Gov. Kim Reynolds signed an appropriations bill (HF 2771) into law Monday, funneling $166.7 million to agriculture and natural resources for the 2027 fiscal year, which runs from July 1 to June 30, 2027.
The legislation includes the "Farm to Faucet" package that Reynolds and Republican legislative leaders introduced in May. It’s expected to drive nearly $320 million over the next 12 years for water quality monitoring, infrastructure upgrades and conservation practices to reduce nutrient runoff in targeted watersheds.
The funding largely comes from redirecting revenue from the state’s water excise tax and Iowa's Water Quality Financing Program, which Reynolds said received few applications.
“It follows through on a promise we made to the people of Iowa earlier this year, shifting water quality resources to the most effective programs and urgent needs,” Reynolds said Monday.
Water monitoring funding
The state will send an additional $500,000 in annual funding to the Iowa Department of Natural Resources’ water quality monitoring network. This brings total state funding for water monitoring up to $3.5 million, according to the Iowa Department of Agriculture and Land Stewardship (IDALS).
The legislation does not include direct funding for a network of river sensors operated by the University of Iowa, which is largely relying on county- and city-level funding for the next year.
Treatment plant upgrades
The legislation also increases annual funding and provides a one-time $8 million allocation to the Wastewater and Drinking Water Treatment Financial Assistance Program. The program provides grants to communities to upgrade wastewater and drinking water treatment facilities and systems.
The Rural Infrastructure Bank Revolving Loan Program, which provides 1% interest loans to small and medium sized communities for water or wastewater infrastructure upgrades, will receive $10 million.
Central Iowa Water Works (CIWW) will receive $25 million to upgrade and expand its nitrate removal capacity over the next three years. The regional water authority provides drinking water to one in five Iowans.
Last year, CIWW issued its first lawn watering ban due to persistently high nitrate levels in the Des Moines and Raccoon rivers, two of its main source waters. Reducing water demand on the system allowed the Fleur Drive treatment plant to keep pace with nitrate removal and stay under the U.S. Environmental Protection Agency’s limit for public drinking water.
Tami Madsen, executive director of CIWW, told IPR on May 29 that the nitrate removal facility has been in operation all but six days since the start of this year.
CIWW issued a Stage II Water Alert on May 27, asking customers to voluntarily reduce outdoor water use by 50%.
Iowa’s 2013 Nutrient Reduction Strategy and the Central Iowa Source Water Research Assessment released last year identified agriculture as the primary source of nutrients in the state’s water.
On farm conservation
The legislation signed by Reynolds also provides IDALS an estimated $52 million of new funding over 12 years to support conservation practices in the Greater Des Moines watershed, which covers 22 counties. Cover crops, edge-of-field buffers, wetlands and rotational grazing helps keep nitrates and other nutrients in farm fields and out of streams and rivers.
Iowa Secretary of Agriculture Mike Naig joined Reynolds Monday during the bill signing, and said the water quality funding allows the department to do more, faster.
“Farmers and landowners, and hundreds of public and private partners, have made tremendous progress implementing conservation practices across Iowa,” Naig said. “There is no finish line when it comes to conservation and water quality improvement in this state, meaning that there is always more that can be done.”
Iowa House Democrats proposed their own plan in January that called for additional financial assistance and incentives for farmers to adopt practices to reduce water pollution.
Other changes in the funding bill
Beyond water quality, the appropriations bill also increases dollars from the general fund for IDALS’ administrative division and Choose Iowa Fund by $356,000 and $300,000, respectively.
It funnels $200,000 to the Choose Iowa School Purchasing Program, which was made permanent by the Iowa Farm Act signed by the governor Monday, and increases funding for the Foreign Animal Disease Prevention and Response Fund by $100,000.
Iowa State University will receive $122,000 to help the veterinary laboratory move materials and equipment into its refurbished facility. The University of Iowa will see a $78,000 decrease in funding for groundwater planning and assessment.
The appropriations bill passed 65-21 in the House and 43-2 in the Senate.
The $47.5 million from the general fund to agriculture and natural resources for fiscal year 2027 represents a net increase of $900,000 from fiscal year 2026. The $119.2 million from other funds reflects an estimated $18.2 million increase.
Iowa Farm Act
Reynolds also signed the so-called Iowa Farm Act (SF 2465) on Monday. The comprehensive bill, introduced by Naig, passed unanimously in the Senate and 81-4 in the House.
“Every item of the Farm Act can be traced back to an idea or feedback that came directly from farmers and businesses or community roundtables as I've traveled the state,” Naig said in the governor’s office. “It expands opportunities for Iowa's agriculture, reduces unnecessary regulatory burdens, strengthens rural communities, supports beginning farmers and our ag workforce and gives farmers greater certainty and more tools to prepare and plan for the future.”
Among the provisions, the Iowa Farm Act:
- Exempts honeybee sales and rural veterinarian loan repayment grants from state taxes
- Makes permanent the Choose Iowa School Purchasing Pilot Program, which helps schools buy food from local farmers and producers
- Updates what information is confidential during animal disease outbreaks to protect the identity of farmers and producers
- Allows IDALS to lease facilities to store foreign animal disease response equipment for faster deployment and a more coordinated response
- Amends requirements for the grain indemnity program, which compensates farmers when a licensed grain dealer or warehouse goes bankrupt or fails to pay
- Adds tree farms to Iowa’s agritourism liability protections
- Removes the cap on channeling money to the Renewable Fuel Infrastructure Program, which supports biofuels infrastructure at gas stations
