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House Study Bill 135 - IntroducedA Bill ForAn Act 1relating to water quality by providing for
2appropriations from the rebuild Iowa infrastructure fund,
3creating a water quality infrastructure fund, establishing
4new water quality programs, providing for cost-share
5programs for infrastructure on agricultural land under the
6water quality initiative, creating a state water service
7excise tax and a related sales tax exemption, making
8appropriations and other changes properly related to water
9quality, and including retroactive applicability provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 8.57, subsection 5, Code 2017, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. 0h. (1) Notwithstanding paragraph “c” of
4this subsection, there is appropriated from the rebuild Iowa
5infrastructure fund to the water quality infrastructure fund
6created in section 8.57B the following amounts:
7(a) For the fiscal year beginning July 1, 2017, and ending
8June 30, 2018, five million dollars.
9(b) For the fiscal year beginning July 1, 2018, and ending
10June 30, 2019, six million five hundred thousand dollars.
11(c) For the fiscal year beginning July 1, 2019, and ending
12June 30, 2020, eleven million five hundred thousand dollars.
13(d) For the fiscal year beginning July 1, 2020, and ending
14June 30, 2021, sixteen million five hundred thousand dollars.
15(e) For the fiscal year beginning July 1, 2021, and ending
16June 30, 2022, sixteen million five hundred thousand dollars.
17(f) For the fiscal year beginning July 1, 2022, and ending
18June 30, 2023, twenty-two million dollars.
19(g) For the fiscal year beginning July 1, 2023, and ending
20June 30, 2024, twenty-two million dollars.
21(h) For the fiscal year beginning July 1, 2024, and ending
22June 30, 2025, twenty-two million dollars.
23(i) For the fiscal year beginning July 1, 2025, and ending
24June 30, 2026, twenty-two million dollars.
25(j) For the fiscal year beginning July 1, 2026, and ending
26June 30, 2027, twenty-two million dollars.
27(k) For the fiscal year beginning July 1, 2027, and ending
28June 30, 2028, twenty-two million dollars.
29(l) For the fiscal year beginning July 1, 2028, and ending
30June 30, 2029, twenty-two million dollars.
31(m) For the fiscal year beginning July 1, 2029, and ending
32June 30, 2030, twenty-two million dollars.
33(2) This paragraph “0h” is repealed on January 1, 2031.
34 Sec. 2. NEW SECTION. 8.57B Water quality infrastructure
35fund — creation — appropriations.
-1- 11. A water quality infrastructure fund is created within
2the division of soil conservation and water quality of the
3department of agriculture and land stewardship. The fund
4shall consist of moneys appropriated from the rebuild Iowa
5infrastructure fund pursuant to section 8.57, subsection 5,
6paragraph “0h”.
72. The fund shall be separate from the general fund of the
8state and the balance in the fund shall not be considered part
9of the balance of the general fund of the state. However, the
10fund shall be considered a special account for the purposes
11of section 8.53, relating to generally accepted accounting
12principles.
133. Moneys in the fund are appropriated to the division
14of soil conservation and water quality of the department of
15agriculture and land stewardship for the exclusive purpose of
16supporting water quality agriculture infrastructure programs
17created in section 466B.43.
184. Notwithstanding section 8.33, moneys in the fund
19that remain unencumbered or unobligated at the close of a
20fiscal year shall not revert but shall remain available for
21expenditure for the purposes designated. Notwithstanding
22section 12C.7, subsection 2, interest or earnings on moneys in
23the fund shall be credited to the fund.
245. This section is repealed on the date that all moneys
25transferred to the water quality infrastructure fund from
26the rebuild Iowa infrastructure fund pursuant to section
278.57, subsection 5, paragraph “0h”, including any interest
28or earnings on such moneys credited to the water quality
29infrastructure fund, are expended by the division of soil
30conservation and water quality of the department of agriculture
31and land stewardship, and the balance of the water quality
32infrastructure fund is zero. The director of the division
33of soil conservation and water quality of the department of
34agriculture and land stewardship shall notify the Iowa Code
35editor of this occurrence.
-2-1 Sec. 3. NEW SECTION. 16.140 Water quality protection and
2wastewater treatment grant program — fund.
31. As used in this section, unless the context otherwise
4requires:
5a. “Clean Water Act” means the same as defined in section
616.131A.
7b. “Eligible entity” means either of the following:
8(1) An entity engaged in an industry identified in the Iowa
9nutrient reduction strategy, as determined by the authority,
10which industry is or will be required pursuant to the Iowa
11nutrient reduction strategy to collect data on the source,
12concentration, and mass of total nitrogen or total phosphorus
13in its effluent, and to evaluate alternatives for reducing the
14amount of nutrients in its discharge.
15(2) An entity implementing technology improvements to
16reduce nutrients in its discharge.
17c. “Iowa nutrient reduction strategy” means a water
18quality initiative developed and updated by the department of
19agriculture and land stewardship, the department of natural
20resources, and the college of agriculture and life sciences at
21Iowa state university of science and technology in order to
22assess and reduce nutrients in this state’s watersheds that
23utilizes a pragmatic, strategic, and coordinated approach with
24the goal of accomplishing reductions over time.
25d. “Municipality” means a city or a rural water district or
26association empowered by law to provide sewage collection and
27treatment services or drinking water.
28e. “Program” means the water quality protection and
29wastewater treatment grant program created in this section.
30f. “Safe Drinking Water Act” means the same as defined in
31section 16.131A.
32g. “Source water protection project” means a project or
33activity designed to prevent pollutants from entering public
34drinking water sources.
35h. “Wastewater infrastructure improvement” includes
-3-1the acquisition, construction, reconstruction, extension,
2equipping, improvement, or rehabilitation of any works or
3facilities useful for the collection, treatment, and disposal
4of sewage or industrial waste in a sanitary manner, including
5treatment works as defined in section 212 of the Clean Water
6Act, and including the implementation and development of
7sponsor projects under section 455B.199.
8i. “Water infrastructure improvement” includes the
9acquisition, construction, reconstruction, extending,
10remodeling, improving, repairing, or equipping of waterworks,
11water mains, extensions, or treatment facilities useful for
12providing potable water to residents served by a water system,
13including the acquisition of real property needed for such
14purposes, and such other purposes and programs as may be
15authorized under the Safe Drinking Water Act.
162. The Iowa finance authority shall establish and
17administer a water quality protection and wastewater treatment
18grant program for the purpose of providing financial assistance
19in the form of grants to enhance water quality, upgrade water
20and wastewater infrastructure, and to implement the Iowa
21nutrient reduction strategy. The program shall be administered
22in accordance with rules adopted by the authority pursuant to
23chapter 17A.
243. a. A water quality protection and wastewater treatment
25grant fund is created in the state treasury and shall consist
26of appropriations made to the fund, transfers of interest,
27earnings, moneys from other funds as provided by law, and
28moneys accepted by the authority for deposit in the fund
29from other public or private sources. Moneys credited
30or transferred to the fund pursuant to section 16.198 are
31appropriated to the authority for purposes of the program.
32Moneys in the fund shall be used exclusively for purposes of
33the program.
34b. Notwithstanding section 8.33, moneys in the fund
35that remain unencumbered or unobligated at the close of a
-4-1fiscal year shall not revert but shall remain available for
2expenditure for the purposes designated. Notwithstanding
3section 12C.7, subsection 2, interest or earnings on moneys in
4the fund shall be credited to the fund.
54. Grants may be awarded under the program for any of the
6following:
7a. To a municipality or an eligible entity participating in
8a nutrient reduction exchange, for the purpose of purchasing
9nutrient reduction credits or for implementing water quality
10practices as described in the Iowa nutrient reduction strategy
11in order to comply with technology-based effluent nutrient
12limits at a facility. For purposes of this paragraph, “nutrient
13reduction credit” and “nutrient reduction exchange” both mean the
14same as defined in section 16.206, section 1, paragraph “d”.
15b. To a municipality or an eligible entity for up to fifty
16percent of the costs associated with conducting economic and
17technical feasibility studies or developing implementation
18plans and reports required by the Iowa nutrient reduction
19strategy.
20c. To a municipality for a source water protection project.
21d. To a municipality or an eligible entity for water
22infrastructure improvements or for wastewater infrastructure
23improvements.
245. Priority for grants shall be given to projects or
25activities that will provide improvement to water quality in
26the relevant watershed.
276. Priority for grants shall be given to projects or
28activities that also have private financing, or financing
29pursuant to section 16.131 under the water pollution control
30works and drinking water facilities financing program created
31pursuant to section 455B.294, or other federal or state
32financing.
337. Grants awarded under the program shall not exceed five
34hundred thousand dollars per recipient.
358. By October 1 of each year, the authority shall submit
-5-1a report to the governor and the general assembly itemizing
2expenditures under the program during the previous fiscal year.
39. a. Beginning September 1, 2027, and every ten years
4thereafter, a program review committee is established for
5purposes of reviewing the program. By December 1 of the
6same year, the review committee shall file a report with
7the governor and the general assembly that reviews the
8effectiveness of the program during the previous ten fiscal
9years.
10b. The program review committee shall consist of the
11following members:
12(1) The governor or the governor’s designee.
13(2) The secretary of agriculture or the secretary’s
14designee.
15(3) The executive director of the authority or the executive
16director’s designee.
17(4) The director of the department of natural resources or
18the director’s designee.
19(5) Four members of the general assembly, with two from the
20senate and two from the house of representatives and not more
21than one member from each chamber being from the same political
22party. The two senators shall be designated one member each
23by the president of the senate, after consultation with the
24majority leader of the senate, and by the minority leader of
25the senate. The two representatives shall be designated one
26member each by the speaker of the house of representatives,
27after consultation with the majority leader of the house of
28representatives, and by the minority leader of the house of
29representatives.
30c. Staffing services shall be provided by the authority.
31 Sec. 4. NEW SECTION. 16.198 Water quality financial
32assistance fund.
331. A water quality financial assistance fund is created in
34the state treasury.
352. The fund shall consist of all of the following:
-6- 1a. (1) Moneys transferred to the fund pursuant to section
2423G.6.
3(2) This paragraph “a” is repealed upon the date on which
4chapter 423G is repealed pursuant to section 423G.7.
5b. Appropriations made to the fund and transfers of
6interest, earnings, and moneys from other funds as provided by
7law.
83. For each fiscal year in the period beginning July 1,
92017, and ending when chapter 423G is repealed pursuant to
10section 423G.7, there is appropriated the following amounts of
11the balance of the fund for the following purposes:
12a. One-sixth of the balance of the fund to the Iowa finance
13authority to be credited to the water quality protection and
14wastewater treatment grant fund created pursuant to section
1516.140, subsection 3.
16b. Five-sixths of the balance of the fund to the Iowa
17finance authority to be credited to the water quality project
18financial assistance fund created pursuant to section 16.204.
194. Moneys in the fund are not subject to section 8.33.
20Notwithstanding section 12C.7, subsection 2, interest or
21earnings on moneys in the fund shall be credited to the fund.
22 Sec. 5. NEW SECTION. 16.201 Definitions.
23As used in this part, unless the context otherwise requires:
241. “Committee” means the water quality project financing
25committee created in section 16.205, subsection 4.
262. “Eligible entity” means a financing entity meeting the
27requirements of section 16.206, as determined by the committee.
283. “Financing entity” means two or more persons that have
29entered into an agreement for purposes of joint financing of a
30project under the program. A financing entity may include but
31is not limited to a governmental body such as a state agency or
32a political subdivision of the state, a city or a city utility,
33a public utility as defined in section 476.1 that furnishes
34drinking water, sanitary sewage, or storm water services to the
35public for compensation, a county, a rural water district or
-7-1association, a soil and water conservation district, a sanitary
2district, a subdistrict of any of the foregoing districts, a
3governmental body or corporation empowered to provide sewage
4collection and treatment services or drinking water, an entity
5jointly exercising governmental powers pursuant to chapter 28E
6or 28F, or any other combination of two or more public agencies
7or private agencies as defined in section 28E.2, acting jointly
8under Iowa law in connection with a project.
94. “Iowa nutrient reduction strategy” means a water
10quality initiative developed and updated by the department of
11agriculture and land stewardship, the department of natural
12resources, and the college of agriculture and life sciences at
13Iowa state university of science and technology in order to
14assess and reduce nutrients in this state’s watersheds that
15utilizes a pragmatic, strategic, and coordinated approach with
16the goal of accomplishing reductions over time.
175. “Loan recipient” means an eligible entity that has
18received a loan under the program.
196. “Program” means the water quality project financial
20assistance program created in this part.
217. “Project” means any combination of works, facilities,
22improvements, structures, developments, tasks, activities,
23constructions, modifications, operations, or practices designed
24to improve water quality or water resource management that are
25proposed by an eligible entity and approved by the committee.
26“Project” includes but is not limited to the following:
27a. A project meeting the requirements of part 2 of this
28subchapter.
29b. A project, operation, or practice undertaken or carried
30out pursuant to chapter 161A, 161C, 161E, or 161F.
31c. A project meeting the requirements of a sponsor project
32under section 455B.199.
33d. Other water resource restoration projects as defined in
34section 384.80, including ones financed pursuant to section
3528F.1.
-8- 1e. An agricultural nonpoint source project eligible for a
2water quality agriculture infrastructure program under section
3466B.43.
48. “Revolving fund” means the fund created in section
516.204.
6 Sec. 6. NEW SECTION. 16.202 Water quality project financial
7assistance program — funding — bonds and notes.
81. The authority shall cooperate with the department of
9natural resources and the department of agriculture and land
10stewardship in the creation, administration, and financing of
11the program established in this part.
122. The authority may issue its bonds and notes until June
1330, 2042, for the purposes of this part, including for the
14purposes of funding the program established under section
1516.205 and of funding any fund or account created under section
1616.204.
173. The authority may enter into one or more loan agreements
18or purchase agreements with one or more bondholders or
19noteholders containing the terms and conditions of the
20repayment of and the security for the bonds or notes. The
21authority and the bondholders or noteholders or a trustee
22agent designated by the authority may enter into agreements to
23provide for any of the following:
24a. That the proceeds of the bonds and notes and the
25investments of the proceeds may be received, held, and
26disbursed by the authority or by a trustee or agent designated
27by the authority.
28b. That the bondholders or noteholders or a trustee or
29agent designated by the authority may collect, invest, and
30apply the amount payable under the loan agreements or any
31other instruments securing the debt obligations under the loan
32agreements.
33c. That the bondholders or noteholders may enforce the
34remedies provided in the loan agreements or other instruments
35on their own behalf without the appointment or designation of a
-9-1trustee. If there is a default in the principal of or interest
2on the bonds or notes or in the performance of any agreement
3contained in the loan agreements or other instruments, the
4payment or performance may be enforced in accordance with the
5loan agreement or other instrument.
6d. Other terms and conditions as deemed necessary or
7appropriate by the authority.
84. The powers granted the authority under this section
9are in addition to other powers contained in this chapter.
10All other provisions of this chapter, except section 16.28,
11subsection 4, apply to bonds or notes issued and powers granted
12to the authority under this section except to the extent they
13are inconsistent with this section.
145. All bonds or notes issued by the authority in connection
15with the program are exempt from taxation by this state and the
16interest on the bonds or notes is exempt from state income tax.
17 Sec. 7. NEW SECTION. 16.203 Security — reserve funds —
18pledges — nonliability — irrevocable contracts.
191. The authority may provide in the resolution, trust
20agreement, or other instrument authorizing the issuance of its
21bonds or notes pursuant to section 16.202 that the principal
22of, premium, and interest on the bonds or notes are payable
23from any of the following and may pledge the same to its bonds
24and notes:
25a. The income and receipts or other moneys derived from the
26projects financed with the proceeds of the bonds or notes.
27b. The income and receipts or other moneys derived from
28designated projects whether or not the projects are financed in
29whole or in part with the proceeds of the bonds or notes.
30c. The amounts on deposit in the revolving fund.
31d. The amounts payable to the authority by eligible entities
32pursuant to loan agreements with eligible entities.
33e. Any other funds or accounts established by the authority
34in connection with the program or the sale and issuance of its
35bonds or notes.
-10- 12. The authority may establish reserve funds to secure
2one or more issues of its bonds or notes. The authority may
3deposit in a reserve fund established under this subsection the
4proceeds of the sale of its bonds or notes and other moneys
5that are made available from any other source.
63. It is the intention of the general assembly that a pledge
7made in respect of bonds or notes issued under this part shall
8be valid and binding from the time the pledge is made, that the
9moneys or property so pledged and received after the pledge
10by the authority shall immediately be subject to the lien of
11the pledge without physical delivery or further act, and that
12the lien of the pledge shall be valid and binding as against
13all parties having claims of any kind in tort, contract, or
14otherwise against the authority whether or not the parties have
15notice of the lien. Neither the resolution, trust agreement,
16nor any other instrument by which a pledge is created needs to
17be recorded or filed under the Iowa uniform commercial code,
18chapter 554, to be valid, binding, or effective against the
19parties.
204. Neither the members of the authority nor persons
21executing the bonds or notes are liable personally on the bonds
22or notes or are subject to personal liability or accountability
23by reason of the issuance of the bonds or notes.
245. The bonds or notes issued by the authority are not
25an indebtedness or other liability of the state or of a
26political subdivision of the state within the meaning of
27any constitutional or statutory debt limitations but are
28special obligations of the authority, and are payable solely
29from the income and receipts or other funds or property of
30the authority, and the amounts on deposit in the revolving
31fund, and the amounts payable to the authority under its loan
32agreements with eligible entities to the extent that the
33amounts are designated in the resolution, trust agreement, or
34other instrument of the authority authorizing the issuance of
35the bonds or notes as being available as security for such
-11-1bonds or notes. The authority shall not pledge the faith or
2credit of the state or of a political subdivision of the state
3to the payment of any bonds or notes. The issuance of any bonds
4or notes by the authority does not directly, indirectly, or
5contingently obligate the state or a political subdivision of
6the state to apply moneys from, or levy or pledge any form of
7taxation whatever to, the payment of the bonds or notes.
86. It is the intent of the general assembly, and the state
9hereby pledges to the holders of bonds or notes issued under
10this part, that the state will not limit or alter the rights
11and powers vested in the authority to fulfill the terms of a
12contract made by the authority with respect to the bonds or
13notes, or in any way impair the rights and remedies of the
14holders until the bonds or notes, together with the interest on
15the bonds or notes, including interest on unpaid installments
16of interest, and all costs and expenses in connection with an
17action or proceeding by or on behalf of the holders, are fully
18met and discharged. The authority is authorized to include
19this pledge and agreement of the state, as it refers to holders
20of bonds or notes of the authority, in a contract with the
21holders.
22 Sec. 8. NEW SECTION. 16.204 Water quality project financial
23assistance fund — other funds and accounts.
241. a. A water quality project financial assistance
25fund is created in the state treasury and shall consist of
26appropriations made to the fund, moneys credited or transferred
27to the fund pursuant to section 16.198, and transfers of
28interest, earnings, and moneys from other funds as provided
29by law. The fund shall be administered by the authority as a
30revolving fund.
31b. Moneys in the fund are not subject to section 8.33.
32Notwithstanding section 12C.7, subsection 2, interest or
33earnings on moneys in the fund shall be credited to the fund.
34c. The authority shall use the moneys in the fund to provide
35financial assistance to eligible entities under the program
-12-1pursuant to section 16.205.
2d. The authority may use an amount of not more than one
3percent of the moneys in the fund for administrative purposes.
42. The authority may establish and maintain other funds
5and accounts determined to be necessary to carry out the
6purposes of the program and shall provide for the funding,
7administration, investment, restrictions, and disposition of
8the funds and accounts.
93. Moneys appropriated to and used by the authority for
10purposes of paying the costs and expenses associated with
11the administration of the program shall be administered as
12determined by the authority.
134. The funds or accounts held by the authority, or a trustee
14acting on behalf of the authority pursuant to a trust agreement
15related to the program, shall not be considered part of the
16general fund of the state, are not subject to appropriation for
17any other purpose by the general assembly, and in determining
18a general fund balance shall not be included in the general
19fund of the state, but shall remain in the funds and accounts
20maintained by the authority or trustee pursuant to a trust
21agreement. Funds and accounts held by the authority, or a
22trustee acting on behalf of the authority pursuant to a trust
23agreement related to the program, are separate dedicated funds
24and accounts under the administration and control of the
25authority and subject to section 16.31.
26 Sec. 9. NEW SECTION. 16.205 Water quality project financial
27assistance program — committee created — rules — use of funds.
281. The authority, in cooperation with the department of
29natural resources and the department of agriculture and land
30stewardship, shall establish and administer a water quality
31project financial assistance program. The purpose of the
32program shall be to provide financial assistance to enhance
33the quality of surface water and groundwater, particularly
34by providing financial assistance for projects designed to
35improve water quality through collaboration between point
-13-1and nonpoint sources. The authority may provide financial
2assistance in the form deemed most convenient for the efficient
3financing of projects, including loans, forgivable loans, and
4grants. However, the authority shall administer the fund and
5the program in such a manner as to provide a permanent source
6of water quality project financial assistance to eligible
7entities.
82. The program shall be administered by the authority
9in accordance with rules adopted by the authority pursuant
10to chapter 17A. In adopting such rules, the authority shall
11consult with the department of natural resources and the
12department of agriculture and land stewardship.
133. The authority shall process and review financial
14assistance applications and make recommendations to the
15committee.
164. a. A water quality project financing committee is
17created to consider applications for financial assistance from
18eligible entities and approve awards of financial assistance
19under the program. The committee shall consist of three
20members, one appointed by the executive director of the
21authority, one appointed by the director of the department
22of natural resources, and one appointed by the secretary of
23agriculture.
24b. The committee shall review project plans submitted
25pursuant to section 16.206, negotiate project details with
26eligible entities, and make financial assistance awards. The
27provision of financial assistance under the program shall take
28into account the number of persons comprising an eligible
29entity and the eligible entity’s financing capacity as well as
30the extent to which the proposed projects will improve water
31quality.
32c. The committee shall score applications for financial
33assistance according to rules adopted pursuant to this part.
34The committee shall only provide financial assistance to
35eligible entities that have sufficient financing capacity and
-14-1that propose a plan likely to make progress toward achieving
2the goals for agricultural and nonpoint sources described in
3the Iowa nutrient reduction strategy.
45. The authority shall determine the interest rate
5and repayment terms for loans made under the program, in
6cooperation with the department of natural resources and
7the department of agriculture and land stewardship, and the
8authority shall enter into loan agreements with eligible
9entities in compliance with and subject to the terms and
10conditions of the program.
116. If a drainage district is a party to a chapter 28E
12agreement that creates a financing entity, the chapter 28E
13agreement shall provide that the drainage district shall not
14be required to be a signatory on any loan agreement entered
15into under the program, and the authority shall not require
16the drainage district to be a signatory on any loan agreement
17entered into under the program. This subsection shall not be
18construed to eliminate or in any way restrict any existing
19liability protection afforded to a drainage district under any
20provision of law.
217. The authority shall adopt rules relating to the
22proportional liability, if any, of members of an eligible
23entity when such eligible entity enters into a loan agreement
24under the program.
258. The authority may charge loan recipients fees and assess
26costs against such recipients necessary for the continued
27operation of the program. Such fees and costs shall not exceed
28the costs directly associated with the administration of the
29program. Fees and costs collected pursuant to this subsection
30shall be deposited in the appropriate fund or account created
31in section 16.204.
329. Financial assistance under the program shall be used by
33eligible entities to fund projects designed to improve water
34quality.
35 Sec. 10. NEW SECTION. 16.206 Eligible entities — project
-15-1plans — agreements required.
21. A financing entity may apply to the authority for
3financial assistance under the program. To be eligible, a
4financing entity shall meet the following requirements:
5a. The financing entity shall include two or more entities
6acting jointly to propose a project plan designed to improve
7water quality in a local area or watershed.
8b. The plan shall include one or more projects that
9substantially improve water quality in the local area or
10watershed. Preference shall be given to projects that will
11have the greatest impact on achieving the goals of the Iowa
12nutrient reduction strategy, and plans designed to achieve
13those goals shall be presumed to substantially improve water
14quality in the local area or watershed.
15c. The plan shall describe in detail the manner in which
16the projects will be financed and undertaken, including the
17sources of financing for the projects as well as the public or
18private entities that will be receiving the revenues and how
19such revenues will be spent on the projects. In describing the
20projects and financing, the plan should attempt to quantify
21the amount of nutrient reduction to be achieved under the
22plan and should provide a reasonable means for verification
23of the amount of nutrient reduction after the projects have
24been financed and completed. Preference shall be given to
25a financing entity that has had its plan evaluated by the
26Iowa nutrient research center established in section 466B.47.
27Preference shall also be given to a financing entity that has
28contracted with the Iowa nutrient research center to verify
29the amount of nutrient reduction achieved by the project upon
30project completion.
31d. (1) The plan may include a nutrient reduction exchange
32between two or more members of the financing entity. A plan
33that includes a nutrient reduction exchange shall be presumed
34to substantially improve water quality in the local area or
35watershed.
-16- 1(2) For purposes of this paragraph:
2(a) “Nutrient reduction” means a reduction in nitrogen or
3phosphorus as measured against standards or goals established
4or adopted by the committee.
5(b) “Nutrient reduction credit” means an amount of nutrient
6reduction expressed as a unit of measurement that is calculated
7using research-based modeling or other methods established or
8adopted by the committee.
9(c) “Nutrient reduction exchange” means an agreement between
10one or more point source or nonpoint source contributors
11and one or more other parties whereby nutrient reduction
12credits are purchased, sold, traded, or exchanged for legal
13consideration.
142. Any eligible entity receiving financial assistance under
15the program shall enter into an agreement with the authority.
16The agreement shall include standard terms for the receipt of
17program funds and any other terms the authority deems necessary
18and convenient for the efficient administration of the program.
19 Sec. 11. Section 28F.1, subsection 1, Code 2017, is amended
20to read as follows:
211. This chapter provides a means for the joint financing
22by public agencies of works or facilities useful and necessary
23for the collection, treatment, purification, and disposal
24in a sanitary manner of liquid and solid waste, sewage, and
25industrial waste, facilities used for the conversion of solid
26waste to energy, facilities, improvements, or projects in a
27watershed useful for flood control, erosion control, or water
28quality restoration by a water utility, wastewater utility,
29or storm water utility, whether located within or without the
30corporate boundaries of a municipal corporation, and also
31electric power facilities constructed within the state of
32Iowa, except that hydroelectric power facilities may also be
33located in the waters and on the dams of or on land adjacent
34to either side of the Mississippi or Missouri river bordering
35the state of Iowa, water supply systems, swimming pools
-17-1or golf courses. This chapter applies to the acquisition,
2construction, reconstruction, ownership, operation, repair,
3extension, or improvement of such works or facilities, by a
4separate administrative or legal entity created pursuant to
5chapter 28E or chapter 389. When the legal entity created
6under this chapter is comprised solely of cities, counties,
7and sanitary districts established under chapter 358, or any
8combination thereof or any combination of the foregoing with
9other public agencies, the entity shall be both a corporation
10and a political subdivision with the name under which it was
11organized. The legal entity may sue and be sued, contract,
12acquire and hold real and personal property necessary for
13corporate purposes, adopt a corporate seal and alter the seal
14at pleasure, and execute all the powers conferred in this
15chapter.
16 Sec. 12. Section 161A.7, subsection 1, paragraph d, Code
172017, is amended to read as follows:
18d. To cooperate, or enter into agreements with, and within
19the limits of appropriations duly made available to it by law,
20to furnish financial or other aid to any agency, governmental
21or otherwise, or any owner or occupier of lands within the
22district, in the carrying on of erosion-control and watershed
23protection and flood prevention operations, or in the carrying
24out of projects or operations pursuant to paragraph “q”, within
25the district, subject to such conditions as the commissioners
26may deem necessary to advance the purposes of this chapter.
27 Sec. 13. Section 161A.7, subsection 1, Code 2017, is amended
28by adding the following new paragraphs:
29 NEW PARAGRAPH. p. To apply for financial assistance under
30the water quality project financial assistance program under
31sections 16.201 through 16.206.
32 NEW PARAGRAPH. q. To carry out soil erosion control,
33watershed protection or improvement, flood prevention, and
34water quality protection projects and operations within the
35district, including but not limited to projects and operations
-18-1to support water protection practices, to protect this
2state’s groundwater and surface water from point and nonpoint
3sources of pollution, including but not limited to pollution
4by agricultural drainage wells, sinkholes, sedimentation,
5or chemical pollutants, to reduce or remove nutrients and
6pollution in or from surface water and groundwater, to reduce
7or eliminate nutrient reduction loads to surface water
8and groundwater from both point and nonpoint sources, to
9maintain, protect, and improve the quality of surface water and
10groundwater, and to achieve or further any of the goals and
11targets described in the Iowa nutrient reduction strategy as
12defined in section 16.201.
13 Sec. 14. Section 161C.1, Code 2017, is amended by adding the
14following new subsection:
15 NEW SUBSECTION. 4A. “Financing entity” means the same as
16defined in section 16.201.
17 Sec. 15. Section 161C.2, subsection 1, paragraph a, Code
182017, is amended to read as follows:
19a. Each soil and water conservation district, alone and
20whenever practical in conjunction with other districts, shall
21 financing entities, or political subdivisions of the state,
22or other local agencies, may carry out district-wide and
23multiple-district projects to support soil erosion control,
24water resource restoration projects, watershed protection,
25flood prevention, and water quality protection practices,
26projects, and operations in the district or districts,
27including but not limited to projects carried out in order to
28protect this state’s groundwater and surface water from point
29and nonpoint sources of contamination pollution, including but
30not limited to contamination pollution by agricultural drainage
31wells, sinkholes, sedimentation, or chemical pollutants, as
32described in the Iowa nutrient reduction strategy as defined
33in section 16.201.
34 Sec. 16. Section 161C.3, Code 2017, is amended to read as
35follows:
-19- 1161C.3 Cooperation with other agencies.
2Soil and water conservation districts may enter into
3agreements with the United States, as provided by state law,
4or with the state of Iowa or any agency of the state, any
5other soil and water conservation district, or other political
6subdivision of this state, or any financing entity, or other
7local agency, for cooperation in preventing, controlling, or
8attempting to prevent or control contamination pollution of
9groundwater or surface water by point and nonpoint sources
10of pollution. Soil and water conservation districts may
11accept, as provided by state law, any money disbursed for water
12quality preservation purposes by the federal government or any
13agency of the federal government, and expend the money for the
14purposes for which it was received.
15 Sec. 17. Section 161E.1, Code 2017, is amended to read as
16follows:
17161E.1 Authority of board.
181. If a county, soil and water conservation district,
19subdistrict of a soil and water conservation district,
20financing entity, or political subdivision of the state, or
21other local agency engages or participates in or carries out
22 a project for flood or soil erosion control, a water resource
23restoration project, watershed protection or improvement
24project, flood prevention, water quality protection project or
25operation, including but not limited to a project or operation
26described in the Iowa nutrient reduction strategy as defined
27in section 16.201, within a county, or engages or participates
28in the conservation, development, utilization, and disposal
29of water, in cooperation with the federal government, or a
30department or agency of the federal government, in cooperation
31with other districts, subdistricts, financing entities,
32political subdivisions, or other local agencies, the counties
33in which the project is carried on may, through the board of
34supervisors or through an intergovernmental agreement under
35chapter 28E or chapter 28F, construct, operate, and maintain
-20-1the project on lands under the control or jurisdiction of the
2county dedicated to county use, or furnish financial and other
3assistance in connection with the projects or operations.
4Flood control, soil erosion control, watershed protection
5projects, flood prevention, water quality improvement projects,
6water resource restoration projects, and watershed improvement
7projects and operations, including but not limited to projects
8or operations described in the Iowa nutrient reduction strategy
9as defined in section 16.201, are presumed to be for the
10protection of the tax base of the county, for the protection of
11public roads and lands, and for the protection of the public
12health, sanitation, safety, and general welfare.
132. For purposes of this chapter, “financing entity” means
14the same as defined in section 16.201.
15 Sec. 18. Section 161E.2, Code 2017, is amended to read as
16follows:
17161E.2 Federal aid.
18A county may, in accordance with this chapter, accept
19federal funds for aid in a project for flood or soil erosion
20control, flood prevention, or the conservation, development,
21utilization, and disposal of water, and may cooperate with
22the federal government or a department or agency of the
23federal government, a soil and water conservation district,
24subdistrict of a soil and water conservation district,
25political subdivision of the state, or other local agency, or
26a financing entity, and the county may assume a proportion of
27the cost of the project as deemed appropriate, and may assume
28the maintenance cost of the project on lands under the control
29or jurisdiction of the county which will not be discharged by
30federal aid or grant.
31 Sec. 19. Section 161E.3, Code 2017, is amended to read as
32follows:
33161E.3 Cooperation.
34The counties, soil and water conservation districts,
35and subdistricts of soil and water conservation districts
-21-1concerned, shall advise and consult with each other, upon the
2request of any of them or any affected landowners, and may
3cooperate with each other or with other state subdivisions or
4instrumentalities, and affected landowners, as well as with the
5federal government or a department or agency of the federal
6government, or a financing entity or other local agency, to
7construct, operate, and maintain suitable projects for flood
8or soil erosion control, water resource restoration projects,
9watershed protection or improvement projects, flood prevention,
10water quality protection or improvement projects, or the
11conservation, development, utilization, and disposal of water
12on public roads or other public lands or other land granted
13county use.
14 Sec. 20. Section 161E.5, Code 2017, is amended to read as
15follows:
16161E.5 Maintenance cost.
17If construction of projects has been completed by the soil
18and water conservation district, subdistricts of soil and
19water conservation districts, political subdivisions of the
20state, or other local agencies, or the federal government, or a
21department or agency of the federal government, or a financing
22entity on private lands under the easement granted to the
23county, only the cost of maintenance may be assumed by the
24county.
25 Sec. 21. Section 161E.9, Code 2017, is amended to read as
26follows:
27161E.9 Tax levy.
28The county board of supervisors may annually levy a tax not
29to exceed six and three-fourths cents per thousand dollars of
30assessed value of all agricultural lands in the county, to
31be used for flood and soil erosion control, water resource
32restoration projects, watershed protection or improvement
33projects, flood prevention and water quality protection
34projects and operations within a county, including but not
35limited to projects or operations described in the Iowa
-22-1nutrient reduction strategy as defined in section 16.201, and
2 including acquisition of land or interests in land, and repair,
3alteration, maintenance, and operation of works of improvement
4on lands under the control or jurisdiction of the county as
5provided in this chapter, or to furnish financial assistance in
6connection with such projects and operations.
7 Sec. 22. Section 161E.10, Code 2017, is amended to read as
8follows:
9161E.10 Assumption of obligations.
10This chapter contemplates that actual direction of the
11project, or projects, and the actual work done in connection
12with them the projects, will be assumed by the soil and water
13conservation district, a subdistrict of a soil and water
14conservation district, or the federal government, and that the
15county or other state subdivisions or instrumentalities or
16financing entities jointly will meet the obligation required
17for federal cooperation and may make proper commitment for
18the care and maintenance of the project after its completion
19for the general welfare of the public and residents of the
20respective counties.
21 Sec. 23. Section 161F.1, Code 2017, is amended to read as
22follows:
23161F.1 Presumption of benefit — definitions.
241. The conservation of the soil resources of the state
25of Iowa, the improvement of water quality through projects,
26 the proper control of water resources of the state and the
27prevention of damage to property and lands through the control
28of floods, the drainage of surface waters or the protection of
29lands from overflow shall be presumed to be a public benefit
30and conducive to the public health, convenience and welfare and
31essential to the economic well-being of the state.
322. For purposes of this chapter, “financing entity” and
33“project” both mean the same as defined in section 16.201.
34 Sec. 24. Section 161F.2, Code 2017, is amended to read as
35follows:
-23- 1161F.2 Board of supervisors to establish districts — strip
2coal mining.
31. The board of supervisors of any county shall have
4jurisdiction, power and authority at any regular, special or
5adjourned session to establish, subject to the provisions
6of this chapter, districts having for their purpose soil
7conservation and the control of flood waters, or the
8improvement of water quality, and to cause to be constructed
9as hereinafter provided, such improvements, projects, and
10facilities as shall be deemed essential for the accomplishment
11of the purpose of soil conservation and flood control, or of
12water quality improvement.
132. Such The board of supervisors shall also have
14jurisdiction, power, and authority at any regular, special,
15 or adjourned session to establish, in the same manner that
16the districts hereinabove referred to in subsection 1
17 are established, districts having for their purpose soil
18conservation in mining areas within the county, and provide
19that anyone engaged in removing the surface soil over any
20bed or strata of coal in such district for the purpose of
21obtaining such coal shall replace the surface soil as nearly
22as practicable to its original position, and provide that,
23upon abandonment of such removal operation, all surface soil
24shall be so replaced. This section subsection shall apply only
25to surface soil so removed after July 4, 1949, and then only
26if it is essential for the accomplishment of the purpose of
27soil conservation and flood control within the purview of this
28chapter.
29 Sec. 25. Section 161F.3, Code 2017, is amended to read as
30follows:
31161F.3 Combination of functions.
32Such districts shall have the power to combine in their
33functions activities affecting soil conservation, flood control
34and drainage, water quality improvement, or any of these
35objects, singly or in combination with another district or
-24-1financing entity under the provisions of an intergovernmental
2agreement pursuant to chapter 28E or 28F.
3 Sec. 26. Section 161F.6, subsection 1, Code 2017, is amended
4to read as follows:
51. In the organization, operation, and financing of
6districts established under this chapter, the provisions of
7chapter 468 shall apply and any procedure provided under
8chapter 468 in connection with the organization, financing,
9and operation of any drainage district shall apply to the
10organization, financing, and operation of districts organized
11under this chapter. However, a district established under this
12chapter shall not be considered a drainage district established
13pursuant to chapter 468.
14 Sec. 27. Section 384.80, subsection 15, Code 2017, is
15amended to read as follows:
1615. “Water resource restoration project” means the
17acquisition of real property or improvements, a project as
18defined in section 16.201, or any other activity or undertaking
19that will assist in improving flood control, erosion control,
20or the quality of the water in the watershed where a city
21water, storm water, or wastewater utility is located.
22 Sec. 28. Section 384.84, subsection 2, Code 2017, is amended
23to read as follows:
242. The governing body of a city water or wastewater utility
25may enter into an agreement with a qualified entity to use
26proceeds from revenue bonds for a water resource restoration
27project if the rate imposed is no greater than if there was not
28a water resource restoration project agreement. For purposes
29of this subsection, “qualified entity” is an entity created
30pursuant to chapter 28E or chapter 28F or two entities that
31have entered into an agreement pursuant to chapter 28E or
32chapter 28F, whose purpose is to undertake a watershed project
33that has been approved for water quality improvements in the
34watershed.
35 Sec. 29. Section 422.7, subsection 2, Code 2017, is amended
-25-1by adding the following new paragraph:
2 NEW PARAGRAPH. 0h. Iowa finance authority water quality
3project financial assistance program bonds or notes pursuant to
4section 16.202, subsection 5.
5 Sec. 30. Section 423.3, Code 2017, is amended by adding the
6following new subsection:
7 NEW SUBSECTION. 103. a. The sales price from the sale or
8furnishing by a water utility of a water service in the state
9to consumers or users.
10b. For purposes of this subsection:
11(1) “Water service” means the delivery of water by piped
12distribution system.
13(2) “Water utility” means a public utility as defined in
14section 476.1 that furnishes water by piped distribution system
15to the public for compensation.
16 Sec. 31. NEW SECTION. 423G.1 Short title.
17This chapter may be cited as the “Water Service Tax Act”.
18 Sec. 32. NEW SECTION. 423G.2 Definitions.
191. All words and phrases used in this chapter and defined in
20section 423.1 have the same meaning given them by section 423.1
21for purposes of this chapter.
222. As used in this chapter, “water service” and “water
23utility” mean the same as defined in section 423.3, subsection
24103.
25 Sec. 33. NEW SECTION. 423G.3 Water service tax.
26An excise tax at the rate of six percent is imposed on the
27sales price from the sale or furnishing by a water utility of a
28water service in the state to consumers or users.
29 Sec. 34. NEW SECTION. 423G.4 Exemptions.
30The sales price from transactions exempt from state sales
31tax under section 423.3, except section 423.3, subsection 103,
32is also exempt from the tax imposed by this chapter.
33 Sec. 35. NEW SECTION. 423G.5 Administration by director.
341. The director of revenue shall administer the state
35water service tax as nearly as possible in conjunction with
-26-1the administration of the state sales and use tax law, except
2that portion of the law that implements the streamlined sales
3and use tax agreement. The director shall provide appropriate
4forms, or provide on the regular state tax forms, for reporting
5state water service tax liability.
62. The director may require all persons who are engaged
7in the business of deriving any sales price or purchase
8price subject to tax under this chapter to register with
9the department. The director may also require a tax permit
10applicable only to this chapter for any retailer not
11collecting, or any user not paying, taxes under chapter 423.
123. Section 422.25, subsection 4, sections 422.30, 422.67,
13and 422.68, section 422.69, subsection 1, sections 422.70,
14422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
151, and sections 423.23, 423.24, 423.25, 423.31 through
16423.35, 423.37 through 423.42, and 423.47, consistent with the
17provisions of this chapter, shall apply with respect to the tax
18authorized under this chapter in the same manner and with the
19same effect as if the excise taxes on the sale or furnishing of
20a water service were retail sales taxes within the meaning of
21those statutes. Notwithstanding this subsection, the director
22shall provide for quarterly filing of returns and for other
23than quarterly filing of returns both as prescribed in section
24423.31. All taxes collected under this chapter by a retailer
25or any user are deemed to be held in trust for the state of
26Iowa.
27 Sec. 36. NEW SECTION. 423G.6 Deposit of revenues.
281. All moneys received and all refunds shall be deposited in
29or withdrawn from the general fund of the state.
302. Subsequent to the deposit in the general fund of the
31state, the department shall transfer the following amounts of
32revenues collected to the water quality financial assistance
33fund created in section 16.198:
34a. For revenues collected on or after July 1, 2017, but
35before August 1, 2018, one-sixth of the revenues.
-27- 1b. For revenues collected on or after August 1, 2018, but
2before August 1, 2019, one-third of the revenues.
3c. For revenues collected on or after August 1, 2019, but
4before August 1, 2020, one-half of the revenues.
5d. For revenues collected on or after August 1, 2020, but
6before August 1, 2021, two-thirds of the revenues.
7e. For revenues collected on or after August 1, 2021, but
8before August 1, 2022, five-sixths of the revenues.
9f. For revenues collected on or after August 1, 2022, one
10hundred percent of the revenues.
11 Sec. 37. NEW SECTION. 423G.7 Future repeal.
12This chapter is repealed on the date on which all bonds,
13notes, or other debt instruments issued on or before June
1430, 2042, pursuant to section 16.202, are fully paid. The
15executive director of the Iowa finance authority shall notify
16the Iowa Code editor upon the occurrence of this condition.
17 Sec. 38. Section 455B.171, subsection 19, Code 2017, is
18amended to read as follows:
1919. “Point source” means any discernible, confined, and
20discrete conveyance, including but not limited to any pipe,
21ditch, channel, tunnel, conduit, well, discrete fissure,
22container, rolling stock, concentrated animal feeding
23operation, or vessel or other floating craft, from which
24pollutants are or may be discharged. “Point source” does not
25include agricultural storm water discharges and return flows
26from irrigated agriculture.
27 Sec. 39. Section 455B.176A, subsection 1, Code 2017, is
28amended by adding the following new paragraphs:
29 NEW PARAGRAPH. 0d. “Iowa nutrient reduction strategy” means
30the same as defined in section 16.201.
31 NEW PARAGRAPH. 00d. “Nutrient” means total nitrogen and
32total phosphorus.
33 Sec. 40. Section 455B.176A, subsection 5, Code 2017, is
34amended to read as follows:
355. a. The commission shall adopt rules designating water
-28-1quality standards which shall be specific to each designated
2use adopted pursuant to subsection 4. The standards shall take
3into account the different characteristics of each designated
4use and shall provide for only the appropriate level of
5protection based upon that particular use. The standards shall
6not be identical for each designated use unless required for
7the appropriate level of protection. The appropriate level of
8protection and standards shall be determined on a scientific
9basis.
10b. In the development process for the water quality
11standards, input shall be received from a water quality
12standards advisory committee convened by the department. The
13water quality standards advisory committee shall be comprised
14of experts in the scientific fields relating to water quality,
15such as environmental engineering, aquatic toxicology,
16fisheries biology, and other life sciences and experts in
17the development of the appropriate levels of aquatic life
18protection and standards. The water quality standards shall be
19reviewed and revised by the department as new scientific data
20becomes available to support revision.
21c. The department shall provide support to the department of
22agriculture and land stewardship in their efforts to implement
23their responsibilities under the Iowa nutrient reduction
24strategy. To evaluate the progress achieved over time toward
25the goals of the Iowa nutrient reduction strategy and the
26United States environmental protection agency gulf hypoxia
27action plan, the baseline condition shall be calculated for the
28time period from 1980 to 1996.
29 Sec. 41. Section 455B.195, subsection 1, paragraph i, Code
302017, is amended to read as follows:
31i. If the department has obtained credible data for a
32water of the state, the department may also use historical
33data for that particular water of the state for the purpose
34of determining whether any trends exist for that water of the
35state. To evaluate the progress achieved over time toward
-29-1the goals of the Iowa nutrient reduction strategy, as defined
2in section 455B.176A, and the United States environmental
3protection agency gulf hypoxia action plan, the baseline
4condition shall be calculated for the time period from 1980 to
51996.
6 Sec. 42. Section 466B.3, subsection 3, paragraph c, Code
72017, is amended to read as follows:
8c. Whether the funds, programs, and regulatory efforts
9coordinated by the council eventually result in a long-term
10improvement to the quality of surface water in Iowa. To
11evaluate the progress achieved over time toward the goals of
12the Iowa nutrient reduction strategy, as defined in section
13455B.176A, and the United States environmental protection
14agency gulf hypoxia action plan, the baseline condition shall
15be calculated for the time period from 1980 to 1996.
16 Sec. 43. Section 466B.42, Code 2017, is amended to read as
17follows:
18466B.42 Water quality initiative.
19The division shall establish a water quality initiative
20in order to assess and reduce nutrients in this state’s
21watersheds, including subwatersheds, and regional watersheds,
22and for implementing its responsibilities under the Iowa
23nutrient reduction strategy as defined in section 455B.176A.
24 The division shall establish and administer projects to
25reduce nutrients in surface waters from nonpoint sources in
26a scientific, reasonable, and cost-effective manner. The
27division shall utilize a pragmatic, strategic, and coordinated
28approach with the goal of accomplishing reductions over time.
29To evaluate the progress achieved over time toward the goals
30of the Iowa nutrient reduction strategy and the United States
31environmental protection agency gulf hypoxia action plan, the
32baseline condition shall be calculated for the time period from
331980 to 1996.
34 Sec. 44. NEW SECTION. 466B.43 Water quality agriculture
35infrastructure programs.
-30- 11. As part of the water quality initiative established
2pursuant to section 466B.42, the division shall administer
3water quality agriculture infrastructure programs created in
4this section.
52. a. The purpose of the programs is to support projects
6for the installation of infrastructure, including conservation
7structures, practices, or other measures that reduce
8contributing nutrient loads, associated sediment, or pollutants
9from point and nonpoint sources to surface waters. The
10programs shall be administered in a manner that is consistent
11with the Iowa nutrient reduction strategy, as defined in
12section 16.201.
13b. In making awards of financial assistance under the
14programs, the division shall attempt to complement the purposes
15of the water quality project financial assistance program
16under sections 16.201 through 16.206 and the water quality
17protection and wastewater treatment grant program under section
1816.140. Preference shall be given to landowners that are
19part of a financing entity participating in the water quality
20project financial assistance program and to landowners that are
21participating in the water quality protection and wastewater
22treatment grant program. The division, the Iowa finance
23authority, landowners, and financing entities shall, when
24possible, coordinate financing between the programs created in
25this section, the water quality project financial assistance
26program, and the water quality protection and wastewater
27treatment grant program, in order to promote the most effective
28use of resources.
293. An edge-of-field infrastructure program is created.
30The program shall support projects located on agricultural
31land, which may include demonstration projects, that capture
32or filter nutrients entering into a surface water. The
33program’s projects shall be limited to infrastructure designed
34and installed for use over multiple years, including but not
35limited to wetlands, bioreactor systems, saturated buffers,
-31-1edge-of-stream buffers, or land use changes. The program shall
2be financed on a cost-share basis.
34. An in-field infrastructure program is created. The
4program shall support projects located on agricultural land,
5which may include demonstration projects, that decrease erosion
6and precipitation-induced surface runoff, increase water
7infiltration rates, and increase soil sustainability. The
8program’s projects shall be limited to infrastructure designed
9and installed for use over multiple years, including but not
10limited to structures, terraces, and waterways located on
11cropland or pastureland, and including but not limited to soil
12conservation or erosion control structures, managed drainage
13systems, or edge-of-stream buffers. The program shall be
14financed on a cost-share basis.
155. Any state moneys used to finance a project under a
16water quality agriculture infrastructure program shall be
17administered according to an agreement entered into by the
18division and the owner of the land where the infrastructure
19is to be installed. The agreement shall include standard
20terms and conditions for the receipt of program moneys and
21any other terms and conditions the division deems necessary
22or convenient for the efficient administration of the project
23or program. The division may support multiple installations
24of infrastructure on a single parcel of land. The division
25may also combine programs if cost effective. The division
26may annually use an amount of not more than four percent of
27the moneys used to support each program for administrative
28purposes.
296. By October 1, 2018, and each October 1, thereafter, the
30division shall submit a report to the governor and the general
31assembly itemizing expenditures, by hydrologic unit code 8
32watershed, under the programs during the previous fiscal year.
337. Any information obtained by the division identifying
34a person holding a legal interest in agricultural land or
35specific agricultural land shall be a confidential record under
-32-1section 22.7.
2 Sec. 45. LEGISLATIVE INTENT. It is the intent of the
3general assembly that the amendment in this Act to the
4definition of “point source” in section 455B.171, subsection
519, is a conforming amendment consistent with current state
6and federal law, and that the amendment does not change the
7application of current law but instead reflects current law
8both before and after the enactment of this Act.
9 Sec. 46. RETROACTIVE APPLICABILITY. The following
10provision or provisions of this Act apply retroactively to
11January 1, 2017, for tax years beginning on or after that date:
121. The section of this Act enacting section 422.7,
13subsection 2, paragraph “0h”.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill relates to water quality by establishing new water
18quality programs, providing for appropriations from the rebuild
19Iowa infrastructure fund and making other appropriations and
20changes related to water quality, and creating a state water
21service excise tax and a related sales tax exemption.
22REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATIONS FOR WATER
23QUALITY AGRICULTURE INFRASTRUCTURE PROGRAMS.
24RIIF appropriations — The bill provides for a total of
25$232 million of appropriations over 13 fiscal years from the
26rebuild Iowa infrastructure fund in Code section 8.57 to a
27water quality infrastructure fund created in the bill (Code
28section 8.57B) to be used by the division of soil conservation
29and water quality of the department of agriculture and land
30stewardship (soil and water division) in administering two new
31water quality agriculture infrastructure programs, described
32below. The appropriations shall be as follows: $5 million for
33fiscal year 2017-2018; $6.5 million for fiscal year 2018-2019;
34$11.5 million for fiscal year 2019-2020; $16.5 million per
35fiscal year for the two-year fiscal period beginning July 1,
-33-12020, and ending June 30, 2022; and $22 million per fiscal year
2for the eight-year fiscal period beginning July 1, 2022, and
3ending June 30, 2030. The water quality infrastructure fund
4is repealed on the date that all moneys transferred to the
5fund from the rebuild Iowa infrastructure fund as provided in
6the bill, including any interest or earnings on such moneys
7credited to the fund, are expended by the soil and water
8division, and the balance of the fund is zero.
9Water quality agriculture infrastructure programs — As
10part of the existing water quality initiative of the soil and
11water division in Code section 466B.42, the bill establishes
12two water quality agriculture infrastructure programs (Code
13section 466B.43), consisting of an edge-of-field infrastructure
14program and an in-field infrastructure program, that will
15provide financing on a cost-share basis to certain agriculture
16infrastructure projects, including demonstration projects.
17The edge-of-field program will support projects that capture
18or filter nutrients entering into surface water. The bill
19includes wetlands, bioreactor systems, saturated buffers,
20edge-of-field buffers, and land use changes as examples
21of projects that may qualify. The in-field infrastructure
22program will support projects that decrease erosion and
23precipitation-induced surface runoff, increase water
24infiltration rates, and increase soil sustainability. The bill
25includes structures, terraces, waterways located on cropland
26or pastureland, and soil conservation or erosion control
27structures or managed drainage systems, and edge-of-field
28buffers as examples of projects that may qualify.
29The bill provides for the purpose of the programs and
30requires that the programs be administered in a manner that
31is consistent with the Iowa nutrient reduction strategy, as
32defined in the bill. Both programs are to be administered
33in a way that coordinates with, and attempts to complement
34the purposes of, the water quality project financial
35assistance program and the water quality protection and
-34-1wastewater treatment grant program created in the bill
2and described below, and preference is to be given to
3landowners participating in those programs. Both water
4quality agriculture infrastructure programs require that
5projects be located on agricultural land and limit projects to
6infrastructure designed and installed for use over multiple
7years. The bill requires that the soil and water division and
8landowners enter into agreements for financing projects under
9the programs, provides that the soil and water division may
10support multiple installations of infrastructure on a single
11parcel of land, and provides that the two programs may be
12combined by the soil and water division if it is cost effective
13to do so. The soil and water division is allowed to annually
14use up to 4 percent of the programs’ moneys for administrative
15purposes. Beginning in 2018, the soil and water division is
16required to submit a report by October 1 of each year to the
17general assembly and the governor detailing expenditures for
18the previous fiscal year under the programs by hydrologic unit
19code 8 watershed. The bill provides that certain information
20related to agricultural land and obtained by the soil and water
21division under the programs shall be considered a confidential
22record under Code section 22.7.
23WATER SERVICE EXCISE TAX FOR CERTAIN WATER QUALITY PROGRAMS.
24Water service excise tax and related sales tax exemption —
25The bill exempts from the state sales tax the sales price from
26the sale or furnishing by a water utility of a water service in
27the state to consumers or users. “Water service” and “water
28utility” are defined in the bill.
29By operation of Code section 423.6, an item exempt from the
30imposition of the sales tax is also exempt from the use tax
31imposed in Code section 423.5.
32The bill creates a state excise tax at the rate of 6 percent
33on the sales price from the sale or furnishing by a water
34utility of a water service in the state to consumers or users
35(Code chapter 423G). The director of revenue is required
-35-1to administer the water service tax as nearly as possible
2in conjunction with the administration of the state sales
3and use tax laws, and, to that end, the bill incorporates by
4reference numerous Code sections that relate to general tax
5administration and the sales and use tax laws.
6State water service tax revenues are deposited in the
7general fund of the state. The bill requires an increasing
8portion of the state water service tax revenues collected each
9year to be transferred to a water quality financial assistance
10fund created in the bill (Code section 16.198) to support
11various water quality programs, described below. Transfers to
12the water quality financial assistance fund equal one-sixth of
13the water service tax revenues collected on or after July 1,
142017, but before August 1, 2018, and increases to one-third,
15one-half, two-thirds, and five-sixths over the next four years.
16All water service tax revenues collected on or after August
171, 2022, will be transferred to the water quality financial
18assistance fund.
19The state and local water service tax is repealed on the date
20on which all bonds, notes, or other debt instruments issued by
21the Iowa finance authority (IFA) on or before June 30, 2042,
22under the water quality project financial assistance program,
23described below, are fully paid.
24Water service tax revenues transferred to the water quality
25financial assistance fund are then appropriated from the
26fund as follows: one-sixth of the moneys in the fund is
27appropriated to IFA to support the water quality protection and
28wastewater treatment grant program created in the bill (Code
29section 16.140), and five-sixths of the moneys in the fund
30is appropriated to IFA to support the water quality project
31financial assistance program created in the bill (Code sections
3216.201 through 16.206).
33Water quality protection and wastewater treatment grant
34program (Code section 16.140) — This program, administered by
35IFA, provides financial assistance in the form of grants to
-36-1municipalities and eligible entities for projects or activities
2that enhance water quality, upgrade water and wastewater
3infrastructure, or implement the nutrient reduction strategy.
4“Municipality”, “eligible entity”, and other related terms are
5defined in the bill. The bill describes the types of projects
6or activities that qualify for grants under the program.
7The program gives priority in awarding grants to projects
8or activities that provide improvement to water quality in
9the relevant watershed, and that also have private financing
10or certain other state or federal financing as described in
11the bill. Grants shall not exceed $500,000 per recipient.
12The program requires IFA to submit a report by October 1 of
13each year to the governor and the general assembly detailing
14expenditures for the previous year under the program, and
15creates a program review committee consisting of eight members,
16as provided in the bill, to review the effectiveness of the
17program every 10 years, beginning in 2027.
18Water quality project financial assistance program (Code
19sections 16.201 through 16.206) — This program provides
20financial assistance to eligible entities that engage in a
21project designed to improve water quality or water resource
22management for the purpose of enhancing the quality of surface
23water and groundwater. “Eligible entity”, “project”, and
24other related terms are defined in the bill. The program
25is administered by IFA in cooperation with the department of
26natural resources (DNR) and the department of agriculture
27and land stewardship (IDALS). The program allows IFA to
28provide financial assistance in the form it deems most
29convenient, including loans, forgivable loans, and grants,
30but requires that the program be a permanent source of water
31quality financial assistance. The program allows financing
32entities, as defined in the bill, to apply to IFA for financial
33assistance and submit project plans that substantially improve
34water quality in the local area or watershed, and provides
35certain application requirements. Preference under the program
-37-1shall be given to projects that will have the greatest impact
2on achieving the goals set forth in the nutrient reduction
3strategy, and plans designed to achieve those goals shall be
4presumed to improve water quality. Also, plans that include a
5nutrient reduction exchange, as defined in the bill, between
6two or more members of the eligible entity will be presumed to
7substantially improve water quality.
8Preference under the program is to be given to eligible
9entities that have project plans evaluated by the Iowa nutrient
10research center (Code section 466B.47), and to eligible
11entities that contract with the Iowa nutrient research center
12to verify the amount of nutrient reduction achieved by the
13project upon project completion.
14The bill creates a three-member committee to review project
15plans, review and score applications, and make financial
16assistance awards. The executive director of IFA, the director
17of DNR, and the secretary of agriculture each appoint one
18member to the committee. Eligible entities receiving financial
19assistance awards are required to enter into agreements with
20IFA, and IFA determines the terms of any loan and may charge
21fees and costs necessary for the continued operation of the
22program. The bill provides that a drainage district that is a
23party to a Code chapter 28E agreement that creates a financing
24entity is not required to be a signatory on any loan agreement
25entered into under the program. The bill further requires
26IFA to adopt rules relating to the proportional liability, if
27any, of members of an eligible entity that enter into a loan
28agreement under the program.
29The bill creates a water quality project financial
30assistance fund administered by IFA to provide financial
31assistance under the program. The bill allows IFA to establish
32and maintain other funds and accounts necessary to carry out
33the purposes of the program.
34The bill allows IFA to issue until June 30, 2042, bonds and
35notes for the purpose of funding the program, and the bill
-38-1provides several requirements for the issuance of such bonds
2and notes, for loan or purchase agreements with bondholders
3or noteholders, for the pledging of certain funds toward the
4repayment of the bonds and notes, and for the establishment of
5reserve funds to secure the bonds and notes. The bill also
6includes other provisions related to the notes and bonds,
7including that such bonds and notes are exempt from taxation
8by the state.
9MISCELLANEOUS PROVISIONS. The bill amends the powers of
10a soil and water conservation district under chapter 161A to
11include the completion of certain projects as described in the
12bill, and to allow a district to apply for financial assistance
13under the water quality project financial assistance program.
14The bill amends provisions in Code chapter 161C governing
15the water protection projects and practices of a soil and water
16conservation district by adding to the types of projects the
17district may engage in and the type of entities the district
18may work with to complete such projects.
19The bill amends various provisions of Code chapter 161E
20(flood and erosion control) to add to the types of projects a
21county may engage in or offer financial assistance for under
22that Code chapter, or to levy a property tax for under that
23Code chapter, and to add to the types of entities the county
24may work with to complete projects.
25The bill amends provisions in Code chapter 161F (soil
26conservation and flood control districts) to add to the
27types of projects a soil conservation and flood control
28district established by a county may engage in under that Code
29chapter, and the types of entities a district may work with
30to complete such projects. The bill also specifies that a
31district established pursuant to Code chapter 161F shall not
32be considered a drainage district established pursuant to Code
33chapter 468.
34The bill adds to the types of projects that a public agency
35may complete through joint financing with another public agency
-39-1under Code chapter 28F (joint financing of public works and
2facilities).
3The bill amends provisions governing certain projects
4completed and financed by a city under Code chapter 384 (city
5finance). The bill adds to the types of projects specified
6that meet the definition of a “water resource restoration
7project”, which is a type of project a city may engage in
8and issue revenue bonds or pledge orders for. The bill also
9amends the definition of “qualified entity” to include entities
10created under Code chapter 28F (joint financing of public
11works and facilities). Under current law, a city may enter
12into agreements with a qualified entity relating to the use of
13revenue bond proceeds for a water resource restoration project.
14The bill amends the definition of “point source” in Code
15section 455B.171, which contains definitions for terms used in
16provisions of the Code that concern the jurisdiction of DNR
17related to water quality, to exclude agricultural storm water
18discharges and return flows from irrigated agriculture. The
19bill provides that it is the legislative intent of the general
20assembly that this amendment to the definition of “point
21source” is a conforming amendment consistent with current state
22and federal law, and that the amendment does not change the
23application of current law but instead reflects current law
24both before and after the enactment of the bill.
25The bill amends Code section 455B.176A, relating to water
26quality standards created by DNR and the environmental
27protection commission, to define “Iowa nutrient reduction
28strategy” and “nutrient”, and to provide that DNR shall provide
29support to IDALS in efforts to implement the Iowa nutrient
30reduction strategy, and further provides that progress under
31the Iowa nutrient reduction strategy and the United States
32environmental protection agency gulf hypoxia action plan shall
33be evaluated using a baseline condition calculated for the time
34period between 1980 and 1996.
35The bill amends Code section 455B.195, relating to
-40-1the required use or analysis of credible data by DNR when
2developing or determining certain water quality issues,
3to provide that progress under the Iowa nutrient reduction
4strategy and the United States environmental protection agency
5gulf hypoxia action plan shall be evaluated using a baseline
6condition calculated for the time period between 1980 and 1996.
7The bill amends Code section 466B.3, relating to the water
8resources coordinating council, to provide that when the
9council is measuring the success of its efforts, progress under
10the Iowa nutrient reduction strategy and the United States
11environmental protection agency gulf hypoxia action plan shall
12be evaluated using a baseline condition calculated for the time
13period between 1980 and 1996.
14The bill amends Code section 466B.42, relating to the water
15quality initiative of the soil and water division, to provide
16that the goal of the water quality initiative is to implement
17the soil and water division’s responsibilities under the Iowa
18nutrient reduction strategy, and to provide that progress under
19the Iowa nutrient reduction strategy and the United States
20environmental protection agency gulf hypoxia action plan shall
21be evaluated using a baseline condition calculated for the time
22period between 1980 and 1996.
23Finally, the bill adds the IFA water quality project
24financial assistance program bonds and notes authorized in
25the bill under new Code section 16.202 to the list of bonds
26and notes the income from which is exempt from the individual
27income tax under Code section 422.7 (computation of net
28income). This provision of the bill applies retroactively to
29January 1, 2017, for tax years beginning on or after that date.
-41-mm/sc
2appropriations from the rebuild Iowa infrastructure fund,
3creating a water quality infrastructure fund, establishing
4new water quality programs, providing for cost-share
5programs for infrastructure on agricultural land under the
6water quality initiative, creating a state water service
7excise tax and a related sales tax exemption, making
8appropriations and other changes properly related to water
9quality, and including retroactive applicability provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 8.57, subsection 5, Code 2017, is amended
2by adding the following new paragraph:
3 NEW PARAGRAPH. 0h. (1) Notwithstanding paragraph “c” of
4this subsection, there is appropriated from the rebuild Iowa
5infrastructure fund to the water quality infrastructure fund
6created in section 8.57B the following amounts:
7(a) For the fiscal year beginning July 1, 2017, and ending
8June 30, 2018, five million dollars.
9(b) For the fiscal year beginning July 1, 2018, and ending
10June 30, 2019, six million five hundred thousand dollars.
11(c) For the fiscal year beginning July 1, 2019, and ending
12June 30, 2020, eleven million five hundred thousand dollars.
13(d) For the fiscal year beginning July 1, 2020, and ending
14June 30, 2021, sixteen million five hundred thousand dollars.
15(e) For the fiscal year beginning July 1, 2021, and ending
16June 30, 2022, sixteen million five hundred thousand dollars.
17(f) For the fiscal year beginning July 1, 2022, and ending
18June 30, 2023, twenty-two million dollars.
19(g) For the fiscal year beginning July 1, 2023, and ending
20June 30, 2024, twenty-two million dollars.
21(h) For the fiscal year beginning July 1, 2024, and ending
22June 30, 2025, twenty-two million dollars.
23(i) For the fiscal year beginning July 1, 2025, and ending
24June 30, 2026, twenty-two million dollars.
25(j) For the fiscal year beginning July 1, 2026, and ending
26June 30, 2027, twenty-two million dollars.
27(k) For the fiscal year beginning July 1, 2027, and ending
28June 30, 2028, twenty-two million dollars.
29(l) For the fiscal year beginning July 1, 2028, and ending
30June 30, 2029, twenty-two million dollars.
31(m) For the fiscal year beginning July 1, 2029, and ending
32June 30, 2030, twenty-two million dollars.
33(2) This paragraph “0h” is repealed on January 1, 2031.
34 Sec. 2. NEW SECTION. 8.57B Water quality infrastructure
35fund — creation — appropriations.
-1- 11. A water quality infrastructure fund is created within
2the division of soil conservation and water quality of the
3department of agriculture and land stewardship. The fund
4shall consist of moneys appropriated from the rebuild Iowa
5infrastructure fund pursuant to section 8.57, subsection 5,
6paragraph “0h”.
72. The fund shall be separate from the general fund of the
8state and the balance in the fund shall not be considered part
9of the balance of the general fund of the state. However, the
10fund shall be considered a special account for the purposes
11of section 8.53, relating to generally accepted accounting
12principles.
133. Moneys in the fund are appropriated to the division
14of soil conservation and water quality of the department of
15agriculture and land stewardship for the exclusive purpose of
16supporting water quality agriculture infrastructure programs
17created in section 466B.43.
184. Notwithstanding section 8.33, moneys in the fund
19that remain unencumbered or unobligated at the close of a
20fiscal year shall not revert but shall remain available for
21expenditure for the purposes designated. Notwithstanding
22section 12C.7, subsection 2, interest or earnings on moneys in
23the fund shall be credited to the fund.
245. This section is repealed on the date that all moneys
25transferred to the water quality infrastructure fund from
26the rebuild Iowa infrastructure fund pursuant to section
278.57, subsection 5, paragraph “0h”, including any interest
28or earnings on such moneys credited to the water quality
29infrastructure fund, are expended by the division of soil
30conservation and water quality of the department of agriculture
31and land stewardship, and the balance of the water quality
32infrastructure fund is zero. The director of the division
33of soil conservation and water quality of the department of
34agriculture and land stewardship shall notify the Iowa Code
35editor of this occurrence.
-2-1 Sec. 3. NEW SECTION. 16.140 Water quality protection and
2wastewater treatment grant program — fund.
31. As used in this section, unless the context otherwise
4requires:
5a. “Clean Water Act” means the same as defined in section
616.131A.
7b. “Eligible entity” means either of the following:
8(1) An entity engaged in an industry identified in the Iowa
9nutrient reduction strategy, as determined by the authority,
10which industry is or will be required pursuant to the Iowa
11nutrient reduction strategy to collect data on the source,
12concentration, and mass of total nitrogen or total phosphorus
13in its effluent, and to evaluate alternatives for reducing the
14amount of nutrients in its discharge.
15(2) An entity implementing technology improvements to
16reduce nutrients in its discharge.
17c. “Iowa nutrient reduction strategy” means a water
18quality initiative developed and updated by the department of
19agriculture and land stewardship, the department of natural
20resources, and the college of agriculture and life sciences at
21Iowa state university of science and technology in order to
22assess and reduce nutrients in this state’s watersheds that
23utilizes a pragmatic, strategic, and coordinated approach with
24the goal of accomplishing reductions over time.
25d. “Municipality” means a city or a rural water district or
26association empowered by law to provide sewage collection and
27treatment services or drinking water.
28e. “Program” means the water quality protection and
29wastewater treatment grant program created in this section.
30f. “Safe Drinking Water Act” means the same as defined in
31section 16.131A.
32g. “Source water protection project” means a project or
33activity designed to prevent pollutants from entering public
34drinking water sources.
35h. “Wastewater infrastructure improvement” includes
-3-1the acquisition, construction, reconstruction, extension,
2equipping, improvement, or rehabilitation of any works or
3facilities useful for the collection, treatment, and disposal
4of sewage or industrial waste in a sanitary manner, including
5treatment works as defined in section 212 of the Clean Water
6Act, and including the implementation and development of
7sponsor projects under section 455B.199.
8i. “Water infrastructure improvement” includes the
9acquisition, construction, reconstruction, extending,
10remodeling, improving, repairing, or equipping of waterworks,
11water mains, extensions, or treatment facilities useful for
12providing potable water to residents served by a water system,
13including the acquisition of real property needed for such
14purposes, and such other purposes and programs as may be
15authorized under the Safe Drinking Water Act.
162. The Iowa finance authority shall establish and
17administer a water quality protection and wastewater treatment
18grant program for the purpose of providing financial assistance
19in the form of grants to enhance water quality, upgrade water
20and wastewater infrastructure, and to implement the Iowa
21nutrient reduction strategy. The program shall be administered
22in accordance with rules adopted by the authority pursuant to
23chapter 17A.
243. a. A water quality protection and wastewater treatment
25grant fund is created in the state treasury and shall consist
26of appropriations made to the fund, transfers of interest,
27earnings, moneys from other funds as provided by law, and
28moneys accepted by the authority for deposit in the fund
29from other public or private sources. Moneys credited
30or transferred to the fund pursuant to section 16.198 are
31appropriated to the authority for purposes of the program.
32Moneys in the fund shall be used exclusively for purposes of
33the program.
34b. Notwithstanding section 8.33, moneys in the fund
35that remain unencumbered or unobligated at the close of a
-4-1fiscal year shall not revert but shall remain available for
2expenditure for the purposes designated. Notwithstanding
3section 12C.7, subsection 2, interest or earnings on moneys in
4the fund shall be credited to the fund.
54. Grants may be awarded under the program for any of the
6following:
7a. To a municipality or an eligible entity participating in
8a nutrient reduction exchange, for the purpose of purchasing
9nutrient reduction credits or for implementing water quality
10practices as described in the Iowa nutrient reduction strategy
11in order to comply with technology-based effluent nutrient
12limits at a facility. For purposes of this paragraph, “nutrient
13reduction credit” and “nutrient reduction exchange” both mean the
14same as defined in section 16.206, section 1, paragraph “d”.
15b. To a municipality or an eligible entity for up to fifty
16percent of the costs associated with conducting economic and
17technical feasibility studies or developing implementation
18plans and reports required by the Iowa nutrient reduction
19strategy.
20c. To a municipality for a source water protection project.
21d. To a municipality or an eligible entity for water
22infrastructure improvements or for wastewater infrastructure
23improvements.
245. Priority for grants shall be given to projects or
25activities that will provide improvement to water quality in
26the relevant watershed.
276. Priority for grants shall be given to projects or
28activities that also have private financing, or financing
29pursuant to section 16.131 under the water pollution control
30works and drinking water facilities financing program created
31pursuant to section 455B.294, or other federal or state
32financing.
337. Grants awarded under the program shall not exceed five
34hundred thousand dollars per recipient.
358. By October 1 of each year, the authority shall submit
-5-1a report to the governor and the general assembly itemizing
2expenditures under the program during the previous fiscal year.
39. a. Beginning September 1, 2027, and every ten years
4thereafter, a program review committee is established for
5purposes of reviewing the program. By December 1 of the
6same year, the review committee shall file a report with
7the governor and the general assembly that reviews the
8effectiveness of the program during the previous ten fiscal
9years.
10b. The program review committee shall consist of the
11following members:
12(1) The governor or the governor’s designee.
13(2) The secretary of agriculture or the secretary’s
14designee.
15(3) The executive director of the authority or the executive
16director’s designee.
17(4) The director of the department of natural resources or
18the director’s designee.
19(5) Four members of the general assembly, with two from the
20senate and two from the house of representatives and not more
21than one member from each chamber being from the same political
22party. The two senators shall be designated one member each
23by the president of the senate, after consultation with the
24majority leader of the senate, and by the minority leader of
25the senate. The two representatives shall be designated one
26member each by the speaker of the house of representatives,
27after consultation with the majority leader of the house of
28representatives, and by the minority leader of the house of
29representatives.
30c. Staffing services shall be provided by the authority.
31 Sec. 4. NEW SECTION. 16.198 Water quality financial
32assistance fund.
331. A water quality financial assistance fund is created in
34the state treasury.
352. The fund shall consist of all of the following:
-6- 1a. (1) Moneys transferred to the fund pursuant to section
2423G.6.
3(2) This paragraph “a” is repealed upon the date on which
4chapter 423G is repealed pursuant to section 423G.7.
5b. Appropriations made to the fund and transfers of
6interest, earnings, and moneys from other funds as provided by
7law.
83. For each fiscal year in the period beginning July 1,
92017, and ending when chapter 423G is repealed pursuant to
10section 423G.7, there is appropriated the following amounts of
11the balance of the fund for the following purposes:
12a. One-sixth of the balance of the fund to the Iowa finance
13authority to be credited to the water quality protection and
14wastewater treatment grant fund created pursuant to section
1516.140, subsection 3.
16b. Five-sixths of the balance of the fund to the Iowa
17finance authority to be credited to the water quality project
18financial assistance fund created pursuant to section 16.204.
194. Moneys in the fund are not subject to section 8.33.
20Notwithstanding section 12C.7, subsection 2, interest or
21earnings on moneys in the fund shall be credited to the fund.
22 Sec. 5. NEW SECTION. 16.201 Definitions.
23As used in this part, unless the context otherwise requires:
241. “Committee” means the water quality project financing
25committee created in section 16.205, subsection 4.
262. “Eligible entity” means a financing entity meeting the
27requirements of section 16.206, as determined by the committee.
283. “Financing entity” means two or more persons that have
29entered into an agreement for purposes of joint financing of a
30project under the program. A financing entity may include but
31is not limited to a governmental body such as a state agency or
32a political subdivision of the state, a city or a city utility,
33a public utility as defined in section 476.1 that furnishes
34drinking water, sanitary sewage, or storm water services to the
35public for compensation, a county, a rural water district or
-7-1association, a soil and water conservation district, a sanitary
2district, a subdistrict of any of the foregoing districts, a
3governmental body or corporation empowered to provide sewage
4collection and treatment services or drinking water, an entity
5jointly exercising governmental powers pursuant to chapter 28E
6or 28F, or any other combination of two or more public agencies
7or private agencies as defined in section 28E.2, acting jointly
8under Iowa law in connection with a project.
94. “Iowa nutrient reduction strategy” means a water
10quality initiative developed and updated by the department of
11agriculture and land stewardship, the department of natural
12resources, and the college of agriculture and life sciences at
13Iowa state university of science and technology in order to
14assess and reduce nutrients in this state’s watersheds that
15utilizes a pragmatic, strategic, and coordinated approach with
16the goal of accomplishing reductions over time.
175. “Loan recipient” means an eligible entity that has
18received a loan under the program.
196. “Program” means the water quality project financial
20assistance program created in this part.
217. “Project” means any combination of works, facilities,
22improvements, structures, developments, tasks, activities,
23constructions, modifications, operations, or practices designed
24to improve water quality or water resource management that are
25proposed by an eligible entity and approved by the committee.
26“Project” includes but is not limited to the following:
27a. A project meeting the requirements of part 2 of this
28subchapter.
29b. A project, operation, or practice undertaken or carried
30out pursuant to chapter 161A, 161C, 161E, or 161F.
31c. A project meeting the requirements of a sponsor project
32under section 455B.199.
33d. Other water resource restoration projects as defined in
34section 384.80, including ones financed pursuant to section
3528F.1.
-8- 1e. An agricultural nonpoint source project eligible for a
2water quality agriculture infrastructure program under section
3466B.43.
48. “Revolving fund” means the fund created in section
516.204.
6 Sec. 6. NEW SECTION. 16.202 Water quality project financial
7assistance program — funding — bonds and notes.
81. The authority shall cooperate with the department of
9natural resources and the department of agriculture and land
10stewardship in the creation, administration, and financing of
11the program established in this part.
122. The authority may issue its bonds and notes until June
1330, 2042, for the purposes of this part, including for the
14purposes of funding the program established under section
1516.205 and of funding any fund or account created under section
1616.204.
173. The authority may enter into one or more loan agreements
18or purchase agreements with one or more bondholders or
19noteholders containing the terms and conditions of the
20repayment of and the security for the bonds or notes. The
21authority and the bondholders or noteholders or a trustee
22agent designated by the authority may enter into agreements to
23provide for any of the following:
24a. That the proceeds of the bonds and notes and the
25investments of the proceeds may be received, held, and
26disbursed by the authority or by a trustee or agent designated
27by the authority.
28b. That the bondholders or noteholders or a trustee or
29agent designated by the authority may collect, invest, and
30apply the amount payable under the loan agreements or any
31other instruments securing the debt obligations under the loan
32agreements.
33c. That the bondholders or noteholders may enforce the
34remedies provided in the loan agreements or other instruments
35on their own behalf without the appointment or designation of a
-9-1trustee. If there is a default in the principal of or interest
2on the bonds or notes or in the performance of any agreement
3contained in the loan agreements or other instruments, the
4payment or performance may be enforced in accordance with the
5loan agreement or other instrument.
6d. Other terms and conditions as deemed necessary or
7appropriate by the authority.
84. The powers granted the authority under this section
9are in addition to other powers contained in this chapter.
10All other provisions of this chapter, except section 16.28,
11subsection 4, apply to bonds or notes issued and powers granted
12to the authority under this section except to the extent they
13are inconsistent with this section.
145. All bonds or notes issued by the authority in connection
15with the program are exempt from taxation by this state and the
16interest on the bonds or notes is exempt from state income tax.
17 Sec. 7. NEW SECTION. 16.203 Security — reserve funds —
18pledges — nonliability — irrevocable contracts.
191. The authority may provide in the resolution, trust
20agreement, or other instrument authorizing the issuance of its
21bonds or notes pursuant to section 16.202 that the principal
22of, premium, and interest on the bonds or notes are payable
23from any of the following and may pledge the same to its bonds
24and notes:
25a. The income and receipts or other moneys derived from the
26projects financed with the proceeds of the bonds or notes.
27b. The income and receipts or other moneys derived from
28designated projects whether or not the projects are financed in
29whole or in part with the proceeds of the bonds or notes.
30c. The amounts on deposit in the revolving fund.
31d. The amounts payable to the authority by eligible entities
32pursuant to loan agreements with eligible entities.
33e. Any other funds or accounts established by the authority
34in connection with the program or the sale and issuance of its
35bonds or notes.
-10- 12. The authority may establish reserve funds to secure
2one or more issues of its bonds or notes. The authority may
3deposit in a reserve fund established under this subsection the
4proceeds of the sale of its bonds or notes and other moneys
5that are made available from any other source.
63. It is the intention of the general assembly that a pledge
7made in respect of bonds or notes issued under this part shall
8be valid and binding from the time the pledge is made, that the
9moneys or property so pledged and received after the pledge
10by the authority shall immediately be subject to the lien of
11the pledge without physical delivery or further act, and that
12the lien of the pledge shall be valid and binding as against
13all parties having claims of any kind in tort, contract, or
14otherwise against the authority whether or not the parties have
15notice of the lien. Neither the resolution, trust agreement,
16nor any other instrument by which a pledge is created needs to
17be recorded or filed under the Iowa uniform commercial code,
18chapter 554, to be valid, binding, or effective against the
19parties.
204. Neither the members of the authority nor persons
21executing the bonds or notes are liable personally on the bonds
22or notes or are subject to personal liability or accountability
23by reason of the issuance of the bonds or notes.
245. The bonds or notes issued by the authority are not
25an indebtedness or other liability of the state or of a
26political subdivision of the state within the meaning of
27any constitutional or statutory debt limitations but are
28special obligations of the authority, and are payable solely
29from the income and receipts or other funds or property of
30the authority, and the amounts on deposit in the revolving
31fund, and the amounts payable to the authority under its loan
32agreements with eligible entities to the extent that the
33amounts are designated in the resolution, trust agreement, or
34other instrument of the authority authorizing the issuance of
35the bonds or notes as being available as security for such
-11-1bonds or notes. The authority shall not pledge the faith or
2credit of the state or of a political subdivision of the state
3to the payment of any bonds or notes. The issuance of any bonds
4or notes by the authority does not directly, indirectly, or
5contingently obligate the state or a political subdivision of
6the state to apply moneys from, or levy or pledge any form of
7taxation whatever to, the payment of the bonds or notes.
86. It is the intent of the general assembly, and the state
9hereby pledges to the holders of bonds or notes issued under
10this part, that the state will not limit or alter the rights
11and powers vested in the authority to fulfill the terms of a
12contract made by the authority with respect to the bonds or
13notes, or in any way impair the rights and remedies of the
14holders until the bonds or notes, together with the interest on
15the bonds or notes, including interest on unpaid installments
16of interest, and all costs and expenses in connection with an
17action or proceeding by or on behalf of the holders, are fully
18met and discharged. The authority is authorized to include
19this pledge and agreement of the state, as it refers to holders
20of bonds or notes of the authority, in a contract with the
21holders.
22 Sec. 8. NEW SECTION. 16.204 Water quality project financial
23assistance fund — other funds and accounts.
241. a. A water quality project financial assistance
25fund is created in the state treasury and shall consist of
26appropriations made to the fund, moneys credited or transferred
27to the fund pursuant to section 16.198, and transfers of
28interest, earnings, and moneys from other funds as provided
29by law. The fund shall be administered by the authority as a
30revolving fund.
31b. Moneys in the fund are not subject to section 8.33.
32Notwithstanding section 12C.7, subsection 2, interest or
33earnings on moneys in the fund shall be credited to the fund.
34c. The authority shall use the moneys in the fund to provide
35financial assistance to eligible entities under the program
-12-1pursuant to section 16.205.
2d. The authority may use an amount of not more than one
3percent of the moneys in the fund for administrative purposes.
42. The authority may establish and maintain other funds
5and accounts determined to be necessary to carry out the
6purposes of the program and shall provide for the funding,
7administration, investment, restrictions, and disposition of
8the funds and accounts.
93. Moneys appropriated to and used by the authority for
10purposes of paying the costs and expenses associated with
11the administration of the program shall be administered as
12determined by the authority.
134. The funds or accounts held by the authority, or a trustee
14acting on behalf of the authority pursuant to a trust agreement
15related to the program, shall not be considered part of the
16general fund of the state, are not subject to appropriation for
17any other purpose by the general assembly, and in determining
18a general fund balance shall not be included in the general
19fund of the state, but shall remain in the funds and accounts
20maintained by the authority or trustee pursuant to a trust
21agreement. Funds and accounts held by the authority, or a
22trustee acting on behalf of the authority pursuant to a trust
23agreement related to the program, are separate dedicated funds
24and accounts under the administration and control of the
25authority and subject to section 16.31.
26 Sec. 9. NEW SECTION. 16.205 Water quality project financial
27assistance program — committee created — rules — use of funds.
281. The authority, in cooperation with the department of
29natural resources and the department of agriculture and land
30stewardship, shall establish and administer a water quality
31project financial assistance program. The purpose of the
32program shall be to provide financial assistance to enhance
33the quality of surface water and groundwater, particularly
34by providing financial assistance for projects designed to
35improve water quality through collaboration between point
-13-1and nonpoint sources. The authority may provide financial
2assistance in the form deemed most convenient for the efficient
3financing of projects, including loans, forgivable loans, and
4grants. However, the authority shall administer the fund and
5the program in such a manner as to provide a permanent source
6of water quality project financial assistance to eligible
7entities.
82. The program shall be administered by the authority
9in accordance with rules adopted by the authority pursuant
10to chapter 17A. In adopting such rules, the authority shall
11consult with the department of natural resources and the
12department of agriculture and land stewardship.
133. The authority shall process and review financial
14assistance applications and make recommendations to the
15committee.
164. a. A water quality project financing committee is
17created to consider applications for financial assistance from
18eligible entities and approve awards of financial assistance
19under the program. The committee shall consist of three
20members, one appointed by the executive director of the
21authority, one appointed by the director of the department
22of natural resources, and one appointed by the secretary of
23agriculture.
24b. The committee shall review project plans submitted
25pursuant to section 16.206, negotiate project details with
26eligible entities, and make financial assistance awards. The
27provision of financial assistance under the program shall take
28into account the number of persons comprising an eligible
29entity and the eligible entity’s financing capacity as well as
30the extent to which the proposed projects will improve water
31quality.
32c. The committee shall score applications for financial
33assistance according to rules adopted pursuant to this part.
34The committee shall only provide financial assistance to
35eligible entities that have sufficient financing capacity and
-14-1that propose a plan likely to make progress toward achieving
2the goals for agricultural and nonpoint sources described in
3the Iowa nutrient reduction strategy.
45. The authority shall determine the interest rate
5and repayment terms for loans made under the program, in
6cooperation with the department of natural resources and
7the department of agriculture and land stewardship, and the
8authority shall enter into loan agreements with eligible
9entities in compliance with and subject to the terms and
10conditions of the program.
116. If a drainage district is a party to a chapter 28E
12agreement that creates a financing entity, the chapter 28E
13agreement shall provide that the drainage district shall not
14be required to be a signatory on any loan agreement entered
15into under the program, and the authority shall not require
16the drainage district to be a signatory on any loan agreement
17entered into under the program. This subsection shall not be
18construed to eliminate or in any way restrict any existing
19liability protection afforded to a drainage district under any
20provision of law.
217. The authority shall adopt rules relating to the
22proportional liability, if any, of members of an eligible
23entity when such eligible entity enters into a loan agreement
24under the program.
258. The authority may charge loan recipients fees and assess
26costs against such recipients necessary for the continued
27operation of the program. Such fees and costs shall not exceed
28the costs directly associated with the administration of the
29program. Fees and costs collected pursuant to this subsection
30shall be deposited in the appropriate fund or account created
31in section 16.204.
329. Financial assistance under the program shall be used by
33eligible entities to fund projects designed to improve water
34quality.
35 Sec. 10. NEW SECTION. 16.206 Eligible entities — project
-15-1plans — agreements required.
21. A financing entity may apply to the authority for
3financial assistance under the program. To be eligible, a
4financing entity shall meet the following requirements:
5a. The financing entity shall include two or more entities
6acting jointly to propose a project plan designed to improve
7water quality in a local area or watershed.
8b. The plan shall include one or more projects that
9substantially improve water quality in the local area or
10watershed. Preference shall be given to projects that will
11have the greatest impact on achieving the goals of the Iowa
12nutrient reduction strategy, and plans designed to achieve
13those goals shall be presumed to substantially improve water
14quality in the local area or watershed.
15c. The plan shall describe in detail the manner in which
16the projects will be financed and undertaken, including the
17sources of financing for the projects as well as the public or
18private entities that will be receiving the revenues and how
19such revenues will be spent on the projects. In describing the
20projects and financing, the plan should attempt to quantify
21the amount of nutrient reduction to be achieved under the
22plan and should provide a reasonable means for verification
23of the amount of nutrient reduction after the projects have
24been financed and completed. Preference shall be given to
25a financing entity that has had its plan evaluated by the
26Iowa nutrient research center established in section 466B.47.
27Preference shall also be given to a financing entity that has
28contracted with the Iowa nutrient research center to verify
29the amount of nutrient reduction achieved by the project upon
30project completion.
31d. (1) The plan may include a nutrient reduction exchange
32between two or more members of the financing entity. A plan
33that includes a nutrient reduction exchange shall be presumed
34to substantially improve water quality in the local area or
35watershed.
-16- 1(2) For purposes of this paragraph:
2(a) “Nutrient reduction” means a reduction in nitrogen or
3phosphorus as measured against standards or goals established
4or adopted by the committee.
5(b) “Nutrient reduction credit” means an amount of nutrient
6reduction expressed as a unit of measurement that is calculated
7using research-based modeling or other methods established or
8adopted by the committee.
9(c) “Nutrient reduction exchange” means an agreement between
10one or more point source or nonpoint source contributors
11and one or more other parties whereby nutrient reduction
12credits are purchased, sold, traded, or exchanged for legal
13consideration.
142. Any eligible entity receiving financial assistance under
15the program shall enter into an agreement with the authority.
16The agreement shall include standard terms for the receipt of
17program funds and any other terms the authority deems necessary
18and convenient for the efficient administration of the program.
19 Sec. 11. Section 28F.1, subsection 1, Code 2017, is amended
20to read as follows:
211. This chapter provides a means for the joint financing
22by public agencies of works or facilities useful and necessary
23for the collection, treatment, purification, and disposal
24in a sanitary manner of liquid and solid waste, sewage, and
25industrial waste, facilities used for the conversion of solid
26waste to energy, facilities, improvements, or projects in a
27watershed useful for flood control, erosion control, or water
28quality restoration by a water utility, wastewater utility,
29or storm water utility, whether located within or without the
30corporate boundaries of a municipal corporation, and also
31electric power facilities constructed within the state of
32Iowa, except that hydroelectric power facilities may also be
33located in the waters and on the dams of or on land adjacent
34to either side of the Mississippi or Missouri river bordering
35the state of Iowa, water supply systems, swimming pools
-17-1or golf courses. This chapter applies to the acquisition,
2construction, reconstruction, ownership, operation, repair,
3extension, or improvement of such works or facilities, by a
4separate administrative or legal entity created pursuant to
5chapter 28E or chapter 389. When the legal entity created
6under this chapter is comprised solely of cities, counties,
7and sanitary districts established under chapter 358, or any
8combination thereof or any combination of the foregoing with
9other public agencies, the entity shall be both a corporation
10and a political subdivision with the name under which it was
11organized. The legal entity may sue and be sued, contract,
12acquire and hold real and personal property necessary for
13corporate purposes, adopt a corporate seal and alter the seal
14at pleasure, and execute all the powers conferred in this
15chapter.
16 Sec. 12. Section 161A.7, subsection 1, paragraph d, Code
172017, is amended to read as follows:
18d. To cooperate, or enter into agreements with, and within
19the limits of appropriations duly made available to it by law,
20to furnish financial or other aid to any agency, governmental
21or otherwise, or any owner or occupier of lands within the
22district, in the carrying on of erosion-control and watershed
23protection and flood prevention operations, or in the carrying
24out of projects or operations pursuant to paragraph “q”, within
25the district, subject to such conditions as the commissioners
26may deem necessary to advance the purposes of this chapter.
27 Sec. 13. Section 161A.7, subsection 1, Code 2017, is amended
28by adding the following new paragraphs:
29 NEW PARAGRAPH. p. To apply for financial assistance under
30the water quality project financial assistance program under
31sections 16.201 through 16.206.
32 NEW PARAGRAPH. q. To carry out soil erosion control,
33watershed protection or improvement, flood prevention, and
34water quality protection projects and operations within the
35district, including but not limited to projects and operations
-18-1to support water protection practices, to protect this
2state’s groundwater and surface water from point and nonpoint
3sources of pollution, including but not limited to pollution
4by agricultural drainage wells, sinkholes, sedimentation,
5or chemical pollutants, to reduce or remove nutrients and
6pollution in or from surface water and groundwater, to reduce
7or eliminate nutrient reduction loads to surface water
8and groundwater from both point and nonpoint sources, to
9maintain, protect, and improve the quality of surface water and
10groundwater, and to achieve or further any of the goals and
11targets described in the Iowa nutrient reduction strategy as
12defined in section 16.201.
13 Sec. 14. Section 161C.1, Code 2017, is amended by adding the
14following new subsection:
15 NEW SUBSECTION. 4A. “Financing entity” means the same as
16defined in section 16.201.
17 Sec. 15. Section 161C.2, subsection 1, paragraph a, Code
182017, is amended to read as follows:
19a. Each soil and water conservation district, alone and
20whenever practical in conjunction with other districts, shall
21 financing entities, or political subdivisions of the state,
22or other local agencies, may carry out district-wide and
23multiple-district projects to support soil erosion control,
24water resource restoration projects, watershed protection,
25flood prevention, and water quality protection practices,
26projects, and operations in the district or districts,
27including but not limited to projects carried out in order to
28protect this state’s groundwater and surface water from point
29and nonpoint sources of contamination pollution, including but
30not limited to contamination pollution by agricultural drainage
31wells, sinkholes, sedimentation, or chemical pollutants, as
32described in the Iowa nutrient reduction strategy as defined
33in section 16.201.
34 Sec. 16. Section 161C.3, Code 2017, is amended to read as
35follows:
-19- 1161C.3 Cooperation with other agencies.
2Soil and water conservation districts may enter into
3agreements with the United States, as provided by state law,
4or with the state of Iowa or any agency of the state, any
5other soil and water conservation district, or other political
6subdivision of this state, or any financing entity, or other
7local agency, for cooperation in preventing, controlling, or
8attempting to prevent or control contamination pollution of
9groundwater or surface water by point and nonpoint sources
10of pollution. Soil and water conservation districts may
11accept, as provided by state law, any money disbursed for water
12quality preservation purposes by the federal government or any
13agency of the federal government, and expend the money for the
14purposes for which it was received.
15 Sec. 17. Section 161E.1, Code 2017, is amended to read as
16follows:
17161E.1 Authority of board.
181. If a county, soil and water conservation district,
19subdistrict of a soil and water conservation district,
20financing entity, or political subdivision of the state, or
21other local agency engages or participates in or carries out
22 a project for flood or soil erosion control, a water resource
23restoration project, watershed protection or improvement
24project, flood prevention, water quality protection project or
25operation, including but not limited to a project or operation
26described in the Iowa nutrient reduction strategy as defined
27in section 16.201, within a county, or engages or participates
28in the conservation, development, utilization, and disposal
29of water, in cooperation with the federal government, or a
30department or agency of the federal government, in cooperation
31with other districts, subdistricts, financing entities,
32political subdivisions, or other local agencies, the counties
33in which the project is carried on may, through the board of
34supervisors or through an intergovernmental agreement under
35chapter 28E or chapter 28F, construct, operate, and maintain
-20-1the project on lands under the control or jurisdiction of the
2county dedicated to county use, or furnish financial and other
3assistance in connection with the projects or operations.
4Flood control, soil erosion control, watershed protection
5projects, flood prevention, water quality improvement projects,
6water resource restoration projects, and watershed improvement
7projects and operations, including but not limited to projects
8or operations described in the Iowa nutrient reduction strategy
9as defined in section 16.201, are presumed to be for the
10protection of the tax base of the county, for the protection of
11public roads and lands, and for the protection of the public
12health, sanitation, safety, and general welfare.
132. For purposes of this chapter, “financing entity” means
14the same as defined in section 16.201.
15 Sec. 18. Section 161E.2, Code 2017, is amended to read as
16follows:
17161E.2 Federal aid.
18A county may, in accordance with this chapter, accept
19federal funds for aid in a project for flood or soil erosion
20control, flood prevention, or the conservation, development,
21utilization, and disposal of water, and may cooperate with
22the federal government or a department or agency of the
23federal government, a soil and water conservation district,
24subdistrict of a soil and water conservation district,
25political subdivision of the state, or other local agency, or
26a financing entity, and the county may assume a proportion of
27the cost of the project as deemed appropriate, and may assume
28the maintenance cost of the project on lands under the control
29or jurisdiction of the county which will not be discharged by
30federal aid or grant.
31 Sec. 19. Section 161E.3, Code 2017, is amended to read as
32follows:
33161E.3 Cooperation.
34The counties, soil and water conservation districts,
35and subdistricts of soil and water conservation districts
-21-1concerned, shall advise and consult with each other, upon the
2request of any of them or any affected landowners, and may
3cooperate with each other or with other state subdivisions or
4instrumentalities, and affected landowners, as well as with the
5federal government or a department or agency of the federal
6government, or a financing entity or other local agency, to
7construct, operate, and maintain suitable projects for flood
8or soil erosion control, water resource restoration projects,
9watershed protection or improvement projects, flood prevention,
10water quality protection or improvement projects, or the
11conservation, development, utilization, and disposal of water
12on public roads or other public lands or other land granted
13county use.
14 Sec. 20. Section 161E.5, Code 2017, is amended to read as
15follows:
16161E.5 Maintenance cost.
17If construction of projects has been completed by the soil
18and water conservation district, subdistricts of soil and
19water conservation districts, political subdivisions of the
20state, or other local agencies, or the federal government, or a
21department or agency of the federal government, or a financing
22entity on private lands under the easement granted to the
23county, only the cost of maintenance may be assumed by the
24county.
25 Sec. 21. Section 161E.9, Code 2017, is amended to read as
26follows:
27161E.9 Tax levy.
28The county board of supervisors may annually levy a tax not
29to exceed six and three-fourths cents per thousand dollars of
30assessed value of all agricultural lands in the county, to
31be used for flood and soil erosion control, water resource
32restoration projects, watershed protection or improvement
33projects, flood prevention and water quality protection
34projects and operations within a county, including but not
35limited to projects or operations described in the Iowa
-22-1nutrient reduction strategy as defined in section 16.201, and
2 including acquisition of land or interests in land, and repair,
3alteration, maintenance, and operation of works of improvement
4on lands under the control or jurisdiction of the county as
5provided in this chapter, or to furnish financial assistance in
6connection with such projects and operations.
7 Sec. 22. Section 161E.10, Code 2017, is amended to read as
8follows:
9161E.10 Assumption of obligations.
10This chapter contemplates that actual direction of the
11project, or projects, and the actual work done in connection
12with them the projects, will be assumed by the soil and water
13conservation district, a subdistrict of a soil and water
14conservation district, or the federal government, and that the
15county or other state subdivisions or instrumentalities or
16financing entities jointly will meet the obligation required
17for federal cooperation and may make proper commitment for
18the care and maintenance of the project after its completion
19for the general welfare of the public and residents of the
20respective counties.
21 Sec. 23. Section 161F.1, Code 2017, is amended to read as
22follows:
23161F.1 Presumption of benefit — definitions.
241. The conservation of the soil resources of the state
25of Iowa, the improvement of water quality through projects,
26 the proper control of water resources of the state and the
27prevention of damage to property and lands through the control
28of floods, the drainage of surface waters or the protection of
29lands from overflow shall be presumed to be a public benefit
30and conducive to the public health, convenience and welfare and
31essential to the economic well-being of the state.
322. For purposes of this chapter, “financing entity” and
33“project” both mean the same as defined in section 16.201.
34 Sec. 24. Section 161F.2, Code 2017, is amended to read as
35follows:
-23- 1161F.2 Board of supervisors to establish districts — strip
2coal mining.
31. The board of supervisors of any county shall have
4jurisdiction, power and authority at any regular, special or
5adjourned session to establish, subject to the provisions
6of this chapter, districts having for their purpose soil
7conservation and the control of flood waters, or the
8improvement of water quality, and to cause to be constructed
9as hereinafter provided, such improvements, projects, and
10facilities as shall be deemed essential for the accomplishment
11of the purpose of soil conservation and flood control, or of
12water quality improvement.
132. Such The board of supervisors shall also have
14jurisdiction, power, and authority at any regular, special,
15 or adjourned session to establish, in the same manner that
16the districts hereinabove referred to in subsection 1
17 are established, districts having for their purpose soil
18conservation in mining areas within the county, and provide
19that anyone engaged in removing the surface soil over any
20bed or strata of coal in such district for the purpose of
21obtaining such coal shall replace the surface soil as nearly
22as practicable to its original position, and provide that,
23upon abandonment of such removal operation, all surface soil
24shall be so replaced. This section subsection shall apply only
25to surface soil so removed after July 4, 1949, and then only
26if it is essential for the accomplishment of the purpose of
27soil conservation and flood control within the purview of this
28chapter.
29 Sec. 25. Section 161F.3, Code 2017, is amended to read as
30follows:
31161F.3 Combination of functions.
32Such districts shall have the power to combine in their
33functions activities affecting soil conservation, flood control
34and drainage, water quality improvement, or any of these
35objects, singly or in combination with another district or
-24-1financing entity under the provisions of an intergovernmental
2agreement pursuant to chapter 28E or 28F.
3 Sec. 26. Section 161F.6, subsection 1, Code 2017, is amended
4to read as follows:
51. In the organization, operation, and financing of
6districts established under this chapter, the provisions of
7chapter 468 shall apply and any procedure provided under
8chapter 468 in connection with the organization, financing,
9and operation of any drainage district shall apply to the
10organization, financing, and operation of districts organized
11under this chapter. However, a district established under this
12chapter shall not be considered a drainage district established
13pursuant to chapter 468.
14 Sec. 27. Section 384.80, subsection 15, Code 2017, is
15amended to read as follows:
1615. “Water resource restoration project” means the
17acquisition of real property or improvements, a project as
18defined in section 16.201, or any other activity or undertaking
19that will assist in improving flood control, erosion control,
20or the quality of the water in the watershed where a city
21water, storm water, or wastewater utility is located.
22 Sec. 28. Section 384.84, subsection 2, Code 2017, is amended
23to read as follows:
242. The governing body of a city water or wastewater utility
25may enter into an agreement with a qualified entity to use
26proceeds from revenue bonds for a water resource restoration
27project if the rate imposed is no greater than if there was not
28a water resource restoration project agreement. For purposes
29of this subsection, “qualified entity” is an entity created
30pursuant to chapter 28E or chapter 28F or two entities that
31have entered into an agreement pursuant to chapter 28E or
32chapter 28F, whose purpose is to undertake a watershed project
33that has been approved for water quality improvements in the
34watershed.
35 Sec. 29. Section 422.7, subsection 2, Code 2017, is amended
-25-1by adding the following new paragraph:
2 NEW PARAGRAPH. 0h. Iowa finance authority water quality
3project financial assistance program bonds or notes pursuant to
4section 16.202, subsection 5.
5 Sec. 30. Section 423.3, Code 2017, is amended by adding the
6following new subsection:
7 NEW SUBSECTION. 103. a. The sales price from the sale or
8furnishing by a water utility of a water service in the state
9to consumers or users.
10b. For purposes of this subsection:
11(1) “Water service” means the delivery of water by piped
12distribution system.
13(2) “Water utility” means a public utility as defined in
14section 476.1 that furnishes water by piped distribution system
15to the public for compensation.
16 Sec. 31. NEW SECTION. 423G.1 Short title.
17This chapter may be cited as the “Water Service Tax Act”.
18 Sec. 32. NEW SECTION. 423G.2 Definitions.
191. All words and phrases used in this chapter and defined in
20section 423.1 have the same meaning given them by section 423.1
21for purposes of this chapter.
222. As used in this chapter, “water service” and “water
23utility” mean the same as defined in section 423.3, subsection
24103.
25 Sec. 33. NEW SECTION. 423G.3 Water service tax.
26An excise tax at the rate of six percent is imposed on the
27sales price from the sale or furnishing by a water utility of a
28water service in the state to consumers or users.
29 Sec. 34. NEW SECTION. 423G.4 Exemptions.
30The sales price from transactions exempt from state sales
31tax under section 423.3, except section 423.3, subsection 103,
32is also exempt from the tax imposed by this chapter.
33 Sec. 35. NEW SECTION. 423G.5 Administration by director.
341. The director of revenue shall administer the state
35water service tax as nearly as possible in conjunction with
-26-1the administration of the state sales and use tax law, except
2that portion of the law that implements the streamlined sales
3and use tax agreement. The director shall provide appropriate
4forms, or provide on the regular state tax forms, for reporting
5state water service tax liability.
62. The director may require all persons who are engaged
7in the business of deriving any sales price or purchase
8price subject to tax under this chapter to register with
9the department. The director may also require a tax permit
10applicable only to this chapter for any retailer not
11collecting, or any user not paying, taxes under chapter 423.
123. Section 422.25, subsection 4, sections 422.30, 422.67,
13and 422.68, section 422.69, subsection 1, sections 422.70,
14422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
151, and sections 423.23, 423.24, 423.25, 423.31 through
16423.35, 423.37 through 423.42, and 423.47, consistent with the
17provisions of this chapter, shall apply with respect to the tax
18authorized under this chapter in the same manner and with the
19same effect as if the excise taxes on the sale or furnishing of
20a water service were retail sales taxes within the meaning of
21those statutes. Notwithstanding this subsection, the director
22shall provide for quarterly filing of returns and for other
23than quarterly filing of returns both as prescribed in section
24423.31. All taxes collected under this chapter by a retailer
25or any user are deemed to be held in trust for the state of
26Iowa.
27 Sec. 36. NEW SECTION. 423G.6 Deposit of revenues.
281. All moneys received and all refunds shall be deposited in
29or withdrawn from the general fund of the state.
302. Subsequent to the deposit in the general fund of the
31state, the department shall transfer the following amounts of
32revenues collected to the water quality financial assistance
33fund created in section 16.198:
34a. For revenues collected on or after July 1, 2017, but
35before August 1, 2018, one-sixth of the revenues.
-27- 1b. For revenues collected on or after August 1, 2018, but
2before August 1, 2019, one-third of the revenues.
3c. For revenues collected on or after August 1, 2019, but
4before August 1, 2020, one-half of the revenues.
5d. For revenues collected on or after August 1, 2020, but
6before August 1, 2021, two-thirds of the revenues.
7e. For revenues collected on or after August 1, 2021, but
8before August 1, 2022, five-sixths of the revenues.
9f. For revenues collected on or after August 1, 2022, one
10hundred percent of the revenues.
11 Sec. 37. NEW SECTION. 423G.7 Future repeal.
12This chapter is repealed on the date on which all bonds,
13notes, or other debt instruments issued on or before June
1430, 2042, pursuant to section 16.202, are fully paid. The
15executive director of the Iowa finance authority shall notify
16the Iowa Code editor upon the occurrence of this condition.
17 Sec. 38. Section 455B.171, subsection 19, Code 2017, is
18amended to read as follows:
1919. “Point source” means any discernible, confined, and
20discrete conveyance, including but not limited to any pipe,
21ditch, channel, tunnel, conduit, well, discrete fissure,
22container, rolling stock, concentrated animal feeding
23operation, or vessel or other floating craft, from which
24pollutants are or may be discharged. “Point source” does not
25include agricultural storm water discharges and return flows
26from irrigated agriculture.
27 Sec. 39. Section 455B.176A, subsection 1, Code 2017, is
28amended by adding the following new paragraphs:
29 NEW PARAGRAPH. 0d. “Iowa nutrient reduction strategy” means
30the same as defined in section 16.201.
31 NEW PARAGRAPH. 00d. “Nutrient” means total nitrogen and
32total phosphorus.
33 Sec. 40. Section 455B.176A, subsection 5, Code 2017, is
34amended to read as follows:
355. a. The commission shall adopt rules designating water
-28-1quality standards which shall be specific to each designated
2use adopted pursuant to subsection 4. The standards shall take
3into account the different characteristics of each designated
4use and shall provide for only the appropriate level of
5protection based upon that particular use. The standards shall
6not be identical for each designated use unless required for
7the appropriate level of protection. The appropriate level of
8protection and standards shall be determined on a scientific
9basis.
10b. In the development process for the water quality
11standards, input shall be received from a water quality
12standards advisory committee convened by the department. The
13water quality standards advisory committee shall be comprised
14of experts in the scientific fields relating to water quality,
15such as environmental engineering, aquatic toxicology,
16fisheries biology, and other life sciences and experts in
17the development of the appropriate levels of aquatic life
18protection and standards. The water quality standards shall be
19reviewed and revised by the department as new scientific data
20becomes available to support revision.
21c. The department shall provide support to the department of
22agriculture and land stewardship in their efforts to implement
23their responsibilities under the Iowa nutrient reduction
24strategy. To evaluate the progress achieved over time toward
25the goals of the Iowa nutrient reduction strategy and the
26United States environmental protection agency gulf hypoxia
27action plan, the baseline condition shall be calculated for the
28time period from 1980 to 1996.
29 Sec. 41. Section 455B.195, subsection 1, paragraph i, Code
302017, is amended to read as follows:
31i. If the department has obtained credible data for a
32water of the state, the department may also use historical
33data for that particular water of the state for the purpose
34of determining whether any trends exist for that water of the
35state. To evaluate the progress achieved over time toward
-29-1the goals of the Iowa nutrient reduction strategy, as defined
2in section 455B.176A, and the United States environmental
3protection agency gulf hypoxia action plan, the baseline
4condition shall be calculated for the time period from 1980 to
51996.
6 Sec. 42. Section 466B.3, subsection 3, paragraph c, Code
72017, is amended to read as follows:
8c. Whether the funds, programs, and regulatory efforts
9coordinated by the council eventually result in a long-term
10improvement to the quality of surface water in Iowa. To
11evaluate the progress achieved over time toward the goals of
12the Iowa nutrient reduction strategy, as defined in section
13455B.176A, and the United States environmental protection
14agency gulf hypoxia action plan, the baseline condition shall
15be calculated for the time period from 1980 to 1996.
16 Sec. 43. Section 466B.42, Code 2017, is amended to read as
17follows:
18466B.42 Water quality initiative.
19The division shall establish a water quality initiative
20in order to assess and reduce nutrients in this state’s
21watersheds, including subwatersheds, and regional watersheds,
22and for implementing its responsibilities under the Iowa
23nutrient reduction strategy as defined in section 455B.176A.
24 The division shall establish and administer projects to
25reduce nutrients in surface waters from nonpoint sources in
26a scientific, reasonable, and cost-effective manner. The
27division shall utilize a pragmatic, strategic, and coordinated
28approach with the goal of accomplishing reductions over time.
29To evaluate the progress achieved over time toward the goals
30of the Iowa nutrient reduction strategy and the United States
31environmental protection agency gulf hypoxia action plan, the
32baseline condition shall be calculated for the time period from
331980 to 1996.
34 Sec. 44. NEW SECTION. 466B.43 Water quality agriculture
35infrastructure programs.
-30- 11. As part of the water quality initiative established
2pursuant to section 466B.42, the division shall administer
3water quality agriculture infrastructure programs created in
4this section.
52. a. The purpose of the programs is to support projects
6for the installation of infrastructure, including conservation
7structures, practices, or other measures that reduce
8contributing nutrient loads, associated sediment, or pollutants
9from point and nonpoint sources to surface waters. The
10programs shall be administered in a manner that is consistent
11with the Iowa nutrient reduction strategy, as defined in
12section 16.201.
13b. In making awards of financial assistance under the
14programs, the division shall attempt to complement the purposes
15of the water quality project financial assistance program
16under sections 16.201 through 16.206 and the water quality
17protection and wastewater treatment grant program under section
1816.140. Preference shall be given to landowners that are
19part of a financing entity participating in the water quality
20project financial assistance program and to landowners that are
21participating in the water quality protection and wastewater
22treatment grant program. The division, the Iowa finance
23authority, landowners, and financing entities shall, when
24possible, coordinate financing between the programs created in
25this section, the water quality project financial assistance
26program, and the water quality protection and wastewater
27treatment grant program, in order to promote the most effective
28use of resources.
293. An edge-of-field infrastructure program is created.
30The program shall support projects located on agricultural
31land, which may include demonstration projects, that capture
32or filter nutrients entering into a surface water. The
33program’s projects shall be limited to infrastructure designed
34and installed for use over multiple years, including but not
35limited to wetlands, bioreactor systems, saturated buffers,
-31-1edge-of-stream buffers, or land use changes. The program shall
2be financed on a cost-share basis.
34. An in-field infrastructure program is created. The
4program shall support projects located on agricultural land,
5which may include demonstration projects, that decrease erosion
6and precipitation-induced surface runoff, increase water
7infiltration rates, and increase soil sustainability. The
8program’s projects shall be limited to infrastructure designed
9and installed for use over multiple years, including but not
10limited to structures, terraces, and waterways located on
11cropland or pastureland, and including but not limited to soil
12conservation or erosion control structures, managed drainage
13systems, or edge-of-stream buffers. The program shall be
14financed on a cost-share basis.
155. Any state moneys used to finance a project under a
16water quality agriculture infrastructure program shall be
17administered according to an agreement entered into by the
18division and the owner of the land where the infrastructure
19is to be installed. The agreement shall include standard
20terms and conditions for the receipt of program moneys and
21any other terms and conditions the division deems necessary
22or convenient for the efficient administration of the project
23or program. The division may support multiple installations
24of infrastructure on a single parcel of land. The division
25may also combine programs if cost effective. The division
26may annually use an amount of not more than four percent of
27the moneys used to support each program for administrative
28purposes.
296. By October 1, 2018, and each October 1, thereafter, the
30division shall submit a report to the governor and the general
31assembly itemizing expenditures, by hydrologic unit code 8
32watershed, under the programs during the previous fiscal year.
337. Any information obtained by the division identifying
34a person holding a legal interest in agricultural land or
35specific agricultural land shall be a confidential record under
-32-1section 22.7.
2 Sec. 45. LEGISLATIVE INTENT. It is the intent of the
3general assembly that the amendment in this Act to the
4definition of “point source” in section 455B.171, subsection
519, is a conforming amendment consistent with current state
6and federal law, and that the amendment does not change the
7application of current law but instead reflects current law
8both before and after the enactment of this Act.
9 Sec. 46. RETROACTIVE APPLICABILITY. The following
10provision or provisions of this Act apply retroactively to
11January 1, 2017, for tax years beginning on or after that date:
121. The section of this Act enacting section 422.7,
13subsection 2, paragraph “0h”.
14EXPLANATION
15The inclusion of this explanation does not constitute agreement with
16the explanation’s substance by the members of the general assembly.
17This bill relates to water quality by establishing new water
18quality programs, providing for appropriations from the rebuild
19Iowa infrastructure fund and making other appropriations and
20changes related to water quality, and creating a state water
21service excise tax and a related sales tax exemption.
22REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATIONS FOR WATER
23QUALITY AGRICULTURE INFRASTRUCTURE PROGRAMS.
24RIIF appropriations — The bill provides for a total of
25$232 million of appropriations over 13 fiscal years from the
26rebuild Iowa infrastructure fund in Code section 8.57 to a
27water quality infrastructure fund created in the bill (Code
28section 8.57B) to be used by the division of soil conservation
29and water quality of the department of agriculture and land
30stewardship (soil and water division) in administering two new
31water quality agriculture infrastructure programs, described
32below. The appropriations shall be as follows: $5 million for
33fiscal year 2017-2018; $6.5 million for fiscal year 2018-2019;
34$11.5 million for fiscal year 2019-2020; $16.5 million per
35fiscal year for the two-year fiscal period beginning July 1,
-33-12020, and ending June 30, 2022; and $22 million per fiscal year
2for the eight-year fiscal period beginning July 1, 2022, and
3ending June 30, 2030. The water quality infrastructure fund
4is repealed on the date that all moneys transferred to the
5fund from the rebuild Iowa infrastructure fund as provided in
6the bill, including any interest or earnings on such moneys
7credited to the fund, are expended by the soil and water
8division, and the balance of the fund is zero.
9Water quality agriculture infrastructure programs — As
10part of the existing water quality initiative of the soil and
11water division in Code section 466B.42, the bill establishes
12two water quality agriculture infrastructure programs (Code
13section 466B.43), consisting of an edge-of-field infrastructure
14program and an in-field infrastructure program, that will
15provide financing on a cost-share basis to certain agriculture
16infrastructure projects, including demonstration projects.
17The edge-of-field program will support projects that capture
18or filter nutrients entering into surface water. The bill
19includes wetlands, bioreactor systems, saturated buffers,
20edge-of-field buffers, and land use changes as examples
21of projects that may qualify. The in-field infrastructure
22program will support projects that decrease erosion and
23precipitation-induced surface runoff, increase water
24infiltration rates, and increase soil sustainability. The bill
25includes structures, terraces, waterways located on cropland
26or pastureland, and soil conservation or erosion control
27structures or managed drainage systems, and edge-of-field
28buffers as examples of projects that may qualify.
29The bill provides for the purpose of the programs and
30requires that the programs be administered in a manner that
31is consistent with the Iowa nutrient reduction strategy, as
32defined in the bill. Both programs are to be administered
33in a way that coordinates with, and attempts to complement
34the purposes of, the water quality project financial
35assistance program and the water quality protection and
-34-1wastewater treatment grant program created in the bill
2and described below, and preference is to be given to
3landowners participating in those programs. Both water
4quality agriculture infrastructure programs require that
5projects be located on agricultural land and limit projects to
6infrastructure designed and installed for use over multiple
7years. The bill requires that the soil and water division and
8landowners enter into agreements for financing projects under
9the programs, provides that the soil and water division may
10support multiple installations of infrastructure on a single
11parcel of land, and provides that the two programs may be
12combined by the soil and water division if it is cost effective
13to do so. The soil and water division is allowed to annually
14use up to 4 percent of the programs’ moneys for administrative
15purposes. Beginning in 2018, the soil and water division is
16required to submit a report by October 1 of each year to the
17general assembly and the governor detailing expenditures for
18the previous fiscal year under the programs by hydrologic unit
19code 8 watershed. The bill provides that certain information
20related to agricultural land and obtained by the soil and water
21division under the programs shall be considered a confidential
22record under Code section 22.7.
23WATER SERVICE EXCISE TAX FOR CERTAIN WATER QUALITY PROGRAMS.
24Water service excise tax and related sales tax exemption —
25The bill exempts from the state sales tax the sales price from
26the sale or furnishing by a water utility of a water service in
27the state to consumers or users. “Water service” and “water
28utility” are defined in the bill.
29By operation of Code section 423.6, an item exempt from the
30imposition of the sales tax is also exempt from the use tax
31imposed in Code section 423.5.
32The bill creates a state excise tax at the rate of 6 percent
33on the sales price from the sale or furnishing by a water
34utility of a water service in the state to consumers or users
35(Code chapter 423G). The director of revenue is required
-35-1to administer the water service tax as nearly as possible
2in conjunction with the administration of the state sales
3and use tax laws, and, to that end, the bill incorporates by
4reference numerous Code sections that relate to general tax
5administration and the sales and use tax laws.
6State water service tax revenues are deposited in the
7general fund of the state. The bill requires an increasing
8portion of the state water service tax revenues collected each
9year to be transferred to a water quality financial assistance
10fund created in the bill (Code section 16.198) to support
11various water quality programs, described below. Transfers to
12the water quality financial assistance fund equal one-sixth of
13the water service tax revenues collected on or after July 1,
142017, but before August 1, 2018, and increases to one-third,
15one-half, two-thirds, and five-sixths over the next four years.
16All water service tax revenues collected on or after August
171, 2022, will be transferred to the water quality financial
18assistance fund.
19The state and local water service tax is repealed on the date
20on which all bonds, notes, or other debt instruments issued by
21the Iowa finance authority (IFA) on or before June 30, 2042,
22under the water quality project financial assistance program,
23described below, are fully paid.
24Water service tax revenues transferred to the water quality
25financial assistance fund are then appropriated from the
26fund as follows: one-sixth of the moneys in the fund is
27appropriated to IFA to support the water quality protection and
28wastewater treatment grant program created in the bill (Code
29section 16.140), and five-sixths of the moneys in the fund
30is appropriated to IFA to support the water quality project
31financial assistance program created in the bill (Code sections
3216.201 through 16.206).
33Water quality protection and wastewater treatment grant
34program (Code section 16.140) — This program, administered by
35IFA, provides financial assistance in the form of grants to
-36-1municipalities and eligible entities for projects or activities
2that enhance water quality, upgrade water and wastewater
3infrastructure, or implement the nutrient reduction strategy.
4“Municipality”, “eligible entity”, and other related terms are
5defined in the bill. The bill describes the types of projects
6or activities that qualify for grants under the program.
7The program gives priority in awarding grants to projects
8or activities that provide improvement to water quality in
9the relevant watershed, and that also have private financing
10or certain other state or federal financing as described in
11the bill. Grants shall not exceed $500,000 per recipient.
12The program requires IFA to submit a report by October 1 of
13each year to the governor and the general assembly detailing
14expenditures for the previous year under the program, and
15creates a program review committee consisting of eight members,
16as provided in the bill, to review the effectiveness of the
17program every 10 years, beginning in 2027.
18Water quality project financial assistance program (Code
19sections 16.201 through 16.206) — This program provides
20financial assistance to eligible entities that engage in a
21project designed to improve water quality or water resource
22management for the purpose of enhancing the quality of surface
23water and groundwater. “Eligible entity”, “project”, and
24other related terms are defined in the bill. The program
25is administered by IFA in cooperation with the department of
26natural resources (DNR) and the department of agriculture
27and land stewardship (IDALS). The program allows IFA to
28provide financial assistance in the form it deems most
29convenient, including loans, forgivable loans, and grants,
30but requires that the program be a permanent source of water
31quality financial assistance. The program allows financing
32entities, as defined in the bill, to apply to IFA for financial
33assistance and submit project plans that substantially improve
34water quality in the local area or watershed, and provides
35certain application requirements. Preference under the program
-37-1shall be given to projects that will have the greatest impact
2on achieving the goals set forth in the nutrient reduction
3strategy, and plans designed to achieve those goals shall be
4presumed to improve water quality. Also, plans that include a
5nutrient reduction exchange, as defined in the bill, between
6two or more members of the eligible entity will be presumed to
7substantially improve water quality.
8Preference under the program is to be given to eligible
9entities that have project plans evaluated by the Iowa nutrient
10research center (Code section 466B.47), and to eligible
11entities that contract with the Iowa nutrient research center
12to verify the amount of nutrient reduction achieved by the
13project upon project completion.
14The bill creates a three-member committee to review project
15plans, review and score applications, and make financial
16assistance awards. The executive director of IFA, the director
17of DNR, and the secretary of agriculture each appoint one
18member to the committee. Eligible entities receiving financial
19assistance awards are required to enter into agreements with
20IFA, and IFA determines the terms of any loan and may charge
21fees and costs necessary for the continued operation of the
22program. The bill provides that a drainage district that is a
23party to a Code chapter 28E agreement that creates a financing
24entity is not required to be a signatory on any loan agreement
25entered into under the program. The bill further requires
26IFA to adopt rules relating to the proportional liability, if
27any, of members of an eligible entity that enter into a loan
28agreement under the program.
29The bill creates a water quality project financial
30assistance fund administered by IFA to provide financial
31assistance under the program. The bill allows IFA to establish
32and maintain other funds and accounts necessary to carry out
33the purposes of the program.
34The bill allows IFA to issue until June 30, 2042, bonds and
35notes for the purpose of funding the program, and the bill
-38-1provides several requirements for the issuance of such bonds
2and notes, for loan or purchase agreements with bondholders
3or noteholders, for the pledging of certain funds toward the
4repayment of the bonds and notes, and for the establishment of
5reserve funds to secure the bonds and notes. The bill also
6includes other provisions related to the notes and bonds,
7including that such bonds and notes are exempt from taxation
8by the state.
9MISCELLANEOUS PROVISIONS. The bill amends the powers of
10a soil and water conservation district under chapter 161A to
11include the completion of certain projects as described in the
12bill, and to allow a district to apply for financial assistance
13under the water quality project financial assistance program.
14The bill amends provisions in Code chapter 161C governing
15the water protection projects and practices of a soil and water
16conservation district by adding to the types of projects the
17district may engage in and the type of entities the district
18may work with to complete such projects.
19The bill amends various provisions of Code chapter 161E
20(flood and erosion control) to add to the types of projects a
21county may engage in or offer financial assistance for under
22that Code chapter, or to levy a property tax for under that
23Code chapter, and to add to the types of entities the county
24may work with to complete projects.
25The bill amends provisions in Code chapter 161F (soil
26conservation and flood control districts) to add to the
27types of projects a soil conservation and flood control
28district established by a county may engage in under that Code
29chapter, and the types of entities a district may work with
30to complete such projects. The bill also specifies that a
31district established pursuant to Code chapter 161F shall not
32be considered a drainage district established pursuant to Code
33chapter 468.
34The bill adds to the types of projects that a public agency
35may complete through joint financing with another public agency
-39-1under Code chapter 28F (joint financing of public works and
2facilities).
3The bill amends provisions governing certain projects
4completed and financed by a city under Code chapter 384 (city
5finance). The bill adds to the types of projects specified
6that meet the definition of a “water resource restoration
7project”, which is a type of project a city may engage in
8and issue revenue bonds or pledge orders for. The bill also
9amends the definition of “qualified entity” to include entities
10created under Code chapter 28F (joint financing of public
11works and facilities). Under current law, a city may enter
12into agreements with a qualified entity relating to the use of
13revenue bond proceeds for a water resource restoration project.
14The bill amends the definition of “point source” in Code
15section 455B.171, which contains definitions for terms used in
16provisions of the Code that concern the jurisdiction of DNR
17related to water quality, to exclude agricultural storm water
18discharges and return flows from irrigated agriculture. The
19bill provides that it is the legislative intent of the general
20assembly that this amendment to the definition of “point
21source” is a conforming amendment consistent with current state
22and federal law, and that the amendment does not change the
23application of current law but instead reflects current law
24both before and after the enactment of the bill.
25The bill amends Code section 455B.176A, relating to water
26quality standards created by DNR and the environmental
27protection commission, to define “Iowa nutrient reduction
28strategy” and “nutrient”, and to provide that DNR shall provide
29support to IDALS in efforts to implement the Iowa nutrient
30reduction strategy, and further provides that progress under
31the Iowa nutrient reduction strategy and the United States
32environmental protection agency gulf hypoxia action plan shall
33be evaluated using a baseline condition calculated for the time
34period between 1980 and 1996.
35The bill amends Code section 455B.195, relating to
-40-1the required use or analysis of credible data by DNR when
2developing or determining certain water quality issues,
3to provide that progress under the Iowa nutrient reduction
4strategy and the United States environmental protection agency
5gulf hypoxia action plan shall be evaluated using a baseline
6condition calculated for the time period between 1980 and 1996.
7The bill amends Code section 466B.3, relating to the water
8resources coordinating council, to provide that when the
9council is measuring the success of its efforts, progress under
10the Iowa nutrient reduction strategy and the United States
11environmental protection agency gulf hypoxia action plan shall
12be evaluated using a baseline condition calculated for the time
13period between 1980 and 1996.
14The bill amends Code section 466B.42, relating to the water
15quality initiative of the soil and water division, to provide
16that the goal of the water quality initiative is to implement
17the soil and water division’s responsibilities under the Iowa
18nutrient reduction strategy, and to provide that progress under
19the Iowa nutrient reduction strategy and the United States
20environmental protection agency gulf hypoxia action plan shall
21be evaluated using a baseline condition calculated for the time
22period between 1980 and 1996.
23Finally, the bill adds the IFA water quality project
24financial assistance program bonds and notes authorized in
25the bill under new Code section 16.202 to the list of bonds
26and notes the income from which is exempt from the individual
27income tax under Code section 422.7 (computation of net
28income). This provision of the bill applies retroactively to
29January 1, 2017, for tax years beginning on or after that date.
-41-mm/sc