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Senate File 512 - ReprintedA Bill ForAn Act 1relating to water quality by amending the wastewater
2treatment financial assistance program, creating a water
3quality infrastructure fund, establishing a water quality
4financing program, providing for cost-share programs for
5infrastructure on agricultural and urban land under the
6water quality initiative, creating a water service excise
7tax and a related sales tax exemption, making transfers and
8appropriations and other changes properly related to water
9quality, and including effective date provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 8.57, subsection 5, paragraph f,
2subparagraph (1), Code 2017, is amended by adding the following
3new subparagraph division:
4 NEW SUBPARAGRAPH DIVISION. (0c) (i) For each fiscal year
5of the period beginning July 1, 2020, and ending June 30, 2029,
6of the wagering tax receipts received pursuant to sections
799D.17 and 99F.11, the next fifteen million dollars shall be
8deposited in the water quality infrastructure fund created in
9section 8.57B.
10(ii) Notwithstanding subparagraph subdivision (i), this
11subparagraph division (0c) is repealed on one of the following
12dates, whichever is earlier:
13(A) On July 1 following the enactment date that the tax
14rate for the sales tax imposed upon the retail sales price of
15tangible personal property and the furnishing of enumerated
16services sold in this state in effect on July 1, 2016, is
17increased.
18(B) On July 1, 2029.
19 Sec. 2. Section 8.57, subsection 5, paragraph f,
20subparagraph (1), subparagraph division (d), Code 2017, is
21amended to read as follows:
22(d) For the fiscal year beginning July 1, 2013, and for
23each fiscal year thereafter, the total moneys in excess of the
24moneys deposited under this paragraph “f” in the revenue bonds
25debt service fund, the revenue bonds federal subsidy holdback
26fund, the vision Iowa fund, the water quality infrastructure
27fund, and the Iowa skilled worker and job creation fund shall
28be deposited in the rebuild Iowa infrastructure fund and shall
29be used as provided in this section, notwithstanding section
308.60.
31 Sec. 3. NEW SECTION. 8.57B Water quality infrastructure
32fund — creation — appropriations.
331. A water quality infrastructure fund is created within
34the division of soil conservation and water quality of the
35department of agriculture and land stewardship. The fund
-1-1shall consist of moneys transferred pursuant to section 8.57,
2subsection 5, paragraph “f”, subparagraph (1), subparagraph
3division (0c), moneys transferred to the fund pursuant to
4section 423G.6, and appropriations made to the fund and
5transfers of interest, earnings, and moneys from other funds
6as provided by law.
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.
24 Sec. 4. Section 16.134, Code 2017, is amended to read as
25follows:
2616.134 Wastewater and drinking water treatment financial
27assistance program.
281. The Iowa finance authority shall establish and
29administer a wastewater and drinking water treatment financial
30assistance program. The purpose of the program shall be to
31provide financial assistance to enhance water quality. The
32program shall be administered in accordance with rules adopted
33by the authority pursuant to chapter 17A. For purposes of
34this section, “program” means the wastewater and drinking water
35 treatment financial assistance program and “committee” means the
-2-1water quality financing review committee created in subsection
29.
32. A wastewater and drinking water treatment financial
4assistance fund is created and shall consist of appropriations
5made to the fund and transfers of interest, earnings, and
6moneys from other funds as provided by law. Moneys transferred
7to the fund pursuant to section 16.134A are appropriated to the
8authority for purposes of the program. Moneys in the fund are
9not subject to section 8.33. Notwithstanding section 12C.7,
10subsection 2, interest or earnings on moneys in the fund shall
11be credited to the fund.
123. Financial assistance under the program shall be used
13to install or upgrade wastewater treatment facilities and
14systems and drinking water treatment facilities and systems,
15including source water protection projects, and for engineering
16or technical assistance for facility planning and design.
174. The authority committee shall distribute approve
18 financial assistance in from the fund in accordance with the
19following:
20a. The goal of the program shall be to base awards on the
21impact of the grant combined with other sources of financing to
22ensure that sewer rates do not exceed one and one-half percent
23of a community’s median household income.
24b. a. Communities shall be eligible for financial
25assistance by qualifying as Priority shall be given for
26projects in which a disadvantaged community and is seeking
27financial assistance for the installation or upgrade of
28wastewater treatment facilities due to regulatory activity
29by the department of natural resources and drinking water
30treatment facilities. For purposes of this section, the term
31“disadvantaged community” means the same as defined by the
32department.
33c. b. Priority shall be given to projects in which the
34 meeting criteria established in section 455B.199B in which the
35applicant seeks financial assistance is to be used to obtain
-3-1 with financing under the water pollution control works and
2drinking water facilities financing program pursuant to section
316.131 or other federal, or state, or private financing.
4d. c. Priority shall also be given to projects whose
5completion will provide significant improvement to water
6quality in the relevant watershed.
7e. d. Priority shall also be given to communities that
8employ an alternative wastewater treatment technology pursuant
9to section 455B.199C.
10f. e. Priority shall be also be given to those communities
11where sewer or water rates are the highest as a percentage of
12that community’s median household income.
13f. Priority shall also be given to communities that employ
14technology to address the latest version of the “Iowa Nutrient
15Reduction Strategy” initially presented in November 2012 by the
16department of agriculture and land stewardship, the department
17of natural resources, and Iowa state university of science and
18technology.
19g. Financial assistance in the form of grants shall be
20issued on an annual basis.
21h. An applicant shall not receive a grant that exceeds five
22hundred thousand dollars.
234A. A utility management organization formed under chapter
2428E or operated by a rural water system organized under chapter
25357A or chapter 504 shall be considered eligible for financial
26assistance under the program.
275. The authority in cooperation with the department of
28natural resources shall share provide information and resources
29to the committee when the committee is determining the
30qualifications of a community for financial assistance from the
31fund.
326. The authority shall enter into agreements with financial
33assistance recipients and distribute moneys under the program
34pursuant to financial assistance determinations made by the
35committee.The authority may use an amount of not more than
-4-1four one percent of any moneys appropriated for deposit in the
2fund for administration purposes.
37. By October 1 of each year, the authority shall submit
4a report to the governor and the general assembly itemizing
5expenditures under the program during the previous fiscal year,
6if any.
78. a. Beginning September 1, 2027, and every ten years
8thereafter, a program review committee is established for
9purposes of reviewing the wastewater and drinking water
10treatment financial assistance program. By December 1 of the
11same year, the program review committee shall file a report
12with the governor and the general assembly that reviews the
13effectiveness of the program during the prior ten fiscal years.
14b. The program review committee shall consist of the
15following members:
16(1) The governor or the governor’s designee.
17(2) The secretary of agriculture or the secretary’s
18designee.
19(3) The executive director of the authority or the executive
20director’s designee.
21(4) The director of the department of natural resources or
22the director’s designee.
23(5) Four members of the general assembly, with two from the
24senate and two from the house of representatives and not more
25than one member from each chamber being from the same political
26party. The two senators shall be designated one member each
27by the president of the senate, after consultation with the
28majority leader of the senate, and by the minority leader of
29the senate. The two representatives shall be designated one
30member each by the speaker of the house of representatives,
31after consultation with the majority leader of the house of
32representatives, and by the minority leader of the house of
33representatives.
34c. Staffing services shall be provided by the authority.
359. a. A water quality financing review committee is
-5-1created consisting of the secretary of agriculture or the
2secretary’s designee, the executive director of the authority
3or the executive director’s designee, and the director of the
4department of natural resources or the director’s designee.
5b. The committee shall review and approve or deny
6applications for financial assistance under the wastewater
7and drinking water treatment financial assistance program
8established in this section.
9 Sec. 5. NEW SECTION. 16.134A Water quality financial
10assistance fund.
111. A water quality financial assistance fund is created in
12the state treasury as a revolving fund.
132. The fund shall consist of all of the following:
14a. (1) Moneys transferred to the fund pursuant to section
15423G.6.
16(2) This paragraph “a” is repealed on January 1, 2030.
17b. Appropriations made to the fund and transfers of
18interest, earnings, and moneys from other funds as provided by
19law.
203. For each fiscal year in the fiscal period beginning
21July 1, 2018, and ending June 30, 2029, there is appropriated
22the following percentages of the balance of the fund for the
23following purposes:
24a. Forty percent to the Iowa finance authority to support
25the wastewater and drinking water treatment financial
26assistance program created in section 16.134.
27b. Forty-five percent to the Iowa finance authority to be
28credited to the water quality financing program fund created
29pursuant to section 16.144.
30c. Fifteen percent to the division of soil conservation
31and water quality of the department of agriculture and land
32stewardship to support the water quality urban infrastructure
33program created in section 466B.44.
344. Moneys in the fund are not subject to section 8.33.
35Notwithstanding section 12C.7, subsection 2, interest or
-6-1earnings on moneys in the fund shall be credited to the fund.
2 Sec. 6. NEW SECTION. 16.142 Definitions.
3As used in this part, unless the context otherwise requires:
41. “Cost” means all costs, charges, expenses, or other
5indebtedness incurred by a loan recipient and determined by
6the authority as reasonable and necessary for carrying out
7all works and undertakings necessary or incidental to the
8accomplishment of any project.
92. “Eligible entity” means a municipality or a landowner,
10as determined by the authority, a public utility as defined
11in section 476.1, or a rural water district or rural water
12association as defined in section 357A.1.
133. “Loan recipient” means an eligible entity that has
14received a loan under the program.
154. “Municipality” means a governmental body such as a state
16agency or a political subdivision of the state. Municipality
17includes but is not limited to a city, city utility, county,
18soil and water conservation district, sanitary district, a
19subdistrict of any of the foregoing districts, a state agency,
20or other governmental body or corporation empowered to provide
21sewage collection and treatment services or drinking water, or
22any entity jointly exercising governmental powers pursuant to
23chapter 28E or 28F, or any other combination of two or more
24governmental bodies or corporations acting jointly under the
25laws of this state in connection with a project.
265. “Program” means the water quality financing program
27created in this part.
286. “Project” means any combination of improvements,
29structures, developments, tasks, actions, constructions,
30modifications, operations, or practices designed to improve
31water quality that are proposed by an eligible entity and
32approved by the authority. “Project” includes but is not
33limited to any of the following:
34a. A project meeting the requirements of part 2 of this
35subchapter.
-7- 1b. A project, operation, or practice undertaken or carried
2out to address watershed protection, flood prevention, or water
3quality improvement.
4c. A project meeting the requirements of a sponsor project
5under section 455B.199.
6 Sec. 7. NEW SECTION. 16.143 Water quality financing
7program.
81. The authority, in cooperation with the department of
9natural resources and the department of agriculture and land
10stewardship, shall establish and administer a water quality
11financing program. The purpose of the program shall be to
12provide financial assistance to enhance the quality of surface
13water and groundwater, particularly by providing financial
14assistance for projects designed to improve water quality
15by addressing point and nonpoint sources, with a higher
16prioritization provided to collaborative efforts.
172. The authority shall determine the interest rate
18and repayment terms for loans made under the program, in
19cooperation with the department of natural resources and
20the department of agriculture and land stewardship, and the
21authority shall enter into loan agreements with eligible
22entities in compliance with and subject to the terms and
23conditions of the program as described in this part.
243. The authority may charge loan recipients fees and assess
25costs against such recipients necessary for the continued
26operation of the program. Such fees and costs shall not exceed
27the costs directly associated with the administration of the
28program. Fees and costs collected pursuant to this subsection
29shall be deposited in the appropriate fund or account created
30in section 16.144.
314. The program shall be administered by the authority in
32accordance with rules adopted by the authority pursuant to
33chapter 17A.
34 Sec. 8. NEW SECTION. 16.144 Water quality financing program
35fund — appropriation — other funds.
-8- 11. a. A water quality financing program fund is created
2and shall consist of appropriations made to the fund, moneys
3credited to the fund pursuant to section 16.134A, and transfers
4of interest, earnings, and moneys from other funds as provided
5by law. The fund shall be administered by the authority as
6a revolving fund. Moneys in the fund are appropriated to
7the authority for purposes of the program. Notwithstanding
8section 8.33, moneys in the fund that remain unencumbered or
9unobligated at the close of a fiscal year shall not revert
10but shall remain available for expenditure for the purposes
11designated. Notwithstanding section 12C.7, subsection 2,
12interest or earnings on moneys in the fund shall be credited
13to the fund.
14b. The authority shall use the moneys in the fund to provide
15financial assistance to eligible entities under the program.
16The authority may provide financial assistance in the form
17deemed most convenient for the efficient financing of projects,
18including loans, forgivable loans, or grants. The authority
19shall administer the fund and the program in such a manner
20as to provide a permanent source of water quality project
21financial assistance to eligible entities.
22c. The authority may annually use an amount of not more
23than one percent of the moneys in the fund for administrative
24purposes.
252. a. The authority may establish and maintain other
26funds and accounts determined to be necessary to carry out the
27purposes of the program and shall provide for the funding,
28administration, investment, restrictions, and disposition of
29the funds and accounts.
30b. Moneys appropriated to and used by the authority for
31purposes of paying the costs and expenses associated with
32the administration of the program shall be administered as
33determined by the authority.
34c. All moneys transferred to the authority for purposes of
35the program shall be deposited and held in a fund or account
-9-1established and maintained pursuant to this section.
23. The funds or accounts held by the authority, or a trustee
3acting on behalf of the authority pursuant to a trust agreement
4related to the program, shall not be considered part of the
5general fund of the state, are not subject to appropriation for
6any other purpose by the general assembly, and in determining
7a general fund balance shall not be included in the general
8fund of the state, but shall remain in the funds and accounts
9maintained by the authority or trustee pursuant to a trust
10agreement. Funds and accounts held by the authority, or a
11trustee acting on behalf of the authority pursuant to a trust
12agreement related to the program, are separate dedicated funds
13and accounts under the administration and control of the
14authority and subject to section 16.31.
154. By October 1, 2018, and by October 1 of each year
16thereafter, the authority shall submit a report to the governor
17and the general assembly itemizing expenditures from the fund,
18if any, during the previous fiscal year.
19 Sec. 9. NEW SECTION. 16.145 Eligible entities — agreements
20required.
211. An eligible entity may apply to the authority for
22financial assistance under the program by submitting a plan
23that meets the following requirements:
24a. The plan includes one or more projects that improve
25water quality in the local area or watershed. Projects shall
26use practices identified in the latest version of the document
27entitled “Iowa Nutrient Reduction Strategy” initially presented
28in November 2012 by the department of agriculture and land
29stewardship, the department of natural resources, and Iowa
30state university of science and technology. A drainage or
31levee district established under chapter 468 shall utilize the
32installation of edge-of-field infrastructure as described in
33section 466B.43.
34b. The plan describes in detail the manner in which the
35projects will be financed and undertaken, including, as
-10-1applicable, the sources of revenue directed to financing the
2improvements as well as the eligible entities that will be
3receiving the revenues and how such revenues will be spent on
4the projects.
52. The authority shall review and approve or deny
6applications for financial assistance. The provision of
7financial assistance under the program shall take into account,
8as applicable, the number of municipalities, landowners, public
9utilities, rural water districts, or rural water associations
10comprising an eligible entity and the eligible entity’s
11financing capacity. The authority shall score applications
12for financial assistance according to rules adopted pursuant
13to this part. The authority shall only provide financial
14assistance to eligible entities that have sufficient financing
15capacity and that submit an appropriate plan designed to
16improve water quality.
173. An approved eligible entity shall enter into an agreement
18with the authority for the provision of financial assistance.
19The agreement shall include standard terms for the receipt
20of program moneys and any other terms the authority deems
21necessary or convenient for the efficient administration of the
22program.
23 Sec. 10. Section 423.3, Code 2017, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 103. a. The sales price from the sale or
26furnishing by a water utility of a water service in the state
27to consumers or users.
28b. For purposes of this subsection:
29(1) “Water service” means the delivery of water by piped
30distribution system.
31(2) “Water utility” means a public utility as defined in
32section 476.1 that furnishes water by piped distribution system
33to the public for compensation.
34 Sec. 11. NEW SECTION. 423G.1 Short title.
35This chapter may be cited as the “Water Service Tax Act”.
-11-1 Sec. 12. NEW SECTION. 423G.2 Definitions.
21. All words and phrases used in this chapter and defined in
3section 423.1 have the same meaning given them by section 423.1
4for purposes of this chapter.
52. As used in this chapter, “water service” and “water
6utility” mean the same as defined in section 423.3, subsection
7103.
8 Sec. 13. NEW SECTION. 423G.3 Water service tax.
9An excise tax at the rate of six percent is imposed on the
10sales price from the sale or furnishing by a water utility of a
11water service in the state to consumers or users.
12 Sec. 14. NEW SECTION. 423G.4 Exemptions.
13The sales price from transactions exempt from state sales
14tax under section 423.3, except section 423.3, subsection 103,
15is also exempt from the tax imposed by this chapter.
16 Sec. 15. NEW SECTION. 423G.5 Administration by director.
171. The director of revenue shall administer the water
18service tax as nearly as possible in conjunction with the
19administration of the state sales and use tax law, except that
20portion of the law that implements the streamlined sales and
21use tax agreement. The director shall provide appropriate
22forms, or provide on the regular state tax forms, for reporting
23water service tax liability.
242. The director may require all persons who are engaged
25in the business of deriving any sales price or purchase
26price subject to tax under this chapter to register with
27the department. The director may also require a tax permit
28applicable only to this chapter for any retailer not
29collecting, or any user not paying, taxes under chapter 423.
303. Section 422.25, subsection 4, sections 422.30, 422.67,
31and 422.68, section 422.69, subsection 1, sections 422.70,
32422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
331, and sections 423.23, 423.24, 423.25, 423.31 through
34423.35, 423.37 through 423.42, and 423.47, consistent with the
35provisions of this chapter, shall apply with respect to the tax
-12-1authorized under this chapter, in the same manner and with the
2same effect as if the excise taxes on the sale or furnishing of
3a water service were retail sales taxes within the meaning of
4those statutes. Notwithstanding this subsection, the director
5shall provide for quarterly filing of returns and for other
6than quarterly filing of returns both as prescribed in section
7423.31. All taxes collected under this chapter by a retailer
8or any user are deemed to be held in trust for the state of
9Iowa.
10 Sec. 16. NEW SECTION. 423G.6 Deposit of revenues.
111. All moneys received and all refunds shall be deposited in
12or withdrawn from the general fund of the state.
132. Subsequent to the deposit in the general fund of the
14state, the department shall transfer the following amounts to
15the following funds:
16a. For revenues collected on or after July 1, 2018, but
17before August 1, 2019, one-twelfth of the revenues to the
18water quality infrastructure fund created in section 8.57B,
19and one-twelfth of the revenues to the water quality financial
20assistance fund created in section 16.134A.
21b. For revenues collected on or after August 1, 2019,
22but before August 1, 2020, one-sixth of the revenues to the
23water quality infrastructure fund created in section 8.57B,
24and one-sixth of the revenues to the water quality financial
25assistance fund created in section 16.134A.
26c. For revenues collected on or after August 1, 2020,
27one-half of the revenues to the water quality financial
28assistance fund created in section 16.134A.
29 Sec. 17. NEW SECTION. 423G.7 Future repeal.
30This chapter is repealed upon the occurrence of one of the
31following, whichever is earlier:
321. The enactment date that the tax rate for the sales
33tax imposed upon the retail sales price of tangible personal
34property and the furnishing of enumerated services sold in this
35state in effect on July 1, 2016, is increased.
-13- 12. July 1, 2029.
2 Sec. 18. Section 455B.171, Code 2017, is amended by adding
3the following new subsections:
4 NEW SUBSECTION. 10A. “Iowa nutrient reduction strategy”
5means a water quality initiative developed and updated by the
6department of agriculture and land stewardship, the department
7of natural resources, and the college of agriculture and life
8sciences at Iowa state university of science and technology in
9order to assess and reduce nutrients in this state’s watersheds
10that utilize a pragmatic, strategic, and coordinated approach
11with the goal of accomplishing reductions over time.
12 NEW SUBSECTION. 15A. “Nutrient” means total nitrogen and
13total phosphorus.
14 Sec. 19. Section 455B.171, subsection 19, Code 2017, is
15amended to read as follows:
1619. “Point source” means any discernible, confined, and
17discrete conveyance, including but not limited to any pipe,
18ditch, channel, tunnel, conduit, well, discrete fissure,
19container, rolling stock, concentrated animal feeding
20operation, or vessel or other floating craft, from which
21pollutants are or may be discharged. “Point source” does not
22include agricultural storm water discharge and return flows
23from irrigated agriculture.
24 Sec. 20. Section 455B.177, Code 2017, is amended by adding
25the following new subsection:
26 NEW SUBSECTION. 3. The general assembly further finds
27and declares that it is in the interest of the people of Iowa
28to assess and reduce nutrients in surface waters over time by
29implementing the Iowa nutrient reduction strategy. To evaluate
30the progress achieved over time toward the goals of the Iowa
31nutrient reduction strategy and the United States environmental
32protection agency gulf hypoxia action plan, the baseline
33condition shall be calculated for the time period from 1980 to
341996.
35 Sec. 21. Section 466B.3, subsection 3, paragraph c, Code
-14-12017, is amended to read as follows:
2c. Whether the funds, programs, and regulatory efforts
3coordinated by the council eventually result in a long-term
4improvement to the quality of surface water in Iowa. To
5evaluate the progress achieved over time toward the goals of
6the Iowa nutrient reduction strategy, as defined in section
7455B.171, and the United States environmental protection agency
8gulf hypoxia action plan, the baseline condition shall be
9calculated for the time period from 1980 to 1996.
10 Sec. 22. Section 466B.42, Code 2017, is amended to read as
11follows:
12466B.42 Water quality initiative.
13The division shall establish a water quality initiative
14in order to assess and reduce nutrients in this state’s
15watersheds, including subwatersheds, and regional watersheds,
16and for implementing its responsibilities under the Iowa
17nutrient reduction strategy as defined in section 455B.171.
18The division shall establish and administer projects to
19reduce nutrients in surface waters from nonpoint sources in
20a scientific, reasonable, and cost-effective manner. The
21division shall utilize a pragmatic, strategic, and coordinated
22approach with the goal of accomplishing reductions over time.
23To evaluate the progress achieved over time toward the goals
24of the Iowa nutrient reduction strategy and the United States
25environmental protection agency gulf hypoxia action plan, the
26baseline condition shall be calculated for the time period from
271980 to 1996.
28 Sec. 23. NEW SECTION. 466B.43 Water quality agriculture
29infrastructure programs.
301. As part of the water quality initiative established
31pursuant to section 466B.42, the division shall administer
32water quality agriculture infrastructure programs created in
33this section.
342. The purpose of the programs is to support projects for
35the installation of infrastructure, including conservation
-15-1structures, practices, or other measures that reduce
2contributing nutrient loads, associated sediment, or
3contaminants from sources to surface waters. The programs
4shall be administered in a manner that is consistent with
5the latest version of the “Iowa Nutrient Reduction Strategy”
6initially presented in November 2012 by the department of
7agriculture and land stewardship, the department of natural
8resources, and Iowa state university of science and technology.
93. An edge-of-field infrastructure program is created.
10The program shall support projects located on agricultural
11land, which may include demonstration projects, that capture
12or filter nutrients entering into a surface water. The
13program’s projects shall be limited to infrastructure designed
14and installed for use over multiple years, including but not
15limited to wetlands, bioreactor systems, saturated buffers,
16or land use changes. The program shall be financed on a
17cost-share basis.
184. An in-field infrastructure program is created. The
19program shall support projects located on agricultural land,
20which may include demonstration projects, that decrease erosion
21and precipitation-induced surface runoff, increase water
22infiltration rates, and increase soil sustainability. The
23program’s projects shall be limited to infrastructure designed
24and installed for use over multiple years, including but not
25limited to structures, terraces, and waterways located on
26cropland or pastureland, and including but not limited to soil
27conservation or erosion control structures or managed drainage
28systems. The program shall be financed on a cost-share basis.
295. Any state moneys used to finance a project under a
30water quality agriculture infrastructure program shall be
31administered according to an agreement entered into by the
32division and the owner of the land where the infrastructure
33is to be installed. The agreement shall include standard
34terms and conditions for the receipt of program moneys and
35any other terms and conditions the division deems necessary
-16-1or convenient for the efficient administration of the project
2or program. The division may support multiple installations
3of infrastructure on a single parcel of land. The division
4may also combine programs if cost effective. The division
5may annually use an amount of not more than four percent of
6the moneys used to support each program for administrative
7purposes.
86. By October 1, 2018, and each October 1, thereafter, the
9division shall submit a report to the governor and the general
10assembly itemizing expenditures, by hydrologic unit code 8
11watershed, under the programs during the previous fiscal year,
12if any.
137. Any information obtained by the division identifying
14a person holding a legal interest in agricultural land or
15specific agricultural land shall be a confidential record under
16section 22.7.
17 Sec. 24. NEW SECTION. 466B.44 Water quality urban
18infrastructure program.
191. As part of the water quality initiative established
20pursuant to section 466B.42, the division shall administer a
21water quality urban infrastructure program.
222. The purpose of the program is to support watershed
23projects and advance implementation of the latest version of
24the “Iowa Nutrient Reduction Strategy” initially presented
25in November 2012 by the department of agriculture and land
26stewardship, the department of natural resources, and Iowa
27state university of science and technology, which program
28support may include demonstration projects that decrease
29erosion, precipitation-induced surface runoff, and storm
30water discharges and that increase water infiltration rates.
31The program’s projects shall be based on Iowa’s storm water
32management manual published by the department of natural
33resources.
343. The program shall be financed on a cost-share basis or
35through cooperative agreements with watershed projects funded
-17-1through section 455B.199 whose project activities fall outside
2the territorial boundaries of a city.
34. Any state moneys used to finance a project under a water
4quality urban infrastructure program shall be administered
5according to an agreement entered into by the division and the
6owner of the land where the infrastructure is to be installed.
7The agreement shall include standard terms and conditions
8for the receipt of program moneys and any other terms and
9conditions the division deems necessary or convenient for
10the efficient administration of the project or program. The
11division may support multiple installations of infrastructure
12on a single parcel of land. The division may annually use an
13amount of not more than four percent of the moneys used to
14support the program for administrative purposes.
155. Notwithstanding any other provision in this section
16to the contrary, beginning on July 1, 2018, the division may
17use any amount available to support the water quality urban
18infrastructure program to instead extend and support the
19three-year data collection of in-field agricultural practices
20project as enacted in 2015 Iowa Acts, ch.132, §18.
216. Notwithstanding any other provision of this section
22to the contrary, the division may use any amount available
23to support the water quality urban infrastructure program to
24develop and maintain an online resource displaying measurable
25indicators of desirable change in water quality within the
26state’s watersheds. These measurable indicators may include
27but are not limited to public and private funding inputs,
28involvement in water quality projects, and improvements, land
29use, practice adoption, calculated load reduction, and measured
30loads at existing monitoring stations.
317. By October 1, 2018, and by October 1 of each year
32thereafter, the division shall submit a report to the governor
33and the general assembly itemizing expenditures under the
34program, if any, during the previous fiscal year.
358. Any information obtained by the division identifying a
-18-1person holding a legal interest in land or specific land shall
2be a confidential record under section 22.7.
3 Sec. 25. INTERIM STUDY COMMITTEE ON SMALL CITIES AND CLEAN
4WATER STANDARDS.
51. The legislative council is requested to establish a study
6committee for the 2017 interim to identify and comprehensively
7review the financial and other challenges faced by small
8cities in complying with the various state and federal clean
9water standards, and to consider options for addressing those
10challenges.
112. The interim committee’s review shall include an
12evaluation of the future effectiveness of the wastewater
13and drinking water treatment financial assistance program
14created in this Act in section 16.134 and the water quality
15financing program created in sections 16.142 through 16.145,
16and may include evaluations of other existing or proposed
17state programs as desired. The committee shall seek input
18and may request information or assistance from public and
19private stakeholders and experts, including utility management
20organizations, the Iowa association of business and industry,
21the department of natural resources, the Iowa finance
22authority, the department of agriculture and land stewardship,
23the economic development authority, the Iowa chamber alliance,
24the Iowa league of cities, and the Iowa state association of
25counties.
263. The interim committee shall submit its findings and
27recommendations to the general assembly for consideration
28during the 2018 legislative session.
29 Sec. 26. LEGISLATIVE INTENT. It is the intent of the
30general assembly that the amendment in this Act to the
31definition of point source in section 455B.171, subsection
3219, is a conforming amendment consistent with current state
33and federal law, and that the amendment does not change the
34application of current law but instead reflects current law
35both before and after the enactment of this Act.
-19-1 Sec. 27. EFFECTIVE DATE. The following provision or
2provisions of this Act take effect July 1, 2018:
31. The section of this Act enacting section 423.3,
4subsection 103.
52. The sections of this Act enacting sections 423G.1,
6423G.2, 423G.3, 423G.4, 423G.5, 423G.6, and 423G.7.
mm/sc/jh
2treatment financial assistance program, creating a water
3quality infrastructure fund, establishing a water quality
4financing program, providing for cost-share programs for
5infrastructure on agricultural and urban land under the
6water quality initiative, creating a water service excise
7tax and a related sales tax exemption, making transfers and
8appropriations and other changes properly related to water
9quality, and including effective date provisions.
10BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 8.57, subsection 5, paragraph f,
2subparagraph (1), Code 2017, is amended by adding the following
3new subparagraph division:
4 NEW SUBPARAGRAPH DIVISION. (0c) (i) For each fiscal year
5of the period beginning July 1, 2020, and ending June 30, 2029,
6of the wagering tax receipts received pursuant to sections
799D.17 and 99F.11, the next fifteen million dollars shall be
8deposited in the water quality infrastructure fund created in
9section 8.57B.
10(ii) Notwithstanding subparagraph subdivision (i), this
11subparagraph division (0c) is repealed on one of the following
12dates, whichever is earlier:
13(A) On July 1 following the enactment date that the tax
14rate for the sales tax imposed upon the retail sales price of
15tangible personal property and the furnishing of enumerated
16services sold in this state in effect on July 1, 2016, is
17increased.
18(B) On July 1, 2029.
19 Sec. 2. Section 8.57, subsection 5, paragraph f,
20subparagraph (1), subparagraph division (d), Code 2017, is
21amended to read as follows:
22(d) For the fiscal year beginning July 1, 2013, and for
23each fiscal year thereafter, the total moneys in excess of the
24moneys deposited under this paragraph “f” in the revenue bonds
25debt service fund, the revenue bonds federal subsidy holdback
26fund, the vision Iowa fund, the water quality infrastructure
27fund, and the Iowa skilled worker and job creation fund shall
28be deposited in the rebuild Iowa infrastructure fund and shall
29be used as provided in this section, notwithstanding section
308.60.
31 Sec. 3. NEW SECTION. 8.57B Water quality infrastructure
32fund — creation — appropriations.
331. A water quality infrastructure fund is created within
34the division of soil conservation and water quality of the
35department of agriculture and land stewardship. The fund
-1-1shall consist of moneys transferred pursuant to section 8.57,
2subsection 5, paragraph “f”, subparagraph (1), subparagraph
3division (0c), moneys transferred to the fund pursuant to
4section 423G.6, and appropriations made to the fund and
5transfers of interest, earnings, and moneys from other funds
6as provided by law.
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.
24 Sec. 4. Section 16.134, Code 2017, is amended to read as
25follows:
2616.134 Wastewater and drinking water treatment financial
27assistance program.
281. The Iowa finance authority shall establish and
29administer a wastewater and drinking water treatment financial
30assistance program. The purpose of the program shall be to
31provide financial assistance to enhance water quality. The
32program shall be administered in accordance with rules adopted
33by the authority pursuant to chapter 17A. For purposes of
34this section, “program” means the wastewater and drinking water
35 treatment financial assistance program and “committee” means the
-2-1water quality financing review committee created in subsection
29.
32. A wastewater and drinking water treatment financial
4assistance fund is created and shall consist of appropriations
5made to the fund and transfers of interest, earnings, and
6moneys from other funds as provided by law. Moneys transferred
7to the fund pursuant to section 16.134A are appropriated to the
8authority for purposes of the program. Moneys in the fund are
9not subject to section 8.33. Notwithstanding section 12C.7,
10subsection 2, interest or earnings on moneys in the fund shall
11be credited to the fund.
123. Financial assistance under the program shall be used
13to install or upgrade wastewater treatment facilities and
14systems and drinking water treatment facilities and systems,
15including source water protection projects, and for engineering
16or technical assistance for facility planning and design.
174. The authority committee shall distribute approve
18 financial assistance in from the fund in accordance with the
19following:
20a. The goal of the program shall be to base awards on the
21impact of the grant combined with other sources of financing to
22ensure that sewer rates do not exceed one and one-half percent
23of a community’s median household income.
24b. a. Communities shall be eligible for financial
25assistance by qualifying as Priority shall be given for
26projects in which a disadvantaged community and is seeking
27financial assistance for the installation or upgrade of
28wastewater treatment facilities due to regulatory activity
29by the department of natural resources and drinking water
30treatment facilities. For purposes of this section, the term
31“disadvantaged community” means the same as defined by the
32department.
33c. b. Priority shall be given to projects in which the
34 meeting criteria established in section 455B.199B in which the
35applicant seeks financial assistance is to be used to obtain
-3-1 with financing under the water pollution control works and
2drinking water facilities financing program pursuant to section
316.131 or other federal, or state, or private financing.
4d. c. Priority shall also be given to projects whose
5completion will provide significant improvement to water
6quality in the relevant watershed.
7e. d. Priority shall also be given to communities that
8employ an alternative wastewater treatment technology pursuant
9to section 455B.199C.
10f. e. Priority shall be also be given to those communities
11where sewer or water rates are the highest as a percentage of
12that community’s median household income.
13f. Priority shall also be given to communities that employ
14technology to address the latest version of the “Iowa Nutrient
15Reduction Strategy” initially presented in November 2012 by the
16department of agriculture and land stewardship, the department
17of natural resources, and Iowa state university of science and
18technology.
19g. Financial assistance in the form of grants shall be
20issued on an annual basis.
21h. An applicant shall not receive a grant that exceeds five
22hundred thousand dollars.
234A. A utility management organization formed under chapter
2428E or operated by a rural water system organized under chapter
25357A or chapter 504 shall be considered eligible for financial
26assistance under the program.
275. The authority in cooperation with the department of
28natural resources shall share provide information and resources
29to the committee when the committee is determining the
30qualifications of a community for financial assistance from the
31fund.
326. The authority shall enter into agreements with financial
33assistance recipients and distribute moneys under the program
34pursuant to financial assistance determinations made by the
35committee.The authority may use an amount of not more than
-4-1four one percent of any moneys appropriated for deposit in the
2fund for administration purposes.
37. By October 1 of each year, the authority shall submit
4a report to the governor and the general assembly itemizing
5expenditures under the program during the previous fiscal year,
6if any.
78. a. Beginning September 1, 2027, and every ten years
8thereafter, a program review committee is established for
9purposes of reviewing the wastewater and drinking water
10treatment financial assistance program. By December 1 of the
11same year, the program review committee shall file a report
12with the governor and the general assembly that reviews the
13effectiveness of the program during the prior ten fiscal years.
14b. The program review committee shall consist of the
15following members:
16(1) The governor or the governor’s designee.
17(2) The secretary of agriculture or the secretary’s
18designee.
19(3) The executive director of the authority or the executive
20director’s designee.
21(4) The director of the department of natural resources or
22the director’s designee.
23(5) Four members of the general assembly, with two from the
24senate and two from the house of representatives and not more
25than one member from each chamber being from the same political
26party. The two senators shall be designated one member each
27by the president of the senate, after consultation with the
28majority leader of the senate, and by the minority leader of
29the senate. The two representatives shall be designated one
30member each by the speaker of the house of representatives,
31after consultation with the majority leader of the house of
32representatives, and by the minority leader of the house of
33representatives.
34c. Staffing services shall be provided by the authority.
359. a. A water quality financing review committee is
-5-1created consisting of the secretary of agriculture or the
2secretary’s designee, the executive director of the authority
3or the executive director’s designee, and the director of the
4department of natural resources or the director’s designee.
5b. The committee shall review and approve or deny
6applications for financial assistance under the wastewater
7and drinking water treatment financial assistance program
8established in this section.
9 Sec. 5. NEW SECTION. 16.134A Water quality financial
10assistance fund.
111. A water quality financial assistance fund is created in
12the state treasury as a revolving fund.
132. The fund shall consist of all of the following:
14a. (1) Moneys transferred to the fund pursuant to section
15423G.6.
16(2) This paragraph “a” is repealed on January 1, 2030.
17b. Appropriations made to the fund and transfers of
18interest, earnings, and moneys from other funds as provided by
19law.
203. For each fiscal year in the fiscal period beginning
21July 1, 2018, and ending June 30, 2029, there is appropriated
22the following percentages of the balance of the fund for the
23following purposes:
24a. Forty percent to the Iowa finance authority to support
25the wastewater and drinking water treatment financial
26assistance program created in section 16.134.
27b. Forty-five percent to the Iowa finance authority to be
28credited to the water quality financing program fund created
29pursuant to section 16.144.
30c. Fifteen percent to the division of soil conservation
31and water quality of the department of agriculture and land
32stewardship to support the water quality urban infrastructure
33program created in section 466B.44.
344. Moneys in the fund are not subject to section 8.33.
35Notwithstanding section 12C.7, subsection 2, interest or
-6-1earnings on moneys in the fund shall be credited to the fund.
2 Sec. 6. NEW SECTION. 16.142 Definitions.
3As used in this part, unless the context otherwise requires:
41. “Cost” means all costs, charges, expenses, or other
5indebtedness incurred by a loan recipient and determined by
6the authority as reasonable and necessary for carrying out
7all works and undertakings necessary or incidental to the
8accomplishment of any project.
92. “Eligible entity” means a municipality or a landowner,
10as determined by the authority, a public utility as defined
11in section 476.1, or a rural water district or rural water
12association as defined in section 357A.1.
133. “Loan recipient” means an eligible entity that has
14received a loan under the program.
154. “Municipality” means a governmental body such as a state
16agency or a political subdivision of the state. Municipality
17includes but is not limited to a city, city utility, county,
18soil and water conservation district, sanitary district, a
19subdistrict of any of the foregoing districts, a state agency,
20or other governmental body or corporation empowered to provide
21sewage collection and treatment services or drinking water, or
22any entity jointly exercising governmental powers pursuant to
23chapter 28E or 28F, or any other combination of two or more
24governmental bodies or corporations acting jointly under the
25laws of this state in connection with a project.
265. “Program” means the water quality financing program
27created in this part.
286. “Project” means any combination of improvements,
29structures, developments, tasks, actions, constructions,
30modifications, operations, or practices designed to improve
31water quality that are proposed by an eligible entity and
32approved by the authority. “Project” includes but is not
33limited to any of the following:
34a. A project meeting the requirements of part 2 of this
35subchapter.
-7- 1b. A project, operation, or practice undertaken or carried
2out to address watershed protection, flood prevention, or water
3quality improvement.
4c. A project meeting the requirements of a sponsor project
5under section 455B.199.
6 Sec. 7. NEW SECTION. 16.143 Water quality financing
7program.
81. The authority, in cooperation with the department of
9natural resources and the department of agriculture and land
10stewardship, shall establish and administer a water quality
11financing program. The purpose of the program shall be to
12provide financial assistance to enhance the quality of surface
13water and groundwater, particularly by providing financial
14assistance for projects designed to improve water quality
15by addressing point and nonpoint sources, with a higher
16prioritization provided to collaborative efforts.
172. The authority shall determine the interest rate
18and repayment terms for loans made under the program, in
19cooperation with the department of natural resources and
20the department of agriculture and land stewardship, and the
21authority shall enter into loan agreements with eligible
22entities in compliance with and subject to the terms and
23conditions of the program as described in this part.
243. The authority may charge loan recipients fees and assess
25costs against such recipients necessary for the continued
26operation of the program. Such fees and costs shall not exceed
27the costs directly associated with the administration of the
28program. Fees and costs collected pursuant to this subsection
29shall be deposited in the appropriate fund or account created
30in section 16.144.
314. The program shall be administered by the authority in
32accordance with rules adopted by the authority pursuant to
33chapter 17A.
34 Sec. 8. NEW SECTION. 16.144 Water quality financing program
35fund — appropriation — other funds.
-8- 11. a. A water quality financing program fund is created
2and shall consist of appropriations made to the fund, moneys
3credited to the fund pursuant to section 16.134A, and transfers
4of interest, earnings, and moneys from other funds as provided
5by law. The fund shall be administered by the authority as
6a revolving fund. Moneys in the fund are appropriated to
7the authority for purposes of the program. Notwithstanding
8section 8.33, moneys in the fund that remain unencumbered or
9unobligated at the close of a fiscal year shall not revert
10but shall remain available for expenditure for the purposes
11designated. Notwithstanding section 12C.7, subsection 2,
12interest or earnings on moneys in the fund shall be credited
13to the fund.
14b. The authority shall use the moneys in the fund to provide
15financial assistance to eligible entities under the program.
16The authority may provide financial assistance in the form
17deemed most convenient for the efficient financing of projects,
18including loans, forgivable loans, or grants. The authority
19shall administer the fund and the program in such a manner
20as to provide a permanent source of water quality project
21financial assistance to eligible entities.
22c. The authority may annually use an amount of not more
23than one percent of the moneys in the fund for administrative
24purposes.
252. a. The authority may establish and maintain other
26funds and accounts determined to be necessary to carry out the
27purposes of the program and shall provide for the funding,
28administration, investment, restrictions, and disposition of
29the funds and accounts.
30b. Moneys appropriated to and used by the authority for
31purposes of paying the costs and expenses associated with
32the administration of the program shall be administered as
33determined by the authority.
34c. All moneys transferred to the authority for purposes of
35the program shall be deposited and held in a fund or account
-9-1established and maintained pursuant to this section.
23. The funds or accounts held by the authority, or a trustee
3acting on behalf of the authority pursuant to a trust agreement
4related to the program, shall not be considered part of the
5general fund of the state, are not subject to appropriation for
6any other purpose by the general assembly, and in determining
7a general fund balance shall not be included in the general
8fund of the state, but shall remain in the funds and accounts
9maintained by the authority or trustee pursuant to a trust
10agreement. Funds and accounts held by the authority, or a
11trustee acting on behalf of the authority pursuant to a trust
12agreement related to the program, are separate dedicated funds
13and accounts under the administration and control of the
14authority and subject to section 16.31.
154. By October 1, 2018, and by October 1 of each year
16thereafter, the authority shall submit a report to the governor
17and the general assembly itemizing expenditures from the fund,
18if any, during the previous fiscal year.
19 Sec. 9. NEW SECTION. 16.145 Eligible entities — agreements
20required.
211. An eligible entity may apply to the authority for
22financial assistance under the program by submitting a plan
23that meets the following requirements:
24a. The plan includes one or more projects that improve
25water quality in the local area or watershed. Projects shall
26use practices identified in the latest version of the document
27entitled “Iowa Nutrient Reduction Strategy” initially presented
28in November 2012 by the department of agriculture and land
29stewardship, the department of natural resources, and Iowa
30state university of science and technology. A drainage or
31levee district established under chapter 468 shall utilize the
32installation of edge-of-field infrastructure as described in
33section 466B.43.
34b. The plan describes in detail the manner in which the
35projects will be financed and undertaken, including, as
-10-1applicable, the sources of revenue directed to financing the
2improvements as well as the eligible entities that will be
3receiving the revenues and how such revenues will be spent on
4the projects.
52. The authority shall review and approve or deny
6applications for financial assistance. The provision of
7financial assistance under the program shall take into account,
8as applicable, the number of municipalities, landowners, public
9utilities, rural water districts, or rural water associations
10comprising an eligible entity and the eligible entity’s
11financing capacity. The authority shall score applications
12for financial assistance according to rules adopted pursuant
13to this part. The authority shall only provide financial
14assistance to eligible entities that have sufficient financing
15capacity and that submit an appropriate plan designed to
16improve water quality.
173. An approved eligible entity shall enter into an agreement
18with the authority for the provision of financial assistance.
19The agreement shall include standard terms for the receipt
20of program moneys and any other terms the authority deems
21necessary or convenient for the efficient administration of the
22program.
23 Sec. 10. Section 423.3, Code 2017, is amended by adding the
24following new subsection:
25 NEW SUBSECTION. 103. a. The sales price from the sale or
26furnishing by a water utility of a water service in the state
27to consumers or users.
28b. For purposes of this subsection:
29(1) “Water service” means the delivery of water by piped
30distribution system.
31(2) “Water utility” means a public utility as defined in
32section 476.1 that furnishes water by piped distribution system
33to the public for compensation.
34 Sec. 11. NEW SECTION. 423G.1 Short title.
35This chapter may be cited as the “Water Service Tax Act”.
-11-1 Sec. 12. NEW SECTION. 423G.2 Definitions.
21. All words and phrases used in this chapter and defined in
3section 423.1 have the same meaning given them by section 423.1
4for purposes of this chapter.
52. As used in this chapter, “water service” and “water
6utility” mean the same as defined in section 423.3, subsection
7103.
8 Sec. 13. NEW SECTION. 423G.3 Water service tax.
9An excise tax at the rate of six percent is imposed on the
10sales price from the sale or furnishing by a water utility of a
11water service in the state to consumers or users.
12 Sec. 14. NEW SECTION. 423G.4 Exemptions.
13The sales price from transactions exempt from state sales
14tax under section 423.3, except section 423.3, subsection 103,
15is also exempt from the tax imposed by this chapter.
16 Sec. 15. NEW SECTION. 423G.5 Administration by director.
171. The director of revenue shall administer the water
18service tax as nearly as possible in conjunction with the
19administration of the state sales and use tax law, except that
20portion of the law that implements the streamlined sales and
21use tax agreement. The director shall provide appropriate
22forms, or provide on the regular state tax forms, for reporting
23water service tax liability.
242. The director may require all persons who are engaged
25in the business of deriving any sales price or purchase
26price subject to tax under this chapter to register with
27the department. The director may also require a tax permit
28applicable only to this chapter for any retailer not
29collecting, or any user not paying, taxes under chapter 423.
303. Section 422.25, subsection 4, sections 422.30, 422.67,
31and 422.68, section 422.69, subsection 1, sections 422.70,
32422.71, 422.72, 422.74, and 422.75, section 423.14, subsection
331, and sections 423.23, 423.24, 423.25, 423.31 through
34423.35, 423.37 through 423.42, and 423.47, consistent with the
35provisions of this chapter, shall apply with respect to the tax
-12-1authorized under this chapter, in the same manner and with the
2same effect as if the excise taxes on the sale or furnishing of
3a water service were retail sales taxes within the meaning of
4those statutes. Notwithstanding this subsection, the director
5shall provide for quarterly filing of returns and for other
6than quarterly filing of returns both as prescribed in section
7423.31. All taxes collected under this chapter by a retailer
8or any user are deemed to be held in trust for the state of
9Iowa.
10 Sec. 16. NEW SECTION. 423G.6 Deposit of revenues.
111. All moneys received and all refunds shall be deposited in
12or withdrawn from the general fund of the state.
132. Subsequent to the deposit in the general fund of the
14state, the department shall transfer the following amounts to
15the following funds:
16a. For revenues collected on or after July 1, 2018, but
17before August 1, 2019, one-twelfth of the revenues to the
18water quality infrastructure fund created in section 8.57B,
19and one-twelfth of the revenues to the water quality financial
20assistance fund created in section 16.134A.
21b. For revenues collected on or after August 1, 2019,
22but before August 1, 2020, one-sixth of the revenues to the
23water quality infrastructure fund created in section 8.57B,
24and one-sixth of the revenues to the water quality financial
25assistance fund created in section 16.134A.
26c. For revenues collected on or after August 1, 2020,
27one-half of the revenues to the water quality financial
28assistance fund created in section 16.134A.
29 Sec. 17. NEW SECTION. 423G.7 Future repeal.
30This chapter is repealed upon the occurrence of one of the
31following, whichever is earlier:
321. The enactment date that the tax rate for the sales
33tax imposed upon the retail sales price of tangible personal
34property and the furnishing of enumerated services sold in this
35state in effect on July 1, 2016, is increased.
-13- 12. July 1, 2029.
2 Sec. 18. Section 455B.171, Code 2017, is amended by adding
3the following new subsections:
4 NEW SUBSECTION. 10A. “Iowa nutrient reduction strategy”
5means a water quality initiative developed and updated by the
6department of agriculture and land stewardship, the department
7of natural resources, and the college of agriculture and life
8sciences at Iowa state university of science and technology in
9order to assess and reduce nutrients in this state’s watersheds
10that utilize a pragmatic, strategic, and coordinated approach
11with the goal of accomplishing reductions over time.
12 NEW SUBSECTION. 15A. “Nutrient” means total nitrogen and
13total phosphorus.
14 Sec. 19. Section 455B.171, subsection 19, Code 2017, is
15amended to read as follows:
1619. “Point source” means any discernible, confined, and
17discrete conveyance, including but not limited to any pipe,
18ditch, channel, tunnel, conduit, well, discrete fissure,
19container, rolling stock, concentrated animal feeding
20operation, or vessel or other floating craft, from which
21pollutants are or may be discharged. “Point source” does not
22include agricultural storm water discharge and return flows
23from irrigated agriculture.
24 Sec. 20. Section 455B.177, Code 2017, is amended by adding
25the following new subsection:
26 NEW SUBSECTION. 3. The general assembly further finds
27and declares that it is in the interest of the people of Iowa
28to assess and reduce nutrients in surface waters over time by
29implementing the Iowa nutrient reduction strategy. To evaluate
30the progress achieved over time toward the goals of the Iowa
31nutrient reduction strategy and the United States environmental
32protection agency gulf hypoxia action plan, the baseline
33condition shall be calculated for the time period from 1980 to
341996.
35 Sec. 21. Section 466B.3, subsection 3, paragraph c, Code
-14-12017, is amended to read as follows:
2c. Whether the funds, programs, and regulatory efforts
3coordinated by the council eventually result in a long-term
4improvement to the quality of surface water in Iowa. To
5evaluate the progress achieved over time toward the goals of
6the Iowa nutrient reduction strategy, as defined in section
7455B.171, and the United States environmental protection agency
8gulf hypoxia action plan, the baseline condition shall be
9calculated for the time period from 1980 to 1996.
10 Sec. 22. Section 466B.42, Code 2017, is amended to read as
11follows:
12466B.42 Water quality initiative.
13The division shall establish a water quality initiative
14in order to assess and reduce nutrients in this state’s
15watersheds, including subwatersheds, and regional watersheds,
16and for implementing its responsibilities under the Iowa
17nutrient reduction strategy as defined in section 455B.171.
18The division shall establish and administer projects to
19reduce nutrients in surface waters from nonpoint sources in
20a scientific, reasonable, and cost-effective manner. The
21division shall utilize a pragmatic, strategic, and coordinated
22approach with the goal of accomplishing reductions over time.
23To evaluate the progress achieved over time toward the goals
24of the Iowa nutrient reduction strategy and the United States
25environmental protection agency gulf hypoxia action plan, the
26baseline condition shall be calculated for the time period from
271980 to 1996.
28 Sec. 23. NEW SECTION. 466B.43 Water quality agriculture
29infrastructure programs.
301. As part of the water quality initiative established
31pursuant to section 466B.42, the division shall administer
32water quality agriculture infrastructure programs created in
33this section.
342. The purpose of the programs is to support projects for
35the installation of infrastructure, including conservation
-15-1structures, practices, or other measures that reduce
2contributing nutrient loads, associated sediment, or
3contaminants from sources to surface waters. The programs
4shall be administered in a manner that is consistent with
5the latest version of the “Iowa Nutrient Reduction Strategy”
6initially presented in November 2012 by the department of
7agriculture and land stewardship, the department of natural
8resources, and Iowa state university of science and technology.
93. An edge-of-field infrastructure program is created.
10The program shall support projects located on agricultural
11land, which may include demonstration projects, that capture
12or filter nutrients entering into a surface water. The
13program’s projects shall be limited to infrastructure designed
14and installed for use over multiple years, including but not
15limited to wetlands, bioreactor systems, saturated buffers,
16or land use changes. The program shall be financed on a
17cost-share basis.
184. An in-field infrastructure program is created. The
19program shall support projects located on agricultural land,
20which may include demonstration projects, that decrease erosion
21and precipitation-induced surface runoff, increase water
22infiltration rates, and increase soil sustainability. The
23program’s projects shall be limited to infrastructure designed
24and installed for use over multiple years, including but not
25limited to structures, terraces, and waterways located on
26cropland or pastureland, and including but not limited to soil
27conservation or erosion control structures or managed drainage
28systems. The program shall be financed on a cost-share basis.
295. Any state moneys used to finance a project under a
30water quality agriculture infrastructure program shall be
31administered according to an agreement entered into by the
32division and the owner of the land where the infrastructure
33is to be installed. The agreement shall include standard
34terms and conditions for the receipt of program moneys and
35any other terms and conditions the division deems necessary
-16-1or convenient for the efficient administration of the project
2or program. The division may support multiple installations
3of infrastructure on a single parcel of land. The division
4may also combine programs if cost effective. The division
5may annually use an amount of not more than four percent of
6the moneys used to support each program for administrative
7purposes.
86. By October 1, 2018, and each October 1, thereafter, the
9division shall submit a report to the governor and the general
10assembly itemizing expenditures, by hydrologic unit code 8
11watershed, under the programs during the previous fiscal year,
12if any.
137. Any information obtained by the division identifying
14a person holding a legal interest in agricultural land or
15specific agricultural land shall be a confidential record under
16section 22.7.
17 Sec. 24. NEW SECTION. 466B.44 Water quality urban
18infrastructure program.
191. As part of the water quality initiative established
20pursuant to section 466B.42, the division shall administer a
21water quality urban infrastructure program.
222. The purpose of the program is to support watershed
23projects and advance implementation of the latest version of
24the “Iowa Nutrient Reduction Strategy” initially presented
25in November 2012 by the department of agriculture and land
26stewardship, the department of natural resources, and Iowa
27state university of science and technology, which program
28support may include demonstration projects that decrease
29erosion, precipitation-induced surface runoff, and storm
30water discharges and that increase water infiltration rates.
31The program’s projects shall be based on Iowa’s storm water
32management manual published by the department of natural
33resources.
343. The program shall be financed on a cost-share basis or
35through cooperative agreements with watershed projects funded
-17-1through section 455B.199 whose project activities fall outside
2the territorial boundaries of a city.
34. Any state moneys used to finance a project under a water
4quality urban infrastructure program shall be administered
5according to an agreement entered into by the division and the
6owner of the land where the infrastructure is to be installed.
7The agreement shall include standard terms and conditions
8for the receipt of program moneys and any other terms and
9conditions the division deems necessary or convenient for
10the efficient administration of the project or program. The
11division may support multiple installations of infrastructure
12on a single parcel of land. The division may annually use an
13amount of not more than four percent of the moneys used to
14support the program for administrative purposes.
155. Notwithstanding any other provision in this section
16to the contrary, beginning on July 1, 2018, the division may
17use any amount available to support the water quality urban
18infrastructure program to instead extend and support the
19three-year data collection of in-field agricultural practices
20project as enacted in 2015 Iowa Acts, ch.132, §18.
216. Notwithstanding any other provision of this section
22to the contrary, the division may use any amount available
23to support the water quality urban infrastructure program to
24develop and maintain an online resource displaying measurable
25indicators of desirable change in water quality within the
26state’s watersheds. These measurable indicators may include
27but are not limited to public and private funding inputs,
28involvement in water quality projects, and improvements, land
29use, practice adoption, calculated load reduction, and measured
30loads at existing monitoring stations.
317. By October 1, 2018, and by October 1 of each year
32thereafter, the division shall submit a report to the governor
33and the general assembly itemizing expenditures under the
34program, if any, during the previous fiscal year.
358. Any information obtained by the division identifying a
-18-1person holding a legal interest in land or specific land shall
2be a confidential record under section 22.7.
3 Sec. 25. INTERIM STUDY COMMITTEE ON SMALL CITIES AND CLEAN
4WATER STANDARDS.
51. The legislative council is requested to establish a study
6committee for the 2017 interim to identify and comprehensively
7review the financial and other challenges faced by small
8cities in complying with the various state and federal clean
9water standards, and to consider options for addressing those
10challenges.
112. The interim committee’s review shall include an
12evaluation of the future effectiveness of the wastewater
13and drinking water treatment financial assistance program
14created in this Act in section 16.134 and the water quality
15financing program created in sections 16.142 through 16.145,
16and may include evaluations of other existing or proposed
17state programs as desired. The committee shall seek input
18and may request information or assistance from public and
19private stakeholders and experts, including utility management
20organizations, the Iowa association of business and industry,
21the department of natural resources, the Iowa finance
22authority, the department of agriculture and land stewardship,
23the economic development authority, the Iowa chamber alliance,
24the Iowa league of cities, and the Iowa state association of
25counties.
263. The interim committee shall submit its findings and
27recommendations to the general assembly for consideration
28during the 2018 legislative session.
29 Sec. 26. LEGISLATIVE INTENT. It is the intent of the
30general assembly that the amendment in this Act to the
31definition of point source in section 455B.171, subsection
3219, is a conforming amendment consistent with current state
33and federal law, and that the amendment does not change the
34application of current law but instead reflects current law
35both before and after the enactment of this Act.
-19-1 Sec. 27. EFFECTIVE DATE. The following provision or
2provisions of this Act take effect July 1, 2018:
31. The section of this Act enacting section 423.3,
4subsection 103.
52. The sections of this Act enacting sections 423G.1,
6423G.2, 423G.3, 423G.4, 423G.5, 423G.6, and 423G.7.
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