S.F. 2302 Section 1. Section 466B.2, Code 2016, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 2A. “Division” means the division of soil 3 conservation and water quality created within the department of 4 agriculture and land stewardship pursuant to section 159.5. 5 Sec. 2. Section 466B.3, subsection 6, Code 2016, is amended 6 by adding the following new paragraph: 7 NEW PARAGRAPH . d. The council shall solicit applications 8 from persons seeking to participate in a regional watershed and 9 clean water program created in section 466B.43. The council, 10 with assistance from the division and department, shall select 11 not more than two applications based on the following criteria: 12 (1) The watershed’s immediate need for improved surface 13 water quality. 14 (2) The existence of political subdivisions and watershed 15 management authorities created pursuant to subchapter II, 16 actively engaged in water quality efforts. 17 (3) The degree to which the governing body of a watershed 18 management authority, political subdivision, or other political 19 unit demonstrates a willingness and has the resources to 20 participate in a program. 21 (4) The degree to which the regional watershed and clean 22 water program can attract additional funding from private and 23 public sources including federal funding. 24 Sec. 3. Section 466B.41, subsections 3 and 4, Code 2016, are 25 amended by striking the subsections. 26 Sec. 4. NEW SECTION . 466B.43 Water quality initiative —— 27 regional watershed and clean water programs. 28 1. As part of the water quality initiative established 29 pursuant to section 466B.42, the division, in cooperation with 30 the department, shall administer three separate and distinct 31 regional watershed and clean water programs. A program 32 shall be established in each of the three following selected 33 watersheds: 34 a. Not more than two regional watersheds designated by the 35 -1- LSB 5811XS (5) 86 da/lh 1/ 7

S.F. 2302 water resources coordinating council. 1 b. The Raccoon river watershed. 2 2. The water quality goal of each regional watershed and 3 clean water program is to reduce nitrates, nitrites, or other 4 contaminants as designated by the division, in cooperation with 5 the department, in untreated surface waters of each selected 6 watershed so that by January 1, 2032, nitrates, nitrites, or 7 other designated contaminants in those surface waters do not 8 exceed the maximum contaminant levels established by the United 9 States environmental protection agency under the Safe Drinking 10 Water Act as defined in section 455B.291. 11 3. a. The division, in cooperation with the department, 12 shall adopt a regional watershed and clean water program 13 plan for each of the three selected watersheds described in 14 subsection 1. The plan shall do all of the following: 15 (1) To the extent feasible, use existing data and amend, 16 augment, and consolidate existing plans or strategies which 17 have improved or which promise to improve watershed management 18 strategies for the selected watershed. 19 (2) Provide water quality objectives to be achieved by 20 dates identified in the plan in order to meet the selected 21 watershed’s water quality goal described in subsection 2. 22 (3) Provide a framework for improving water quality by 23 administering regional watershed and clean water projects. 24 b. The division shall cooperate with the department, 25 interested government bodies, landowners, and stakeholders in 26 adopting each regional watershed and clean water program plan. 27 The division, in cooperation with the department, shall conduct 28 public hearings throughout each selected watershed prior to and 29 during the duration of the watershed and clean water program in 30 order to do all of the following: 31 (1) Educate persons residing within the selected watershed 32 regarding the regional watershed and clean water program. 33 (2) Recruit persons to participate in regional watershed 34 and clean water projects. 35 -2- LSB 5811XS (5) 86 da/lh 2/ 7

S.F. 2302 (3) Receive comments regarding how to establish and improve 1 the program or administer the projects. 2 4. The division shall be responsible for the implementation 3 of regional watershed and clean water projects on cropland 4 and pastureland within each selected watershed. A project 5 may include but is not limited to in-field and edge-of-field 6 practices, wetland restoration and construction, vegetated 7 buffer strips, and other management practices. 8 5. The department, in cooperation with the division, shall 9 be responsible for the implementation of watershed and clean 10 water projects within cities and other communities within 11 each selected watershed. A project may include but is not 12 limited to improving wastewater, sewer and septic tank systems, 13 storm water drainage, or sewage treatment services for both 14 sewered and unsewered communities, including incorporated and 15 unincorporated communities. 16 6. In establishing and administering regional watershed 17 and clean water projects, the division and department shall 18 identify and actively seek participation from persons who 19 in the aggregate contribute at least ninety percent of the 20 maximum contaminant levels. A person may participate in a 21 project on a voluntary basis by entering into an agreement 22 with either the division under subsection 4 or the department 23 under subsection 5. An agreement may provide for the award of 24 financial incentives to the participating person, which may be 25 in the form of a loan, grant, or cost-share basis arrangement 26 as determined by the division or department who enters into the 27 agreement with the person. 28 7. The division, in cooperation with the department, shall 29 regularly monitor the surface water quality in each selected 30 watershed to measure progress in achieving the objectives 31 of the regional watershed and clean water program plan as 32 described in subsection 3. 33 8. a. The division, in cooperation with the department, 34 shall prepare and submit interim reports to the governor and 35 -3- LSB 5811XS (5) 86 da/lh 3/ 7

S.F. 2302 general assembly every two years beginning January 15, 2018, 1 and ending January 15, 2030. The division, in cooperation with 2 the department, shall prepare and submit a final report to the 3 governor and general assembly by January 15, 2032. 4 b. A report shall include all of the following: 5 (1) A description and update of the current status of the 6 regional watershed and clean water programs and projects, and 7 the expenditure of moneys appropriated to support the programs 8 and projects. 9 (2) An evaluation of the successes and failures of each 10 program and project in meeting the program’s water quality 11 objectives and the water quality goal. If a program has failed 12 to meet an objective, the report shall recommend methods to 13 improve the program, including but not limited to amending 14 statutes, administrative rules, or the program’s plan. 15 Sec. 5. Section 466B.45, subsections 1 and 3, Code 2016, are 16 amended to read as follows: 17 1. A water quality initiative fund for agriculture is 18 created in the state treasury under the management and control 19 of the division. 20 3. Moneys in the fund are appropriated to the division 21 and shall be used exclusively to carry out the provisions of 22 this subchapter as determined by the division, and shall not 23 require further special authorization by the general assembly. 24 The department may transfer moneys from this fund to the water 25 quality initiative fund for communities created in section 26 466B.45A and may reallocate moneys from this fund to support 27 regional watershed and clean water programs under section 28 466B.43 as necessary to accomplish the water quality objectives 29 identified in the regional watershed and clean water program 30 plan for that selected watershed. 31 Sec. 6. NEW SECTION . 466B.45A Water quality initiative fund 32 for communities. 33 1. A water quality initiative fund for communities is 34 created in the state treasury under the management and control 35 -4- LSB 5811XS (5) 86 da/lh 4/ 7

S.F. 2302 of the department. 1 2. The fund shall include moneys appropriated by the general 2 assembly. The fund may include other moneys available to and 3 obtained or accepted by the department, including moneys from 4 public or private sources. 5 3. Moneys in the fund are appropriated to the department 6 and shall be used exclusively to carry out the provisions of 7 this subchapter as determined by the department, and shall not 8 require further special authorization by the general assembly. 9 The department may transfer moneys from this fund to the water 10 quality initiative fund for agriculture created in section 11 466B.45 and may reallocate moneys from this fund to support 12 the regional watershed and clean water programs under section 13 466B.43 as necessary to accomplish the water quality objectives 14 identified in the regional watershed and clean water plan for 15 that selected watershed. 16 4. a. Notwithstanding section 12C.7, interest or earnings 17 on moneys in the fund shall be credited to the fund. 18 b. Notwithstanding section 8.33, moneys appropriated or 19 otherwise credited to the fund for a fiscal year shall not 20 revert to the fund from which appropriated at the close of the 21 fiscal year for which the appropriation was made but shall 22 remain available for expenditure for the purposes designated 23 until the close of the fiscal year that begins three years 24 from the beginning date of the fiscal year for which the 25 appropriation was made. 26 Sec. 7. APPROPRIATIONS —— WATER QUALITY INITIATIVE —— 27 REGIONAL WATERSHED AND CLEAN WATER PROGRAMS. 28 1. There is appropriated from the general fund of the 29 state to the soil conservation division of the department of 30 agriculture and land stewardship for the fiscal year beginning 31 July 1, 2015, and ending June 30, 2016, the following amount, 32 or so much thereof as is necessary, to be used for the purposes 33 designated: 34 For deposit into the water quality initiative fund for 35 -5- LSB 5811XS (5) 86 da/lh 5/ 7

S.F. 2302 agriculture as created in section 466B.45, as amended in this 1 Act, for purposes of administering regional watershed and clean 2 water programs, as provided in section 466B.43 as created in 3 this Act, including the implementation of regional watershed 4 and clean water projects on cropland and pastureland within 5 each selected watershed: 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,000,000 7 2. There is appropriated from the general fund of the state 8 to the department of natural resources for the fiscal year 9 beginning July 1, 2015, and ending June 30, 2016, the following 10 amount, or so much thereof as is necessary, to be used for the 11 purposes designated: 12 For deposit into the water quality initiative fund for 13 communities as created in section 466B.45A, as enacted in this 14 Act, for purposes of administering regional watershed and clean 15 water programs, as provided in section 466B.43 as created in 16 this Act, including the implementation of regional watershed 17 and clean water projects within cities and other communities 18 within each selected watershed: 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,000,000 20 3. Notwithstanding section 8.33, moneys appropriated for 21 the fiscal year beginning July 1, 2015, in this section that 22 remain unencumbered or unobligated at the close of the fiscal 23 year shall not revert but shall remain available to be used for 24 the purposes designated until January 1, 2032. 25 Sec. 8. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 26 immediate importance, takes effect upon enactment. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to the state’s water quality initiative 31 that provides for the assessment and reduction of nutrients 32 in this state’s watersheds, including regional watersheds 33 (Code section 466B.42). The bill provides programs to support 34 three watersheds, including two regional watersheds selected 35 -6- LSB 5811XS (5) 86 da/lh 6/ 7

S.F. 2302 by the water resources coordinating council (Code section 1 466B.3 as amended) and the Raccoon river watershed. The bill 2 appropriates moneys for the fiscal year beginning July 1, 2015, 3 and ending June 30, 2016, to two funds: (1) the water quality 4 initiative fund for agriculture administered by the division of 5 soil conservation and water quality and (2) the water quality 6 initiative fund for communities administered by the department 7 of natural resources. The goal for each program is to reduce 8 nitrates, nitrites, or other contaminants designated by the 9 division so that by January 1, 2032, contaminants in surface 10 waters do not exceed the maximum contaminant levels established 11 by the United States environmental protection agency under the 12 Safe Drinking Water Act. The division, in cooperation with 13 the department, must prepare and submit interim reports to the 14 governor and general assembly every two years, with a final 15 report to be delivered January 15, 2032. 16 The bill takes effect upon enactment. 17 -7- LSB 5811XS (5) 86 da/lh 7/ 7