Bill Text: IA SF482 | 2017-2018 | 87th General Assembly | Introduced
Bill Title: A bill for an act relating to water quality by amending the wastewater treatment financial assistance program, making appropriations from the rebuild Iowa infrastructure fund, creating a water quality infrastructure fund, establishing a water quality financing program, providing for cost-share programs for infrastructure on agricultural and urban land under the water quality initiative, creating a water service excise tax and a related sales tax exemption, and making appropriations and other changes properly related to water quality. (Formerly SSB 1034; See SF 512.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2017-04-05 - Subcommittee recommends passage. [SF482 Detail]
Download: Iowa-2017-SF482-Introduced.html
Senate File 482 - Introduced SENATE FILE BY COMMITTEE ON NATURAL RESOURCES AND ENVIRONMENT (SUCCESSOR TO SSB 1034) A BILL FOR 1 An Act relating to water quality by amending the wastewater 2 treatment financial assistance program, making 3 appropriations from the rebuild Iowa infrastructure fund, 4 creating a water quality infrastructure fund, establishing 5 a water quality financing program, providing for cost=share 6 programs for infrastructure on agricultural and urban land 7 under the water quality initiative, creating a water service 8 excise tax and a related sales tax exemption, and making 9 appropriations and other changes properly related to water 10 quality. 11 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 1844SV (3) 87 mm/sc PAG LIN 1 1 Section 1. Section 8.57, subsection 5, Code 2017, is amended 1 2 by adding the following new paragraph: 1 3 NEW PARAGRAPH. 0h. (1) Notwithstanding paragraph "c" of 1 4 this subsection, there is appropriated from the rebuild Iowa 1 5 infrastructure fund to the water quality infrastructure fund 1 6 created in section 8.57B the following amounts: 1 7 (a) For the fiscal year beginning July 1, 2017, and ending 1 8 June 30, 2018, four million three hundred thousand dollars. 1 9 (b) For the fiscal year beginning July 1, 2018, and ending 1 10 June 30, 2019, four million three hundred thousand dollars. 1 11 (c) For the fiscal year beginning July 1, 2019, and ending 1 12 June 30, 2020, eleven million five hundred thousand dollars. 1 13 (d) For the fiscal year beginning July 1, 2020, and ending 1 14 June 30, 2021, sixteen million five hundred thousand dollars. 1 15 (e) For the fiscal year beginning July 1, 2021, and ending 1 16 June 30, 2022, sixteen million five hundred thousand dollars. 1 17 (f) For the fiscal year beginning July 1, 2022, and ending 1 18 June 30, 2023, twenty=two million dollars. 1 19 (g) For the fiscal year beginning July 1, 2023, and ending 1 20 June 30, 2024, twenty=two million dollars. 1 21 (h) For the fiscal year beginning July 1, 2024, and ending 1 22 June 30, 2025, twenty=two million dollars. 1 23 (i) For the fiscal year beginning July 1, 2025, and ending 1 24 June 30, 2026, twenty=two million dollars. 1 25 (j) For the fiscal year beginning July 1, 2026, and ending 1 26 June 30, 2027, twenty=two million dollars. 1 27 (k) For the fiscal year beginning July 1, 2027, and ending 1 28 June 30, 2028, twenty=two million dollars. 1 29 (l) For the fiscal year beginning July 1, 2028, and ending 1 30 June 30, 2029, twenty=two million dollars. 1 31 (m) For the fiscal year beginning July 1, 2029, and ending 1 32 June 30, 2030, twenty=two million dollars. 1 33 (2) This paragraph "0h" is repealed on January 1, 2031. 1 34 Sec. 2. NEW SECTION. 8.57B Water quality infrastructure 1 35 fund ==== creation ==== appropriations. 2 1 1. A water quality infrastructure fund is created within 2 2 the division of soil conservation and water quality of the 2 3 department of agriculture and land stewardship. The fund 2 4 shall consist of moneys appropriated from the rebuild Iowa 2 5 infrastructure fund pursuant to section 8.57, subsection 5, 2 6 paragraph "0h". 2 7 2. The fund shall be separate from the general fund of the 2 8 state and the balance in the fund shall not be considered part 2 9 of the balance of the general fund of the state. However, the 2 10 fund shall be considered a special account for the purposes 2 11 of section 8.53, relating to generally accepted accounting 2 12 principles. 2 13 3. Moneys in the fund are appropriated to the division 2 14 of soil conservation and water quality of the department of 2 15 agriculture and land stewardship for the exclusive purpose of 2 16 supporting water quality agriculture infrastructure programs 2 17 created in section 466B.43. 2 18 4. Notwithstanding section 8.33, moneys in the fund 2 19 that remain unencumbered or unobligated at the close of a 2 20 fiscal year shall not revert but shall remain available for 2 21 expenditure for the purposes designated. Notwithstanding 2 22 section 12C.7, subsection 2, interest or earnings on moneys in 2 23 the fund shall be credited to the fund. 2 24 5. This section is repealed on the date that all moneys 2 25 transferred to the water quality infrastructure fund from 2 26 the rebuild Iowa infrastructure fund pursuant to section 2 27 8.57, subsection 5, paragraph "0h", including any interest 2 28 or earnings on such moneys credited to the water quality 2 29 infrastructure fund, are expended by the division of soil 2 30 conservation and water quality of the department of agriculture 2 31 and land stewardship, and the balance of the water quality 2 32 infrastructure fund is zero. The director of the division 2 33 of soil conservation and water quality of the department of 2 34 agriculture and land stewardship shall notify the Code editor 2 35 of this occurrence. 3 1 Sec. 3. Section 16.134, Code 2017, is amended to read as 3 2 follows: 3 3 16.134 Wastewater and drinking water treatment financial 3 4 assistance program. 3 5 1. The Iowa finance authority shall establish and 3 6 administer a wastewater and drinking water treatment financial 3 7 assistance program. The purpose of the program shall be to 3 8 provide financial assistance to enhance water quality. The 3 9 program shall be administered in accordance with rules adopted 3 10 by the authority pursuant to chapter 17A. For purposes of 3 11 this section, "program" means the wastewater and drinking water 3 12 treatment financial assistance program and "committee" means the 3 13 water quality financing review committee created in subsection 3 14 9. 3 15 2. A wastewater and drinking water treatment financial 3 16 assistance fund is created and shall consist of appropriations 3 17 made to the fund and transfers of interest, earnings, and 3 18 moneys from other funds as provided by law. Moneys transferred 3 19 to the fund pursuant to section 16.134A are appropriated to the 3 20 authority for purposes of the program. Moneys in the fund are 3 21 not subject to section 8.33. Notwithstanding section 12C.7, 3 22 subsection 2, interest or earnings on moneys in the fund shall 3 23 be credited to the fund. 3 24 3. Financial assistance under the program shall be used 3 25 to install or upgrade wastewater treatment facilities and 3 26 systems and drinking water treatment facilities and systems, 3 27 including source water protection projects, and for engineering 3 28 or technical assistance for facility planning and design. 3 29 4. Theauthoritycommittee shalldistributeapprove 3 30 financial assistanceinfrom the fund in accordance with the 3 31 following: 3 32a. The goal of the program shall be to base awards on the 3 33 impact of the grant combined with other sources of financing to 3 34 ensure that sewer rates do not exceed one and one=half percent 3 35 of a community's median household income.4 1b.a.Communities shall be eligible for financial 4 2 assistance by qualifying asPriority shall be given for 4 3 projects in which a disadvantaged communityandis seeking 4 4 financial assistance for the installation or upgrade of 4 5 wastewater treatment facilitiesdue to regulatory activity 4 6 by the department of natural resourcesand drinking water 4 7 treatment facilities. For purposes of this section, the term 4 8 "disadvantaged community" means the same as defined by the 4 9 department. 4 10c.b. Priority shall be given to projectsin which the 4 11meeting criteria established in section 455B.199B in which the 4 12 applicant seeks financial assistanceisto be usedto obtain 4 13with financing under the water pollution control works and 4 14 drinking water facilities financing program pursuant to section 4 15 16.131 or other federal,orstate, or private financing. 4 16d.c. Priority shall also be given to projects whose 4 17 completion will provide significant improvement to water 4 18 quality in the relevant watershed. 4 19e.d. Priority shall also be given to communities that 4 20 employ an alternative wastewater treatment technology pursuant 4 21 to section 455B.199C. 4 22f.e. Priority shallbealso be given to those communities 4 23 where sewer or water rates are the highest as a percentage of 4 24 that community's median household income. 4 25 f. Priority shall also be given to communities that employ 4 26 technology to address the latest version of the "Iowa Nutrient 4 27 Reduction Strategy" initially presented in November 2012 by the 4 28 department of agriculture and land stewardship, the department 4 29 of natural resources, and Iowa state university of science and 4 30 technology. 4 31 g. Financial assistance in the form of grants shall be 4 32 issued on an annual basis. 4 33 h. An applicant shall not receive a grant that exceeds five 4 34 hundred thousand dollars. 4 35 4A. A utility management organization formed under chapter 5 1 28E or operated by a rural water system organized under chapter 5 2 357A or chapter 504 shall be considered eligible for financial 5 3 assistance under the program. 5 4 5. The authority in cooperation with the department of 5 5 natural resources shallshareprovide information and resources 5 6 to the committee when the committee is determining the 5 7 qualifications of a community for financial assistance from the 5 8 fund. 5 9 6. The authority shall enter into agreements with financial 5 10 assistance recipients and distribute moneys under the program 5 11 pursuant to financial assistance determinations made by the 5 12 committee. The authority may use an amount of not more than 5 13fourone percent of any moneys appropriated for deposit in the 5 14 fund for administration purposes. 5 15 7. By October 1 of each year, the authority shall submit 5 16 a report to the governor and the general assembly itemizing 5 17 expenditures under the program during the previous fiscal year. 5 18 8. a. Beginning September 1, 2027, and every ten years 5 19 thereafter, a program review committee is established for 5 20 purposes of reviewing the wastewater and drinking water 5 21 treatment financial assistance program. By December 1 of the 5 22 same year, the program review committee shall file a report 5 23 with the governor and the general assembly that reviews the 5 24 effectiveness of the program during the prior ten fiscal years. 5 25 b. The program review committee shall consist of the 5 26 following members: 5 27 (1) The governor or the governor's designee. 5 28 (2) The secretary of agriculture or the secretary's 5 29 designee. 5 30 (3) The executive director of the authority or the executive 5 31 director's designee. 5 32 (4) The director of the department of natural resources or 5 33 the director's designee. 5 34 (5) Four members of the general assembly, with two from the 5 35 senate and two from the house of representatives and not more 6 1 than one member from each chamber being from the same political 6 2 party. The two senators shall be designated one member each 6 3 by the president of the senate, after consultation with the 6 4 majority leader of the senate, and by the minority leader of 6 5 the senate. The two representatives shall be designated one 6 6 member each by the speaker of the house of representatives, 6 7 after consultation with the majority leader of the house of 6 8 representatives, and by the minority leader of the house of 6 9 representatives. 6 10 c. Staffing services shall be provided by the authority. 6 11 9. a. A water quality financing review committee is 6 12 created consisting of the secretary of agriculture or the 6 13 secretary's designee, the executive director of the authority 6 14 or the executive director's designee, and the director of the 6 15 department of natural resources or the director's designee. 6 16 b. The committee shall review and approve or deny 6 17 applications for financial assistance under the wastewater 6 18 and drinking water treatment financial assistance program 6 19 established in this section. 6 20 Sec. 4. NEW SECTION. 16.134A Water quality financial 6 21 assistance fund. 6 22 1. A water quality financial assistance fund is created in 6 23 the state treasury as a revolving fund. 6 24 2. The fund shall consist of all of the following: 6 25 a. (1) Moneys transferred to the fund pursuant to section 6 26 423G.6. 6 27 (2) This paragraph "a" is repealed on January 1, 2030. 6 28 b. Appropriations made to the fund and transfers of 6 29 interest, earnings, and moneys from other funds as provided by 6 30 law. 6 31 3. For each fiscal year in the fiscal period beginning 6 32 July 1, 2017, and ending June 30, 2029, there is appropriated 6 33 the following percentages of the balance of the fund for the 6 34 following purposes: 6 35 a. Forty percent to the Iowa finance authority to support 7 1 the wastewater and drinking water treatment financial 7 2 assistance program created in section 16.134. 7 3 b. Forty=five percent to the Iowa finance authority to be 7 4 credited to the water quality financing program fund created 7 5 pursuant to section 16.144. 7 6 c. Fifteen percent to the division of soil conservation 7 7 and water quality of the department of agriculture and land 7 8 stewardship to support the water quality urban infrastructure 7 9 program created in section 466B.44. 7 10 4. Moneys in the fund are not subject to section 8.33. 7 11 Notwithstanding section 12C.7, subsection 2, interest or 7 12 earnings on moneys in the fund shall be credited to the fund. 7 13 Sec. 5. NEW SECTION. 16.142 Definitions. 7 14 As used in this part, unless the context otherwise requires: 7 15 1. "Cost" means all costs, charges, expenses, or other 7 16 indebtedness incurred by a loan recipient and determined by 7 17 the authority as reasonable and necessary for carrying out 7 18 all works and undertakings necessary or incidental to the 7 19 accomplishment of any project. 7 20 2. "Eligible entity" means a municipality or a landowner, 7 21 as determined by the authority, a public utility as defined 7 22 in section 476.1, or a rural water district or rural water 7 23 association as defined in section 357A.1. 7 24 3. "Loan recipient" means an eligible entity that has 7 25 received a loan under the program. 7 26 4. "Municipality" means a governmental body such as a state 7 27 agency or a political subdivision of the state. Municipality 7 28 includes but is not limited to a city, city utility, county, 7 29 soil and water conservation district, sanitary district, a 7 30 subdistrict of any of the foregoing districts, a state agency, 7 31 or other governmental body or corporation empowered to provide 7 32 sewage collection and treatment services or drinking water, or 7 33 any entity jointly exercising governmental powers pursuant to 7 34 chapter 28E or 28F, or any other combination of two or more 7 35 governmental bodies or corporations acting jointly under the 8 1 laws of this state in connection with a project. 8 2 5. "Program" means the water quality financing program 8 3 created in this part. 8 4 6. "Project" means any combination of improvements, 8 5 structures, developments, tasks, actions, constructions, 8 6 modifications, operations, or practices designed to improve 8 7 water quality that are proposed by an eligible entity and 8 8 approved by the authority. "Project" includes but is not 8 9 limited to any of the following: 8 10 a. A project meeting the requirements of part 2 of this 8 11 subchapter. 8 12 b. A project, operation, or practice undertaken or carried 8 13 out to address watershed protection, flood prevention, or water 8 14 quality improvement. 8 15 c. A project meeting the requirements of a sponsor project 8 16 under section 455B.199. 8 17 Sec. 6. NEW SECTION. 16.143 Water quality financing 8 18 program. 8 19 1. The authority, in cooperation with the department of 8 20 natural resources and the department of agriculture and land 8 21 stewardship, shall establish and administer a water quality 8 22 financing program. The purpose of the program shall be to 8 23 provide financial assistance to enhance the quality of surface 8 24 water and groundwater, particularly by providing financial 8 25 assistance for projects designed to improve water quality 8 26 by addressing point and nonpoint sources, with a higher 8 27 prioritization provided to collaborative efforts. 8 28 2. The authority shall determine the interest rate 8 29 and repayment terms for loans made under the program, in 8 30 cooperation with the department of natural resources and 8 31 the department of agriculture and land stewardship, and the 8 32 authority shall enter into loan agreements with eligible 8 33 entities in compliance with and subject to the terms and 8 34 conditions of the program as described in this part. 8 35 3. The authority may charge loan recipients fees and assess 9 1 costs against such recipients necessary for the continued 9 2 operation of the program. Such fees and costs shall not exceed 9 3 the costs directly associated with the administration of the 9 4 program. Fees and costs collected pursuant to this subsection 9 5 shall be deposited in the appropriate fund or account created 9 6 in section 16.144. 9 7 4. The program shall be administered by the authority in 9 8 accordance with rules adopted by the authority pursuant to 9 9 chapter 17A. 9 10 Sec. 7. NEW SECTION. 16.144 Water quality financing program 9 11 fund ==== appropriation ==== other funds. 9 12 1. a. A water quality financing program fund is created 9 13 and shall consist of appropriations made to the fund, moneys 9 14 credited to the fund pursuant to section 16.134A, and transfers 9 15 of interest, earnings, and moneys from other funds as provided 9 16 by law. The fund shall be administered by the authority as 9 17 a revolving fund. Moneys in the fund are appropriated to 9 18 the authority for purposes of the program. Notwithstanding 9 19 section 8.33, moneys in the fund that remain unencumbered or 9 20 unobligated at the close of a fiscal year shall not revert 9 21 but shall remain available for expenditure for the purposes 9 22 designated. Notwithstanding section 12C.7, subsection 2, 9 23 interest or earnings on moneys in the fund shall be credited 9 24 to the fund. 9 25 b. The authority shall use the moneys in the fund to provide 9 26 financial assistance to eligible entities under the program. 9 27 The authority may provide financial assistance in the form 9 28 deemed most convenient for the efficient financing of projects, 9 29 including loans, forgivable loans, or grants. The authority 9 30 shall administer the fund and the program in such a manner 9 31 as to provide a permanent source of water quality project 9 32 financial assistance to eligible entities. 9 33 c. The authority may annually use an amount of not more 9 34 than one percent of the moneys in the fund for administrative 9 35 purposes. 10 1 2. a. The authority may establish and maintain other 10 2 funds and accounts determined to be necessary to carry out the 10 3 purposes of the program and shall provide for the funding, 10 4 administration, investment, restrictions, and disposition of 10 5 the funds and accounts. 10 6 b. Moneys appropriated to and used by the authority for 10 7 purposes of paying the costs and expenses associated with 10 8 the administration of the program shall be administered as 10 9 determined by the authority. 10 10 c. All moneys transferred to the authority for purposes of 10 11 the program shall be deposited and held in a fund or account 10 12 established and maintained pursuant to this section. 10 13 3. The funds or accounts held by the authority, or a trustee 10 14 acting on behalf of the authority pursuant to a trust agreement 10 15 related to the program, shall not be considered part of the 10 16 general fund of the state, are not subject to appropriation for 10 17 any other purpose by the general assembly, and in determining 10 18 a general fund balance shall not be included in the general 10 19 fund of the state, but shall remain in the funds and accounts 10 20 maintained by the authority or trustee pursuant to a trust 10 21 agreement. Funds and accounts held by the authority, or a 10 22 trustee acting on behalf of the authority pursuant to a trust 10 23 agreement related to the program, are separate dedicated funds 10 24 and accounts under the administration and control of the 10 25 authority and subject to section 16.31. 10 26 4. By October 1, 2018, and by October 1 of each year 10 27 thereafter, the authority shall submit a report to the governor 10 28 and the general assembly itemizing expenditures from the fund 10 29 during the previous fiscal year. 10 30 Sec. 8. NEW SECTION. 16.145 Eligible entities ==== agreements 10 31 required. 10 32 1. An eligible entity may apply to the authority for 10 33 financial assistance under the program by submitting a plan 10 34 that meets the following requirements: 10 35 a. The plan includes one or more projects that improve 11 1 water quality in the local area or watershed. Projects shall 11 2 use practices identified in the latest version of the document 11 3 entitled "Iowa Nutrient Reduction Strategy" initially presented 11 4 in November 2012 by the department of agriculture and land 11 5 stewardship, the department of natural resources, and Iowa 11 6 state university of science and technology. A drainage or 11 7 levee district established under chapter 468 shall utilize the 11 8 installation of edge=of=field infrastructure as described in 11 9 section 466B.43. 11 10 b. The plan describes in detail the manner in which the 11 11 projects will be financed and undertaken, including, as 11 12 applicable, the sources of revenue directed to financing the 11 13 improvements as well as the eligible entities that will be 11 14 receiving the revenues and how such revenues will be spent on 11 15 the projects. 11 16 2. The authority shall review and approve or deny 11 17 applications for financial assistance. The provision of 11 18 financial assistance under the program shall take into account, 11 19 as applicable, the number of municipalities, landowners, public 11 20 utilities, rural water districts, or rural water associations 11 21 comprising an eligible entity and the eligible entity's 11 22 financing capacity. The authority shall score applications 11 23 for financial assistance according to rules adopted pursuant 11 24 to this part. The authority shall only provide financial 11 25 assistance to eligible entities that have sufficient financing 11 26 capacity and that submit an appropriate plan designed to 11 27 improve water quality. 11 28 3. An approved eligible entity shall enter into an agreement 11 29 with the authority for the provision of financial assistance. 11 30 The agreement shall include standard terms for the receipt 11 31 of program moneys and any other terms the authority deems 11 32 necessary or convenient for the efficient administration of the 11 33 program. 11 34 Sec. 9. Section 423.3, Code 2017, is amended by adding the 11 35 following new subsection: 12 1 NEW SUBSECTION. 103. a. The sales price from the sale or 12 2 furnishing by a water utility of a water service in the state 12 3 to consumers or users. 12 4 b. For purposes of this subsection: 12 5 (1) "Water service" means the delivery of water by piped 12 6 distribution system. 12 7 (2) "Water utility" means a public utility as defined in 12 8 section 476.1 that furnishes water by piped distribution system 12 9 to the public for compensation. 12 10 Sec. 10. NEW SECTION. 423G.1 Short title. 12 11 This chapter may be cited as the "Water Service Tax Act". 12 12 Sec. 11. NEW SECTION. 423G.2 Definitions. 12 13 1. All words and phrases used in this chapter and defined in 12 14 section 423.1 have the same meaning given them by section 423.1 12 15 for purposes of this chapter. 12 16 2. As used in this chapter, "water service" and "water 12 17 utility" mean the same as defined in section 423.3, subsection 12 18 103. 12 19 Sec. 12. NEW SECTION. 423G.3 Water service tax. 12 20 An excise tax at the rate of six percent is imposed on the 12 21 sales price from the sale or furnishing by a water utility of a 12 22 water service in the state to consumers or users. 12 23 Sec. 13. NEW SECTION. 423G.4 Exemptions. 12 24 The sales price from transactions exempt from state sales 12 25 tax under section 423.3, except section 423.3, subsection 103, 12 26 is also exempt from the tax imposed by this chapter. 12 27 Sec. 14. NEW SECTION. 423G.5 Administration by director. 12 28 1. The director of revenue shall administer the water 12 29 service tax as nearly as possible in conjunction with the 12 30 administration of the state sales and use tax law, except that 12 31 portion of the law that implements the streamlined sales and 12 32 use tax agreement. The director shall provide appropriate 12 33 forms, or provide on the regular state tax forms, for reporting 12 34 water service tax liability. 12 35 2. The director may require all persons who are engaged 13 1 in the business of deriving any sales price or purchase 13 2 price subject to tax under this chapter to register with 13 3 the department. The director may also require a tax permit 13 4 applicable only to this chapter for any retailer not 13 5 collecting, or any user not paying, taxes under chapter 423. 13 6 3. Section 422.25, subsection 4, sections 422.30, 422.67, 13 7 and 422.68, section 422.69, subsection 1, sections 422.70, 13 8 422.71, 422.72, 422.74, and 422.75, section 423.14, subsection 13 9 1, and sections 423.23, 423.24, 423.25, 423.31 through 13 10 423.35, 423.37 through 423.42, and 423.47, consistent with the 13 11 provisions of this chapter, shall apply with respect to the tax 13 12 authorized under this chapter, in the same manner and with the 13 13 same effect as if the excise taxes on the sale or furnishing of 13 14 a water service were retail sales taxes within the meaning of 13 15 those statutes. Notwithstanding this subsection, the director 13 16 shall provide for quarterly filing of returns and for other 13 17 than quarterly filing of returns both as prescribed in section 13 18 423.31. All taxes collected under this chapter by a retailer 13 19 or any user are deemed to be held in trust for the state of 13 20 Iowa. 13 21 Sec. 15. NEW SECTION. 423G.6 Deposit of revenues. 13 22 1. All moneys received and all refunds shall be deposited in 13 23 or withdrawn from the general fund of the state. 13 24 2. Subsequent to the deposit in the general fund of the 13 25 state, the department shall transfer the following amounts to 13 26 the water quality financial assistance fund created in section 13 27 16.134A: 13 28 a. For revenues collected on or after July 1, 2017, but 13 29 before August 1, 2018, one=sixth of the revenues. 13 30 b. For revenues collected on or after August 1, 2018, but 13 31 before August 1, 2019, one=third of the revenues. 13 32 c. For revenues collected on or after August 1, 2019, but 13 33 before August 1, 2020, one=half of the revenues. 13 34 d. For revenues collected on or after August 1, 2020, but 13 35 before August 1, 2021, two=thirds of the revenues. 14 1 e. For revenues collected on or after August 1, 2021, but 14 2 before August 1, 2022, five=sixths of the revenues. 14 3 f. For revenues collected on or after August 1, 2022, one 14 4 hundred percent of the revenues. 14 5 Sec. 16. NEW SECTION. 423G.7 Future repeal. 14 6 This chapter is repealed upon the occurrence of one of the 14 7 following, whichever is earlier: 14 8 1. The enactment date that the tax rate for the sales 14 9 tax imposed upon the retail sales price of tangible personal 14 10 property and the furnishing of enumerated services sold in this 14 11 state in effect on July 1, 2016, is increased. 14 12 2. July 1, 2029. 14 13 Sec. 17. Section 455B.171, Code 2017, is amended by adding 14 14 the following new subsections: 14 15 NEW SUBSECTION. 10A. "Iowa nutrient reduction strategy" 14 16 means a water quality initiative developed and updated by the 14 17 department of agriculture and land stewardship, the department 14 18 of natural resources, and the college of agriculture and life 14 19 sciences at Iowa state university of science and technology in 14 20 order to assess and reduce nutrients in this state's watersheds 14 21 that utilize a pragmatic, strategic, and coordinated approach 14 22 with the goal of accomplishing reductions over time. 14 23 NEW SUBSECTION. 15A. "Nutrient" means total nitrogen and 14 24 total phosphorus. 14 25 Sec. 18. Section 455B.171, subsection 19, Code 2017, is 14 26 amended to read as follows: 14 27 19. "Point source" means any discernible, confined, and 14 28 discrete conveyance, including but not limited to any pipe, 14 29 ditch, channel, tunnel, conduit, well, discrete fissure, 14 30 container, rolling stock, concentrated animal feeding 14 31 operation, or vessel or other floating craft, from which 14 32 pollutants are or may be discharged. "Point source" does not 14 33 include agricultural storm water discharge and return flows 14 34 from irrigated agriculture. 14 35 Sec. 19. Section 455B.177, Code 2017, is amended by adding 15 1 the following new subsection: 15 2 NEW SUBSECTION. 3. The general assembly further finds 15 3 and declares that it is in the interest of the people of Iowa 15 4 to assess and reduce nutrients in surface waters over time by 15 5 implementing the Iowa nutrient reduction strategy. To evaluate 15 6 the progress achieved over time toward the goals of the Iowa 15 7 nutrient reduction strategy and the United States environmental 15 8 protection agency gulf hypoxia action plan, the baseline 15 9 condition shall be calculated for the time period from 1980 to 15 10 1996. 15 11 Sec. 20. Section 466B.3, subsection 3, paragraph c, Code 15 12 2017, is amended to read as follows: 15 13 c. Whether the funds, programs, and regulatory efforts 15 14 coordinated by the council eventually result in a long=term 15 15 improvement to the quality of surface water in Iowa. To 15 16 evaluate the progress achieved over time toward the goals of 15 17 the Iowa nutrient reduction strategy, as defined in section 15 18 455B.171, and the United States environmental protection agency 15 19 gulf hypoxia action plan, the baseline condition shall be 15 20 calculated for the time period from 1980 to 1996. 15 21 Sec. 21. Section 466B.42, Code 2017, is amended to read as 15 22 follows: 15 23 466B.42 Water quality initiative. 15 24 The division shall establish a water quality initiative 15 25 in order to assess and reduce nutrients in this state's 15 26 watersheds, including subwatersheds,and regional watersheds, 15 27 and for implementing its responsibilities under the Iowa 15 28 nutrient reduction strategy as defined in section 455B.171. 15 29 The division shall establish and administer projects to 15 30 reduce nutrients in surface waters from nonpoint sources in 15 31 a scientific, reasonable, and cost=effective manner. The 15 32 division shall utilize a pragmatic, strategic, and coordinated 15 33 approach with the goal of accomplishing reductions over time. 15 34 To evaluate the progress achieved over time toward the goals 15 35 of the Iowa nutrient reduction strategy and the United States 16 1 environmental protection agency gulf hypoxia action plan, the 16 2 baseline condition shall be calculated for the time period from 16 3 1980 to 1996. 16 4 Sec. 22. NEW SECTION. 466B.43 Water quality agriculture 16 5 infrastructure programs. 16 6 1. As part of the water quality initiative established 16 7 pursuant to section 466B.42, the division shall administer 16 8 water quality agriculture infrastructure programs created in 16 9 this section. 16 10 2. The purpose of the programs is to support projects for 16 11 the installation of infrastructure, including conservation 16 12 structures, practices, or other measures that reduce 16 13 contributing nutrient loads, associated sediment, or 16 14 contaminants from sources to surface waters. The programs 16 15 shall be administered in a manner that is consistent with 16 16 the latest version of the "Iowa Nutrient Reduction Strategy" 16 17 initially presented in November 2012 by the department of 16 18 agriculture and land stewardship, the department of natural 16 19 resources, and Iowa state university of science and technology. 16 20 3. An edge=of=field infrastructure program is created. 16 21 The program shall support projects located on agricultural 16 22 land, which may include demonstration projects, that capture 16 23 or filter nutrients entering into a surface water. The 16 24 program's projects shall be limited to infrastructure designed 16 25 and installed for use over multiple years, including but not 16 26 limited to wetlands, bioreactor systems, saturated buffers, 16 27 or land use changes. The program shall be financed on a 16 28 cost=share basis. 16 29 4. An in=field infrastructure program is created. The 16 30 program shall support projects located on agricultural land, 16 31 which may include demonstration projects, that decrease erosion 16 32 and precipitation=induced surface runoff, increase water 16 33 infiltration rates, and increase soil sustainability. The 16 34 program's projects shall be limited to infrastructure designed 16 35 and installed for use over multiple years, including but not 17 1 limited to structures, terraces, and waterways located on 17 2 cropland or pastureland, and including but not limited to soil 17 3 conservation or erosion control structures or managed drainage 17 4 systems. The program shall be financed on a cost=share basis. 17 5 5. Any state moneys used to finance a project under a 17 6 water quality agriculture infrastructure program shall be 17 7 administered according to an agreement entered into by the 17 8 division and the owner of the land where the infrastructure 17 9 is to be installed. The agreement shall include standard 17 10 terms and conditions for the receipt of program moneys and 17 11 any other terms and conditions the division deems necessary 17 12 or convenient for the efficient administration of the project 17 13 or program. The division may support multiple installations 17 14 of infrastructure on a single parcel of land. The division 17 15 may also combine programs if cost effective. The division 17 16 may annually use an amount of not more than four percent of 17 17 the moneys used to support each program for administrative 17 18 purposes. 17 19 6. By October 1, 2018, and each October 1, thereafter, the 17 20 division shall submit a report to the governor and the general 17 21 assembly itemizing expenditures, by hydrologic unit code 8 17 22 watershed, under the programs during the previous fiscal year. 17 23 7. Any information obtained by the division identifying 17 24 a person holding a legal interest in agricultural land or 17 25 specific agricultural land shall be a confidential record under 17 26 section 22.7. 17 27 Sec. 23. NEW SECTION. 466B.44 Water quality urban 17 28 infrastructure program. 17 29 1. As part of the water quality initiative established 17 30 pursuant to section 466B.42, the division shall administer a 17 31 water quality urban infrastructure program. 17 32 2. The purpose of the program is to support watershed 17 33 projects and advance implementation of the latest version of 17 34 the "Iowa Nutrient Reduction Strategy" initially presented 17 35 in November 2012 by the department of agriculture and land 18 1 stewardship, the department of natural resources, and Iowa 18 2 state university of science and technology, which program 18 3 support may include demonstration projects that decrease 18 4 erosion, precipitation=induced surface runoff, and storm 18 5 water discharges and that increase water infiltration rates. 18 6 The program's projects shall be based on Iowa's storm water 18 7 management manual published by the department of natural 18 8 resources. 18 9 3. The program shall be financed on a cost=share basis or 18 10 through cooperative agreements with watershed projects funded 18 11 through section 455B.199 whose project activities fall outside 18 12 the territorial boundaries of a city. 18 13 4. Any state moneys used to finance a project under a water 18 14 quality urban infrastructure program shall be administered 18 15 according to an agreement entered into by the division and the 18 16 owner of the land where the infrastructure is to be installed. 18 17 The agreement shall include standard terms and conditions 18 18 for the receipt of program moneys and any other terms and 18 19 conditions the division deems necessary or convenient for 18 20 the efficient administration of the project or program. The 18 21 division may support multiple installations of infrastructure 18 22 on a single parcel of land. The division may annually use an 18 23 amount of not more than four percent of the moneys used to 18 24 support the program for administrative purposes. 18 25 5. Notwithstanding any other provision in this section 18 26 to the contrary, beginning on July 1, 2019, the division may 18 27 use any amount available to support the water quality urban 18 28 infrastructure program to instead support the three=year data 18 29 collection of in=field agricultural practices project as 18 30 enacted in 2015 Iowa Acts, ch. 132, {18. 18 31 6. Notwithstanding any other provision of this section 18 32 to the contrary, the division may use any amount available 18 33 to support the water quality urban infrastructure program to 18 34 develop and maintain an online resource displaying measurable 18 35 indicators of desirable change in water quality within the 19 1 state's watersheds. These measurable indicators may include 19 2 but are not limited to public and private funding inputs, 19 3 involvement in water quality projects, and improvements, land 19 4 use, practice adoption, calculated load reduction, and measured 19 5 loads at existing monitoring stations. 19 6 7. By October 1, 2018, and by October 1 of each year 19 7 thereafter, the division shall submit a report to the governor 19 8 and the general assembly itemizing expenditures under the 19 9 program during the previous fiscal year. 19 10 8. Any information obtained by the division identifying a 19 11 person holding a legal interest in land or specific land shall 19 12 be a confidential record under section 22.7. 19 13 Sec. 24. LEGISLATIVE INTENT. It is the intent of the 19 14 general assembly that the amendment in this Act to the 19 15 definition of point source in section 455B.171, subsection 19 16 19, is a conforming amendment consistent with current state 19 17 and federal law, and that the amendment does not change the 19 18 application of current law but instead reflects current law 19 19 both before and after the enactment of this Act. 19 20 EXPLANATION 19 21 The inclusion of this explanation does not constitute agreement with 19 22 the explanation's substance by the members of the general assembly. 19 23 This bill relates to water quality by modifying an existing 19 24 wastewater treatment program, establishing new water quality 19 25 programs, providing for appropriations from the rebuild Iowa 19 26 infrastructure fund and making other appropriations and changes 19 27 related to water quality, and creating a water service excise 19 28 tax and related sales tax exemption. 19 29 REBUILD IOWA INFRASTRUCTURE FUND APPROPRIATIONS FOR WATER 19 30 QUALITY AGRICULTURE INFRASTRUCTURE PROGRAMS. 19 31 RIIF appropriations ==== The bill provides for a total of 19 32 $229.1 million of appropriations over 13 fiscal years from 19 33 the rebuild Iowa infrastructure fund in Code section 8.57 to 19 34 a water quality infrastructure fund created in the bill (Code 19 35 section 8.57B) to be used by the division of soil conservation 20 1 and water quality of the department of agriculture and land 20 2 stewardship (soil and water division) in administering 20 3 two new water quality agriculture infrastructure programs, 20 4 described below. The appropriations shall be as follows: $4.3 20 5 million for fiscal year 2017=2018; $4.3 million for fiscal 20 6 year 2018=2019; $11.5 million for fiscal year 2019=2020; 20 7 $16.5 million per fiscal year for the two=year fiscal period 20 8 beginning July 1, 2020, and ending June 30, 2022; and $22 20 9 million per fiscal year for the eight=year fiscal period 20 10 beginning July 1, 2022, and ending June 30, 2030. The water 20 11 quality infrastructure fund is repealed on the date that 20 12 all moneys transferred to the fund from the rebuild Iowa 20 13 infrastructure fund as provided in the bill, including any 20 14 interest or earnings on such moneys credited to the fund, are 20 15 expended by the soil and water division, and the balance of the 20 16 fund is zero. 20 17 Water quality agriculture infrastructure programs ==== As 20 18 part of the existing water quality initiative of the soil and 20 19 water division in Code section 466B.42, the bill establishes 20 20 two water quality agriculture infrastructure programs (Code 20 21 section 466B.43), consisting of an edge=of=field infrastructure 20 22 program and an in=field infrastructure program, that will 20 23 provide financing on a cost=share basis to certain agriculture 20 24 infrastructure projects, including demonstration projects. 20 25 The edge=of=field program will support projects that capture 20 26 or filter nutrients entering into surface water. The bill 20 27 includes wetlands, bioreactor systems, saturated buffers, and 20 28 land use changes as examples of projects that may qualify. 20 29 The in=field infrastructure program will support projects 20 30 that decrease erosion and precipitation=induced surface 20 31 runoff, increase water infiltration rates, and increase soil 20 32 sustainability. The bill includes structures, terraces, 20 33 waterways located on cropland or pastureland, and soil 20 34 conservation or erosion control structures or managed drainage 20 35 systems as examples of projects that may qualify. 21 1 The bill provides for the purpose of the programs and 21 2 requires that the programs be administered in a manner that 21 3 is consistent with the latest version of the Iowa nutrient 21 4 reduction strategy initially presented in November 2012 by the 21 5 department of agriculture and land stewardship, the department 21 6 of natural resources, and Iowa state university of science 21 7 and technology (nutrient reduction strategy). Both programs 21 8 require that projects be located on agricultural land and limit 21 9 projects to infrastructure designed and installed for use over 21 10 multiple years. The bill requires that the soil and water 21 11 division and landowners enter into agreements for financing 21 12 projects under the programs, provides that the soil and water 21 13 division may support multiple installations of infrastructure 21 14 on a single parcel of land, and provides that the two programs 21 15 may be combined by the soil and water division if it is cost 21 16 effective to do so. The soil and water division is allowed 21 17 to annually use up to 4 percent of the programs' moneys for 21 18 administrative purposes. Beginning in 2018, the soil and 21 19 water division is required to submit a report by October 1 of 21 20 each year to the general assembly and the governor detailing 21 21 expenditures for the previous fiscal year under the programs 21 22 by hydrologic unit code 8 watershed. The bill provides that 21 23 certain information related to agricultural land and obtained 21 24 by the soil and water division under the programs shall be 21 25 considered a confidential record under Code section 22.7. 21 26 WATER SERVICE EXCISE TAX FOR CERTAIN WATER QUALITY PROGRAMS. 21 27 Water service excise tax and related sales tax exemption ==== 21 28 The bill exempts from the state sales tax the sales price from 21 29 the sale or furnishing by a water utility of a water service in 21 30 the state to consumers or users. "Water service" and "water 21 31 utility" are defined in the bill. 21 32 By operation of Code section 423.6, an item exempt from the 21 33 imposition of the sales tax is also exempt from the use tax 21 34 imposed in Code section 423.5. 21 35 The bill creates an excise tax at the rate of 6 percent 22 1 on the sales price from the sale or furnishing by a water 22 2 utility of a water service in the state to consumers or users 22 3 (Code chapter 423G). The director of revenue is required 22 4 to administer the water service tax as nearly as possible 22 5 in conjunction with the administration of the state sales 22 6 and use tax laws, and, to that end, the bill incorporates by 22 7 reference numerous Code sections that relate to general tax 22 8 administration and the sales and use tax laws. 22 9 Water service tax revenues are deposited in the general 22 10 fund of the state, and the bill then requires an increasing 22 11 portion of the water service tax revenues collected each year 22 12 to be transferred to a water quality financial assistance fund 22 13 created in the bill (Code section 16.134A) to support various 22 14 water quality programs, described below. Transfers to the 22 15 water quality financial assistance fund equal one=sixth of 22 16 the water service tax revenues collected on or after July 1, 22 17 2017, but before August 1, 2018, and increases to one=third, 22 18 one=half, two=thirds, and five=sixths over the next four years. 22 19 All water service tax revenues collected on or after August 22 20 1, 2022, will be transferred to the water quality financial 22 21 assistance fund. 22 22 The water service tax is repealed on the enactment date 22 23 that the state sales tax rate in effect on July 1, 2016, is 22 24 increased, or on July 1, 2029, whichever occurs earlier. 22 25 Water service tax revenues transferred to the water quality 22 26 financial assistance fund are then appropriated from the 22 27 fund as follows: 40 percent is appropriated to the Iowa 22 28 finance authority (IFA) to support the wastewater and drinking 22 29 water treatment financial assistance program in Code section 22 30 16.134, 45 percent is appropriated to IFA to support the water 22 31 quality financing program created in the bill (Code sections 22 32 16.142 through 16.145), and 15 percent is appropriated to the 22 33 soil and water division to support the water quality urban 22 34 infrastructure program created in the bill (Code section 22 35 466B.44). 23 1 Wastewater and drinking water treatment financial assistance 23 2 program ==== The bill amends the wastewater treatment financial 23 3 assistance program administered by IFA in Code section 16.134. 23 4 Currently, the program provides financial assistance in the 23 5 form of grants from IFA to disadvantaged communities to install 23 6 or upgrade wastewater treatment facilities and systems, and 23 7 for engineering or technical assistance for facility planning 23 8 and design. The bill adds drinking water treatment facilities 23 9 and systems, including source water protection projects, to 23 10 the program. The bill also removes the requirement that a 23 11 community qualify as a disadvantaged community in order to 23 12 receive financial assistance, instead providing that such 23 13 disadvantaged communities shall receive priority under the 23 14 program. The bill also modifies other priority designations 23 15 under the program and modifies goals of the program, and 23 16 provides that a utility management organization formed under 23 17 Code chapter 28E or operated by a rural water system organized 23 18 under Code chapter 357A or 504 shall be considered eligible for 23 19 financial assistance under the program. The bill also adds 23 20 reporting and review requirements to the program, modifies the 23 21 permitted use of fund moneys for administrative purposes, and 23 22 creates a water quality financing review committee consisting 23 23 of three members, as provided in the bill, to review and 23 24 approve applications for financial assistance under the 23 25 program. Finally, the bill requires IFA to submit a report by 23 26 October 1 of each year to the governor and general assembly 23 27 detailing expenditures for the previous year under the program, 23 28 and creates a program review committee consisting of eight 23 29 members, as provided in the bill, to review the effectiveness 23 30 of the program every 10 years, beginning in 2027. 23 31 Water quality financing program (Code sections 16.142 23 32 through 16.145) ==== This program provides financial assistance 23 33 in the form of loans, forgivable loans, and grants to enhance 23 34 the quality of surface water and groundwater, particularly 23 35 by providing financial assistance for projects designed 24 1 to improve water quality by addressing point and nonpoint 24 2 sources. The program is administered by IFA in cooperation 24 3 with the department of natural resources and the department of 24 4 agriculture and land stewardship. The bill creates a water 24 5 quality financing program fund administered by IFA to provide 24 6 financial assistance under the program. The bill allows IFA 24 7 to establish and maintain other funds and accounts necessary 24 8 to carry out the purposes of the program. Under the program, 24 9 an eligible entity is a municipality, as defined in the bill, 24 10 or a landowner, public utility, or rural water district or 24 11 rural water association. The bill provides certain application 24 12 requirements regarding a plan for water quality improvement and 24 13 financing and requires loan recipients to enter into agreements 24 14 with IFA for terms of the financial assistance. 24 15 In order to be eligible for financial assistance, a proposed 24 16 project must improve water quality in the local area or 24 17 watershed using practices identified in the Iowa nutrient 24 18 reduction strategy. Drainage and levee districts are required 24 19 to utilize installations described in the edge=of=field 24 20 infrastructure program (Code section 466B.43), discussed above. 24 21 IFA reviews proposed projects, negotiates project details, and 24 22 approves or denies applications. 24 23 Beginning in 2018, IFA is required to submit a report by 24 24 October 1 of each year to the general assembly and the governor 24 25 detailing expenditures from the fund for the previous fiscal 24 26 year. 24 27 Water quality urban infrastructure program (Code section 24 28 466B.44) ==== As part of the existing water quality initiative 24 29 of the soil and water division in Code section 466B.42, the 24 30 bill creates a water quality urban infrastructure program 24 31 to support watershed projects and advance implementation 24 32 of the Iowa nutrient reduction strategy. Program support 24 33 may include demonstration projects that decrease erosion, 24 34 precipitation=induced surface runoff, and storm water 24 35 discharges and that increase water infiltration rates. 25 1 Projects shall be based on Iowa's storm water management manual 25 2 published by the department of natural resources. Financial 25 3 assistance is provided on a cost=share basis or through 25 4 cooperative agreements with certain watersheds as described 25 5 in the bill. The bill requires the soil and water division 25 6 and landowners to enter into agreements for financing projects 25 7 under the program, and provides that the soil and water 25 8 division may support multiple installations of infrastructure 25 9 on a single parcel of land. The soil and water division is 25 10 allowed to annually use up to 4 percent of the program's moneys 25 11 for administrative purposes. 25 12 The soil and water division may use any amount available 25 13 under the program to develop and maintain an online resource 25 14 displaying measurable indicators of desirable change in water 25 15 quality within the state's watersheds, and beginning July 1, 25 16 2019, may use any amount available under the program to support 25 17 the three=year data collection of the in=field agricultural 25 18 practices project as enacted in 2015 Iowa Acts, ch. 132, {18. 25 19 Beginning in 2018, the soil and water division is required 25 20 to submit a report by October 1 of each year to the general 25 21 assembly and the governor detailing expenditures for the 25 22 previous fiscal year under the program. The bill provides that 25 23 certain information related to the land and obtained by the 25 24 soil and water division under the program shall be considered a 25 25 confidential record under Code section 22.7. 25 26 MISCELLANEOUS CHANGES. The bill defines "Iowa nutrient 25 27 reduction strategy" and "nutrient" in Code section 455B.171, 25 28 which contains definitions for terms used in provisions of 25 29 the Code that concern the jurisdiction of the department of 25 30 natural resources related to water quality, and also amends 25 31 the definition of "point source" in that Code section to 25 32 exclude agricultural storm water discharges and return flows 25 33 from irrigated agriculture. The bill provides that it is the 25 34 legislative intent of the general assembly that this amendment 25 35 to the definition of "point source" is a conforming amendment 26 1 consistent with current state and federal law, and that the 26 2 amendment does not change the application of current law but 26 3 instead reflects current law both before and after enactment 26 4 of the bill. 26 5 The bill amends the declaration of policy for the department 26 6 of natural resources' water quality jurisdiction in Code 26 7 section 455B.177 to include in such policy the assessment 26 8 and reduction of nutrients in surface waters over time by 26 9 implementing the Iowa nutrient reduction strategy, and further 26 10 adds that progress under the Iowa nutrient reduction strategy 26 11 and the United States environmental protection agency gulf 26 12 hypoxia action plan shall be evaluated using a baseline 26 13 condition calculated for the time period between 1980 and 1996. 26 14 The bill amends Code section 466B.3, relating to the water 26 15 resources coordinating council, to provide that when the 26 16 council is measuring the success of its efforts, progress under 26 17 the Iowa nutrient reduction strategy and the United States 26 18 environmental protection agency gulf hypoxia action plan shall 26 19 be evaluated using a baseline condition calculated for the time 26 20 period between 1980 and 1996. 26 21 The bill amends Code section 466B.42, relating to the water 26 22 quality initiative of the soil and water division, to provide 26 23 that the goal of the water quality initiative is to implement 26 24 the soil and water division's responsibilities under the Iowa 26 25 nutrient reduction strategy, and to provide that progress under 26 26 the Iowa nutrient reduction strategy and the United States 26 27 environmental protection agency gulf hypoxia action plan shall 26 28 be evaluated using a baseline condition calculated for the time 26 29 period between 1980 and 1996. LSB 1844SV (3) 87 mm/sc
