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House File 538 - 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33(2) This paragraph “0h” is repealed on January 1, 2031.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 or operational
16improvements to reduce 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
12for providing potable water to residents served by a water
13system, including the acquisition of real property needed
14for such purposes, and such other purposes and programs as
15may be authorized under the Safe Drinking Water Act. “Water
16infrastructure improvement” does not include the acquisition of
17real property through the use of eminent domain.
182. The Iowa finance authority shall establish and
19administer a water quality protection and wastewater treatment
20grant program for the purpose of providing financial assistance
21in the form of grants to enhance water quality, upgrade water
22and wastewater infrastructure, and to implement the Iowa
23nutrient reduction strategy. The program shall be administered
24in accordance with rules adopted by the authority pursuant to
25chapter 17A.
263. a. A water quality protection and wastewater treatment
27grant fund is created in the state treasury and shall consist
28of appropriations made to the fund, transfers of interest,
29earnings, moneys from other funds as provided by law, and
30moneys accepted by the authority for deposit in the fund
31from other public or private sources. Moneys credited
32or transferred to the fund pursuant to section 16.198 are
33appropriated to the authority for purposes of the program.
34Moneys in the fund shall be used exclusively for purposes of
35the program.
-4- 1b. Notwithstanding section 8.33, moneys in the fund
2that remain unencumbered or unobligated at the close of a
3fiscal year shall not revert but shall remain available for
4expenditure for the purposes designated. Notwithstanding
5section 12C.7, subsection 2, interest or earnings on moneys in
6the fund shall be credited to the fund.
74. Grants may be awarded under the program for any of the
8following:
9a. To a municipality or an eligible entity participating in
10a nutrient reduction exchange, for the purpose of purchasing
11nutrient reduction credits or for implementing water quality
12practices as described in the Iowa nutrient reduction strategy.
13For purposes of this paragraph, “nutrient reduction credit” and
14“nutrient reduction exchange” both mean the same as defined in
15section 16.206, section 1, paragraph “d”.
16b. To a municipality or an eligible entity for up to fifty
17percent of the costs associated with conducting economic and
18technical feasibility studies or developing implementation
19plans and reports required by the Iowa nutrient reduction
20strategy.
21c. To a municipality for a source water protection project.
22d. To a municipality or an eligible entity for water
23infrastructure improvements or for wastewater infrastructure
24improvements.
255. Priority for grants shall be given to projects or
26activities that will provide improvement to water quality in
27the relevant watershed.
286. Priority for grants shall be given to projects or
29activities that also have private financing, or financing
30pursuant to section 16.131 under the water pollution control
31works and drinking water facilities financing program created
32pursuant to section 455B.294, or other federal or state
33financing.
347. Priority for grants shall be given to projects or
35activities that are part of a project receiving financing under
-5-1the water quality project financial assistance program under
2sections 16.201 through 16.206.
38. Grants awarded under the program shall not exceed five
4hundred thousand dollars per recipient.
59. By October 1 of each year, the authority shall submit
6a report to the governor and the general assembly itemizing
7expenditures under the program during the previous fiscal year.
810. a. Beginning September 1, 2027, and every ten years
9thereafter, a program review committee is established for
10purposes of reviewing the program. By December 1 of the
11same year, the review committee shall file a report with
12the governor and the general assembly that reviews the
13effectiveness of the program during the previous ten fiscal
14years.
15b. The program review committee shall consist of the
16following members:
17(1) The governor or the governor’s designee.
18(2) The secretary of agriculture or the secretary’s
19designee.
20(3) The executive director of the authority or the executive
21director’s designee.
22(4) The director of the department of natural resources or
23the director’s designee.
24(5) Four members of the general assembly, with two from the
25senate and two from the house of representatives and not more
26than one member from each chamber being from the same political
27party. The two senators shall be designated one member each
28by the president of the senate, after consultation with the
29majority leader of the senate, and by the minority leader of
30the senate. The two representatives shall be designated one
31member each by the speaker of the house of representatives,
32after consultation with the majority leader of the house of
33representatives, and by the minority leader of the house of
34representatives.
35c. Staffing services shall be provided by the authority.
-6-1 Sec. 4. NEW SECTION. 16.198 Water quality financial
2assistance fund.
31. A water quality financial assistance fund is created in
4the state treasury.
52. The fund shall consist of all of the following:
6a. (1) Moneys transferred to the fund pursuant to section
7423G.6.
8(2) This paragraph “a” is repealed upon the date on which
9chapter 423G is repealed pursuant to section 423G.7.
10b. Appropriations made to the fund and transfers of
11interest, earnings, and moneys from other funds as provided by
12law.
133. For each fiscal year in the period beginning July 1,
142017, and ending when chapter 423G is repealed pursuant to
15section 423G.7, there is appropriated the following amounts of
16the balance of the fund for the following purposes:
17a. One-sixth of the balance of the fund to the Iowa finance
18authority to be credited to the water quality protection and
19wastewater treatment grant fund created pursuant to section
2016.140, subsection 3.
21b. Five-sixths of the balance of the fund to the Iowa
22finance authority to be credited to the water quality project
23financial assistance fund created pursuant to section 16.204.
244. Moneys in the fund are not subject to section 8.33.
25Notwithstanding section 12C.7, subsection 2, interest or
26earnings on moneys in the fund shall be credited to the fund.
27 Sec. 5. NEW SECTION. 16.201 Definitions.
28As used in this part, unless the context otherwise requires:
291. “Committee” means the water quality project financing
30committee created in section 16.205, subsection 4.
312. “Eligible entity” means a financing entity meeting the
32requirements of section 16.206, as determined by the committee.
333. “Financing entity” means two or more persons that have
34entered into an agreement for purposes of joint financing of a
35project under the program. A financing entity may include but
-7-1is not limited to a governmental body such as a state agency or
2a political subdivision of the state, a city or a city utility,
3a public utility as defined in section 476.1 that furnishes
4drinking water, sanitary sewage, or storm water services to the
5public for compensation, a county, a rural water district or
6association, a soil and water conservation district, a sanitary
7district, a subdistrict of any of the foregoing districts, a
8governmental body or corporation empowered to provide sewage
9collection and treatment services or drinking water, an entity
10jointly exercising governmental powers pursuant to chapter 28E
11or 28F, or any other combination of two or more public agencies
12or private agencies as defined in section 28E.2, acting jointly
13under Iowa law in connection with a project.
144. “Iowa nutrient reduction strategy” means a water
15quality initiative developed and updated by the department of
16agriculture and land stewardship, the department of natural
17resources, and the college of agriculture and life sciences at
18Iowa state university of science and technology in order to
19assess and reduce nutrients in this state’s watersheds that
20utilizes a pragmatic, strategic, and coordinated approach with
21the goal of accomplishing reductions over time.
225. “Loan recipient” means an eligible entity that has
23received a loan under the program.
246. “Program” means the water quality project financial
25assistance program created in this part.
267. “Project” means any combination of works, facilities,
27improvements, structures, developments, tasks, activities,
28constructions, modifications, operations, or practices designed
29to improve water quality or water resource management that are
30proposed by an eligible entity and approved by the committee.
31“Project” includes but is not limited to the following:
32a. A project meeting the requirements of part 2 of this
33subchapter.
34b. A project, operation, or practice undertaken or carried
35out pursuant to chapter 161A, 161C, 161E, or 161F.
-8- 1c. A project meeting the requirements of a sponsor project
2under section 455B.199.
3d. Other water resource restoration projects as defined in
4section 384.80, including ones financed pursuant to section
528F.1.
6e. An agricultural nonpoint source project eligible for a
7water quality agriculture infrastructure program under section
8466B.43.
98. “Revolving fund” means the fund created in section
1016.204.
11 Sec. 6. NEW SECTION. 16.202 Water quality project financial
12assistance program — funding — bonds and notes.
131. The authority shall cooperate with the department of
14natural resources and the department of agriculture and land
15stewardship in the creation, administration, and financing of
16the program established in this part.
172. The authority may issue its bonds and notes until June
1830, 2042, for the purposes of this part, including for the
19purposes of funding the program established under section
2016.205 and of funding any fund or account created under section
2116.204.
223. The authority may enter into one or more loan agreements
23or purchase agreements with one or more bondholders or
24noteholders containing the terms and conditions of the
25repayment of and the security for the bonds or notes. The
26authority and the bondholders or noteholders or a trustee
27agent designated by the authority may enter into agreements to
28provide for any of the following:
29a. That the proceeds of the bonds and notes and the
30investments of the proceeds may be received, held, and
31disbursed by the authority or by a trustee or agent designated
32by the authority.
33b. That the bondholders or noteholders or a trustee or
34agent designated by the authority may collect, invest, and
35apply the amount payable under the loan agreements or any
-9-1other instruments securing the debt obligations under the loan
2agreements.
3c. That the bondholders or noteholders may enforce the
4remedies provided in the loan agreements or other instruments
5on their own behalf without the appointment or designation of a
6trustee. If there is a default in the principal of or interest
7on the bonds or notes or in the performance of any agreement
8contained in the loan agreements or other instruments, the
9payment or performance may be enforced in accordance with the
10loan agreement or other instrument.
11d. Other terms and conditions as deemed necessary or
12appropriate by the authority.
134. The powers granted the authority under this section
14are in addition to other powers contained in this chapter.
15All other provisions of this chapter, except section 16.28,
16subsection 4, apply to bonds or notes issued and powers granted
17to the authority under this section except to the extent they
18are inconsistent with this section.
195. All bonds or notes issued by the authority in connection
20with the program are exempt from taxation by this state and the
21interest on the bonds or notes is exempt from state income tax.
22 Sec. 7. NEW SECTION. 16.203 Security — reserve funds —
23pledges — nonliability — irrevocable contracts.
241. The authority may provide in the resolution, trust
25agreement, or other instrument authorizing the issuance of its
26bonds or notes pursuant to section 16.202 that the principal
27of, premium, and interest on the bonds or notes are payable
28from any of the following and may pledge the same to its bonds
29and notes:
30a. The income and receipts or other moneys derived from the
31projects financed with the proceeds of the bonds or notes.
32b. The income and receipts or other moneys derived from
33designated projects whether or not the projects are financed in
34whole or in part with the proceeds of the bonds or notes.
35c. The amounts on deposit in the revolving fund.
-10- 1d. The amounts payable to the authority by eligible entities
2pursuant to loan agreements with eligible entities.
3e. Any other funds or accounts established by the authority
4in connection with the program or the sale and issuance of its
5bonds or notes.
62. The authority may establish reserve funds to secure
7one or more issues of its bonds or notes. The authority may
8deposit in a reserve fund established under this subsection the
9proceeds of the sale of its bonds or notes and other moneys
10that are made available from any other source.
113. It is the intention of the general assembly that a pledge
12made in respect of bonds or notes issued under this part shall
13be valid and binding from the time the pledge is made, that the
14moneys or property so pledged and received after the pledge
15by the authority shall immediately be subject to the lien of
16the pledge without physical delivery or further act, and that
17the lien of the pledge shall be valid and binding as against
18all parties having claims of any kind in tort, contract, or
19otherwise against the authority whether or not the parties have
20notice of the lien. Neither the resolution, trust agreement,
21nor any other instrument by which a pledge is created needs to
22be recorded or filed under the Iowa uniform commercial code,
23chapter 554, to be valid, binding, or effective against the
24parties.
254. Neither the members of the authority nor persons
26executing the bonds or notes are liable personally on the bonds
27or notes or are subject to personal liability or accountability
28by reason of the issuance of the bonds or notes.
295. The bonds or notes issued by the authority are not
30an indebtedness or other liability of the state or of a
31political subdivision of the state within the meaning of
32any constitutional or statutory debt limitations but are
33special obligations of the authority, and are payable solely
34from the income and receipts or other funds or property of
35the authority, and the amounts on deposit in the revolving
-11-1fund, and the amounts payable to the authority under its loan
2agreements with eligible entities to the extent that the
3amounts are designated in the resolution, trust agreement, or
4other instrument of the authority authorizing the issuance of
5the bonds or notes as being available as security for such
6bonds or notes. The authority shall not pledge the faith or
7credit of the state or of a political subdivision of the state
8to the payment of any bonds or notes. The issuance of any bonds
9or notes by the authority does not directly, indirectly, or
10contingently obligate the state or a political subdivision of
11the state to apply moneys from, or levy or pledge any form of
12taxation whatever to, the payment of the bonds or notes.
136. It is the intent of the general assembly, and the state
14hereby pledges to the holders of bonds or notes issued under
15this part, that the state will not limit or alter the rights
16and powers vested in the authority to fulfill the terms of a
17contract made by the authority with respect to the bonds or
18notes, or in any way impair the rights and remedies of the
19holders until the bonds or notes, together with the interest on
20the bonds or notes, including interest on unpaid installments
21of interest, and all costs and expenses in connection with an
22action or proceeding by or on behalf of the holders, are fully
23met and discharged. The authority is authorized to include
24this pledge and agreement of the state, as it refers to holders
25of bonds or notes of the authority, in a contract with the
26holders.
27 Sec. 8. NEW SECTION. 16.204 Water quality project financial
28assistance fund — other funds and accounts.
291. a. A water quality project financial assistance
30fund is created in the state treasury and shall consist of
31appropriations made to the fund, moneys credited or transferred
32to the fund pursuant to section 16.198, and transfers of
33interest, earnings, and moneys from other funds as provided
34by law. The fund shall be administered by the authority as a
35revolving fund.
-12- 1b. Moneys in the fund are not subject to section 8.33.
2Notwithstanding section 12C.7, subsection 2, interest or
3earnings on moneys in the fund shall be credited to the fund.
4c. The authority shall use the moneys in the fund to provide
5financial assistance to eligible entities under the program
6pursuant to section 16.205.
7d. The authority may use an amount of not more than one
8percent of the moneys in the fund for administrative purposes.
92. The authority may establish and maintain other funds
10and accounts determined to be necessary to carry out the
11purposes of the program and shall provide for the funding,
12administration, investment, restrictions, and disposition of
13the funds and accounts.
143. Moneys appropriated to and used by the authority for
15purposes of paying the costs and expenses associated with
16the administration of the program shall be administered as
17determined by the authority.
184. The funds or accounts held by the authority, or a trustee
19acting on behalf of the authority pursuant to a trust agreement
20related to the program, shall not be considered part of the
21general fund of the state, are not subject to appropriation for
22any other purpose by the general assembly, and in determining
23a general fund balance shall not be included in the general
24fund of the state, but shall remain in the funds and accounts
25maintained by the authority or trustee pursuant to a trust
26agreement. Funds and accounts held by the authority, or a
27trustee acting on behalf of the authority pursuant to a trust
28agreement related to the program, are separate dedicated funds
29and accounts under the administration and control of the
30authority and subject to section 16.31.
31 Sec. 9. NEW SECTION. 16.205 Water quality project financial
32assistance program — committee created — rules — use of funds.
331. The authority, in cooperation with the department of
34natural resources and the department of agriculture and land
35stewardship, shall establish and administer a water quality
-13-1project financial assistance program. The purpose of the
2program shall be to provide financial assistance to enhance
3the quality of surface water and groundwater, particularly
4by providing financial assistance for projects designed to
5improve water quality through collaboration between point
6and nonpoint sources. The authority may provide financial
7assistance in the form deemed most convenient for the efficient
8financing of projects, including loans, forgivable loans, and
9grants. However, the authority shall administer the fund and
10the program in such a manner as to provide a permanent source
11of water quality project financial assistance to eligible
12entities.
132. The program shall be administered by the authority
14in accordance with rules adopted by the authority pursuant
15to chapter 17A. In adopting such rules, the authority shall
16consult with the department of natural resources and the
17department of agriculture and land stewardship.
183. The authority shall process and review financial
19assistance applications and make recommendations to the
20committee.
214. a. A water quality project financing committee is
22created to consider applications for financial assistance from
23eligible entities and approve awards of financial assistance
24under the program. The committee shall consist of three
25members, one appointed by the executive director of the
26authority, one appointed by the director of the department
27of natural resources, and one appointed by the secretary of
28agriculture.
29b. The committee shall review project plans submitted
30pursuant to section 16.206, negotiate project details with
31eligible entities, and make financial assistance awards. The
32provision of financial assistance under the program shall take
33into account the number of persons comprising an eligible
34entity and the eligible entity’s financing capacity as well as
35the extent to which the proposed projects will improve water
-14-1quality.
2c. The committee shall score applications for financial
3assistance according to rules adopted pursuant to this part.
4The committee shall only provide financial assistance to
5eligible entities that have sufficient financing capacity and
6that propose a plan likely to make progress toward achieving
7the goals for agricultural and nonpoint sources described in
8the Iowa nutrient reduction strategy.
95. The authority shall determine the interest rate
10and repayment terms for loans made under the program, in
11cooperation with the department of natural resources and
12the department of agriculture and land stewardship, and the
13authority shall enter into loan agreements with eligible
14entities in compliance with and subject to the terms and
15conditions of the program.
166. The authority shall adopt rules relating to the
17proportional liability, if any, of members of an eligible
18entity when such eligible entity enters into a loan agreement
19under the program.
207. The authority may charge loan recipients fees and assess
21costs against such recipients necessary for the continued
22operation of the program. Such fees and costs shall not exceed
23the costs directly associated with the administration of the
24program. Fees and costs collected pursuant to this subsection
25shall be deposited in the appropriate fund or account created
26in section 16.204.
278. Financial assistance under the program shall be used by
28eligible entities to fund projects designed to improve water
29quality.
30 Sec. 10. NEW SECTION. 16.206 Eligible entities — project
31plans — agreements required.
321. A financing entity may apply to the authority for
33financial assistance under the program. To be eligible, a
34financing entity shall meet the following requirements:
35a. The financing entity shall include two or more entities
-15-1acting jointly to propose a project plan designed to improve
2water quality in a local area or watershed.
3b. The plan shall include one or more projects that
4substantially improve water quality in the local area or
5watershed. Preference shall be given to projects that will
6have the greatest impact on achieving the goals of the Iowa
7nutrient reduction strategy, and plans designed to achieve
8those goals shall be presumed to substantially improve water
9quality in the local area or watershed.
10c. The plan shall describe in detail the manner in which
11the projects will be financed and undertaken, including the
12sources of financing for the projects as well as the public or
13private entities that will be receiving the revenues and how
14such revenues will be spent on the projects. In describing the
15projects and financing, the plan should attempt to quantify
16the amount of nutrient reduction to be achieved under the
17plan and should provide a reasonable means for verification
18of the amount of nutrient reduction after the projects have
19been financed and completed. Preference shall be given to
20a financing entity that has had its plan evaluated by the
21Iowa nutrient research center established in section 466B.47.
22Preference shall also be given to a financing entity that has
23contracted with the Iowa nutrient research center to verify
24the amount of nutrient reduction achieved by the project upon
25project completion.
26d. (1) The plan may include a nutrient reduction exchange
27between two or more members of the financing entity. A plan
28that includes a nutrient reduction exchange shall be presumed
29to substantially improve water quality in the local area or
30watershed.
31(2) For purposes of this paragraph:
32(a) “Nutrient reduction” means a reduction in nitrogen or
33phosphorus as measured against standards or goals established
34or adopted by the committee.
35(b) “Nutrient reduction credit” means an amount of nutrient
-16-1reduction expressed as a unit of measurement that is calculated
2using research-based modeling or other methods established or
3adopted by the committee.
4(c) “Nutrient reduction exchange” means an agreement between
5one or more point source or nonpoint source contributors
6and one or more other parties whereby nutrient reduction
7credits are purchased, sold, traded, or exchanged for legal
8consideration through a trading system approved by the
9department of natural resources.
102. Any eligible entity receiving financial assistance under
11the program shall enter into an agreement with the authority.
12The agreement shall include standard terms for the receipt of
13program funds and any other terms the authority deems necessary
14and convenient for the efficient administration of the program.
15 Sec. 11. Section 28F.1, subsection 1, Code 2017, is amended
16to read as follows:
171. This chapter provides a means for the joint financing
18by public agencies of works or facilities useful and necessary
19for the collection, treatment, purification, and disposal
20in a sanitary manner of liquid and solid waste, sewage, and
21industrial waste, facilities used for the conversion of solid
22waste to energy, facilities, improvements, or projects in a
23watershed useful for flood control, erosion control, or water
24quality restoration by a water utility, wastewater utility,
25or storm water utility, whether located within or without the
26corporate boundaries of a municipal corporation, and also
27electric power facilities constructed within the state of
28Iowa, except that hydroelectric power facilities may also be
29located in the waters and on the dams of or on land adjacent
30to either side of the Mississippi or Missouri river bordering
31the state of Iowa, water supply systems, swimming pools
32or golf courses. This chapter applies to the acquisition,
33construction, reconstruction, ownership, operation, repair,
34extension, or improvement of such works or facilities, by a
35separate administrative or legal entity created pursuant to
-17-1chapter 28E or chapter 389. When the legal entity created
2under this chapter is comprised solely of cities, counties,
3and sanitary districts established under chapter 358, or any
4combination thereof or any combination of the foregoing with
5other public agencies, the entity shall be both a corporation
6and a political subdivision with the name under which it was
7organized. The legal entity may sue and be sued, contract,
8acquire and hold real and personal property necessary for
9corporate purposes, adopt a corporate seal and alter the seal
10at pleasure, and execute all the powers conferred in this
11chapter. This section shall not be construed or interpreted to
12create or expand the authority to acquire real property through
13the use of eminent domain.
14 Sec. 12. Section 161A.7, subsection 1, paragraph d, Code
152017, is amended to read as follows:
16d. To cooperate, or enter into agreements with, and within
17the limits of appropriations duly made available to it by law,
18to furnish financial or other aid to any agency, governmental
19or otherwise, or any owner or occupier of lands within the
20district, in the carrying on of erosion-control and watershed
21protection and flood prevention operations, or in the carrying
22out of projects pursuant to paragraph “q”, within the district,
23subject to such conditions as the commissioners may deem
24necessary to advance the purposes of this chapter.
25 Sec. 13. Section 161A.7, subsection 1, Code 2017, is amended
26by adding the following new paragraphs:
27 NEW PARAGRAPH. p. To apply for financial assistance under
28the water quality project financial assistance program under
29sections 16.201 through 16.206.
30 NEW PARAGRAPH. q. To carry out soil erosion control,
31watershed protection or improvement, flood prevention, and
32water quality protection projects and operations within the
33district, including but not limited to projects and operations
34to support water protection practices, to protect this
35state’s groundwater and surface water from point and nonpoint
-18-1sources of pollution, including but not limited to pollution
2by agricultural drainage wells, sinkholes, sedimentation,
3or chemical pollutants, to reduce or remove nutrients and
4pollution in or from surface water and groundwater, to reduce
5or eliminate nutrient loads to surface water and groundwater
6from both point and nonpoint sources, to maintain, protect,
7and improve the quality of surface water and groundwater, and
8to achieve or further any of the goals and targets described
9in the Iowa nutrient reduction strategy as defined in section
1016.201.
11 Sec. 14. Section 161C.1, Code 2017, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 4A. “Financing entity” means the same as
14defined in section 16.201.
15 Sec. 15. Section 161C.2, subsection 1, paragraph a, Code
162017, is amended to read as follows:
17a. Each soil and water conservation district, alone and
18whenever practical in conjunction with other districts, shall
19 financing entities, or political subdivisions of the state,
20or other local agencies, may carry out district-wide and
21multiple-district projects to support soil erosion control,
22water resource restoration projects, watershed protection,
23flood prevention, and water quality protection practices,
24projects, and operations in the district or districts,
25including but not limited to projects carried out in order to
26protect this state’s groundwater and surface water from point
27and nonpoint sources of contamination pollution, including but
28not limited to contamination pollution by agricultural drainage
29wells, sinkholes, sedimentation, or chemical pollutants, as
30described in the Iowa nutrient reduction strategy as defined
31in section 16.201.
32 Sec. 16. Section 161C.3, Code 2017, is amended to read as
33follows:
34161C.3 Cooperation with other agencies.
35Soil and water conservation districts may enter into
-19-1agreements with the United States, as provided by state law,
2or with the state of Iowa or any agency of the state, any
3other soil and water conservation district, or other political
4subdivision of this state, or any financing entity, or other
5local agency, for cooperation in preventing, controlling, or
6attempting to prevent or control contamination pollution of
7groundwater or surface water by point and nonpoint sources
8of pollution. Soil and water conservation districts may
9accept, as provided by state law, any money disbursed for water
10quality preservation purposes by the federal government or any
11agency of the federal government, and expend the money for the
12purposes for which it was received.
13 Sec. 17. Section 161E.1, Code 2017, is amended to read as
14follows:
15161E.1 Authority of board.
161. If a county, soil and water conservation district,
17subdistrict of a soil and water conservation district,
18financing entity, or political subdivision of the state, or
19other local agency engages or participates in or carries out
20 a project for flood or soil erosion control, a water resource
21restoration project, watershed protection or improvement
22project, flood prevention, water quality protection project or
23operation, including but not limited to a project or operation
24described in the Iowa nutrient reduction strategy as defined
25in section 16.201, within a county, or engages or participates
26in the conservation, development, utilization, and disposal
27of water, in cooperation with the federal government, or a
28department or agency of the federal government, in cooperation
29with other districts, subdistricts, financing entities,
30political subdivisions, or other local agencies, the counties
31in which the project is carried on may, through the board of
32supervisors or through an intergovernmental agreement under
33chapter 28E or chapter 28F, construct, operate, and maintain
34the project on lands under the control or jurisdiction of the
35county dedicated to county use, or furnish financial and other
-20-1assistance in connection with the projects or operations.
2Flood control, soil erosion control, watershed protection
3projects, flood prevention, water quality improvement projects,
4water resource restoration projects, and watershed improvement
5projects and operations, including but not limited to projects
6or operations described in the Iowa nutrient reduction strategy
7as defined in section 16.201, are presumed to be for the
8protection of the tax base of the county, for the protection of
9public roads and lands, and for the protection of the public
10health, sanitation, safety, and general welfare.
112. For purposes of this chapter, “financing entity” means
12the same as defined in section 16.201.
13 Sec. 18. Section 161E.2, Code 2017, is amended to read as
14follows:
15161E.2 Federal aid.
16A county may, in accordance with this chapter, accept
17federal funds for aid in a project for flood or soil erosion
18control, flood prevention, or the conservation, development,
19utilization, and disposal of water, and may cooperate with
20the federal government or a department or agency of the
21federal government, a soil and water conservation district,
22subdistrict of a soil and water conservation district,
23political subdivision of the state, or other local agency, or
24a financing entity, and the county may assume a proportion of
25the cost of the project as deemed appropriate, and may assume
26the maintenance cost of the project on lands under the control
27or jurisdiction of the county which will not be discharged by
28federal aid or grant.
29 Sec. 19. Section 161E.3, Code 2017, is amended to read as
30follows:
31161E.3 Cooperation.
32The counties, soil and water conservation districts,
33and subdistricts of soil and water conservation districts
34concerned, shall advise and consult with each other, upon the
35request of any of them or any affected landowners, and may
-21-1cooperate with each other or with other state subdivisions or
2instrumentalities, and affected landowners, as well as with the
3federal government or a department or agency of the federal
4government, or a financing entity or other local agency, to
5construct, operate, and maintain suitable projects for flood
6or soil erosion control, water resource restoration projects,
7watershed protection or improvement projects, flood prevention,
8water quality protection or improvement projects, or the
9conservation, development, utilization, and disposal of water
10on public roads or other public lands or other land granted
11county use.
12 Sec. 20. Section 161E.5, Code 2017, is amended to read as
13follows:
14161E.5 Maintenance cost.
15If construction of projects has been completed by the soil
16and water conservation district, subdistricts of soil and
17water conservation districts, political subdivisions of the
18state, or other local agencies, or the federal government, or a
19department or agency of the federal government, or a financing
20entity on private lands under the easement granted to the
21county, only the cost of maintenance may be assumed by the
22county.
23 Sec. 21. Section 161E.9, Code 2017, is amended to read as
24follows:
25161E.9 Tax levy.
26The county board of supervisors may annually levy a tax not
27to exceed six and three-fourths cents per thousand dollars of
28assessed value of all agricultural lands in the county, to
29be used for flood and soil erosion control, water resource
30restoration projects, watershed protection or improvement
31projects, flood prevention and water quality protection
32projects and operations within a county, including but not
33limited to projects or operations described in the Iowa
34nutrient reduction strategy as defined in section 16.201, and
35 including acquisition of land or interests in land, and repair,
-22-1alteration, maintenance, and operation of works of improvement
2on lands under the control or jurisdiction of the county as
3provided in this chapter, or to furnish financial assistance in
4connection with such projects and operations.
5 Sec. 22. Section 161E.10, Code 2017, is amended to read as
6follows:
7161E.10 Assumption of obligations.
8This chapter contemplates that actual direction of the
9project, or projects, and the actual work done in connection
10with them the projects, will be assumed by the soil and water
11conservation district, a subdistrict of a soil and water
12conservation district, or the federal government, and that the
13county or other state subdivisions or instrumentalities or
14financing entities jointly will meet the obligation required
15for federal cooperation and may make proper commitment for
16the care and maintenance of the project after its completion
17for the general welfare of the public and residents of the
18respective counties.
19 Sec. 23. Section 161F.1, Code 2017, is amended to read as
20follows:
21161F.1 Presumption of benefit — definitions.
221. The conservation of the soil resources of the state
23of Iowa, the improvement of water quality through projects,
24 the proper control of water resources of the state and the
25prevention of damage to property and lands through the control
26of floods, the drainage of surface waters or the protection of
27lands from overflow shall be presumed to be a public benefit
28and conducive to the public health, convenience and welfare and
29essential to the economic well-being of the state.
302. For purposes of this chapter, “financing entity” and
31“project” both mean the same as defined in section 16.201.
32 Sec. 24. Section 161F.2, Code 2017, is amended to read as
33follows:
34161F.2 Board of supervisors to establish districts — strip
35coal mining.
-23- 11. The board of supervisors of any county shall have
2jurisdiction, power and authority at any regular, special or
3adjourned session to establish, subject to the provisions
4of this chapter, districts having for their purpose soil
5conservation and the control of flood waters, or the
6improvement of water quality, and to cause to be constructed
7as hereinafter provided, such improvements, projects, and
8facilities as shall be deemed essential for the accomplishment
9of the purpose of soil conservation and flood control, or of
10water quality improvement.
112. Such The board of supervisors shall also have
12jurisdiction, power, and authority at any regular, special,
13 or adjourned session to establish, in the same manner that
14the districts hereinabove referred to in subsection 1
15 are established, districts having for their purpose soil
16conservation in mining areas within the county, and provide
17that anyone engaged in removing the surface soil over any
18bed or strata of coal in such district for the purpose of
19obtaining such coal shall replace the surface soil as nearly
20as practicable to its original position, and provide that,
21upon abandonment of such removal operation, all surface soil
22shall be so replaced. This section subsection shall apply only
23to surface soil so removed after July 4, 1949, and then only
24if it is essential for the accomplishment of the purpose of
25soil conservation and flood control within the purview of this
26chapter.
27 Sec. 25. Section 161F.3, Code 2017, is amended to read as
28follows:
29161F.3 Combination of functions.
30Such districts shall have the power to combine in their
31functions activities affecting soil conservation, flood control
32and drainage, water quality improvement, or any of these
33objects, singly or in combination with another district or
34financing entity under the provisions of an intergovernmental
35agreement pursuant to chapter 28E or 28F.
-24-1 Sec. 26. Section 161F.6, subsection 1, Code 2017, is amended
2to read as follows:
31. In the organization, operation, and financing of
4districts established under this chapter, the provisions of
5chapter 468 shall apply and any procedure provided under
6chapter 468 in connection with the organization, financing,
7and operation of any drainage district shall apply to the
8organization, financing, and operation of districts organized
9under this chapter. However, a district established under this
10chapter shall not be considered a drainage district established
11pursuant to chapter 468.
12 Sec. 27. Section 384.80, subsection 15, Code 2017, is
13amended to read as follows:
1415. “Water resource restoration project” means the
15acquisition of real property or improvements, a project as
16defined in section 16.201, or any other activity or undertaking
17that will assist in improving flood control, erosion control,
18or the quality of the water in the watershed where a city
19water, storm water, or wastewater utility is located.
20 Sec. 28. Section 384.84, subsection 2, Code 2017, is amended
21to read as follows:
222. The governing body of a city water or wastewater utility
23may enter into an agreement with a qualified entity to use
24proceeds from revenue bonds for a water resource restoration
25project if the rate imposed is no greater than if there was not
26a water resource restoration project agreement. For purposes
27of this subsection, “qualified entity” is an entity created
28pursuant to chapter 28E or chapter 28F or two entities that
29have entered into an agreement pursuant to chapter 28E or
30chapter 28F, whose purpose is to undertake a watershed project
31that has been approved for water quality improvements in the
32watershed.
33 Sec. 29. Section 422.7, subsection 2, Code 2017, is amended
34by adding the following new paragraph:
35 NEW PARAGRAPH. 0h. Iowa finance authority water quality
-25-1project financial assistance program bonds or notes pursuant to
2section 16.202, subsection 5.
3 Sec. 30. Section 423.3, Code 2017, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 103. a. The sales price from the sale or
6furnishing by a water utility of a water service in the state
7to consumers or users.
8b. For purposes of this subsection:
9(1) “Water service” means the delivery of water by piped
10distribution system.
11(2) “Water utility” means a public utility as defined in
12section 476.1 that furnishes water by piped distribution system
13to the public for compensation.
14 Sec. 31. NEW SECTION. 423G.1 Short title.
15This chapter may be cited as the “Water Service Tax Act”.
16 Sec. 32. NEW SECTION. 423G.2 Definitions.
171. All words and phrases used in this chapter and defined in
18section 423.1 have the same meaning given them by section 423.1
19for purposes of this chapter.
202. As used in this chapter, “water service” and “water
21utility” mean the same as defined in section 423.3, subsection
22103.
23 Sec. 33. NEW SECTION. 423G.3 Water service tax.
24An excise tax at the rate of six percent is imposed on the
25sales price from the sale or furnishing by a water utility of a
26water service in the state to consumers or users.
27 Sec. 34. NEW SECTION. 423G.4 Exemptions.
28The sales price from transactions exempt from state sales
29tax under section 423.3, except section 423.3, subsection 103,
30is also exempt from the tax imposed by this chapter.
31 Sec. 35. NEW SECTION. 423G.5 Administration by director.
321. The director of revenue shall administer the state
33water service tax as nearly as possible in conjunction with
34the administration of the state sales and use tax law, except
35that portion of the law that implements the streamlined sales
-26-1and use tax agreement. The director shall provide appropriate
2forms, or provide on the regular state tax forms, for reporting
3state water service tax liability.
42. The director may require all persons who are engaged
5in the business of deriving any sales price or purchase
6price subject to tax under this chapter to register with
7the department. The director may also require a tax permit
8applicable only to this chapter for any retailer not
9collecting, or any user not paying, taxes under chapter 423.
103. Section 422.25, subsection 4, sections 422.30, 422.67,
11and 422.68, section 422.69, subsection 1, sections 422.70,
12422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
131, and sections 423.23, 423.24, 423.25, 423.31 through
14423.35, 423.37 through 423.42, and 423.47, consistent with the
15provisions of this chapter, shall apply with respect to the tax
16authorized under this chapter in the same manner and with the
17same effect as if the excise taxes on the sale or furnishing of
18a water service were retail sales taxes within the meaning of
19those statutes. Notwithstanding this subsection, the director
20shall provide for quarterly filing of returns and for other
21than quarterly filing of returns both as prescribed in section
22423.31. All taxes collected under this chapter by a retailer
23or any user are deemed to be held in trust for the state of
24Iowa.
25 Sec. 36. NEW SECTION. 423G.6 Deposit of revenues.
261. All moneys received and all refunds shall be deposited in
27or withdrawn from the general fund of the state.
282. Subsequent to the deposit in the general fund of the
29state, the department shall transfer the following amounts of
30revenues collected to the water quality financial assistance
31fund created in section 16.198:
32a. For revenues collected on or after July 1, 2017, but
33before August 1, 2018, one-sixth of the revenues.
34b. For revenues collected on or after August 1, 2018, but
35before August 1, 2019, one-third of the revenues.
-27- 1c. For revenues collected on or after August 1, 2019, but
2before August 1, 2020, one-half of the revenues.
3d. For revenues collected on or after August 1, 2020, but
4before August 1, 2021, two-thirds of the revenues.
5e. For revenues collected on or after August 1, 2021, but
6before August 1, 2022, five-sixths of the revenues.
7f. For revenues collected on or after August 1, 2022, one
8hundred percent of the revenues.
9 Sec. 37. NEW SECTION. 423G.7 Future repeal.
10This chapter is repealed on the date on which all bonds,
11notes, or other debt instruments issued on or before June
1230, 2042, pursuant to section 16.202, are fully paid. The
13executive director of the Iowa finance authority shall notify
14the Iowa Code editor upon the occurrence of this condition.
15 Sec. 38. Section 455B.171, subsection 19, Code 2017, is
16amended to read as follows:
1719. “Point source” means any discernible, confined, and
18discrete conveyance, including but not limited to any pipe,
19ditch, channel, tunnel, conduit, well, discrete fissure,
20container, rolling stock, concentrated animal feeding
21operation, or vessel or other floating craft, from which
22pollutants are or may be discharged. “Point source” does not
23include agricultural storm water discharges and return flows
24from irrigated agriculture.
25 Sec. 39. Section 455B.176A, subsection 1, Code 2017, is
26amended by adding the following new paragraphs:
27 NEW PARAGRAPH. 0d. “Iowa nutrient reduction strategy” means
28the same as defined in section 16.201.
29 NEW PARAGRAPH. 00d. “Nutrient” means total nitrogen and
30total phosphorus.
31 Sec. 40. Section 455B.176A, subsection 5, Code 2017, is
32amended to read as follows:
335. a. The commission shall adopt rules designating water
34quality standards which shall be specific to each designated
35use adopted pursuant to subsection 4. The standards shall take
-28-1into account the different characteristics of each designated
2use and shall provide for only the appropriate level of
3protection based upon that particular use. The standards shall
4not be identical for each designated use unless required for
5the appropriate level of protection. The appropriate level of
6protection and standards shall be determined on a scientific
7basis.
8b. In the development process for the water quality
9standards, input shall be received from a water quality
10standards advisory committee convened by the department. The
11water quality standards advisory committee shall be comprised
12of experts in the scientific fields relating to water quality,
13such as environmental engineering, aquatic toxicology,
14fisheries biology, and other life sciences and experts in
15the development of the appropriate levels of aquatic life
16protection and standards. The water quality standards shall be
17reviewed and revised by the department as new scientific data
18becomes available to support revision.
19c. The department shall provide support to the department of
20agriculture and land stewardship in their efforts to implement
21their responsibilities under the Iowa nutrient reduction
22strategy.
23 Sec. 41. Section 466B.3, subsection 3, paragraph c, Code
242017, is amended to read as follows:
25c. Whether the funds, programs, and regulatory efforts
26coordinated by the council eventually result in a long-term
27improvement to the quality of surface water in Iowa. To
28evaluate the progress achieved over time toward the goals of
29the Iowa nutrient reduction strategy, as defined in section
30455B.176A, and the United States environmental protection
31agency gulf hypoxia action plan, the baseline condition shall
32be calculated for the time period from 1980 to 1996.
33 Sec. 42. Section 466B.42, Code 2017, is amended to read as
34follows:
35466B.42 Water quality initiative.
-29- 1The division shall establish a water quality initiative
2in order to assess and reduce nutrients in this state’s
3watersheds, including subwatersheds, and regional watersheds,
4and for implementing its responsibilities under the Iowa
5nutrient reduction strategy as defined in section 455B.176A.
6 The division shall establish and administer projects to
7reduce nutrients in surface waters from nonpoint sources in
8a scientific, reasonable, and cost-effective manner. The
9division shall utilize a pragmatic, strategic, and coordinated
10approach with the goal of accomplishing reductions over time.
11To evaluate the progress achieved over time toward the goals
12of the Iowa nutrient reduction strategy and the United States
13environmental protection agency gulf hypoxia action plan, the
14baseline condition shall be calculated for the time period from
151980 to 1996.
16 Sec. 43. NEW SECTION. 466B.43 Water quality agriculture
17infrastructure programs.
181. As part of the water quality initiative established
19pursuant to section 466B.42, the division shall administer
20water quality agriculture infrastructure programs created in
21this section.
222. a. The purpose of the programs is to support projects
23for the installation of infrastructure, including conservation
24structures, practices, or other measures that reduce
25contributing nutrient loads, associated sediment, or pollutants
26from point and nonpoint sources to surface waters. The
27programs shall be administered in a manner that is consistent
28with the Iowa nutrient reduction strategy, as defined in
29section 16.201.
30b. In making awards of financial assistance under the
31programs, the division shall attempt to complement the purposes
32of the water quality project financial assistance program
33under sections 16.201 through 16.206 and the water quality
34protection and wastewater treatment grant program under section
3516.140. Preference shall be given to landowners that are
-30-1part of a financing entity participating in the water quality
2project financial assistance program and to landowners that are
3participating in the water quality protection and wastewater
4treatment grant program. The division, the Iowa finance
5authority, landowners, and financing entities shall, when
6possible, coordinate financing between the programs created in
7this section, the water quality project financial assistance
8program, and the water quality protection and wastewater
9treatment grant program, in order to promote the most effective
10use of resources.
113. An edge-of-field infrastructure program is created.
12The program shall support projects located on agricultural
13land, which may include demonstration projects, that capture
14or filter nutrients entering into a surface water. The
15program’s projects shall be limited to infrastructure designed
16and installed for use over multiple years, including but not
17limited to wetlands, bioreactor systems, saturated buffers,
18edge-of-stream buffers, or land use changes. The program shall
19be financed on a cost-share basis.
204. An in-field infrastructure program is created. The
21program shall support projects located on agricultural land,
22which may include demonstration projects, that decrease erosion
23and precipitation-induced surface runoff, increase water
24infiltration rates, and increase soil sustainability. The
25program’s projects shall be limited to infrastructure designed
26and installed for use over multiple years, including but not
27limited to structures, terraces, and waterways located on
28cropland or pastureland, and including but not limited to soil
29conservation or erosion control structures, managed drainage
30systems, or edge-of-stream buffers. The program shall be
31financed on a cost-share basis.
325. Any state moneys used to finance a project under
33a water quality agriculture infrastructure program shall
34be administered according to an agreement entered into by
35the division and either the owner of the land where the
-31-1infrastructure is to be installed or a financing entity
2participating in the water quality project financial assistance
3program under sections 16.201 through 16.206. The agreement
4shall include standard terms and conditions for the receipt of
5program moneys and any other terms and conditions the division
6deems necessary or convenient for the efficient administration
7of the project or program. The division may support multiple
8installations of infrastructure on a single parcel of land.
9The division may also combine programs if cost effective.
10The division may annually use an amount of not more than
11four percent of the moneys used to support each program for
12administrative purposes.
136. By October 1, 2018, and each October 1, thereafter, the
14division shall submit a report to the governor and the general
15assembly itemizing expenditures, by hydrologic unit code 8
16watershed, under the programs during the previous fiscal year.
177. Any information obtained by the division identifying
18a person holding a legal interest in agricultural land or
19specific agricultural land shall be a confidential record under
20section 22.7.
21 Sec. 44. LEGISLATIVE INTENT. It is the intent of the
22general assembly that the amendment in this Act to the
23definition of “point source” in section 455B.171, subsection
2419, is a conforming amendment consistent with current state
25and federal law, and that the amendment does not change the
26application of current law but instead reflects current law
27both before and after the enactment of this Act.
28 Sec. 45. RETROACTIVE APPLICABILITY. The following
29provision or provisions of this Act apply retroactively to
30January 1, 2017, for tax years beginning on or after that date:
311. The section of this Act enacting section 422.7,
32subsection 2, paragraph “0h”.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-32- 1This bill relates to water quality by establishing new water
2quality programs, providing for appropriations from the rebuild
3Iowa infrastructure fund and making other appropriations and
4changes related to water quality, and creating a state water
5service excise tax and a related sales tax exemption.
6REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATIONS FOR WATER
7QUALITY AGRICULTURE INFRASTRUCTURE PROGRAMS.
8RIIF appropriations — The bill provides for a total of
9$232 million of appropriations over 13 fiscal years from the
10rebuild Iowa infrastructure fund in Code section 8.57 to a
11water quality infrastructure fund created in the bill (Code
12section 8.57B) to be used by the division of soil conservation
13and water quality of the department of agriculture and land
14stewardship (soil and water division) in administering two new
15water quality agriculture infrastructure programs, described
16below. The appropriations shall be as follows: $5 million for
17fiscal year 2017-2018; $6.5 million for fiscal year 2018-2019;
18$11.5 million for fiscal year 2019-2020; $16.5 million per
19fiscal year for the two-year fiscal period beginning July 1,
202020, and ending June 30, 2022; and $22 million per fiscal year
21for the eight-year fiscal period beginning July 1, 2022, and
22ending June 30, 2030. The water quality infrastructure fund
23is repealed on the date that all moneys transferred to the
24fund from the rebuild Iowa infrastructure fund as provided in
25the bill, including any interest or earnings on such moneys
26credited to the fund, are expended by the soil and water
27division, and the balance of the fund is zero.
28Water quality agriculture infrastructure programs — As
29part of the existing water quality initiative of the soil and
30water division in Code section 466B.42, the bill establishes
31two water quality agriculture infrastructure programs (Code
32section 466B.43), consisting of an edge-of-field infrastructure
33program and an in-field infrastructure program, that will
34provide financing on a cost-share basis to certain agriculture
35infrastructure projects, including demonstration projects.
-33-1The edge-of-field program will support projects that capture
2or filter nutrients entering into surface water. The bill
3includes wetlands, bioreactor systems, saturated buffers,
4edge-of-field buffers, and land use changes as examples
5of projects that may qualify. The in-field infrastructure
6program will support projects that decrease erosion and
7precipitation-induced surface runoff, increase water
8infiltration rates, and increase soil sustainability. The bill
9includes structures, terraces, waterways located on cropland
10or pastureland, and soil conservation or erosion control
11structures or managed drainage systems, and edge-of-field
12buffers as examples of projects that may qualify.
13The bill provides for the purpose of the programs and
14requires that the programs be administered in a manner that
15is consistent with the Iowa nutrient reduction strategy, as
16defined in the bill. Both programs are to be administered
17in a way that coordinates with, and attempts to complement
18the purposes of, the water quality project financial
19assistance program and the water quality protection and
20wastewater treatment grant program created in the bill
21and described below, and preference is to be given to
22landowners participating in those programs. Both water
23quality agriculture infrastructure programs require that
24projects be located on agricultural land and limit projects to
25infrastructure designed and installed for use over multiple
26years. The bill requires that the soil and water division
27and either landowners or financing entities participating in
28the water quality protection financial assistance program,
29described below, enter into agreements for financing projects
30under the programs, provides that the soil and water division
31may support multiple installations of infrastructure on a
32single parcel of land, and provides that the two programs
33may be combined by the soil and water division if it is cost
34effective to do so. The soil and water division is allowed
35to annually use up to 4 percent of the programs’ moneys for
-34-1administrative purposes. Beginning in 2018, the soil and
2water division is required to submit a report by October 1 of
3each year to the general assembly and the governor detailing
4expenditures for the previous fiscal year under the programs
5by hydrologic unit code 8 watershed. The bill provides that
6certain information related to agricultural land and obtained
7by the soil and water division under the programs shall be
8considered a confidential record under Code section 22.7.
9WATER SERVICE EXCISE TAX FOR CERTAIN WATER QUALITY PROGRAMS.
10Water service excise tax and related sales tax exemption —
11The bill exempts from the state sales tax the sales price from
12the sale or furnishing by a water utility of a water service in
13the state to consumers or users. “Water service” and “water
14utility” are defined in the bill.
15By operation of Code section 423.6, an item exempt from the
16imposition of the sales tax is also exempt from the use tax
17imposed in Code section 423.5.
18The bill creates a state excise tax at the rate of 6 percent
19on the sales price from the sale or furnishing by a water
20utility of a water service in the state to consumers or users
21(Code chapter 423G). The director of revenue is required
22to administer the water service tax as nearly as possible
23in conjunction with the administration of the state sales
24and use tax laws, and, to that end, the bill incorporates by
25reference numerous Code sections that relate to general tax
26administration and the sales and use tax laws.
27State water service tax revenues are deposited in the
28general fund of the state. The bill requires an increasing
29portion of the state water service tax revenues collected each
30year to be transferred to a water quality financial assistance
31fund created in the bill (Code section 16.198) to support
32various water quality programs, described below. Transfers to
33the water quality financial assistance fund equal one-sixth of
34the water service tax revenues collected on or after July 1,
352017, but before August 1, 2018, and increases to one-third,
-35-1one-half, two-thirds, and five-sixths over the next four years.
2All water service tax revenues collected on or after August
31, 2022, will be transferred to the water quality financial
4assistance fund.
5The state and local water service tax is repealed on the date
6on which all bonds, notes, or other debt instruments issued by
7the Iowa finance authority (IFA) on or before June 30, 2042,
8under the water quality project financial assistance program,
9described below, are fully paid.
10Water service tax revenues transferred to the water quality
11financial assistance fund are then appropriated from the
12fund as follows: one-sixth of the moneys in the fund is
13appropriated to IFA to support the water quality protection and
14wastewater treatment grant program created in the bill (Code
15section 16.140), and five-sixths of the moneys in the fund
16is appropriated to IFA to support the water quality project
17financial assistance program created in the bill (Code sections
1816.201 through 16.206).
19Water quality protection and wastewater treatment grant
20program (Code section 16.140) — This program, administered by
21IFA, provides financial assistance in the form of grants to
22municipalities and eligible entities for projects or activities
23that enhance water quality, upgrade water and wastewater
24infrastructure, or implement the nutrient reduction strategy.
25“Municipality”, “eligible entity”, and other related terms are
26defined in the bill. The bill describes the types of projects
27or activities that qualify for grants under the program.
28The program gives priority in awarding grants to projects
29or activities that provide improvement to water quality in
30the relevant watershed, and that also have private financing
31or certain other state or federal financing as described in
32the bill. Grants shall not exceed $500,000 per recipient.
33The program requires IFA to submit a report by October 1 of
34each year to the governor and the general assembly detailing
35expenditures for the previous year under the program, and
-36-1creates a program review committee consisting of eight members,
2as provided in the bill, to review the effectiveness of the
3program every 10 years, beginning in 2027.
4Water quality project financial assistance program (Code
5sections 16.201 through 16.206) — This program provides
6financial assistance to eligible entities that engage in a
7project designed to improve water quality or water resource
8management for the purpose of enhancing the quality of surface
9water and groundwater. “Eligible entity”, “project”, and
10other related terms are defined in the bill. The program
11is administered by IFA in cooperation with the department of
12natural resources (DNR) and the department of agriculture
13and land stewardship (IDALS). The program allows IFA to
14provide financial assistance in the form it deems most
15convenient, including loans, forgivable loans, and grants,
16but requires that the program be a permanent source of water
17quality financial assistance. The program allows financing
18entities, as defined in the bill, to apply to IFA for financial
19assistance and submit project plans that substantially improve
20water quality in the local area or watershed, and provides
21certain application requirements. Preference under the program
22shall be given to projects that will have the greatest impact
23on achieving the goals set forth in the nutrient reduction
24strategy, and plans designed to achieve those goals shall be
25presumed to improve water quality. Also, plans that include a
26nutrient reduction exchange, as defined in the bill, between
27two or more members of the eligible entity will be presumed to
28substantially improve water quality.
29Preference under the program is to be given to eligible
30entities that have project plans evaluated by the Iowa nutrient
31research center (Code section 466B.47), and to eligible
32entities that contract with the Iowa nutrient research center
33to verify the amount of nutrient reduction achieved by the
34project upon project completion.
35The bill creates a three-member committee to review project
-37-1plans, review and score applications, and make financial
2assistance awards. The executive director of IFA, the director
3of DNR, and the secretary of agriculture each appoint one
4member to the committee. Eligible entities receiving financial
5assistance awards are required to enter into agreements with
6IFA, and IFA determines the terms of any loan and may charge
7fees and costs necessary for the continued operation of the
8program. The bill requires IFA to adopt rules relating to
9the proportional liability, if any, of members of an eligible
10entity that enter into a loan agreement under the program.
11The bill creates a water quality project financial
12assistance fund administered by IFA to provide financial
13assistance under the program. The bill allows IFA to establish
14and maintain other funds and accounts necessary to carry out
15the purposes of the program.
16The bill allows IFA to issue until June 30, 2042, bonds and
17notes for the purpose of funding the program, and the bill
18provides several requirements for the issuance of such bonds
19and notes, for loan or purchase agreements with bondholders
20or noteholders, for the pledging of certain funds toward the
21repayment of the bonds and notes, and for the establishment of
22reserve funds to secure the bonds and notes. The bill also
23includes other provisions related to the notes and bonds,
24including that such bonds and notes are exempt from taxation
25by the state.
26MISCELLANEOUS PROVISIONS. The bill amends the powers of
27a soil and water conservation district under chapter 161A to
28include the completion of certain projects as described in the
29bill, and to allow a district to apply for financial assistance
30under the water quality project financial assistance program.
31The bill amends provisions in Code chapter 161C governing
32the water protection projects and practices of a soil and water
33conservation district by adding to the types of projects the
34district may engage in and the type of entities the district
35may work with to complete such projects.
-38- 1The bill amends various provisions of Code chapter 161E
2(flood and erosion control) to add to the types of projects a
3county may engage in or offer financial assistance for under
4that Code chapter, or to levy a property tax for under that
5Code chapter, and to add to the types of entities the county
6may work with to complete projects.
7The bill amends provisions in Code chapter 161F (soil
8conservation and flood control districts) to add to the
9types of projects a soil conservation and flood control
10district established by a county may engage in under that Code
11chapter, and the types of entities a district may work with
12to complete such projects. The bill also specifies that a
13district established pursuant to Code chapter 161F shall not
14be considered a drainage district established pursuant to Code
15chapter 468.
16The bill adds to the types of projects that a public agency
17may complete through joint financing with another public agency
18under Code chapter 28F (joint financing of public works and
19facilities), and further specifies that the powers enumerated
20in Code section 28F.1 shall not be construed or interpreted to
21create or expand the authority to acquire real property through
22the use of eminent domain.
23The bill amends provisions governing certain projects
24completed and financed by a city under Code chapter 384 (city
25finance). The bill adds to the types of projects specified
26that meet the definition of a “water resource restoration
27project”, which is a type of project a city may engage in
28and issue revenue bonds or pledge orders for. The bill also
29amends the definition of “qualified entity” to include entities
30created under Code chapter 28F (joint financing of public
31works and facilities). Under current law, a city may enter
32into agreements with a qualified entity relating to the use of
33revenue bond proceeds for a water resource restoration project.
34The bill amends the definition of “point source” in Code
35section 455B.171, which contains definitions for terms used in
-39-1provisions of the Code that concern the jurisdiction of DNR
2related to water quality, to exclude agricultural storm water
3discharges and return flows from irrigated agriculture. The
4bill provides that it is the legislative intent of the general
5assembly that this amendment to the definition of “point
6source” is a conforming amendment consistent with current state
7and federal law, and that the amendment does not change the
8application of current law but instead reflects current law
9both before and after the enactment of the bill.
10The bill amends Code section 455B.176A, relating to water
11quality standards created by DNR and the environmental
12protection commission, to define “Iowa nutrient reduction
13strategy” and “nutrient”, and to provide that DNR shall provide
14support to IDALS in efforts to implement the Iowa nutrient
15reduction strategy.
16The bill amends Code section 466B.3, relating to the water
17resources coordinating council, to provide that when the
18council is measuring the success of its efforts, 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.
23The bill amends Code section 466B.42, relating to the water
24quality initiative of the soil and water division, to provide
25that the goal of the water quality initiative is to implement
26the soil and water division’s responsibilities under the Iowa
27nutrient reduction strategy, and to provide that progress under
28the Iowa nutrient reduction strategy and the United States
29environmental protection agency gulf hypoxia action plan shall
30be evaluated using a baseline condition calculated for the time
31period between 1980 and 1996.
32Finally, the bill adds the IFA water quality project
33financial assistance program bonds and notes authorized in
34the bill under new Code section 16.202 to the list of bonds
35and notes the income from which is exempt from the individual
-40-1income tax under Code section 422.7 (computation of net
2income). This provision of the bill applies retroactively to
3January 1, 2017, for tax years beginning on or after that date.
-41-mm/sc/rj
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 or operational
16improvements to reduce 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
12for providing potable water to residents served by a water
13system, including the acquisition of real property needed
14for such purposes, and such other purposes and programs as
15may be authorized under the Safe Drinking Water Act. “Water
16infrastructure improvement” does not include the acquisition of
17real property through the use of eminent domain.
182. The Iowa finance authority shall establish and
19administer a water quality protection and wastewater treatment
20grant program for the purpose of providing financial assistance
21in the form of grants to enhance water quality, upgrade water
22and wastewater infrastructure, and to implement the Iowa
23nutrient reduction strategy. The program shall be administered
24in accordance with rules adopted by the authority pursuant to
25chapter 17A.
263. a. A water quality protection and wastewater treatment
27grant fund is created in the state treasury and shall consist
28of appropriations made to the fund, transfers of interest,
29earnings, moneys from other funds as provided by law, and
30moneys accepted by the authority for deposit in the fund
31from other public or private sources. Moneys credited
32or transferred to the fund pursuant to section 16.198 are
33appropriated to the authority for purposes of the program.
34Moneys in the fund shall be used exclusively for purposes of
35the program.
-4- 1b. Notwithstanding section 8.33, moneys in the fund
2that remain unencumbered or unobligated at the close of a
3fiscal year shall not revert but shall remain available for
4expenditure for the purposes designated. Notwithstanding
5section 12C.7, subsection 2, interest or earnings on moneys in
6the fund shall be credited to the fund.
74. Grants may be awarded under the program for any of the
8following:
9a. To a municipality or an eligible entity participating in
10a nutrient reduction exchange, for the purpose of purchasing
11nutrient reduction credits or for implementing water quality
12practices as described in the Iowa nutrient reduction strategy.
13For purposes of this paragraph, “nutrient reduction credit” and
14“nutrient reduction exchange” both mean the same as defined in
15section 16.206, section 1, paragraph “d”.
16b. To a municipality or an eligible entity for up to fifty
17percent of the costs associated with conducting economic and
18technical feasibility studies or developing implementation
19plans and reports required by the Iowa nutrient reduction
20strategy.
21c. To a municipality for a source water protection project.
22d. To a municipality or an eligible entity for water
23infrastructure improvements or for wastewater infrastructure
24improvements.
255. Priority for grants shall be given to projects or
26activities that will provide improvement to water quality in
27the relevant watershed.
286. Priority for grants shall be given to projects or
29activities that also have private financing, or financing
30pursuant to section 16.131 under the water pollution control
31works and drinking water facilities financing program created
32pursuant to section 455B.294, or other federal or state
33financing.
347. Priority for grants shall be given to projects or
35activities that are part of a project receiving financing under
-5-1the water quality project financial assistance program under
2sections 16.201 through 16.206.
38. Grants awarded under the program shall not exceed five
4hundred thousand dollars per recipient.
59. By October 1 of each year, the authority shall submit
6a report to the governor and the general assembly itemizing
7expenditures under the program during the previous fiscal year.
810. a. Beginning September 1, 2027, and every ten years
9thereafter, a program review committee is established for
10purposes of reviewing the program. By December 1 of the
11same year, the review committee shall file a report with
12the governor and the general assembly that reviews the
13effectiveness of the program during the previous ten fiscal
14years.
15b. The program review committee shall consist of the
16following members:
17(1) The governor or the governor’s designee.
18(2) The secretary of agriculture or the secretary’s
19designee.
20(3) The executive director of the authority or the executive
21director’s designee.
22(4) The director of the department of natural resources or
23the director’s designee.
24(5) Four members of the general assembly, with two from the
25senate and two from the house of representatives and not more
26than one member from each chamber being from the same political
27party. The two senators shall be designated one member each
28by the president of the senate, after consultation with the
29majority leader of the senate, and by the minority leader of
30the senate. The two representatives shall be designated one
31member each by the speaker of the house of representatives,
32after consultation with the majority leader of the house of
33representatives, and by the minority leader of the house of
34representatives.
35c. Staffing services shall be provided by the authority.
-6-1 Sec. 4. NEW SECTION. 16.198 Water quality financial
2assistance fund.
31. A water quality financial assistance fund is created in
4the state treasury.
52. The fund shall consist of all of the following:
6a. (1) Moneys transferred to the fund pursuant to section
7423G.6.
8(2) This paragraph “a” is repealed upon the date on which
9chapter 423G is repealed pursuant to section 423G.7.
10b. Appropriations made to the fund and transfers of
11interest, earnings, and moneys from other funds as provided by
12law.
133. For each fiscal year in the period beginning July 1,
142017, and ending when chapter 423G is repealed pursuant to
15section 423G.7, there is appropriated the following amounts of
16the balance of the fund for the following purposes:
17a. One-sixth of the balance of the fund to the Iowa finance
18authority to be credited to the water quality protection and
19wastewater treatment grant fund created pursuant to section
2016.140, subsection 3.
21b. Five-sixths of the balance of the fund to the Iowa
22finance authority to be credited to the water quality project
23financial assistance fund created pursuant to section 16.204.
244. Moneys in the fund are not subject to section 8.33.
25Notwithstanding section 12C.7, subsection 2, interest or
26earnings on moneys in the fund shall be credited to the fund.
27 Sec. 5. NEW SECTION. 16.201 Definitions.
28As used in this part, unless the context otherwise requires:
291. “Committee” means the water quality project financing
30committee created in section 16.205, subsection 4.
312. “Eligible entity” means a financing entity meeting the
32requirements of section 16.206, as determined by the committee.
333. “Financing entity” means two or more persons that have
34entered into an agreement for purposes of joint financing of a
35project under the program. A financing entity may include but
-7-1is not limited to a governmental body such as a state agency or
2a political subdivision of the state, a city or a city utility,
3a public utility as defined in section 476.1 that furnishes
4drinking water, sanitary sewage, or storm water services to the
5public for compensation, a county, a rural water district or
6association, a soil and water conservation district, a sanitary
7district, a subdistrict of any of the foregoing districts, a
8governmental body or corporation empowered to provide sewage
9collection and treatment services or drinking water, an entity
10jointly exercising governmental powers pursuant to chapter 28E
11or 28F, or any other combination of two or more public agencies
12or private agencies as defined in section 28E.2, acting jointly
13under Iowa law in connection with a project.
144. “Iowa nutrient reduction strategy” means a water
15quality initiative developed and updated by the department of
16agriculture and land stewardship, the department of natural
17resources, and the college of agriculture and life sciences at
18Iowa state university of science and technology in order to
19assess and reduce nutrients in this state’s watersheds that
20utilizes a pragmatic, strategic, and coordinated approach with
21the goal of accomplishing reductions over time.
225. “Loan recipient” means an eligible entity that has
23received a loan under the program.
246. “Program” means the water quality project financial
25assistance program created in this part.
267. “Project” means any combination of works, facilities,
27improvements, structures, developments, tasks, activities,
28constructions, modifications, operations, or practices designed
29to improve water quality or water resource management that are
30proposed by an eligible entity and approved by the committee.
31“Project” includes but is not limited to the following:
32a. A project meeting the requirements of part 2 of this
33subchapter.
34b. A project, operation, or practice undertaken or carried
35out pursuant to chapter 161A, 161C, 161E, or 161F.
-8- 1c. A project meeting the requirements of a sponsor project
2under section 455B.199.
3d. Other water resource restoration projects as defined in
4section 384.80, including ones financed pursuant to section
528F.1.
6e. An agricultural nonpoint source project eligible for a
7water quality agriculture infrastructure program under section
8466B.43.
98. “Revolving fund” means the fund created in section
1016.204.
11 Sec. 6. NEW SECTION. 16.202 Water quality project financial
12assistance program — funding — bonds and notes.
131. The authority shall cooperate with the department of
14natural resources and the department of agriculture and land
15stewardship in the creation, administration, and financing of
16the program established in this part.
172. The authority may issue its bonds and notes until June
1830, 2042, for the purposes of this part, including for the
19purposes of funding the program established under section
2016.205 and of funding any fund or account created under section
2116.204.
223. The authority may enter into one or more loan agreements
23or purchase agreements with one or more bondholders or
24noteholders containing the terms and conditions of the
25repayment of and the security for the bonds or notes. The
26authority and the bondholders or noteholders or a trustee
27agent designated by the authority may enter into agreements to
28provide for any of the following:
29a. That the proceeds of the bonds and notes and the
30investments of the proceeds may be received, held, and
31disbursed by the authority or by a trustee or agent designated
32by the authority.
33b. That the bondholders or noteholders or a trustee or
34agent designated by the authority may collect, invest, and
35apply the amount payable under the loan agreements or any
-9-1other instruments securing the debt obligations under the loan
2agreements.
3c. That the bondholders or noteholders may enforce the
4remedies provided in the loan agreements or other instruments
5on their own behalf without the appointment or designation of a
6trustee. If there is a default in the principal of or interest
7on the bonds or notes or in the performance of any agreement
8contained in the loan agreements or other instruments, the
9payment or performance may be enforced in accordance with the
10loan agreement or other instrument.
11d. Other terms and conditions as deemed necessary or
12appropriate by the authority.
134. The powers granted the authority under this section
14are in addition to other powers contained in this chapter.
15All other provisions of this chapter, except section 16.28,
16subsection 4, apply to bonds or notes issued and powers granted
17to the authority under this section except to the extent they
18are inconsistent with this section.
195. All bonds or notes issued by the authority in connection
20with the program are exempt from taxation by this state and the
21interest on the bonds or notes is exempt from state income tax.
22 Sec. 7. NEW SECTION. 16.203 Security — reserve funds —
23pledges — nonliability — irrevocable contracts.
241. The authority may provide in the resolution, trust
25agreement, or other instrument authorizing the issuance of its
26bonds or notes pursuant to section 16.202 that the principal
27of, premium, and interest on the bonds or notes are payable
28from any of the following and may pledge the same to its bonds
29and notes:
30a. The income and receipts or other moneys derived from the
31projects financed with the proceeds of the bonds or notes.
32b. The income and receipts or other moneys derived from
33designated projects whether or not the projects are financed in
34whole or in part with the proceeds of the bonds or notes.
35c. The amounts on deposit in the revolving fund.
-10- 1d. The amounts payable to the authority by eligible entities
2pursuant to loan agreements with eligible entities.
3e. Any other funds or accounts established by the authority
4in connection with the program or the sale and issuance of its
5bonds or notes.
62. The authority may establish reserve funds to secure
7one or more issues of its bonds or notes. The authority may
8deposit in a reserve fund established under this subsection the
9proceeds of the sale of its bonds or notes and other moneys
10that are made available from any other source.
113. It is the intention of the general assembly that a pledge
12made in respect of bonds or notes issued under this part shall
13be valid and binding from the time the pledge is made, that the
14moneys or property so pledged and received after the pledge
15by the authority shall immediately be subject to the lien of
16the pledge without physical delivery or further act, and that
17the lien of the pledge shall be valid and binding as against
18all parties having claims of any kind in tort, contract, or
19otherwise against the authority whether or not the parties have
20notice of the lien. Neither the resolution, trust agreement,
21nor any other instrument by which a pledge is created needs to
22be recorded or filed under the Iowa uniform commercial code,
23chapter 554, to be valid, binding, or effective against the
24parties.
254. Neither the members of the authority nor persons
26executing the bonds or notes are liable personally on the bonds
27or notes or are subject to personal liability or accountability
28by reason of the issuance of the bonds or notes.
295. The bonds or notes issued by the authority are not
30an indebtedness or other liability of the state or of a
31political subdivision of the state within the meaning of
32any constitutional or statutory debt limitations but are
33special obligations of the authority, and are payable solely
34from the income and receipts or other funds or property of
35the authority, and the amounts on deposit in the revolving
-11-1fund, and the amounts payable to the authority under its loan
2agreements with eligible entities to the extent that the
3amounts are designated in the resolution, trust agreement, or
4other instrument of the authority authorizing the issuance of
5the bonds or notes as being available as security for such
6bonds or notes. The authority shall not pledge the faith or
7credit of the state or of a political subdivision of the state
8to the payment of any bonds or notes. The issuance of any bonds
9or notes by the authority does not directly, indirectly, or
10contingently obligate the state or a political subdivision of
11the state to apply moneys from, or levy or pledge any form of
12taxation whatever to, the payment of the bonds or notes.
136. It is the intent of the general assembly, and the state
14hereby pledges to the holders of bonds or notes issued under
15this part, that the state will not limit or alter the rights
16and powers vested in the authority to fulfill the terms of a
17contract made by the authority with respect to the bonds or
18notes, or in any way impair the rights and remedies of the
19holders until the bonds or notes, together with the interest on
20the bonds or notes, including interest on unpaid installments
21of interest, and all costs and expenses in connection with an
22action or proceeding by or on behalf of the holders, are fully
23met and discharged. The authority is authorized to include
24this pledge and agreement of the state, as it refers to holders
25of bonds or notes of the authority, in a contract with the
26holders.
27 Sec. 8. NEW SECTION. 16.204 Water quality project financial
28assistance fund — other funds and accounts.
291. a. A water quality project financial assistance
30fund is created in the state treasury and shall consist of
31appropriations made to the fund, moneys credited or transferred
32to the fund pursuant to section 16.198, and transfers of
33interest, earnings, and moneys from other funds as provided
34by law. The fund shall be administered by the authority as a
35revolving fund.
-12- 1b. Moneys in the fund are not subject to section 8.33.
2Notwithstanding section 12C.7, subsection 2, interest or
3earnings on moneys in the fund shall be credited to the fund.
4c. The authority shall use the moneys in the fund to provide
5financial assistance to eligible entities under the program
6pursuant to section 16.205.
7d. The authority may use an amount of not more than one
8percent of the moneys in the fund for administrative purposes.
92. The authority may establish and maintain other funds
10and accounts determined to be necessary to carry out the
11purposes of the program and shall provide for the funding,
12administration, investment, restrictions, and disposition of
13the funds and accounts.
143. Moneys appropriated to and used by the authority for
15purposes of paying the costs and expenses associated with
16the administration of the program shall be administered as
17determined by the authority.
184. The funds or accounts held by the authority, or a trustee
19acting on behalf of the authority pursuant to a trust agreement
20related to the program, shall not be considered part of the
21general fund of the state, are not subject to appropriation for
22any other purpose by the general assembly, and in determining
23a general fund balance shall not be included in the general
24fund of the state, but shall remain in the funds and accounts
25maintained by the authority or trustee pursuant to a trust
26agreement. Funds and accounts held by the authority, or a
27trustee acting on behalf of the authority pursuant to a trust
28agreement related to the program, are separate dedicated funds
29and accounts under the administration and control of the
30authority and subject to section 16.31.
31 Sec. 9. NEW SECTION. 16.205 Water quality project financial
32assistance program — committee created — rules — use of funds.
331. The authority, in cooperation with the department of
34natural resources and the department of agriculture and land
35stewardship, shall establish and administer a water quality
-13-1project financial assistance program. The purpose of the
2program shall be to provide financial assistance to enhance
3the quality of surface water and groundwater, particularly
4by providing financial assistance for projects designed to
5improve water quality through collaboration between point
6and nonpoint sources. The authority may provide financial
7assistance in the form deemed most convenient for the efficient
8financing of projects, including loans, forgivable loans, and
9grants. However, the authority shall administer the fund and
10the program in such a manner as to provide a permanent source
11of water quality project financial assistance to eligible
12entities.
132. The program shall be administered by the authority
14in accordance with rules adopted by the authority pursuant
15to chapter 17A. In adopting such rules, the authority shall
16consult with the department of natural resources and the
17department of agriculture and land stewardship.
183. The authority shall process and review financial
19assistance applications and make recommendations to the
20committee.
214. a. A water quality project financing committee is
22created to consider applications for financial assistance from
23eligible entities and approve awards of financial assistance
24under the program. The committee shall consist of three
25members, one appointed by the executive director of the
26authority, one appointed by the director of the department
27of natural resources, and one appointed by the secretary of
28agriculture.
29b. The committee shall review project plans submitted
30pursuant to section 16.206, negotiate project details with
31eligible entities, and make financial assistance awards. The
32provision of financial assistance under the program shall take
33into account the number of persons comprising an eligible
34entity and the eligible entity’s financing capacity as well as
35the extent to which the proposed projects will improve water
-14-1quality.
2c. The committee shall score applications for financial
3assistance according to rules adopted pursuant to this part.
4The committee shall only provide financial assistance to
5eligible entities that have sufficient financing capacity and
6that propose a plan likely to make progress toward achieving
7the goals for agricultural and nonpoint sources described in
8the Iowa nutrient reduction strategy.
95. The authority shall determine the interest rate
10and repayment terms for loans made under the program, in
11cooperation with the department of natural resources and
12the department of agriculture and land stewardship, and the
13authority shall enter into loan agreements with eligible
14entities in compliance with and subject to the terms and
15conditions of the program.
166. The authority shall adopt rules relating to the
17proportional liability, if any, of members of an eligible
18entity when such eligible entity enters into a loan agreement
19under the program.
207. The authority may charge loan recipients fees and assess
21costs against such recipients necessary for the continued
22operation of the program. Such fees and costs shall not exceed
23the costs directly associated with the administration of the
24program. Fees and costs collected pursuant to this subsection
25shall be deposited in the appropriate fund or account created
26in section 16.204.
278. Financial assistance under the program shall be used by
28eligible entities to fund projects designed to improve water
29quality.
30 Sec. 10. NEW SECTION. 16.206 Eligible entities — project
31plans — agreements required.
321. A financing entity may apply to the authority for
33financial assistance under the program. To be eligible, a
34financing entity shall meet the following requirements:
35a. The financing entity shall include two or more entities
-15-1acting jointly to propose a project plan designed to improve
2water quality in a local area or watershed.
3b. The plan shall include one or more projects that
4substantially improve water quality in the local area or
5watershed. Preference shall be given to projects that will
6have the greatest impact on achieving the goals of the Iowa
7nutrient reduction strategy, and plans designed to achieve
8those goals shall be presumed to substantially improve water
9quality in the local area or watershed.
10c. The plan shall describe in detail the manner in which
11the projects will be financed and undertaken, including the
12sources of financing for the projects as well as the public or
13private entities that will be receiving the revenues and how
14such revenues will be spent on the projects. In describing the
15projects and financing, the plan should attempt to quantify
16the amount of nutrient reduction to be achieved under the
17plan and should provide a reasonable means for verification
18of the amount of nutrient reduction after the projects have
19been financed and completed. Preference shall be given to
20a financing entity that has had its plan evaluated by the
21Iowa nutrient research center established in section 466B.47.
22Preference shall also be given to a financing entity that has
23contracted with the Iowa nutrient research center to verify
24the amount of nutrient reduction achieved by the project upon
25project completion.
26d. (1) The plan may include a nutrient reduction exchange
27between two or more members of the financing entity. A plan
28that includes a nutrient reduction exchange shall be presumed
29to substantially improve water quality in the local area or
30watershed.
31(2) For purposes of this paragraph:
32(a) “Nutrient reduction” means a reduction in nitrogen or
33phosphorus as measured against standards or goals established
34or adopted by the committee.
35(b) “Nutrient reduction credit” means an amount of nutrient
-16-1reduction expressed as a unit of measurement that is calculated
2using research-based modeling or other methods established or
3adopted by the committee.
4(c) “Nutrient reduction exchange” means an agreement between
5one or more point source or nonpoint source contributors
6and one or more other parties whereby nutrient reduction
7credits are purchased, sold, traded, or exchanged for legal
8consideration through a trading system approved by the
9department of natural resources.
102. Any eligible entity receiving financial assistance under
11the program shall enter into an agreement with the authority.
12The agreement shall include standard terms for the receipt of
13program funds and any other terms the authority deems necessary
14and convenient for the efficient administration of the program.
15 Sec. 11. Section 28F.1, subsection 1, Code 2017, is amended
16to read as follows:
171. This chapter provides a means for the joint financing
18by public agencies of works or facilities useful and necessary
19for the collection, treatment, purification, and disposal
20in a sanitary manner of liquid and solid waste, sewage, and
21industrial waste, facilities used for the conversion of solid
22waste to energy, facilities, improvements, or projects in a
23watershed useful for flood control, erosion control, or water
24quality restoration by a water utility, wastewater utility,
25or storm water utility, whether located within or without the
26corporate boundaries of a municipal corporation, and also
27electric power facilities constructed within the state of
28Iowa, except that hydroelectric power facilities may also be
29located in the waters and on the dams of or on land adjacent
30to either side of the Mississippi or Missouri river bordering
31the state of Iowa, water supply systems, swimming pools
32or golf courses. This chapter applies to the acquisition,
33construction, reconstruction, ownership, operation, repair,
34extension, or improvement of such works or facilities, by a
35separate administrative or legal entity created pursuant to
-17-1chapter 28E or chapter 389. When the legal entity created
2under this chapter is comprised solely of cities, counties,
3and sanitary districts established under chapter 358, or any
4combination thereof or any combination of the foregoing with
5other public agencies, the entity shall be both a corporation
6and a political subdivision with the name under which it was
7organized. The legal entity may sue and be sued, contract,
8acquire and hold real and personal property necessary for
9corporate purposes, adopt a corporate seal and alter the seal
10at pleasure, and execute all the powers conferred in this
11chapter. This section shall not be construed or interpreted to
12create or expand the authority to acquire real property through
13the use of eminent domain.
14 Sec. 12. Section 161A.7, subsection 1, paragraph d, Code
152017, is amended to read as follows:
16d. To cooperate, or enter into agreements with, and within
17the limits of appropriations duly made available to it by law,
18to furnish financial or other aid to any agency, governmental
19or otherwise, or any owner or occupier of lands within the
20district, in the carrying on of erosion-control and watershed
21protection and flood prevention operations, or in the carrying
22out of projects pursuant to paragraph “q”, within the district,
23subject to such conditions as the commissioners may deem
24necessary to advance the purposes of this chapter.
25 Sec. 13. Section 161A.7, subsection 1, Code 2017, is amended
26by adding the following new paragraphs:
27 NEW PARAGRAPH. p. To apply for financial assistance under
28the water quality project financial assistance program under
29sections 16.201 through 16.206.
30 NEW PARAGRAPH. q. To carry out soil erosion control,
31watershed protection or improvement, flood prevention, and
32water quality protection projects and operations within the
33district, including but not limited to projects and operations
34to support water protection practices, to protect this
35state’s groundwater and surface water from point and nonpoint
-18-1sources of pollution, including but not limited to pollution
2by agricultural drainage wells, sinkholes, sedimentation,
3or chemical pollutants, to reduce or remove nutrients and
4pollution in or from surface water and groundwater, to reduce
5or eliminate nutrient loads to surface water and groundwater
6from both point and nonpoint sources, to maintain, protect,
7and improve the quality of surface water and groundwater, and
8to achieve or further any of the goals and targets described
9in the Iowa nutrient reduction strategy as defined in section
1016.201.
11 Sec. 14. Section 161C.1, Code 2017, is amended by adding the
12following new subsection:
13 NEW SUBSECTION. 4A. “Financing entity” means the same as
14defined in section 16.201.
15 Sec. 15. Section 161C.2, subsection 1, paragraph a, Code
162017, is amended to read as follows:
17a. Each soil and water conservation district, alone and
18whenever practical in conjunction with other districts, shall
19 financing entities, or political subdivisions of the state,
20or other local agencies, may carry out district-wide and
21multiple-district projects to support soil erosion control,
22water resource restoration projects, watershed protection,
23flood prevention, and water quality protection practices,
24projects, and operations in the district or districts,
25including but not limited to projects carried out in order to
26protect this state’s groundwater and surface water from point
27and nonpoint sources of contamination pollution, including but
28not limited to contamination pollution by agricultural drainage
29wells, sinkholes, sedimentation, or chemical pollutants, as
30described in the Iowa nutrient reduction strategy as defined
31in section 16.201.
32 Sec. 16. Section 161C.3, Code 2017, is amended to read as
33follows:
34161C.3 Cooperation with other agencies.
35Soil and water conservation districts may enter into
-19-1agreements with the United States, as provided by state law,
2or with the state of Iowa or any agency of the state, any
3other soil and water conservation district, or other political
4subdivision of this state, or any financing entity, or other
5local agency, for cooperation in preventing, controlling, or
6attempting to prevent or control contamination pollution of
7groundwater or surface water by point and nonpoint sources
8of pollution. Soil and water conservation districts may
9accept, as provided by state law, any money disbursed for water
10quality preservation purposes by the federal government or any
11agency of the federal government, and expend the money for the
12purposes for which it was received.
13 Sec. 17. Section 161E.1, Code 2017, is amended to read as
14follows:
15161E.1 Authority of board.
161. If a county, soil and water conservation district,
17subdistrict of a soil and water conservation district,
18financing entity, or political subdivision of the state, or
19other local agency engages or participates in or carries out
20 a project for flood or soil erosion control, a water resource
21restoration project, watershed protection or improvement
22project, flood prevention, water quality protection project or
23operation, including but not limited to a project or operation
24described in the Iowa nutrient reduction strategy as defined
25in section 16.201, within a county, or engages or participates
26in the conservation, development, utilization, and disposal
27of water, in cooperation with the federal government, or a
28department or agency of the federal government, in cooperation
29with other districts, subdistricts, financing entities,
30political subdivisions, or other local agencies, the counties
31in which the project is carried on may, through the board of
32supervisors or through an intergovernmental agreement under
33chapter 28E or chapter 28F, construct, operate, and maintain
34the project on lands under the control or jurisdiction of the
35county dedicated to county use, or furnish financial and other
-20-1assistance in connection with the projects or operations.
2Flood control, soil erosion control, watershed protection
3projects, flood prevention, water quality improvement projects,
4water resource restoration projects, and watershed improvement
5projects and operations, including but not limited to projects
6or operations described in the Iowa nutrient reduction strategy
7as defined in section 16.201, are presumed to be for the
8protection of the tax base of the county, for the protection of
9public roads and lands, and for the protection of the public
10health, sanitation, safety, and general welfare.
112. For purposes of this chapter, “financing entity” means
12the same as defined in section 16.201.
13 Sec. 18. Section 161E.2, Code 2017, is amended to read as
14follows:
15161E.2 Federal aid.
16A county may, in accordance with this chapter, accept
17federal funds for aid in a project for flood or soil erosion
18control, flood prevention, or the conservation, development,
19utilization, and disposal of water, and may cooperate with
20the federal government or a department or agency of the
21federal government, a soil and water conservation district,
22subdistrict of a soil and water conservation district,
23political subdivision of the state, or other local agency, or
24a financing entity, and the county may assume a proportion of
25the cost of the project as deemed appropriate, and may assume
26the maintenance cost of the project on lands under the control
27or jurisdiction of the county which will not be discharged by
28federal aid or grant.
29 Sec. 19. Section 161E.3, Code 2017, is amended to read as
30follows:
31161E.3 Cooperation.
32The counties, soil and water conservation districts,
33and subdistricts of soil and water conservation districts
34concerned, shall advise and consult with each other, upon the
35request of any of them or any affected landowners, and may
-21-1cooperate with each other or with other state subdivisions or
2instrumentalities, and affected landowners, as well as with the
3federal government or a department or agency of the federal
4government, or a financing entity or other local agency, to
5construct, operate, and maintain suitable projects for flood
6or soil erosion control, water resource restoration projects,
7watershed protection or improvement projects, flood prevention,
8water quality protection or improvement projects, or the
9conservation, development, utilization, and disposal of water
10on public roads or other public lands or other land granted
11county use.
12 Sec. 20. Section 161E.5, Code 2017, is amended to read as
13follows:
14161E.5 Maintenance cost.
15If construction of projects has been completed by the soil
16and water conservation district, subdistricts of soil and
17water conservation districts, political subdivisions of the
18state, or other local agencies, or the federal government, or a
19department or agency of the federal government, or a financing
20entity on private lands under the easement granted to the
21county, only the cost of maintenance may be assumed by the
22county.
23 Sec. 21. Section 161E.9, Code 2017, is amended to read as
24follows:
25161E.9 Tax levy.
26The county board of supervisors may annually levy a tax not
27to exceed six and three-fourths cents per thousand dollars of
28assessed value of all agricultural lands in the county, to
29be used for flood and soil erosion control, water resource
30restoration projects, watershed protection or improvement
31projects, flood prevention and water quality protection
32projects and operations within a county, including but not
33limited to projects or operations described in the Iowa
34nutrient reduction strategy as defined in section 16.201, and
35 including acquisition of land or interests in land, and repair,
-22-1alteration, maintenance, and operation of works of improvement
2on lands under the control or jurisdiction of the county as
3provided in this chapter, or to furnish financial assistance in
4connection with such projects and operations.
5 Sec. 22. Section 161E.10, Code 2017, is amended to read as
6follows:
7161E.10 Assumption of obligations.
8This chapter contemplates that actual direction of the
9project, or projects, and the actual work done in connection
10with them the projects, will be assumed by the soil and water
11conservation district, a subdistrict of a soil and water
12conservation district, or the federal government, and that the
13county or other state subdivisions or instrumentalities or
14financing entities jointly will meet the obligation required
15for federal cooperation and may make proper commitment for
16the care and maintenance of the project after its completion
17for the general welfare of the public and residents of the
18respective counties.
19 Sec. 23. Section 161F.1, Code 2017, is amended to read as
20follows:
21161F.1 Presumption of benefit — definitions.
221. The conservation of the soil resources of the state
23of Iowa, the improvement of water quality through projects,
24 the proper control of water resources of the state and the
25prevention of damage to property and lands through the control
26of floods, the drainage of surface waters or the protection of
27lands from overflow shall be presumed to be a public benefit
28and conducive to the public health, convenience and welfare and
29essential to the economic well-being of the state.
302. For purposes of this chapter, “financing entity” and
31“project” both mean the same as defined in section 16.201.
32 Sec. 24. Section 161F.2, Code 2017, is amended to read as
33follows:
34161F.2 Board of supervisors to establish districts — strip
35coal mining.
-23- 11. The board of supervisors of any county shall have
2jurisdiction, power and authority at any regular, special or
3adjourned session to establish, subject to the provisions
4of this chapter, districts having for their purpose soil
5conservation and the control of flood waters, or the
6improvement of water quality, and to cause to be constructed
7as hereinafter provided, such improvements, projects, and
8facilities as shall be deemed essential for the accomplishment
9of the purpose of soil conservation and flood control, or of
10water quality improvement.
112. Such The board of supervisors shall also have
12jurisdiction, power, and authority at any regular, special,
13 or adjourned session to establish, in the same manner that
14the districts hereinabove referred to in subsection 1
15 are established, districts having for their purpose soil
16conservation in mining areas within the county, and provide
17that anyone engaged in removing the surface soil over any
18bed or strata of coal in such district for the purpose of
19obtaining such coal shall replace the surface soil as nearly
20as practicable to its original position, and provide that,
21upon abandonment of such removal operation, all surface soil
22shall be so replaced. This section subsection shall apply only
23to surface soil so removed after July 4, 1949, and then only
24if it is essential for the accomplishment of the purpose of
25soil conservation and flood control within the purview of this
26chapter.
27 Sec. 25. Section 161F.3, Code 2017, is amended to read as
28follows:
29161F.3 Combination of functions.
30Such districts shall have the power to combine in their
31functions activities affecting soil conservation, flood control
32and drainage, water quality improvement, or any of these
33objects, singly or in combination with another district or
34financing entity under the provisions of an intergovernmental
35agreement pursuant to chapter 28E or 28F.
-24-1 Sec. 26. Section 161F.6, subsection 1, Code 2017, is amended
2to read as follows:
31. In the organization, operation, and financing of
4districts established under this chapter, the provisions of
5chapter 468 shall apply and any procedure provided under
6chapter 468 in connection with the organization, financing,
7and operation of any drainage district shall apply to the
8organization, financing, and operation of districts organized
9under this chapter. However, a district established under this
10chapter shall not be considered a drainage district established
11pursuant to chapter 468.
12 Sec. 27. Section 384.80, subsection 15, Code 2017, is
13amended to read as follows:
1415. “Water resource restoration project” means the
15acquisition of real property or improvements, a project as
16defined in section 16.201, or any other activity or undertaking
17that will assist in improving flood control, erosion control,
18or the quality of the water in the watershed where a city
19water, storm water, or wastewater utility is located.
20 Sec. 28. Section 384.84, subsection 2, Code 2017, is amended
21to read as follows:
222. The governing body of a city water or wastewater utility
23may enter into an agreement with a qualified entity to use
24proceeds from revenue bonds for a water resource restoration
25project if the rate imposed is no greater than if there was not
26a water resource restoration project agreement. For purposes
27of this subsection, “qualified entity” is an entity created
28pursuant to chapter 28E or chapter 28F or two entities that
29have entered into an agreement pursuant to chapter 28E or
30chapter 28F, whose purpose is to undertake a watershed project
31that has been approved for water quality improvements in the
32watershed.
33 Sec. 29. Section 422.7, subsection 2, Code 2017, is amended
34by adding the following new paragraph:
35 NEW PARAGRAPH. 0h. Iowa finance authority water quality
-25-1project financial assistance program bonds or notes pursuant to
2section 16.202, subsection 5.
3 Sec. 30. Section 423.3, Code 2017, is amended by adding the
4following new subsection:
5 NEW SUBSECTION. 103. a. The sales price from the sale or
6furnishing by a water utility of a water service in the state
7to consumers or users.
8b. For purposes of this subsection:
9(1) “Water service” means the delivery of water by piped
10distribution system.
11(2) “Water utility” means a public utility as defined in
12section 476.1 that furnishes water by piped distribution system
13to the public for compensation.
14 Sec. 31. NEW SECTION. 423G.1 Short title.
15This chapter may be cited as the “Water Service Tax Act”.
16 Sec. 32. NEW SECTION. 423G.2 Definitions.
171. All words and phrases used in this chapter and defined in
18section 423.1 have the same meaning given them by section 423.1
19for purposes of this chapter.
202. As used in this chapter, “water service” and “water
21utility” mean the same as defined in section 423.3, subsection
22103.
23 Sec. 33. NEW SECTION. 423G.3 Water service tax.
24An excise tax at the rate of six percent is imposed on the
25sales price from the sale or furnishing by a water utility of a
26water service in the state to consumers or users.
27 Sec. 34. NEW SECTION. 423G.4 Exemptions.
28The sales price from transactions exempt from state sales
29tax under section 423.3, except section 423.3, subsection 103,
30is also exempt from the tax imposed by this chapter.
31 Sec. 35. NEW SECTION. 423G.5 Administration by director.
321. The director of revenue shall administer the state
33water service tax as nearly as possible in conjunction with
34the administration of the state sales and use tax law, except
35that portion of the law that implements the streamlined sales
-26-1and use tax agreement. The director shall provide appropriate
2forms, or provide on the regular state tax forms, for reporting
3state water service tax liability.
42. The director may require all persons who are engaged
5in the business of deriving any sales price or purchase
6price subject to tax under this chapter to register with
7the department. The director may also require a tax permit
8applicable only to this chapter for any retailer not
9collecting, or any user not paying, taxes under chapter 423.
103. Section 422.25, subsection 4, sections 422.30, 422.67,
11and 422.68, section 422.69, subsection 1, sections 422.70,
12422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
131, and sections 423.23, 423.24, 423.25, 423.31 through
14423.35, 423.37 through 423.42, and 423.47, consistent with the
15provisions of this chapter, shall apply with respect to the tax
16authorized under this chapter in the same manner and with the
17same effect as if the excise taxes on the sale or furnishing of
18a water service were retail sales taxes within the meaning of
19those statutes. Notwithstanding this subsection, the director
20shall provide for quarterly filing of returns and for other
21than quarterly filing of returns both as prescribed in section
22423.31. All taxes collected under this chapter by a retailer
23or any user are deemed to be held in trust for the state of
24Iowa.
25 Sec. 36. NEW SECTION. 423G.6 Deposit of revenues.
261. All moneys received and all refunds shall be deposited in
27or withdrawn from the general fund of the state.
282. Subsequent to the deposit in the general fund of the
29state, the department shall transfer the following amounts of
30revenues collected to the water quality financial assistance
31fund created in section 16.198:
32a. For revenues collected on or after July 1, 2017, but
33before August 1, 2018, one-sixth of the revenues.
34b. For revenues collected on or after August 1, 2018, but
35before August 1, 2019, one-third of the revenues.
-27- 1c. For revenues collected on or after August 1, 2019, but
2before August 1, 2020, one-half of the revenues.
3d. For revenues collected on or after August 1, 2020, but
4before August 1, 2021, two-thirds of the revenues.
5e. For revenues collected on or after August 1, 2021, but
6before August 1, 2022, five-sixths of the revenues.
7f. For revenues collected on or after August 1, 2022, one
8hundred percent of the revenues.
9 Sec. 37. NEW SECTION. 423G.7 Future repeal.
10This chapter is repealed on the date on which all bonds,
11notes, or other debt instruments issued on or before June
1230, 2042, pursuant to section 16.202, are fully paid. The
13executive director of the Iowa finance authority shall notify
14the Iowa Code editor upon the occurrence of this condition.
15 Sec. 38. Section 455B.171, subsection 19, Code 2017, is
16amended to read as follows:
1719. “Point source” means any discernible, confined, and
18discrete conveyance, including but not limited to any pipe,
19ditch, channel, tunnel, conduit, well, discrete fissure,
20container, rolling stock, concentrated animal feeding
21operation, or vessel or other floating craft, from which
22pollutants are or may be discharged. “Point source” does not
23include agricultural storm water discharges and return flows
24from irrigated agriculture.
25 Sec. 39. Section 455B.176A, subsection 1, Code 2017, is
26amended by adding the following new paragraphs:
27 NEW PARAGRAPH. 0d. “Iowa nutrient reduction strategy” means
28the same as defined in section 16.201.
29 NEW PARAGRAPH. 00d. “Nutrient” means total nitrogen and
30total phosphorus.
31 Sec. 40. Section 455B.176A, subsection 5, Code 2017, is
32amended to read as follows:
335. a. The commission shall adopt rules designating water
34quality standards which shall be specific to each designated
35use adopted pursuant to subsection 4. The standards shall take
-28-1into account the different characteristics of each designated
2use and shall provide for only the appropriate level of
3protection based upon that particular use. The standards shall
4not be identical for each designated use unless required for
5the appropriate level of protection. The appropriate level of
6protection and standards shall be determined on a scientific
7basis.
8b. In the development process for the water quality
9standards, input shall be received from a water quality
10standards advisory committee convened by the department. The
11water quality standards advisory committee shall be comprised
12of experts in the scientific fields relating to water quality,
13such as environmental engineering, aquatic toxicology,
14fisheries biology, and other life sciences and experts in
15the development of the appropriate levels of aquatic life
16protection and standards. The water quality standards shall be
17reviewed and revised by the department as new scientific data
18becomes available to support revision.
19c. The department shall provide support to the department of
20agriculture and land stewardship in their efforts to implement
21their responsibilities under the Iowa nutrient reduction
22strategy.
23 Sec. 41. Section 466B.3, subsection 3, paragraph c, Code
242017, is amended to read as follows:
25c. Whether the funds, programs, and regulatory efforts
26coordinated by the council eventually result in a long-term
27improvement to the quality of surface water in Iowa. To
28evaluate the progress achieved over time toward the goals of
29the Iowa nutrient reduction strategy, as defined in section
30455B.176A, and the United States environmental protection
31agency gulf hypoxia action plan, the baseline condition shall
32be calculated for the time period from 1980 to 1996.
33 Sec. 42. Section 466B.42, Code 2017, is amended to read as
34follows:
35466B.42 Water quality initiative.
-29- 1The division shall establish a water quality initiative
2in order to assess and reduce nutrients in this state’s
3watersheds, including subwatersheds, and regional watersheds,
4and for implementing its responsibilities under the Iowa
5nutrient reduction strategy as defined in section 455B.176A.
6 The division shall establish and administer projects to
7reduce nutrients in surface waters from nonpoint sources in
8a scientific, reasonable, and cost-effective manner. The
9division shall utilize a pragmatic, strategic, and coordinated
10approach with the goal of accomplishing reductions over time.
11To evaluate the progress achieved over time toward the goals
12of the Iowa nutrient reduction strategy and the United States
13environmental protection agency gulf hypoxia action plan, the
14baseline condition shall be calculated for the time period from
151980 to 1996.
16 Sec. 43. NEW SECTION. 466B.43 Water quality agriculture
17infrastructure programs.
181. As part of the water quality initiative established
19pursuant to section 466B.42, the division shall administer
20water quality agriculture infrastructure programs created in
21this section.
222. a. The purpose of the programs is to support projects
23for the installation of infrastructure, including conservation
24structures, practices, or other measures that reduce
25contributing nutrient loads, associated sediment, or pollutants
26from point and nonpoint sources to surface waters. The
27programs shall be administered in a manner that is consistent
28with the Iowa nutrient reduction strategy, as defined in
29section 16.201.
30b. In making awards of financial assistance under the
31programs, the division shall attempt to complement the purposes
32of the water quality project financial assistance program
33under sections 16.201 through 16.206 and the water quality
34protection and wastewater treatment grant program under section
3516.140. Preference shall be given to landowners that are
-30-1part of a financing entity participating in the water quality
2project financial assistance program and to landowners that are
3participating in the water quality protection and wastewater
4treatment grant program. The division, the Iowa finance
5authority, landowners, and financing entities shall, when
6possible, coordinate financing between the programs created in
7this section, the water quality project financial assistance
8program, and the water quality protection and wastewater
9treatment grant program, in order to promote the most effective
10use of resources.
113. An edge-of-field infrastructure program is created.
12The program shall support projects located on agricultural
13land, which may include demonstration projects, that capture
14or filter nutrients entering into a surface water. The
15program’s projects shall be limited to infrastructure designed
16and installed for use over multiple years, including but not
17limited to wetlands, bioreactor systems, saturated buffers,
18edge-of-stream buffers, or land use changes. The program shall
19be financed on a cost-share basis.
204. An in-field infrastructure program is created. The
21program shall support projects located on agricultural land,
22which may include demonstration projects, that decrease erosion
23and precipitation-induced surface runoff, increase water
24infiltration rates, and increase soil sustainability. The
25program’s projects shall be limited to infrastructure designed
26and installed for use over multiple years, including but not
27limited to structures, terraces, and waterways located on
28cropland or pastureland, and including but not limited to soil
29conservation or erosion control structures, managed drainage
30systems, or edge-of-stream buffers. The program shall be
31financed on a cost-share basis.
325. Any state moneys used to finance a project under
33a water quality agriculture infrastructure program shall
34be administered according to an agreement entered into by
35the division and either the owner of the land where the
-31-1infrastructure is to be installed or a financing entity
2participating in the water quality project financial assistance
3program under sections 16.201 through 16.206. The agreement
4shall include standard terms and conditions for the receipt of
5program moneys and any other terms and conditions the division
6deems necessary or convenient for the efficient administration
7of the project or program. The division may support multiple
8installations of infrastructure on a single parcel of land.
9The division may also combine programs if cost effective.
10The division may annually use an amount of not more than
11four percent of the moneys used to support each program for
12administrative purposes.
136. By October 1, 2018, and each October 1, thereafter, the
14division shall submit a report to the governor and the general
15assembly itemizing expenditures, by hydrologic unit code 8
16watershed, under the programs during the previous fiscal year.
177. Any information obtained by the division identifying
18a person holding a legal interest in agricultural land or
19specific agricultural land shall be a confidential record under
20section 22.7.
21 Sec. 44. LEGISLATIVE INTENT. It is the intent of the
22general assembly that the amendment in this Act to the
23definition of “point source” in section 455B.171, subsection
2419, is a conforming amendment consistent with current state
25and federal law, and that the amendment does not change the
26application of current law but instead reflects current law
27both before and after the enactment of this Act.
28 Sec. 45. RETROACTIVE APPLICABILITY. The following
29provision or provisions of this Act apply retroactively to
30January 1, 2017, for tax years beginning on or after that date:
311. The section of this Act enacting section 422.7,
32subsection 2, paragraph “0h”.
33EXPLANATION
34The inclusion of this explanation does not constitute agreement with
35the explanation’s substance by the members of the general assembly.
-32- 1This bill relates to water quality by establishing new water
2quality programs, providing for appropriations from the rebuild
3Iowa infrastructure fund and making other appropriations and
4changes related to water quality, and creating a state water
5service excise tax and a related sales tax exemption.
6REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATIONS FOR WATER
7QUALITY AGRICULTURE INFRASTRUCTURE PROGRAMS.
8RIIF appropriations — The bill provides for a total of
9$232 million of appropriations over 13 fiscal years from the
10rebuild Iowa infrastructure fund in Code section 8.57 to a
11water quality infrastructure fund created in the bill (Code
12section 8.57B) to be used by the division of soil conservation
13and water quality of the department of agriculture and land
14stewardship (soil and water division) in administering two new
15water quality agriculture infrastructure programs, described
16below. The appropriations shall be as follows: $5 million for
17fiscal year 2017-2018; $6.5 million for fiscal year 2018-2019;
18$11.5 million for fiscal year 2019-2020; $16.5 million per
19fiscal year for the two-year fiscal period beginning July 1,
202020, and ending June 30, 2022; and $22 million per fiscal year
21for the eight-year fiscal period beginning July 1, 2022, and
22ending June 30, 2030. The water quality infrastructure fund
23is repealed on the date that all moneys transferred to the
24fund from the rebuild Iowa infrastructure fund as provided in
25the bill, including any interest or earnings on such moneys
26credited to the fund, are expended by the soil and water
27division, and the balance of the fund is zero.
28Water quality agriculture infrastructure programs — As
29part of the existing water quality initiative of the soil and
30water division in Code section 466B.42, the bill establishes
31two water quality agriculture infrastructure programs (Code
32section 466B.43), consisting of an edge-of-field infrastructure
33program and an in-field infrastructure program, that will
34provide financing on a cost-share basis to certain agriculture
35infrastructure projects, including demonstration projects.
-33-1The edge-of-field program will support projects that capture
2or filter nutrients entering into surface water. The bill
3includes wetlands, bioreactor systems, saturated buffers,
4edge-of-field buffers, and land use changes as examples
5of projects that may qualify. The in-field infrastructure
6program will support projects that decrease erosion and
7precipitation-induced surface runoff, increase water
8infiltration rates, and increase soil sustainability. The bill
9includes structures, terraces, waterways located on cropland
10or pastureland, and soil conservation or erosion control
11structures or managed drainage systems, and edge-of-field
12buffers as examples of projects that may qualify.
13The bill provides for the purpose of the programs and
14requires that the programs be administered in a manner that
15is consistent with the Iowa nutrient reduction strategy, as
16defined in the bill. Both programs are to be administered
17in a way that coordinates with, and attempts to complement
18the purposes of, the water quality project financial
19assistance program and the water quality protection and
20wastewater treatment grant program created in the bill
21and described below, and preference is to be given to
22landowners participating in those programs. Both water
23quality agriculture infrastructure programs require that
24projects be located on agricultural land and limit projects to
25infrastructure designed and installed for use over multiple
26years. The bill requires that the soil and water division
27and either landowners or financing entities participating in
28the water quality protection financial assistance program,
29described below, enter into agreements for financing projects
30under the programs, provides that the soil and water division
31may support multiple installations of infrastructure on a
32single parcel of land, and provides that the two programs
33may be combined by the soil and water division if it is cost
34effective to do so. The soil and water division is allowed
35to annually use up to 4 percent of the programs’ moneys for
-34-1administrative purposes. Beginning in 2018, the soil and
2water division is required to submit a report by October 1 of
3each year to the general assembly and the governor detailing
4expenditures for the previous fiscal year under the programs
5by hydrologic unit code 8 watershed. The bill provides that
6certain information related to agricultural land and obtained
7by the soil and water division under the programs shall be
8considered a confidential record under Code section 22.7.
9WATER SERVICE EXCISE TAX FOR CERTAIN WATER QUALITY PROGRAMS.
10Water service excise tax and related sales tax exemption —
11The bill exempts from the state sales tax the sales price from
12the sale or furnishing by a water utility of a water service in
13the state to consumers or users. “Water service” and “water
14utility” are defined in the bill.
15By operation of Code section 423.6, an item exempt from the
16imposition of the sales tax is also exempt from the use tax
17imposed in Code section 423.5.
18The bill creates a state excise tax at the rate of 6 percent
19on the sales price from the sale or furnishing by a water
20utility of a water service in the state to consumers or users
21(Code chapter 423G). The director of revenue is required
22to administer the water service tax as nearly as possible
23in conjunction with the administration of the state sales
24and use tax laws, and, to that end, the bill incorporates by
25reference numerous Code sections that relate to general tax
26administration and the sales and use tax laws.
27State water service tax revenues are deposited in the
28general fund of the state. The bill requires an increasing
29portion of the state water service tax revenues collected each
30year to be transferred to a water quality financial assistance
31fund created in the bill (Code section 16.198) to support
32various water quality programs, described below. Transfers to
33the water quality financial assistance fund equal one-sixth of
34the water service tax revenues collected on or after July 1,
352017, but before August 1, 2018, and increases to one-third,
-35-1one-half, two-thirds, and five-sixths over the next four years.
2All water service tax revenues collected on or after August
31, 2022, will be transferred to the water quality financial
4assistance fund.
5The state and local water service tax is repealed on the date
6on which all bonds, notes, or other debt instruments issued by
7the Iowa finance authority (IFA) on or before June 30, 2042,
8under the water quality project financial assistance program,
9described below, are fully paid.
10Water service tax revenues transferred to the water quality
11financial assistance fund are then appropriated from the
12fund as follows: one-sixth of the moneys in the fund is
13appropriated to IFA to support the water quality protection and
14wastewater treatment grant program created in the bill (Code
15section 16.140), and five-sixths of the moneys in the fund
16is appropriated to IFA to support the water quality project
17financial assistance program created in the bill (Code sections
1816.201 through 16.206).
19Water quality protection and wastewater treatment grant
20program (Code section 16.140) — This program, administered by
21IFA, provides financial assistance in the form of grants to
22municipalities and eligible entities for projects or activities
23that enhance water quality, upgrade water and wastewater
24infrastructure, or implement the nutrient reduction strategy.
25“Municipality”, “eligible entity”, and other related terms are
26defined in the bill. The bill describes the types of projects
27or activities that qualify for grants under the program.
28The program gives priority in awarding grants to projects
29or activities that provide improvement to water quality in
30the relevant watershed, and that also have private financing
31or certain other state or federal financing as described in
32the bill. Grants shall not exceed $500,000 per recipient.
33The program requires IFA to submit a report by October 1 of
34each year to the governor and the general assembly detailing
35expenditures for the previous year under the program, and
-36-1creates a program review committee consisting of eight members,
2as provided in the bill, to review the effectiveness of the
3program every 10 years, beginning in 2027.
4Water quality project financial assistance program (Code
5sections 16.201 through 16.206) — This program provides
6financial assistance to eligible entities that engage in a
7project designed to improve water quality or water resource
8management for the purpose of enhancing the quality of surface
9water and groundwater. “Eligible entity”, “project”, and
10other related terms are defined in the bill. The program
11is administered by IFA in cooperation with the department of
12natural resources (DNR) and the department of agriculture
13and land stewardship (IDALS). The program allows IFA to
14provide financial assistance in the form it deems most
15convenient, including loans, forgivable loans, and grants,
16but requires that the program be a permanent source of water
17quality financial assistance. The program allows financing
18entities, as defined in the bill, to apply to IFA for financial
19assistance and submit project plans that substantially improve
20water quality in the local area or watershed, and provides
21certain application requirements. Preference under the program
22shall be given to projects that will have the greatest impact
23on achieving the goals set forth in the nutrient reduction
24strategy, and plans designed to achieve those goals shall be
25presumed to improve water quality. Also, plans that include a
26nutrient reduction exchange, as defined in the bill, between
27two or more members of the eligible entity will be presumed to
28substantially improve water quality.
29Preference under the program is to be given to eligible
30entities that have project plans evaluated by the Iowa nutrient
31research center (Code section 466B.47), and to eligible
32entities that contract with the Iowa nutrient research center
33to verify the amount of nutrient reduction achieved by the
34project upon project completion.
35The bill creates a three-member committee to review project
-37-1plans, review and score applications, and make financial
2assistance awards. The executive director of IFA, the director
3of DNR, and the secretary of agriculture each appoint one
4member to the committee. Eligible entities receiving financial
5assistance awards are required to enter into agreements with
6IFA, and IFA determines the terms of any loan and may charge
7fees and costs necessary for the continued operation of the
8program. The bill requires IFA to adopt rules relating to
9the proportional liability, if any, of members of an eligible
10entity that enter into a loan agreement under the program.
11The bill creates a water quality project financial
12assistance fund administered by IFA to provide financial
13assistance under the program. The bill allows IFA to establish
14and maintain other funds and accounts necessary to carry out
15the purposes of the program.
16The bill allows IFA to issue until June 30, 2042, bonds and
17notes for the purpose of funding the program, and the bill
18provides several requirements for the issuance of such bonds
19and notes, for loan or purchase agreements with bondholders
20or noteholders, for the pledging of certain funds toward the
21repayment of the bonds and notes, and for the establishment of
22reserve funds to secure the bonds and notes. The bill also
23includes other provisions related to the notes and bonds,
24including that such bonds and notes are exempt from taxation
25by the state.
26MISCELLANEOUS PROVISIONS. The bill amends the powers of
27a soil and water conservation district under chapter 161A to
28include the completion of certain projects as described in the
29bill, and to allow a district to apply for financial assistance
30under the water quality project financial assistance program.
31The bill amends provisions in Code chapter 161C governing
32the water protection projects and practices of a soil and water
33conservation district by adding to the types of projects the
34district may engage in and the type of entities the district
35may work with to complete such projects.
-38- 1The bill amends various provisions of Code chapter 161E
2(flood and erosion control) to add to the types of projects a
3county may engage in or offer financial assistance for under
4that Code chapter, or to levy a property tax for under that
5Code chapter, and to add to the types of entities the county
6may work with to complete projects.
7The bill amends provisions in Code chapter 161F (soil
8conservation and flood control districts) to add to the
9types of projects a soil conservation and flood control
10district established by a county may engage in under that Code
11chapter, and the types of entities a district may work with
12to complete such projects. The bill also specifies that a
13district established pursuant to Code chapter 161F shall not
14be considered a drainage district established pursuant to Code
15chapter 468.
16The bill adds to the types of projects that a public agency
17may complete through joint financing with another public agency
18under Code chapter 28F (joint financing of public works and
19facilities), and further specifies that the powers enumerated
20in Code section 28F.1 shall not be construed or interpreted to
21create or expand the authority to acquire real property through
22the use of eminent domain.
23The bill amends provisions governing certain projects
24completed and financed by a city under Code chapter 384 (city
25finance). The bill adds to the types of projects specified
26that meet the definition of a “water resource restoration
27project”, which is a type of project a city may engage in
28and issue revenue bonds or pledge orders for. The bill also
29amends the definition of “qualified entity” to include entities
30created under Code chapter 28F (joint financing of public
31works and facilities). Under current law, a city may enter
32into agreements with a qualified entity relating to the use of
33revenue bond proceeds for a water resource restoration project.
34The bill amends the definition of “point source” in Code
35section 455B.171, which contains definitions for terms used in
-39-1provisions of the Code that concern the jurisdiction of DNR
2related to water quality, to exclude agricultural storm water
3discharges and return flows from irrigated agriculture. The
4bill provides that it is the legislative intent of the general
5assembly that this amendment to the definition of “point
6source” is a conforming amendment consistent with current state
7and federal law, and that the amendment does not change the
8application of current law but instead reflects current law
9both before and after the enactment of the bill.
10The bill amends Code section 455B.176A, relating to water
11quality standards created by DNR and the environmental
12protection commission, to define “Iowa nutrient reduction
13strategy” and “nutrient”, and to provide that DNR shall provide
14support to IDALS in efforts to implement the Iowa nutrient
15reduction strategy.
16The bill amends Code section 466B.3, relating to the water
17resources coordinating council, to provide that when the
18council is measuring the success of its efforts, 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.
23The bill amends Code section 466B.42, relating to the water
24quality initiative of the soil and water division, to provide
25that the goal of the water quality initiative is to implement
26the soil and water division’s responsibilities under the Iowa
27nutrient reduction strategy, and to provide that progress under
28the Iowa nutrient reduction strategy and the United States
29environmental protection agency gulf hypoxia action plan shall
30be evaluated using a baseline condition calculated for the time
31period between 1980 and 1996.
32Finally, the bill adds the IFA water quality project
33financial assistance program bonds and notes authorized in
34the bill under new Code section 16.202 to the list of bonds
35and notes the income from which is exempt from the individual
-40-1income tax under Code section 422.7 (computation of net
2income). This provision of the bill applies retroactively to
3January 1, 2017, for tax years beginning on or after that date.
-41-mm/sc/rj