H.F. 2344 DIVISION I 1 MERGER 2 Section 1. NEW SECTION . 468.262 Purpose. 3 The provisions of this part apply to drainage or levee 4 districts participating in a merger. 5 Sec. 2. NEW SECTION . 468.263 General. 6 1. A merger must involve two or more voluntarily 7 participating drainage or levee districts including all of the 8 following: 9 a. One participating dominant district whose board would 10 survive the merger to govern the merged district. 11 b. One or more participating servient districts whose boards 12 would be dissolved by the merger. 13 2. a. The merger must be proposed by the board of each 14 participating drainage or levee district as provided in this 15 part. 16 b. The proposed merger must be approved by the board of the 17 participating dominant district and one or more boards of the 18 participating servient districts, as provided in this part. 19 3. a. The boundary of a participating drainage or levee 20 district must adjoin all or part of the boundary of another 21 participating drainage or levee district. 22 b. Notwithstanding paragraph “a” two participating drainage 23 or levee districts may be separated by land not part of any 24 drainage or levee district if the proposed merger is contingent 25 upon the annexation of such land pursuant to sections 468.119 26 through 468.121. 27 4. A merger may occur notwithstanding that a drainage 28 or levee district participating in a merger is not otherwise 29 eligible for dissolution as provided in part 6 of this 30 subchapter. 31 Sec. 3. NEW SECTION . 468.264 Board participation initiated. 32 1. In order to participate in a proposed merger the board 33 of a drainage or levee district must determine that the merger 34 will substantially benefit the owners of land situated in the 35 -1- LSB 1111HV (3) 85 da/sc 1/ 12

H.F. 2344 drainage or levee district. 1 2. A board making the determination described in subsection 2 1 shall enter an order to conduct a public hearing regarding 3 a proposed merger as provided in section 468.265. The board 4 shall enter the order with the auditor of each county where the 5 drainage or levee district is situated. 6 Sec. 4. NEW SECTION . 468.265 Public hearing. 7 1. A public hearing must be conducted within forty-five 8 days from the last date that the board enters an order with the 9 auditor of each county where the drainage or levee district is 10 situated as provided in section 468.264. The auditor of each 11 county where the participating drainage or levee district is 12 located shall provide notice of a public hearing regarding the 13 proposed merger. However, the board may designate the auditor 14 of the county with the greatest portion of the district’s 15 territory to provide the notice. The notice must include all 16 of the following: 17 a. A description of the proposed merger. 18 b. The determination made by the board under section 19 468.264. 20 c. Whether land in the participating drainage or levee 21 district may be subject to any special assessment as provided 22 in section 468.269. 23 d. The date, time, and place of the public hearing. 24 e. That all written objections to the proposed merger must 25 be filed in the office of the county auditor. 26 2. The auditor shall deliver the notice provided in 27 subsection 1 to all of the following: 28 a. Each owner of land situated within the participating 29 drainage or levee district which is part of the county, as 30 shown by the transfer books of the auditor’s office, including 31 railway companies having right-of-way in the district. 32 b. Each lienholder or encumbrancer of land situated or 33 the auditor designated by the board within the participating 34 drainage or levee district which is part of the county. 35 -2- LSB 1111HV (3) 85 da/sc 2/ 12

H.F. 2344 c. Each actual occupant of land located in the participating 1 drainage or levee district which is part of the county. 2 However, the auditor is not required to name an individual 3 occupant. 4 d. Any other person in the county affected by the proposed 5 merger as determined by the board. 6 3. If land is to be annexed as a condition of the merger, 7 as provided in this part, the auditor of the county where the 8 land to be annexed is situated or the auditor designated by the 9 board shall deliver the notice specified in subsection 1 to the 10 owner of such land. 11 4. a. Except as otherwise provided in this section the 12 auditor shall provide the notice specified in subsection 1 by 13 ordinary mail to the persons described in subsections 2 and 3. 14 b. The auditor shall cause the notice to be published 15 in a newspaper of general circulation in the county where a 16 participating drainage or levee district is situated or the 17 auditor designated by the board. The publication shall be made 18 not less than twenty days prior to the day set for the public 19 hearing. Proof of service shall be made by affidavit of the 20 publisher. 21 c. If an agent has been designated, the auditor shall 22 provide the notice to a person’s agent in the same manner as 23 provided in section 468.16. 24 5. The boards of one or more participating drainage or levee 25 districts may conduct the public hearing jointly. 26 6. This section shall not be construed to prevent the board 27 of a participating drainage or levee district from convening 28 and conducting a public hearing in a manner consistent with 29 section 468.258. 30 Sec. 5. NEW SECTION . 468.266 Meeting and vote. 31 1. Each board of a participating drainage or levee district 32 shall meet to vote on a resolution which includes the question 33 whether or not to approve the proposed merger. A board must 34 vote on the resolution within forty-five days of the last 35 -3- LSB 1111HV (3) 85 da/sc 3/ 12

H.F. 2344 public hearing conducted pursuant to section 468.265. 1 2. The board shall only consider written objections to the 2 proposed merger as filed in the office of the county auditor as 3 provided in the notice for a public hearing or comments made at 4 a public hearing conducted pursuant to section 468.265. 5 3. Two or more boards may approve a joint meeting and vote 6 upon a joint resolution. If the board for the participating 7 dominant district votes at the joint meeting, the dominant 8 board shall pay any costs associated with conducting the joint 9 meeting, regardless of the vote’s outcome. 10 Sec. 6. NEW SECTION . 468.267 Joint order. 11 1. A resolution to merge participating drainage or levee 12 districts approved by their respective boards as provided in 13 section 468.266 shall be effectuated according to the terms and 14 conditions of a joint order for merger entered by those boards. 15 2. Each board shall file the joint order with the auditors 16 of their respective counties. Upon receipt of a joint order, 17 the auditor shall include the joint order as part of the 18 drainage record. 19 3. The auditor shall not file an order unless all territory 20 within the merged drainage or levee district is contiguous, and 21 includes any land required to be annexed as a condition of the 22 merger. 23 4. Upon the filing of the joint order with the county 24 auditor as provided in subsection 2, title to all real estate, 25 other property, improvement, and any right-of-way held by the 26 participating drainage or levee district is vested in the 27 merged drainage or levee district, subject to any condition 28 which applied immediately prior to the merger. 29 5. The auditor of a county designated by the board governing 30 the merged drainage or levee district shall prepare and file 31 with the recorder of each county where the merged district is 32 situated all conveyances and other documentation necessary to 33 effect the transfers referenced in the joint order. 34 6. The merged drainage or levee district assumes all 35 -4- LSB 1111HV (3) 85 da/sc 4/ 12

H.F. 2344 existing obligations of a participating drainage or levee 1 district subject to the joint order. 2 Sec. 7. NEW SECTION . 468.268 Effect of the merger. 3 1. a. Except as provided in this subsection, a legal or 4 equitable proceeding pending against a participating drainage 5 or levee district prior to a merger shall continue as if the 6 merger did not occur. 7 b. The merged drainage or levee district shall be 8 substituted for the participating drainage or levee district 9 standing as a party. 10 c. The board governing the merged drainage or levee 11 district may apportion the costs of a legal or equitable 12 proceeding against the landowners of the participating drainage 13 or levee district based upon the classification of land and 14 assessments applicable to the participating drainage or levee 15 district prior to the merger. 16 2. Except as provided in section 468.269, the merger 17 does not affect the classification of land or the levy of an 18 assessment. 19 3. The original cost and the subsequent cost of improvements 20 in a participating drainage or levee district under this part 21 shall be added to and become a part of the original cost and the 22 subsequent cost of improvements in the merged drainage or levee 23 district. 24 4. The surviving board of a merged drainage or levee 25 district shall pay any remaining costs associated with the 26 merger. 27 Sec. 8. NEW SECTION . 468.269 Special assessment —— merged 28 land. 29 1. In addition to assessments imposed pursuant to sections 30 468.49 and 468.50, the surviving board of a merged drainage or 31 levee district may impose a special assessment on land situated 32 in the merged district which was a participating servient 33 district prior to the merger. 34 2. The special assessment shall apply to costs of 35 -5- LSB 1111HV (3) 85 da/sc 5/ 12

H.F. 2344 improvements made within the participating dominant district 1 prior to the merger for not longer than five years prior to the 2 date that the joint order was filed with the county auditor by 3 the surviving board for the participating dominant district 4 pursuant to section 468.267. 5 3. In order to impose a special assessment under this 6 section all of the following must apply: 7 a. The board must approve a report by an engineer 8 appointed by the board as provided in this part stating 9 those improvements directly benefiting land situated in the 10 participating dominant district were made within the five-year 11 period provided in subsection 2. 12 b. The notice for a public hearing required in section 13 468.265 must have stated that the board may impose a special 14 assessment under this section. 15 4. The board shall not impose the special assessment under 16 this section on land that was annexed as part of the merger. 17 However, such land is subject to a special assessment pursuant 18 to sections 468.119 through 468.121. 19 Sec. 9. DIRECTIONS TO CODE EDITOR. The Code editor shall 20 codify the provisions of this division of this Act as chapter 21 468, subchapter I, part 7. 22 DIVISION II 23 LIABILITY OF TRUSTEES 24 Sec. 10. NEW SECTION . 468.526A Liability. 25 A trustee is not personally liable for a claim which is 26 exempted under section 670.4, except a claim for punitive 27 damages. A trustee is not liable for punitive damages as 28 a result of acts in the performance of a duty under this 29 chapter, unless actual malice or willful, wanton, and reckless 30 misconduct is proven. 31 DIVISION III 32 BIDDING PROCEDURES 33 Sec. 11. Section 468.3, Code 2014, is amended by adding the 34 following new subsection: 35 -6- LSB 1111HV (3) 85 da/sc 6/ 12

H.F. 2344 NEW SUBSECTION . 9. The term “minor repair” shall mean 1 any repair not in excess of the competitive bid threshold as 2 provided in section 26.3. 3 Sec. 12. Section 468.34, Code 2014, is amended by striking 4 the section and inserting in lieu thereof the following: 5 468.34 Bidding procedures —— Iowa Construction Bidding 6 Procedures Act. 7 When ordering the construction of an improvement under 8 this part, the board and any bidders shall comply with the 9 competitive bid requirements applicable to a governmental 10 entity ordering the construction of a public improvement in 11 chapter 26. 12 Sec. 13. Section 468.66, Code 2014, is amended to read as 13 follows: 14 468.66 Bids required. 15 In case the board shall finally determine determines that 16 any such changes as defined a change described in section 17 468.62 shall be made involving an expenditure of twenty 18 thousand dollars or more increases the cost of the improvement 19 to more than the competitive bid threshold as provided in 20 section 26.3 , the work shall be let by bids in the same 21 manner as is provided for the original construction of such 22 improvements board and any bidders shall comply with the 23 competitive bid requirements applicable to a governing entity 24 ordering the construction of a public improvement in chapter 25 26 . 26 Sec. 14. Section 468.126, subsection 1, paragraph c, Code 27 2014, is amended by striking the paragraph and inserting in 28 lieu thereof the following: 29 c. When ordering a repair under this section, the board and 30 any bidders shall comply with the competitive bid requirements 31 applicable to a governing entity ordering the construction of 32 a public improvement in chapter 26. If the repair is more 33 than fifty thousand dollars but less than the competitive bid 34 threshold in section 26.3, the board shall conduct a hearing 35 -7- LSB 1111HV (3) 85 da/sc 7/ 12

H.F. 2344 on the matter of making the proposed repair. The board shall 1 provide notice of the hearing as provided in sections 468.14 2 through 468.18. 3 Sec. 15. Section 468.126, subsection 2, Code 2013, is 4 amended to read as follows: 5 2. In the case of a minor repairs repair , or in the 6 eradication of brush and weeds along the open ditches , not 7 in excess of twenty thousand dollars , where the board finds 8 that a saving to the district will result, the board may cause 9 the repairs or eradication to be done by secondary road fund 10 equipment, or weed fund equipment, and labor of the county and 11 then reimburse the secondary road fund or the weed fund from 12 the fund of the drainage district thus benefited. 13 Sec. 16. Section 468.126, subsection 4, Code 2014, is 14 amended to read as follows: 15 4. For the purpose of this subsection , an “improvement” in 16 a drainage or levee district in which any ditch, tile drain or 17 other facility has previously been constructed is a project 18 intended to expand, enlarge , or otherwise increase the capacity 19 of any existing ditch, drain , or other facility above that for 20 which it was designed. 21 a. When the board determines that improvements are an 22 improvement is necessary or desirable, the board shall appoint 23 an engineer to make surveys as seem appropriate to determine 24 the nature and extent of the needed improvements improvement , 25 and to file a report showing what improvements are improvement 26 is recommended and their its estimated costs cost , which report 27 may be amended before final action. If the estimated cost of 28 the improvements does not exceed twenty thousand dollars, or 29 twenty-five percent of the original cost of the district and 30 subsequent improvements, whichever is the greater amount, the 31 board may order the work done without notice. The board shall 32 not divide proposed improvements into separate programs in 33 order to avoid the limitation for making improvements without 34 notice compliance with paragraph “b” . If the board deems 35 -8- LSB 1111HV (3) 85 da/sc 8/ 12

H.F. 2344 it desirable to make improvements where the estimated cost 1 exceeds the twenty thousand dollar or twenty-five percent 2 limit, the board shall set a date for a hearing on the matter 3 of constructing the proposed improvements and also on the 4 matter of whether there shall be a reclassification of benefits 5 for the cost of the proposed improvements and shall give 6 notice as provided in sections 468.14 through 468.18 . At the 7 hearing, the board shall hear objections to the feasibility 8 of the proposed improvements and arguments for or against 9 a reclassification presented by or for any taxpayer of the 10 district. Following the a hearing , if required by section 11 26.12 , the board shall order that the improvements it deems 12 desirable and feasible be made and shall also determine whether 13 there should be a reclassification of benefits for the cost of 14 improvements. If it is determined that a reclassification of 15 benefits should be made, the board shall proceed as provided in 16 section 468.38 . In lieu of publishing the notice of a hearing 17 as provided by this subsection section 331.305 , the board may 18 mail a copy of the notice to each address where a landowner in 19 the district resides by first class mail if the cost of mailing 20 is less than publication of the notice. The mailing shall be 21 made during the time the notice would otherwise be required to 22 be published. 23 b. When ordering the construction of an improvement under 24 this subsection, the board shall comply with the competitive 25 bid requirements applicable to a governing entity ordering 26 the construction of a public improvement in chapter 26. If 27 the improvement is more than fifty thousand dollars but less 28 than the competitive bid threshold in section 26.3, the board 29 shall conduct a hearing on the matter of making the proposed 30 improvement. The board shall provide notice of the hearing as 31 provided in sections 468.14 through 468.18. 32 c. If the estimated cost of the improvements as defined 33 in this subsection exceeds twenty-five thousand dollars the 34 competitive bid threshold as provided in section 26.3 , or the 35 -9- LSB 1111HV (3) 85 da/sc 9/ 12

H.F. 2344 original cost of the district plus the cost of subsequent 1 improvements in the district, whichever is the greater amount, 2 a majority of the landowners, owning in the aggregate more than 3 seventy percent of the total land in the district, may file a 4 written remonstrance against the proposed improvements, at or 5 before the time fixed for hearing on the proposed improvements, 6 with the county auditor, or auditors in case the district 7 extends into more than one county. If a remonstrance is filed, 8 the board shall discontinue and dismiss all further proceedings 9 on the proposed improvements and charge the costs incurred 10 to date for the proposed improvements to the district. Any 11 interested party may appeal from such orders in the manner 12 provided in this subchapter, parts 1 through 5 . However, this 13 section does not affect the procedures of section 468.132 14 covering the common outlet. 15 Sec. 17. REPEAL. Sections 468.35 and 468.36, Code 2014, 16 are repealed. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 BACKGROUND —— GOVERNANCE. A drainage or levee district 21 (district) is managed by a board of supervisors in the county 22 where the district is located (Code chapter 468, subchapter 23 I), by a joint board of supervisors if the district extends 24 into more than one county (Code chapter 468, subchapter II) 25 but may also be managed by a board of trustees elected by the 26 district’s landowners (Code chapter 468, subchapter III). 27 BILL’S PROVISIONS —— MERGER. This bill allows for the 28 voluntary merger of two or more participating districts which 29 must include a dominant district whose board survives the 30 merger and a servient district whose board would be dissolved 31 if the merger were approved. The boundary of a participating 32 district must adjoin a neighboring district or be separated 33 by land which is to be annexed as part of the merger. Each 34 board must make a determination that a proposed merger will 35 -10- LSB 1111HV (3) 85 da/sc 10/ 12

H.F. 2344 substantially benefit the owners of land situated in the 1 district, conduct a public hearing regarding the proposed 2 merger, and vote to approve or disapprove of the merger. The 3 merger does not affect a legal or equitable proceeding pending 4 against a participating district except that the name of the 5 party is changed to the merged district. A special assessment 6 may be imposed on land located within the servient district and 7 land that was annexed as part of the merger. 8 BILL’S PROVISIONS —— LIABILITY OF TRUSTEES. The bill 9 provides that a member of a board of trustees is not personally 10 liable for an act or omission in the same manner that an 11 employee of a municipality (city, county, township, school 12 district, or any other unit of local government other than a 13 soil and water conservation district) is not personally liable 14 for certain acts or omissions under the municipalities tort 15 claim chapter (Code chapter 670). However, this exemption 16 extended to a trustee does not apply to a claim for punitive 17 damages in which the trustee acted with actual malice or 18 willful, wanton, and reckless misconduct. 19 BILL’S PROVISIONS —— BIDDING PROCEDURES. The bill requires 20 that in order to let work for an improvement or repair 21 the board must comply with the “Iowa Construction Bidding 22 Procedures Act” (Code chapter 26) which currently applies 23 to a “governmental entity” defined in part to mean the 24 state, political subdivisions of the state, and all boards 25 or commissions empowered to enter into contracts for the 26 construction of public improvements. Code chapter 26 requires 27 a governmental entity to advertise for sealed bids for the 28 proposed public improvement by publishing a notice to bidders 29 if the estimated total cost exceeds a threshold amount of 30 $100,000. The bill provides that the board must hold a public 31 hearing when the cost of the improvement or repair is more than 32 $50,000 but less than the threshold amount in Code chapter 33 26. The bill eliminates a number of provisions that currently 34 require the board to publish a notice in a newspaper, hold a 35 -11- LSB 1111HV (3) 85 da/sc 11/ 12