(A) As used in this section:

1. (1) "Agricultural water project" means a project that will improve water quality by reducing or aiding in the reduction of levels of phosphorus, nitrogen, or sediment, that result from agricultural practices, in the waters of the state. "Agricultural water project" includes a project involving research, technology, design, construction, best management practices, conservation, testing, or education.
2. (2) "Community water project" means a project involving a public water system operated by a political subdivision that will improve water quality by reducing or aiding in the reduction of levels of phosphorus, nitrogen, or sediment in the waters of the state. "Community water project" includes a project involving research, technology, design, construction, best management practices, conservation, testing, or maintenance.
3. (3) "Nature water project" means a project involving a natural water system that will improve water quality by reducing or aiding in the reduction of levels of phosphorus, nitrogen, or sediment in the waters of the state. "Nature water project" includes a project involving research, technology, design, construction, best management practices, conservation, or maintenance. "Nature water project" also includes the creation, maintenance, or restoration of wetlands, flood plains, flood control systems, and buffers throughout the state, including the western basin of Lake Erie.

(B) There is hereby created in the state treasury the H2Ohio fund consisting of money credited to it and any donations, gifts, bequests, and other money received for deposit in the fund. All investment earnings of the fund shall be credited to the fund. All money credited or deposited in the fund shall be used for any of the following purposes:

1. (1) Agriculture water projects;
2. (2) Community water projects;
3. (3) Nature water projects;
4. (4) Awarding or allocating grants or money, issuing loans, or making purchases for the development and implementation of projects and programs, including remediation projects, that are designed to address water quality priorities;
5. (5) Funding cooperative research, data gathering and monitoring, and demonstration projects related to water quality priorities;
6. (6) Encouraging cooperation with and among leaders from state legislatures, state agencies, political subdivisions, business and industry, labor, agriculture, environmental organizations, institutions of higher education, and water conservation districts;
7. (7) Other purposes, policies, programs, and priorities identified by the Ohio Lake Erie commission in coordination with state agencies or boards responsible for water protection and water management, provided that the purposes, policies, programs, and priorities align with a statewide strategic vision and comprehensive periodic water protection and restoration strategy.

(C) Not later than August 31, 2020, and annually thereafter, the Ohio Lake Erie commission, in coordination with state agencies or boards responsible for water protection and water management, shall do both of the following:

1. (1) Prepare a report of the activities that were undertaken with respect to the fund during the immediately preceding fiscal year, including the revenues and expenses of the fund for the preceding fiscal year;
2. (2) Submit the report to the general assembly and to the governor.