pursuant to section 418.9. 4 5. If a project is eligible for state financial assistance 5 under section 29C.6, subsection 17, such project is ineligible 6 for approval by the board under this chapter. 7 6. Following approval of a project under section 418.9, the 8 governmental entity shall on or before December 15 of each year 9 submit a report to the board detailing all of the following: 10 a. The current status of the project. 11 b. Total expenditures and the types of expenditures that 12 have been made related to the project. 13 c. The amount of the total project cost remaining as of the 14 date the report is submitted. 15 d. The amounts, types, and sources of funding being used. 16 e. The amount of bonds issued or other indebtedness incurred 17 for the project, including information related to the rate of 18 interest, length of term, costs of issuance, and net proceeds. 19 The report shall also include the amounts and types of moneys 20 used for payment of such bonds or indebtedness. 21 7. A governmental entity may contract with a council of 22 governments to perform any duty or power authorized under this 23 chapter or for the completion of a project. 24 Sec. 6. NEW SECTION . 418.5 Flood mitigation board. 25 1. The flood mitigation board is established consisting of 26 nine voting members and four ex officio, nonvoting members, and 27 is located for administrative purposes within the division. 28 The administrator of the division shall provide office space, 29 staff assistance, and necessary supplies and equipment for 30 the board. The administrator shall budget funds to pay the 31 necessary expenses of the board. In performing its functions, 32 the board is performing a public function on behalf of the 33 state and is a public instrumentality of the state. 34 2. The voting membership of the board shall include all of 35 -4- LSB 6002XC (8) 84 md/sc 4/ 27

S.F. _____ the following: 1 a. Four members of the general public. Two general public 2 members shall have demonstrable experience or expertise in 3 the field of natural disaster recovery and two general public 4 members shall have demonstrable experience or expertise in the 5 field of flood mitigation. 6 b. The director of the department of natural resources or 7 the director’s designee. 8 c. The secretary of agriculture or the secretary’s designee. 9 d. The treasurer of state or the treasurer’s designee. 10 e. The administrator of the division or the administrator’s 11 designee. 12 f. The executive director of the Iowa finance authority or 13 the executive director’s designee. 14 3. The general public members shall be appointed by 15 the governor, subject to confirmation by the senate. The 16 appointments shall comply with sections 69.16 and 69.16A. 17 4. The chairperson and vice chairperson of the board shall 18 be designated by the governor from the board members listed 19 in subsection 2. In case of the absence or disability of the 20 chairperson and vice chairperson, the members of the board 21 shall elect a temporary chairperson by a majority vote of those 22 members who are present and voting. 23 5. The members appointed under subsection 2, paragraph 24 “a” , shall be appointed to three-year staggered terms and the 25 terms shall commence and end as provided by section 69.19. If 26 a vacancy occurs, a successor shall be appointed to serve the 27 unexpired term. A successor shall be appointed in the same 28 manner and subject to the same qualifications as the original 29 appointment. 30 6. The board’s ex officio membership shall include four 31 members of the general assembly with one each appointed by 32 the majority leader of the senate, the minority leader of the 33 senate, the speaker of the house of representatives, and the 34 minority leader of the house of representatives. A legislative 35 -5- LSB 6002XC (8) 84 md/sc 5/ 27

S.F. _____ member serves for a term as provided in section 69.16B in an ex 1 officio, nonvoting capacity and is eligible for per diem and 2 expenses as provided in section 2.10. 3 7. A majority of the board constitutes a quorum. 4 Sec. 7. NEW SECTION . 418.6 Expenses of board members. 5 The voting members of the board are entitled to receive 6 reimbursement for actual expenses incurred while engaged in the 7 performance of official duties. A member of the board is not 8 eligible to receive the additional expense allowance provided 9 in section 7E.6, subsection 2. 10 Sec. 8. NEW SECTION . 418.7 Division duties. 11 The division, subject to approval by the board, shall 12 adopt administrative rules pursuant to chapter 17A necessary 13 to administer the flood mitigation program. The division 14 shall provide the board with assistance in implementing 15 administrative functions and providing technical assistance and 16 application assistance to applicants under the program. 17 Sec. 9. NEW SECTION . 418.8 Flood mitigation program. 18 1. The board shall establish and the division, subject 19 to direction and approval by the board, shall administer a 20 flood mitigation program to assist governmental entities 21 in undertaking projects approved under this chapter. The 22 flood mitigation program shall include projects approved 23 by the board to utilize either financial assistance from 24 the flood mitigation fund created under section 418.10 or 25 sales tax revenues remitted to the governmental entity under 26 section 418.12. A governmental entity shall not be approved 27 by the board to utilize both financial assistance from the 28 flood mitigation fund and sales tax revenues remitted to the 29 governmental entity. 30 2. The board shall, by rules adopted under section 31 418.7, prescribe application instructions, forms, and other 32 requirements deemed necessary to operate the flood mitigation 33 program. 34 3. The board may contract with or otherwise consult with the 35 -6- LSB 6002XC (8) 84 md/sc 6/ 27

S.F. _____ Iowa flood center, established under section 466C.1, to assist 1 the board in administering the flood mitigation program. 2 4. The board shall submit a written report to the governor 3 and the general assembly on or before January 15 of each year. 4 The report shall include information relating to all projects 5 approved by the board for inclusion in the flood mitigation 6 program, the status of such projects, summaries of each report 7 submitted to the board under section 418.4, subsection 6, 8 information relating to the types of funding being used for 9 each approved project, including all indebtedness incurred by 10 the applicable governmental entities, and any recommendations 11 for legislative action to modify the provisions of this 12 chapter. 13 Sec. 10. NEW SECTION . 418.9 Project application review. 14 1. a. A governmental entity shall submit an application 15 to the board for approval of a project plan. The board shall 16 not approve a project for inclusion in the program if the 17 application is submitted after January 1, 2016. 18 b. The application shall specify whether the governmental 19 entity is requesting financial assistance from the flood 20 mitigation fund or approval for the use of sales tax revenues. 21 Applications for financial assistance from the flood mitigation 22 fund shall describe the type and amount of assistance 23 requested. Applications for the use of sales tax revenues 24 shall state the amount of sales tax revenues necessary for 25 completion of the project. 26 2. Each application shall include or have attached to 27 the application, the governmental entity’s project plan 28 adopted under section 418.4, subsection 2. When reviewing 29 applications, in addition to the project plan, the board shall 30 consider, at a minimum, all of the following: 31 a. Whether the project is designed to mitigate future 32 flooding of property that has sustained significant flood 33 damage and is likely to sustain significant flood damage in the 34 future. 35 -7- LSB 6002XC (8) 84 md/sc 7/ 27

S.F. _____ b. Whether the project plan addresses the impact of flooding 1 both upstream and downstream from the area where the project 2 is to be undertaken and whether the project conforms to any 3 applicable floodplain ordinance. 4 c. Whether the area that would benefit from the project’s 5 flood mitigation efforts is sufficiently valuable to the 6 economic viability of the state or is of sufficient historic 7 value to the state to justify the cost of the project. 8 d. The extent to which the project would utilize local 9 matching funds. The board shall not approve a project unless 10 at least fifty percent of the total cost of the project, less 11 any federal financial assistance for the project, is funded 12 using local matching funds, and unless the project will result 13 in nonpublic investment in the governmental entity’s area as 14 defined in section 418.11, subsection 3, of an amount equal to 15 fifty percent of the total cost of the project. For purposes 16 of this paragraph, “nonpublic investment” means investment 17 by nonpublic entities consisting of capital investment or 18 infrastructure improvements occurring in anticipation of or as 19 a result of the project during the period of time between July 20 1, 2008, and ten years following completion of the project. 21 e. The extent of nonfinancial support committed to the 22 project from public and nonpublic sources. 23 f. Whether the project is designed in coordination with 24 other watershed management measures adopted by the governmental 25 entity or adopted by the participating jurisdictions of the 26 governmental entity, as applicable. 27 g. Whether the project plan is consistent with the 28 applicable comprehensive, countywide emergency operations plan 29 in effect and other applicable local hazard mitigation plans. 30 h. Whether financial assistance through the flood mitigation 31 program is essential to meet the necessary expenses or serious 32 needs of the governmental entity related to flood mitigation. 33 3. If requested by the board during consideration of 34 an application, the governmental entity shall pay for an 35 -8- LSB 6002XC (8) 84 md/sc 8/ 27

S.F. _____ independent engineering review of the project to determine 1 the technical feasibility, engineering standards, and total 2 estimated cost of the project. An engineering review required 3 by the board under this subsection may be completed by the 4 United States army corps of engineers. 5 4. Upon review of the applications, the board, following 6 consultation with the economic development authority, shall 7 approve, defer, or deny the applications. If a project plan 8 is denied, the board shall state the reasons for the denial 9 and the governmental entity may resubmit the application so 10 long as the application is filed on or before January 1, 2016. 11 If a project plan application is approved, the board shall 12 specify whether the governmental entity is approved for the 13 use of sales tax revenues under section 418.12 or whether the 14 governmental entity is approved to receive financial assistance 15 from the flood mitigation fund under section 418.10. If 16 the board approves a project plan application that includes 17 financial assistance from the flood mitigation fund, the board 18 shall negotiate and execute on behalf of the division all 19 necessary agreements to provide such financial assistance. If 20 the board approves a project plan application that includes 21 the use of sales tax increment revenues, the board shall 22 establish the annual maximum amount of such revenues that 23 may be remitted to the governmental entity not to exceed the 24 limitations in section 418.12, subsection 4. The board may, 25 however, establish remittance limitations for the project lower 26 than the individual project remittance limitations specified 27 for projects under section 418.12, subsection 4. 28 5. The board shall not approve a project plan application 29 that includes financial assistance from the flood mitigation 30 fund or the use of sales tax revenue to pay principal and 31 interest on or to refinance any debt or other obligation 32 existing prior to the approval of the project. 33 6. The board shall not approve a project plan application 34 for which the amount of sales tax increment revenue remitted to 35 -9- LSB 6002XC (8) 84 md/sc 9/ 27

S.F. _____ the governmental entity would exceed fifteen million dollars in 1 any one fiscal year or if approval of the project would result 2 in total remittances in any one fiscal year for all approved 3 projects to exceed, in the aggregate, thirty million dollars. 4 7. Upon approval of an application for financial assistance 5 under the program, the board shall notify the treasurer of 6 state regarding the amount of moneys needed to satisfy the 7 award of financial assistance and the terms of the award. The 8 treasurer of state shall notify the division any time moneys 9 are disbursed to a recipient of financial assistance under the 10 program. 11 8. If, following approval of a project application under the 12 program, it is determined that the amount of federal financial 13 assistance exceeds the amount of federal financial assistance 14 specified in the application, the board shall reduce the award 15 of financial assistance from the flood mitigation fund or 16 reduce the amount of sales tax revenue to be received for the 17 project by a corresponding amount. 18 Sec. 11. NEW SECTION . 418.10 Flood mitigation fund. 19 1. A flood mitigation fund is created as a separate and 20 distinct fund in the state treasury under the control of the 21 board and consists of moneys appropriated by the general 22 assembly and any other moneys available to and obtained or 23 accepted by the board for placement in the fund. Moneys in the 24 fund shall only be used for the purposes of this section. 25 2. Payments of interest, repayments of moneys loaned 26 pursuant to this chapter, and recaptures of grants, if provided 27 for in the financial assistance agreements, shall be deposited 28 in the fund. 29 3. The moneys in the fund shall be used to provide 30 assistance in the form of grants, loans, and forgivable loans. 31 The board may only provide financial assistance from moneys in 32 the fund. 33 4. Moneys credited to the fund are not subject to 34 section 8.33 and shall not be transferred, used, obligated, 35 -10- LSB 6002XC (8) 84 md/sc 10/ 27

S.F. _____ appropriated, or otherwise encumbered except as provided in 1 this chapter. Notwithstanding section 12C.7, subsection 2, 2 interest or earnings on moneys in the fund shall be credited 3 to the fund. 4 5. If any portion of the moneys appropriated for deposit 5 in the fund have not been awarded during the fiscal year for 6 which the appropriation is made, the portion which has not 7 been awarded may be utilized by the board to provide financial 8 assistance under the program in subsequent fiscal years. 9 6. The board may make a multiyear commitment to a 10 governmental entity of up to four million dollars in any one 11 fiscal year. 12 7. Moneys received by a governmental entity from the fund 13 shall be deposited in the governmental entity’s flood project 14 fund under section 418.13. 15 8. The board is not required to award financial assistance 16 pursuant to this section unless moneys are appropriated to and 17 available from the fund. 18 9. Following completion of all projects approved to utilize 19 financial assistance from the fund and upon a determination 20 by the board that remaining moneys in the fund are no longer 21 needed for the program, all moneys remaining in the fund or 22 subsequently deposited in the fund shall be credited for 23 deposit in the general fund of the state. 24 Sec. 12. NEW SECTION . 418.11 Sales tax increment 25 calculation. 26 1. The department of revenue shall calculate quarterly the 27 amount of increased sales tax revenues to be credited to the 28 sales tax increment fund pursuant to section 423.2, subsection 29 11, paragraph “a” , subparagraph (2). 30 2. The department of revenue shall calculate the amount of 31 the increase for purposes of subsection 1 as follows: 32 a. Determine the amount of sales subject to the tax under 33 section 423.2 in each applicable area specified in subsection 34 3, during the corresponding quarter in the base year from 35 -11- LSB 6002XC (8) 84 md/sc 11/ 27

S.F. _____ retail establishments in such areas. 1 b. Determine the amount of sales subject to the tax under 2 section 423.2 in each applicable area specified in subsection 3 3, during the corresponding quarter in each subsequent calendar 4 year from retail establishments in such areas. 5 c. Subtract the base year quarterly amount determined under 6 paragraph “a” from the subsequent calendar year quarterly 7 amount in paragraph “b” . 8 d. If the amount determined under paragraph “c” is positive, 9 the product of the amount determined under paragraph “c” times 10 the tax rate imposed under section 423.2 shall constitute the 11 amount of increased sales tax revenue pursuant to subsection 1. 12 3. a. For projects approved for a governmental entity as 13 defined in section 418.1, subsection 4, paragraph “a” , the area 14 used to determine the sales tax increment shall include only 15 the unincorporated areas of the county. 16 b. For projects approved for a governmental entity as 17 defined in section 418.1, subsection 4, paragraph “b” , the area 18 used to determine the sales tax increment shall include only 19 the incorporated areas of the city. 20 c. For projects approved for a governmental entity as 21 defined in section 418.1, subsection 4, paragraph “c” , the 22 area used to determine the sales tax increment shall include 23 the incorporated areas of each city that is participating 24 in the chapter 28E agreement, the unincorporated areas of 25 the participating county, and the area of any participating 26 drainage district not otherwise included in the areas of the 27 participating cities or county, as applicable. 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 -12- LSB 6002XC (8) 84 md/sc 12/ 27

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 “b” . Moneys 6 deposited in the fund are appropriated to the department of 7 revenue for the purposes of this section. Moneys in the fund 8 shall only be used for the purposes of this section. 9 2. An account is created within the fund for each 10 governmental entity that has adopted a resolution under section 11 418.4, subsection 3, paragraph “d” . 12 3. The department of revenue shall deposit in the fund the 13 moneys described in subsection 1 beginning the first day of the 14 quarter following receipt of a resolution under section 418.4, 15 subsection 3, paragraph “d” . However, in no case shall a sales 16 tax increment be calculated under section 418.11 or such moneys 17 be deposited in the fund under this section prior to January 18 1, 2014. 19 4. a. Upon request of a governmental entity, the department 20 of revenue shall remit the moneys in the governmental entity’s 21 account within the fund to the governmental entity for deposit 22 in the governmental entity’s flood project fund. Such requests 23 shall be made not more than quarterly. Requests for remittance 24 shall be submitted on forms prescribed by the department 25 of revenue. In lieu of quarterly requests, a governmental 26 entity may submit a certified schedule of principal and 27 interest payments on bonds issued under section 418.14. If 28 such a certified schedule is submitted, the department of 29 revenue shall, subject to the remittance limitations of this 30 chapter, remit from the governmental entity’s account to the 31 governmental entity for deposit in the governmental entity’s 32 flood project fund the amounts necessary for such principal and 33 interest payments in accordance with the certified schedule. 34 Requests for remittance shall be made for the amount of moneys 35 -13- LSB 6002XC (8) 84 md/sc 13/ 27

S.F. _____ in the governmental entity’s account necessary to pay the 1 governmental entity’s costs or obligations related to the 2 project, according to the sales tax revenue funding needs 3 specified in the approved project plan. A governmental entity 4 shall not, however, during any fiscal year receive remittances 5 under this section exceeding fifteen million dollars or seventy 6 percent of the total yearly amount of increased sales tax 7 increment revenue in the governmental entity’s applicable area 8 and deposited in the governmental entity’s account, whichever 9 is less. The total amount of remittances during any fiscal 10 year for all governmental entities approved to use sales tax 11 revenues under this chapter shall not exceed, in the aggregate, 12 thirty million dollars. Remittances from the department of 13 revenue shall be deposited in the governmental entity’s flood 14 project fund under section 418.13. 15 b. The department of revenue shall adopt rules for the 16 remittance of moneys to governmental entities. 17 5. If the department of revenue determines that the revenue 18 accruing to the fund or accounts within the fund exceeds 19 thirty million dollars or exceeds the amount necessary for 20 the purposes of this chapter if the amount necessary is less 21 than thirty million dollars, then those excess moneys shall 22 be credited by the department of revenue for deposit in the 23 general fund of the state. 24 6. If the nonpublic investment requirements of section 25 418.9, subsection 2, paragraph “d” , are not satisfied, the board 26 shall reduce the governmental entity’s amount of sales tax 27 increment revenues eligible to be remitted during the remaining 28 period of time for receiving remittances by an amount equal 29 to the shortfall in nonpublic investment. However, such a 30 reduction shall not be to an amount less than zero. 31 Sec. 14. NEW SECTION . 418.13 Flood project fund. 32 1. Sales tax revenue remitted by the department of revenue 33 to a governmental entity under section 418.12 or financial 34 assistance received by a governmental entity pursuant to 35 -14- LSB 6002XC (8) 84 md/sc 14/ 27

S.F. _____ section 418.10 shall be deposited in the governmental entity’s 1 flood project fund created for purposes of this chapter and 2 shall be used to fund the costs of the governmental entity’s 3 approved project and to pay principal and interest on bonds 4 issued pursuant to section 418.14, if applicable. 5 2. In addition to the moneys received pursuant to section 6 418.10 or 418.12, a governmental entity may deposit in the 7 flood project fund any other moneys lawfully received by the 8 governmental entity, including but not limited to local sales 9 and services tax receipts collected under chapter 423B. 10 Sec. 15. NEW SECTION . 418.14 Bond issuance. 11 1. a. A governmental entity receiving sales tax revenues 12 pursuant to this chapter is authorized to issue bonds that are 13 payable from revenues deposited in the governmental entity’s 14 flood project fund created pursuant to section 418.13 for the 15 purpose of funding a project in the area from which sales tax 16 revenues will be collected. 17 b. A governmental entity shall have the authority to pledge 18 irrevocably to the payment of the bonds an amount of revenue 19 derived from the sales tax revenue received by the governmental 20 entity pursuant to section 418.12 for each of the years the 21 bonds remain outstanding, together with other amounts held in 22 the flood project fund of the governmental entity. 23 c. The costs of a project may include but are not limited 24 to administrative expenses, construction and reconstruction 25 costs, engineering, fiscal, financial and legal expenses, 26 surveys, plans and specifications, interest during construction 27 or reconstruction and for one year after completion of the 28 project, initial reserve funds, acquisition of real or personal 29 property necessary for the construction or reconstruction 30 of the project, and such other costs as are necessary and 31 incidental to the construction or reconstruction of the project 32 and the financing thereof. The governmental entity shall have 33 the power to retain and enter into agreements with engineers, 34 fiscal agents, financial advisers, attorneys, architects, and 35 -15- LSB 6002XC (8) 84 md/sc 15/ 27

S.F. _____ other consultants or advisers for planning, supervision, and 1 financing of a project upon such terms and conditions as shall 2 be deemed by the governing body of the governmental entity as 3 advisable and in the best interest of the governmental entity. 4 Bonds issued under the provisions of this chapter are declared 5 to be investment securities under the laws of the state of 6 Iowa. 7 2. a. If a governmental entity elects to authorize the 8 issuance of bonds payable as provided in this section, the 9 governmental entity shall follow the authorization procedures 10 for cities set forth in section 384.83. 11 b. A governmental entity shall have the authority to issue 12 bonds for the purpose of refunding outstanding bonds issued 13 under this section without otherwise complying with the notice 14 and hearing provisions of section 384.83. 15 3. a. Except as otherwise provided in this section, 16 bonds issued pursuant to this section shall not be subject to 17 the provisions of any other law or charter relating to the 18 authorization, issuance, or sale of bonds. Bonds issued under 19 this section shall not limit or restrict the authority of a 20 governmental entity as defined in section 418.1, subsection 4, 21 paragraphs “a” and “b” , or a city, county, or drainage district 22 participating in a governmental entity as defined in section 23 418.1, subsection 4, paragraph “c” , to issue bonds for the 24 project under other provisions of the Code. 25 b. The bonds may be issued in one or more series and shall 26 comply with all of the following: 27 (1) The bonds shall bear the date of issuance. 28 (2) The bonds shall specify whether they are payable on 29 demand or the time of maturity. 30 (3) The bonds shall bear interest at a rate not exceeding 31 that permitted by chapter 74A. 32 (4) The bonds shall be in a denomination or denominations, 33 be in the form, have the rank or priority, be executed in 34 the manner, be payable in the medium of payment, at the 35 -16- LSB 6002XC (8) 84 md/sc 16/ 27

S.F. _____ place or places, be subject to the terms of redemption, with 1 or without premium, be secured in the manner, and have the 2 other characteristics, as may be provided by the resolution 3 authorizing their issuance. The resolution authorizing the 4 issuance of the bonds may also prescribe additional provisions, 5 terms, conditions, and covenants which the governmental 6 entity deems advisable, including provisions for creating and 7 maintaining reserve funds and the issuance of additional bonds 8 ranking on a parity with such bonds and additional bonds junior 9 and subordinate to such bonds. 10 c. The bonds may be sold at public or private sale at a 11 price as may be determined by the governmental entity. 12 d. The principal and interest on the bonds issued by a 13 governmental entity under this section shall be payable solely 14 from and secured by the revenue derived from the sales tax 15 revenues received by the governmental entity pursuant to 16 section 418.12 and from other funds of the governmental entity 17 lawfully available from the governmental entity’s flood project 18 fund established under section 418.13. 19 4. a. Bonds, notes, or other obligations issued by a 20 governmental entity for purposes of financing a project under 21 this chapter are not an obligation of this state. Except as 22 provided in paragraph “b” , bonds, notes, or other obligations 23 issued by a governmental entity for purposes of financing 24 a project under this chapter are not an obligation of any 25 political subdivision of this state other than the governmental 26 entity. A governmental entity shall not pledge the credit or 27 taxing power of this state. Except as provided in paragraph 28 “b” , a governmental entity shall not pledge the credit or taxing 29 power of any political subdivision of this state other than the 30 governmental entity or make its debts payable out of any of the 31 moneys except those in the governmental entity’s flood project 32 fund. 33 b. If the moneys in the governmental entity’s flood project 34 fund are insufficient to pay the governmental entity’s costs 35 -17- LSB 6002XC (8) 84 md/sc 17/ 27

S.F. _____ related to bonds, notes, or other obligations issued under 1 this chapter, the amounts necessary to pay such costs may 2 be levied and transferred for deposit in the governmental 3 entity’s flood project fund from the debt service fund of the 4 governmental entity or, if applicable, the debt service fund 5 of a participating city or county for a governmental entity as 6 defined in section 418.1, subsection 4, paragraph “c” , if and to 7 the extent provided in the resolution authorizing the issuance 8 of bonds and, if applicable, the chapter 28E agreement. 9 Sec. 16. NEW SECTION . 418.15 Durational limitation on use 10 of revenues —— property disposition. 11 1. A governmental entity shall not receive remittances of 12 sales tax revenue under this chapter after twenty-five years 13 from the date the governmental entity’s project was approved 14 by the board. 15 2. If the governmental entity ceases to need the sales 16 tax revenues prior to the expiration of the limitation under 17 subsection 1, the governmental entity shall notify the director 18 of revenue. 19 3. Upon the receipt of a notification pursuant to subsection 20 2, or the expiration of the limitation under subsection 1, the 21 department of revenue shall cease to deposit revenues into the 22 governmental entity’s account in the sales tax increment fund. 23 4. All property and improvements acquired by a governmental 24 entity as defined in section 418.1, subsection 4, paragraph “c” , 25 relating to a project shall be transferred to the county, city, 26 or drainage district designated in the chapter 28E agreement to 27 receive such property and improvements. The county, city, or 28 drainage district to which such property or improvements are 29 transferred shall, unless otherwise provided in the chapter 28E 30 agreement, be solely responsible for the ongoing maintenance 31 and support of such property and improvements. 32 Sec. 17. Section 423.2, subsection 11, Code Supplement 33 2011, is amended to read as follows: 34 11. a. (1) All revenues arising under the operation of the 35 -18- LSB 6002XC (8) 84 md/sc 18/ 27

S.F. _____ provisions of this section shall be deposited into the general 1 fund of the state. 2 (2) Subsequent to the deposit into the general fund of the 3 state, the director shall credit an amount equal to the amount 4 of the increase in sales tax revenue, determined in section 5 418.11, subsection 2, paragraph “d” , in the applicable area of a 6 governmental entity that is approved to use sales tax revenues 7 under chapter 418 into an account created for that governmental 8 entity in the sales tax increment fund created in section 9 418.12. The director shall credit the moneys beginning the 10 first day of the quarter following adoption of the resolution 11 pursuant to section 418.4, subsection 3, paragraph “d” . 12 b. Subsequent to the deposit into the general fund of the 13 state and after the transfer of such pursuant to paragraph “a” , 14 the department shall do the following in the order prescribed: 15 (1) Transfer the revenues collected under chapter 423B , the 16 department shall transfer . 17 (2) Transfer one-sixth of such the remaining revenues to the 18 secure an advanced vision for education fund created in section 19 423F.2 . This paragraph subparagraph (2) is repealed December 20 31, 2029. 21 (3) Transfer to the sales tax increment fund that portion of 22 the sales tax receipts described in paragraph “a” , subparagraph 23 (2), remaining after the transfers required under subparagraphs 24 (1) and (2) of this paragraph “b” . 25 Sec. 18. EFFECTIVE UPON ENACTMENT. This Act, being deemed 26 of immediate importance, takes effect upon enactment. 27 EXPLANATION 28 This bill relates to flood mitigation by establishing a 29 flood mitigation program, establishing a flood mitigation 30 board, authorizing the use of certain sales tax revenue 31 and other financial assistance for certain flood mitigation 32 projects and providing for their appropriation, establishing a 33 flood mitigation fund, and authorizing the issuance of bonds 34 for certain flood mitigation projects. 35 -19- LSB 6002XC (8) 84 md/sc 19/ 27