S.F. 42 Section 1. Section 8.55, subsection 2, Code 2015, is amended 1 to read as follows: 2 2. The maximum balance of the fund is the amount equal to 3 two and one-half percent of the adjusted revenue estimate for 4 the fiscal year. If the amount of moneys in the Iowa economic 5 emergency fund is equal to the maximum balance, moneys in 6 excess of this amount shall be distributed as follows: 7 a. The first sixty million dollars of the difference between 8 the actual net revenue for the general fund of the state for 9 the fiscal year and the adjusted revenue estimate for the 10 fiscal year shall be transferred to the taxpayers trust fund. 11 b. Moneys in excess of the amount transferred under 12 paragraph “a” , up to a maximum of one hundred million dollars, 13 shall be transferred to the critical needs road fund created 14 under section 312B.1. 15 b. c. The remainder of the excess, if any, shall be 16 transferred to the general fund of the state. 17 Sec. 2. Section 8.58, Code 2015, is amended to read as 18 follows: 19 8.58 Exemption from automatic application. 20 1. To the extent that moneys appropriated under section 21 8.57 do not result in moneys being credited to the general 22 fund under section 8.55, subsection 2 , moneys appropriated 23 under section 8.57 and moneys contained in the cash reserve 24 fund, rebuild Iowa infrastructure fund, environment first 25 fund, Iowa economic emergency fund, taxpayers trust fund, 26 and state bond repayment fund , and critical needs road fund 27 shall not be considered in the application of any formula, 28 index, or other statutory triggering mechanism which would 29 affect appropriations, payments, or taxation rates, contrary 30 provisions of the Code notwithstanding. 31 2. To the extent that moneys appropriated under section 32 8.57 do not result in moneys being credited to the general 33 fund under section 8.55, subsection 2 , moneys appropriated 34 under section 8.57 and moneys contained in the cash reserve 35 -1- LSB 1707XS (2) 86 ns/nh 1/ 3

S.F. 42 fund, rebuild Iowa infrastructure fund, environment first fund, 1 Iowa economic emergency fund, taxpayers trust fund, and state 2 bond repayment fund , and critical needs road fund shall not be 3 considered by an arbitrator or in negotiations under chapter 4 20 . 5 Sec. 3. NEW SECTION . 312B.1 Critical needs road fund. 6 1. A critical needs road fund is created in the state 7 treasury under the control of the department of transportation. 8 The fund shall be separate from the general fund of the state 9 and the balance in the fund shall not be considered part of 10 the balance of the general fund of the state. The fund shall 11 consist of moneys appropriated by the general assembly and any 12 revenues credited by law to the critical needs road fund. The 13 moneys in the fund are not subject to section 8.33 and shall 14 not be transferred, used, obligated, appropriated, or otherwise 15 encumbered except as provided in this section. Notwithstanding 16 section 12C.7, subsection 2, interest or earnings on moneys 17 deposited in the critical needs road fund shall be credited to 18 the fund. 19 2. Moneys in the critical needs road fund are appropriated 20 to the department of transportation to be used as directed by 21 the department exclusively for the repair and maintenance of 22 roads on the primary or secondary road system or the municipal 23 street system, including bridges. The department shall 24 establish guidelines to be used by the department, counties, 25 and cities for identifying roads and bridges in critical 26 need of repair or maintenance and for the department to use 27 in evaluating and prioritizing state and local road projects 28 to receive funding under this section. Counties and cities 29 may apply for funding from the critical needs road fund by 30 submitting to the department proposals for projects on roads 31 under their respective jurisdictions. A qualifying proposal 32 shall include information regarding the status and condition 33 of the road that is the subject of the proposal, the plan for 34 completing the project, and any other information required by 35 -2- LSB 1707XS (2) 86 ns/nh 2/ 3

S.F. 42 the department. The department shall develop an application 1 process for counties and cities to use for the submission of 2 proposals for the use of funds under this section. Moneys 3 distributed from the critical needs road fund may be used 4 in combination with other available funding as necessary to 5 accomplish the completion of a qualifying project and to 6 accomplish the goal of reducing the number of Iowa roads and 7 bridges with critical needs. 8 EXPLANATION 9 The inclusion of this explanation does not constitute agreement with 10 the explanation’s substance by the members of the general assembly. 11 This bill establishes a critical needs road fund in the state 12 treasury under the control of the department of transportation. 13 Moneys in the fund are appropriated to the department to be 14 used exclusively for repair and maintenance of state and local 15 roads. The department is authorized to direct the use of the 16 fund’s resources according to guidelines to be established by 17 the department for identifying roads and bridges in critical 18 need of repair or maintenance and for prioritizing state 19 and local critical needs projects. Counties and cities 20 may submit proposals for the use of funds on roads under 21 their jurisdiction according to an application process to be 22 developed by the department. Moneys from the fund may be used 23 in combination with other available funding. 24 The bill provides that if the economic emergency fund 25 reaches the maximum balance, after the required transfer of a 26 portion of the excess to the taxpayers trust fund and before 27 any remaining excess is transferred to the general fund of the 28 state, any excess moneys in an amount up to $100 million shall 29 be transferred to the critical needs road fund. 30 -3- LSB 1707XS (2) 86 ns/nh 3/ 3