House File 2211 - Introduced HOUSE FILE 2211 BY WILLS A BILL FOR An Act relating to water quality improvement, by providing 1 for water quality programs, projects, and practices, the 2 certification of conservation planners, the use or transfer 3 of fertilizer fees, and the approval of designs for soil 4 and water conservation practices, making appropriations to 5 support environmental specialists, and reducing property 6 taxes on land reserved for conservation practices. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5601YH (5) 86 da/lh

H.F. 2211 DIVISION I 1 WATER POLLUTION REDUCTION PROJECTS 2 IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY 3 IOWA NUTRIENT RESEARCH CENTER 4 Section 1. Section 466B.47, Code 2016, is amended by adding 5 the following new subsection: 6 NEW SUBSECTION . 3A. The center may sponsor or support 7 projects to reduce water pollution, including projects that 8 reduce the transport of nutrients to surface water from 9 nonpoint sources within watersheds in accordance with the 10 latest revision of the document entitled “Iowa nutrient 11 reduction strategy” initially presented in November 2012 by the 12 department of agriculture and land stewardship, the department 13 of natural resources, and Iowa state university of science 14 and technology. The projects may also implement findings or 15 recommendations of the college of agriculture and life sciences 16 of Iowa state university of science and technology, including 17 those findings and recommendations submitted to the general 18 assembly pursuant to 2015 Iowa Acts, chapter 132, section 18. 19 DIVISION II 20 CONSERVATION PLANNING CERTIFICATION FOR AGRIBUSINESS PROGRAM 21 IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY 22 IOWA COOPERATIVE EXTENSION SERVICE FOR AGRICULTURE AND HOME 23 ECONOMICS 24 Sec. 2. NEW SECTION . 266.35A Conservation planning 25 certification for agribusiness program. 26 1. The Iowa cooperative extension service for agriculture 27 and home economics shall develop and administer a conservation 28 planning certification for agribusiness program. The program 29 shall, to every extent practicable, be based on the same 30 criteria used by the United States department of agriculture 31 to certify persons as conservation planners under 7 C.F.R. 32 pt. 1469. When developing and implementing the program, the 33 extension service shall, to every extent practicable, consult 34 with the United States department of agriculture, natural 35 -1- LSB 5601YH (5) 86 da/lh 1/ 11

H.F. 2211 resources conservation service. Participation in the program 1 is voluntary. The program shall be designed to provide program 2 participants with information and materials regarding practical 3 management practices that optimize nitrogen and phosphorus use 4 within crop fields and reduce downstream nutrient loading, in a 5 scientific, reasonable, and cost-effective manner. 6 2. A person seeking to obtain or maintain a certification 7 under the program must complete an annual number of hours 8 of instruction as determined by the extension service. The 9 extension service may offer a person the option of passing 10 an examination as a method to become certified in lieu of 11 completing all of the instructional hours. However, a person 12 shall not be required to pass an examination in order to become 13 certified. The extension service may provide the required 14 hours of instruction via an internet site maintained by Iowa 15 state university of science and technology. 16 3. The extension service shall establish and adjust 17 certification fees based on the costs of developing and 18 administering the program. Any fees received by the service 19 shall be deemed repayment receipts as defined in section 8.2. 20 DIVISION III 21 HIGH-PRIORITY WATERSHEDS AND WATER QUALITY INITIATIVE FUND —— 22 FERTILIZER FEES 23 DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP, SOIL AND WATER 24 CONSERVATION DIVISION 25 Sec. 3. Section 200.9, Code 2016, is amended to read as 26 follows: 27 200.9 Fertilizer fees. 28 1. Fees collected for licenses and inspection fees 29 inspections under sections 200.4 and 200.8 , with the exception 30 of those fees collected for deposit in the agriculture 31 management account of the groundwater protection fund, shall 32 be deposited in the general fund of the state and shall 33 be subject to the requirements of section 8.60 . Moneys 34 deposited under this section to in the general fund shall 35 -2- LSB 5601YH (5) 86 da/lh 2/ 11

H.F. 2211 are appropriated to the department to be used only by the 1 department for the purpose of inspection, sampling, analysis, 2 preparation, and publishing of reports and other expenses 3 necessary for administration of this chapter . The secretary 4 may assign moneys to the Iowa agricultural experiment station 5 for research, work projects, and investigations as needed for 6 the specific purpose of improving the regulatory functions for 7 enforcement of this chapter . 8 2. Notwithstanding subsection 1, the moneys appropriated 9 to the department under that subsection may be used by the 10 division of soil conservation and water quality to administer 11 water quality projects and programs in high-priority watersheds 12 identified by the water resources coordinating council pursuant 13 to section 466B.3, including salaries, support, maintenance, 14 and other miscellaneous purposes. The secretary may also 15 transfer the moneys to the water quality initiative fund 16 established pursuant to section 466B.45 for use as described in 17 that section. 18 DIVISION IV 19 INNOVATIVE PROJECTS —— WATER QUALITY INITIATIVE FUND 20 DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP, SOIL AND WATER 21 CONSERVATION DIVISION 22 Sec. 4. NEW SECTION . 466B.46 Innovation project —— grants. 23 The division shall award grants to support innovative 24 projects for the development of new and improved practices or 25 technologies to reduce the transport of nutrients to surface 26 waters from nonpoint sources. The new or improved practices 27 or technologies must be able to be implemented within a 28 reasonable period of time and in a scientific, reasonable, 29 and cost-effective manner. The division shall make awards 30 from moneys deposited into the fund. Total awards made by the 31 division to support all innovative projects shall not exceed 32 fifty thousand dollars during any fiscal year. 33 DIVISION V 34 QUALIFYING SOIL AND WATER CONSERVATION PRACTICES 35 -3- LSB 5601YH (5) 86 da/lh 3/ 11

H.F. 2211 DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP, SOIL AND WATER 1 CONSERVATION DIVISION AND SOIL AND WATER CONSERVATION DISTRICTS 2 Sec. 5. NEW SECTION . 161A.55 Qualifying practices —— 3 eligibility for cost-share moneys. 4 1. A landowner may submit a design to the district for a 5 voluntary qualifying permanent soil and water conservation 6 practice to be established on the landowner’s land for approval 7 by the district. 8 2. The division shall adopt rules as necessary to administer 9 this section, which shall include at least all of the 10 following: 11 a. Design standards and specifications. The division shall 12 adopt in whole or in part the standards and specifications of 13 the United States department of agriculture, natural resources 14 conservation service. 15 b. A process to approve designs for qualifying practices, 16 which may be established by a person having a practical 17 knowledge of land use and row crop farming, that are relatively 18 inexpensive to establish and maintain, and that remain highly 19 effective for a long period of time. 20 c. A schedule of amounts of cost-share moneys or other 21 financing available under this chapter that may be used to 22 finance specific qualifying practices. 23 3. The commissioners are not required to provide for the 24 submission of bids to establish a qualifying practice, unless 25 otherwise provided in rules adopted by the division. 26 4. A landowner shall not receive cost-share moneys for 27 preparing or submitting a design to a district. 28 Sec. 6. Section 542B.2, subsection 9, Code 2016, is amended 29 by adding the following new paragraph: 30 NEW PARAGRAPH . c. Notwithstanding paragraphs “a” and 31 “b” , a person shall not be construed to be engaged in the 32 practice of engineering if the person constructs or establishes 33 a qualifying permanent soil and water conservation practice 34 pursuant to section 161A.55. 35 -4- LSB 5601YH (5) 86 da/lh 4/ 11

H.F. 2211 DIVISION VI 1 ADDITIONAL ENVIRONMENTAL SPECIALISTS 2 DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP, SOIL AND WATER 3 CONSERVATION DIVISION 4 Sec. 7. ADDITIONAL ENVIRONMENTAL SPECIALISTS POSITIONS. 5 There is appropriated from the general fund of the state to the 6 department of agriculture and land stewardship for the fiscal 7 year beginning July 1, 2016, and ending June 30, 2017, the 8 following amount, or so much thereof as is necessary, to be 9 used for the purposes designated: 10 1. For purposes of supporting additional environmental 11 specialists within the department’s soil and water conservation 12 division in order to administer water quality projects and 13 programs in high-priority watersheds identified by the water 14 resources coordinating council pursuant to section 466B.3, 15 including salaries, support, maintenance, miscellaneous 16 purposes, and for not more than the following full-time 17 equivalent positions: 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FTEs 30.00 20 2. The department shall convert contract positions referred 21 to as project coordinators and associated with assessing and 22 reducing nutrients in this state’s watersheds to the full-time 23 equivalent environmental specialist positions described in 24 subsection 1. 25 3. For the fiscal year beginning July 1, 2016, and ending 26 June 30, 2017, the department may also provide support for 27 the full-time equivalent environmental specialist positions 28 described in subsection 1 from other moneys available to the 29 department that are not expressly appropriated for another 30 purpose. 31 DIVISION VII 32 PRIORITIZING WATERSHED FUNDING 33 DEPARTMENT OF NATURAL RESOURCES AND 34 WATER RESOURCES COORDINATING COUNCIL 35 -5- LSB 5601YH (5) 86 da/lh 5/ 11

H.F. 2211 Sec. 8. Section 456A.33A, Code 2016, is amended to read as 1 follows: 2 456A.33A Watershed priority. 3 1. The commission shall each year establish and maintain 4 a priority list of watersheds which are of highest importance 5 based on soil all of the following: 6 a. Soil loss , to be used for the allocation of moneys set 7 aside in annual appropriations from the general fund to the 8 department of agriculture and land stewardship for permanent 9 soil conservation practices under chapter 161A on watersheds 10 above publicly owned lakes. 11 b. An evaluation of economic and quality-of-life factors 12 that contribute to the watershed’s comparative value to 13 the state and local communities located in the watershed, 14 including the populations served by the watershed, the use of 15 the watershed as a source of drinking water, the existence 16 of a rare or valuable ecological system, and recreational 17 opportunities associated with the watershed. 18 2. Chapter 17A does not apply to this section . 19 Sec. 9. Section 466B.3, subsection 6, paragraph b, 20 subparagraph (8), Code 2016, is amended to read as follows: 21 (8) Develop a protocol which identifies high-priority 22 watersheds, including local and community-based subwatersheds, 23 and which appropriately directs resources to those watersheds. 24 The protocol shall consider economic and quality-of-life 25 factors that contribute to the watershed’s comparative value 26 to the state and local communities located in the watershed, 27 including the population served by the watershed, the use of 28 the watershed as a source of drinking water, the existence 29 of a rare or valuable ecological system, and recreational 30 opportunities associated with the watershed. 31 DIVISION VIII 32 PROPERTY TAX REDUCTION TO SUPPORT WATER QUALITY PRACTICES 33 Sec. 10. Section 441.21, Code 2016, is amended by adding the 34 following new subsection: 35 -6- LSB 5601YH (5) 86 da/lh 6/ 11

H.F. 2211 NEW SUBSECTION . 4A. a. Notwithstanding other provisions 1 in this section to the contrary, for valuations established on 2 or after January 1, 2017, property classified as residential 3 property, agricultural property, commercial property, 4 industrial property, multiresidential property, property 5 valued by the department of revenue pursuant to chapter 6 434, and property valued by the department of revenue 7 pursuant to chapters 428, 433, 437, and 438 in each assessing 8 jurisdiction in the county, and which is used for soil and 9 water conservation purposes, shall be assessed at ten percent 10 of the actual value established for that property. 11 b. Property used for soil and water conservation purposes 12 under paragraph “a” is limited to parcels or segments of parcels 13 of the property that utilize a system or practice that reduces 14 the transport of sediment, nutrients, or contaminants to a 15 surface water. To be eligible for the reduction in assessed 16 value a parcel or segment of a parcel must include one or more 17 of the following: 18 (1) A bioreactor system, which is part of or connected to a 19 working subsurface field drainage tile line, that is utilized 20 to reduce sediment, nutrient, or contaminant loading in water 21 transported in the tile line. The parcel or segment of the 22 parcel qualifying for the reduction shall not be more than 23 three acres in size. 24 (2) A filter buffer strip that is an area of permanent 25 vegetation cover utilized to reduce sediment, nutrient, or 26 contaminant loading associated with runoff. The parcel or 27 segment of the parcel qualifying for the reduction may extend 28 any distance along the edge of a surface water but shall not 29 extend more than thirty feet from the edge of the surface water 30 to that portion of the agricultural property used for producing 31 crops. 32 (3) A prairie conservation strip integrating perennial 33 prairie grass strips into agricultural property used for 34 producing crops, and utilized to reduce erosion and the 35 -7- LSB 5601YH (5) 86 da/lh 7/ 11

H.F. 2211 transport of sediment, nutrients, or contaminants downslope. 1 The parcel or segment of the parcel qualifying for the 2 reduction shall not exceed ten percent of the agricultural 3 property’s acreage. 4 (4) A restored wetland that is mostly underwater or 5 waterlogged during the growing season, and characterized by 6 vegetation of hydric soils. The parcel or segment of the 7 parcel qualifying for the reduction shall not exceed ten acres. 8 c. The county assessor shall require an owner of the 9 agricultural property to submit documentation regarding 10 the amount of agricultural property used for soil and water 11 conservation purposes. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 GENERAL. This bill provides for the assessment and 16 reduction of nutrients in this state’s watersheds and for soil 17 and water conservation and water quality practices established 18 on real property, including agricultural land. The bill amends 19 or creates a number of programs administered by or entities 20 associated with the following: Iowa state university of 21 science and technology (ISU), including the Iowa cooperative 22 extension service for agriculture and home economics (extension 23 service), and the Iowa nutrient research center (center); 24 the department of agriculture and land stewardship (DALS), 25 including its soil and water conservation division (division) 26 and soil and water conservation districts (districts) 27 associated with the division; the department of natural 28 resources (DNR); and the water resources coordinating council 29 (WRCC). The bill also provides for these entities’ cooperation 30 with the United States department of agriculture, natural 31 resources conservation service (NRCS). The bill appropriates 32 moneys to DALS for use by the division in administering water 33 quality projects and programs in this state’s watersheds and 34 for deposit into the water quality initiative fund (WQIF). The 35 -8- LSB 5601YH (5) 86 da/lh 8/ 11

H.F. 2211 bill also provides for a reduction of property taxes assessed 1 on property that is reserved for soil and water conservation 2 practices. 3 WATER POLLUTION REDUCTION PROJECTS. The bill authorizes 4 the center to sponsor or support water quality projects that 5 reduce water pollution, including the transport of nutrients 6 to surface water from nonpoint sources. The purpose of the 7 center is to carry out the state’s water quality initiative 8 by pursuing a science-based approach to nutrient management 9 research. Currently, the center is supported by an annual 10 appropriation (see 2015 Iowa Acts, ch. 132, sections 17 and 11 40). 12 CONSERVATION PLANNING CERTIFICATION FOR AGRIBUSINESS 13 PROGRAM. The bill requires the extension service to 14 develop and administer a conservation planning certification 15 for agribusiness program. The program is to be based 16 on educational requirements established by NRCS for its 17 certification of conservation planners. The extension service 18 may establish a fee at an amount determined by the extension 19 service based on the costs of developing and administering the 20 program. The extension service is entitled to retain fees 21 collected under the program as repayment receipts. 22 HIGH-PRIORITY WATERSHEDS AND WQIF FUNDING —— FERTILIZER 23 FEES. The bill provides that license and inspection fees paid 24 by persons who manufacture, blend, or distribute fertilizers 25 and soil conditioners and deposited in the general fund for use 26 by DALS in regulating the sale and use of fertilizers and soil 27 conditioners may instead be used by the division to administer 28 water quality projects and programs in high-priority watersheds 29 identified by the WRRC. The secretary of agriculture may also 30 transfer the moneys to the WQIF. The bill does not affect 31 fertilizer fees that are required to be deposited into the 32 agriculture management account of the groundwater protection 33 fund. 34 INNOVATIVE PROJECTS —— WQIF. The bill authorizes the 35 -9- LSB 5601YH (5) 86 da/lh 9/ 11

H.F. 2211 division to use moneys available in the WQIF to support 1 grants awarded to persons to support the development of new or 2 improved practices or technologies that reduce the transport of 3 nutrients to surface waters from nonpoint sources. However, 4 the division cannot award more than $50,000 in grants from the 5 WQIF to support all projects during any fiscal year. 6 DESIGNS FOR QUALIFYING SOIL AND WATER CONSERVATION 7 PRACTICES. The bill authorizes a landowner of a district to 8 submit a design for approval by a district for a qualifying 9 voluntary permanent soil conservation practice eligible for 10 cost-share or other forms of available state financing. The 11 design standards adopted by the division must meet NRCS 12 standards and specifications. The qualifying practice used in 13 approved designs must be able to be established by a person 14 having a practical knowledge of land use and row crop farming, 15 be relatively inexpensive to establish and maintain, and be 16 highly effective for a long period of time. The commissioners 17 are not required to provide for the submission of bids unless 18 the division otherwise requires a submission. A landowner is 19 not entitled to receive cost-share or other state financing for 20 preparing or submitting a design. 21 ENVIRONMENTAL SPECIALISTS. The bill appropriates moneys 22 from the general fund to support additional full-time 23 equivalent environmental specialist positions within the 24 division. The specialists are to administer water quality 25 projects and programs in high-priority watersheds. DALS must 26 convert contract positions referred to as project coordinators 27 and currently associated with assessing and reducing nutrients 28 in district watersheds to full-time equivalent environmental 29 specialist positions. The new environmental specialist 30 positions are to administer water quality projects and programs 31 in high-priority watersheds identified by the WRCC. DALS 32 may use other available moneys to support the new full-time 33 equivalent positions. 34 PRIORITIZING WATERSHED FUNDING. The bill provides that 35 -10- LSB 5601YH (5) 86 da/lh 10/ 11

H.F. 2211 when making funding decisions to improve water quality in 1 watersheds, the DNR and the WRCC must, in their respective 2 priority evaluations, account for economic and quality-of-life 3 factors that contribute to the watershed’s comparative value to 4 the state and local communities located in the watershed. 5 PROPERTY TAX REDUCTION. The bill provides that property 6 used for soil and water conservation purposes is assessed at 7 10 percent of the actual value established for the property. 8 Property eligible for the reduction in actual value for 9 assessment purposes is limited to a parcel or a segment of 10 a parcel of property that utilizes a system or practice that 11 reduces the transport of sediment, nutrients, or contaminants 12 to surface water. The county assessor must require the owner 13 of the property to submit documentation regarding the amount of 14 property used for soil and water conservation purposes. 15 -11- LSB 5601YH (5) 86 da/lh 11/ 11