House File 2077 - Introduced HOUSE FILE 2077 BY ISENHART A BILL FOR An Act appropriating moneys to the department of agriculture 1 and land stewardship to develop a nutrient credit earning 2 and trading initiative. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5469HH (4) 85 da/nh

H.F. 2077 Section 1. NUTRIENT CREDIT EARNING AND TRADING 1 INITIATIVE. There is appropriated from the general fund of the 2 state to the department of agriculture and land stewardship for 3 the fiscal year beginning July 1, 2014, and ending June 30, 4 2015, the following amount, or so much thereof as is necessary, 5 to be used for the purposes designated: 6 For purposes of establishing a nutrient credit earning and 7 trading initiative, including salaries, support, maintenance, 8 and miscellaneous purposes: 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 175,000 10 1. The department shall develop a nutrient credit earning 11 and trading initiative, which shall be designed to assist in 12 the reduction of nutrients in surface waters. The nutrient 13 credit earning and trading initiative shall utilize a voluntary 14 cost-effective, market-based exchange that allows a point 15 source discharger of nutrients to achieve an established 16 discharge limit by purchasing offset credits from other 17 dischargers who reduce their discharge by equal or greater 18 amounts. The initiative shall also include the establishment 19 of a pilot project to determine strategies for the initiative’s 20 permanent success. The nutrient credit earning and trading 21 initiative shall be consistent with findings included in the 22 document entitled “Iowa nutrient reduction strategy” prepared 23 by the department of agriculture and land stewardship, the 24 department of natural resources, and Iowa state university of 25 science and technology and dated May 2013. 26 2. The department shall investigate the feasibility of 27 establishing an interstate nutrient credit earning and trading 28 program among states in the Mississippi river basin, and 29 represented on the Mississippi river/gulf of Mexico nutrient 30 task force. 31 3. a. The department shall submit a report to the 32 general assembly that summarizes its efforts to develop a 33 nutrient credit earning and trading initiative, including 34 recommendations for establishing a viable exchange for earning 35 -1- LSB 5469HH (4) 85 da/nh 1/ 2

H.F. 2077 and trading nutrient credits and necessary statutory changes. 1 The recommendations shall include proposed legislation 2 if necessary. If such legislation is not necessary, the 3 department shall do all of the following: 4 (1) Report on its plans to establish or expand pilot 5 projects not inconsistent with state law. 6 (2) Establish or expand pilot projects using any available 7 public or private funding sources. 8 b. The report is due not later than December 1, 2014. 9 EXPLANATION 10 The inclusion of this explanation does not constitute agreement with 11 the explanation’s substance by the members of the general assembly. 12 This bill appropriates $175,000 to the department of 13 agriculture and land stewardship to begin developing a 14 nutrient credit earning and trading initiative, including by 15 establishing a pilot project. The department must investigate 16 the feasibility of establishing an interstate nutrient credit 17 earning and trading program among states in the Mississippi 18 river basin. The department is required to submit a report to 19 the general assembly by December 1, 2014, regarding its efforts 20 and recommendations to establish a viable exchange for earning 21 and trading nutrient credits and necessary statutory changes. 22 Generally, nutrient credit trading is a system that 23 recognizes two sources of surface water pollution —— a point 24 source that can be identified (e.g., a pipe that discharges 25 waste), and a nonpoint source that cannot be so identified 26 (e.g., runoff). The system requires the establishment of 27 certain nutrient (nitrogen and phosphorus) limits or “caps” 28 for sources and allows the point source to exceed its cap by 29 purchasing credits from sellers, including other point sources 30 or nonpoint sources, who reduce their nutrient contribution. 31 -2- LSB 5469HH (4) 85 da/nh 2/ 2