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Senate File 556 - IntroducedA Bill ForAn Act 1providing for financing of certain agricultural
2commodity programs, by reducing and eliminating fees imposed
3on licensed grain dealers and warehouse operators, replacing
4those moneys with moneys collected from a percentage of
5state assessments imposed on the sale of corn, increasing
6moneys deposited into the grain depositors and sellers
7indemnity fund, increasing indemnification amounts, and
8making appropriations.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 185C.1, subsection 9, Code 2023, is
2amended to read as follows:
39. “Market development” means to engage improve the economic
4conditions of corn production, storage, and marketing, by
5engaging in research and educational programs directed toward
6better and more efficient production, storage, and utilization
7of corn; to provide providing methods and means, including but
8not limited to, public relations and other promotion techniques
9for the maintenance of present markets; to provide ensuring
10the security of corn to be stored and marketed in commercial
11channels; providing for the development of new or larger
12domestic and foreign markets; and to provide providing for the
13prevention, modification, or elimination of trade barriers
14which obstruct the free flow of corn.
15 Sec. 2. Section 185C.11, subsection 1, Code 2023, is amended
16by adding the following new paragraphs:
17 NEW PARAGRAPH. j. Administer the corn checkoff account as
18provided in section 185C.26.
19 NEW PARAGRAPH. k. Accept gifts, rents, royalties, interest,
20license fees, or federal or state grants. Any moneys accepted
21by the board shall be deposited in an account of a qualified
22financial institution.
23 Sec. 3. Section 185C.21, subsection 1, Code 2023, is amended
24to read as follows:
251. The board shall determine and set the state assessment
26rate. State assessments collected pursuant to the promotional
27order shall be paid into the corn promotion marketing fund
28established in section 185C.26. Except as provided in
29subsection 2, a state assessment shall not exceed one-quarter
30of one cent per bushel upon corn marketed in this state.
31 Sec. 4. Section 185C.24, subsections 1 and 2, Code 2023, are
32amended to read as follows:
331. The board shall be suspended and board operations and
34terms of members shall cease upon either any of the following
35events:
-1- 1a. The state assessment is terminated pursuant to section
2185C.25.
3b. The state assessment is suspended pursuant to section
4185C.25A.
52. However, notwithstanding subsection 1, the board
6shall continue to operate until proceeds remaining in moneys
7transferred from the corn promotion marketing fund to the corn
8checkoff account are disbursed. Disbursement shall be made
9as provided for payment the transfer of moneys under section
10185C.26.
11 Sec. 5. Section 185C.26, Code 2023, is amended to read as
12follows:
13185C.26 Deposit of moneys — corn promotion marketing fund
14— transfers.
151. A Moneys from the state assessment collected by the Iowa
16corn promotion board from a the sale of corn shall be deposited
17in the office of the treasurer of state in a special fund known
18as the corn promotion marketing fund established in the office
19of the treasurer of state. The fund may include any gifts,
20rents, royalties, interest, license fees, or a federal or state
21grant received by the board. Moneys collected, deposited
22in the corn marketing fund, and transferred to the board as
23provided in this chapter shall be subject to audit by the
24auditor of state. The auditor of state may seek reimbursement
25for the cost of the audit from moneys deposited in the corn
26marketing fund as provided in this chapter. The department of
27administrative services shall transfer moneys from the fund
282. a. Except as provided in paragraph “b”, the department
29of administrative services shall transfer moneys deposited
30in the corn marketing fundto the board for deposit into in
31 an account known as the corn checkoff account which shall be
32 established by the board in a qualified financial institution.
33The department of administrative services shall transfer the
34moneys to the corn checkoff account as provided in a resolution
35adopted by the board. However, the department is only required
-2-1to transfer moneys once during each day and only during hours
2when the offices of the state are open. From moneys collected,
3 transferred to the corn checkoff account, the board shall first
4pay all the direct and indirect costs incurred by the secretary
5and the costs of referendums, elections, and other expenses
6incurred in the administration of this chapter, before the
7transferred moneys may be expended to carry for other uses as
8provided in section 185C.28, including for carrying out the
9purposes of this chapter as provided in section 185C.11.
10b. (1) Except as otherwise provided in subparagraph (2),
11twenty-five percent of moneys deposited in the corn marketing
12fund shall be transferred to the grain depositors and sellers
13indemnity fund created in section 203D.3 for use as provided
14in section 185C.28.
15(2) If the department of agriculture and land stewardship
16delivers a state assessment transfer suspension notice to the
17department of administrative services as provided in section
18203D.3B, moneys that would otherwise be transferred to the
19grain depositors and sellers indemnity fund as described in
20subparagraph (1) shall instead be transferred to the corn
21checkoff account for use by the board in the same manner
22provided in paragraph “a”.
23(3) If the department of agriculture and land stewardship
24delivers a state assessment transfer reinstatement notice
25to the department of administrative services as provided in
26section 203D.3B, moneys that would otherwise be transferred to
27the corn checkoff account under subparagraph (2) shall again be
28transferred to the grain depositors and sellers indemnity fund
29in the same manner described in subparagraph (1).
30c. The department of administrative services is only
31required to transfer moneys under this subsection to the corn
32checkoff account and the grain depositors and sellers indemnity
33fund once during each day and only during hours when the
34offices of the state are open.
35 Sec. 6. Section 185C.28, Code 2023, is amended to read as
-3-1follows:
2185C.28 Use of moneys — appropriation appropriations.
31. Moneys deposited in the corn promotion fund and
4transferred to Except as provided in subsection 2, moneys
5transferred or accepted by the board, as provided in section
6185C.26, including federal moneys to the extent permitted
7by federal law, are appropriated and shall be used for
8the administration of this chapter and for the payment of
9claims based upon obligations incurred in the performance of
10activities and functions provided in this chapter.
112. Moneys transferred from the corn marketing fund to the
12grain depositors and sellers indemnity fund as provided in
13section 185C.26 are appropriated for use by the department of
14agriculture and land stewardship and the Iowa grain indemnity
15fund board as provided in chapter 203D.
16 Sec. 7. Section 185C.29, subsection 1, Code 2023, is amended
17to read as follows:
181. After the direct and indirect costs incurred by the
19secretary and the costs of elections, referendums, necessary
20board expenses, and administrative costs have been paid, at
21least seventy-five percent of the remaining moneys from a state
22assessment deposited in the corn promotion marketing fund and
23transferred to the corn checkoff account established in section
24185C.26 shall be used to carry out the purposes of the board as
25provided in section 185C.11.
26 Sec. 8. Section 185C.30, Code 2023, is amended to read as
27follows:
28185C.30 Bond.
29Every person occupying a position of trust with the board
30and acting under any provisions a provision of this chapter
31shall give post a bond in such amount as may be required by the
32board, the. The premium for which the bond shall be paid out of
33moneys in the corn promotion fund checkoff account established
34in section 185C.26.
35 Sec. 9. Section 185C.33, Code 2023, is amended to read as
-4-1follows:
2185C.33 Report.
3The board shall each year prepare and submit a report
4summarizing the activities of the board under this chapter to
5the auditor of state and the secretary of agriculture. The
6report shall show all income, expenses, and other relevant
7information concerning fees moneys collected by the board,
8deposited by the board into the corn marketing fund established
9in section 185C.26 or another account, transferred to the
10board, and expended by the board under the provisions of this
11chapter.
12 Sec. 10. Section 185C.34, Code 2023, is amended to read as
13follows:
14185C.34 Not a state agency — public funds.
151. The Except as provided in subsection 2, the Iowa corn
16promotion board is not a state agency.
172. The board is deemed to be a public body for purposes of
18chapter 12C.
193. Moneys deposited in the corn marketing fund and
20transferred to the corn checkoff account as established in
21section 185C.26 or the grain depositors and sellers indemnity
22fund as provided in that section shall be deemed to be public
23funds under chapter 12C.
24 Sec. 11. Section 203.1, Code 2023, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 7A. “Fund” means the grain depositors and
27sellers indemnity fund created in section 203D.3.
28 Sec. 12. Section 203.4, Code 2023, is amended to read as
29follows:
30203.4 Participation in indemnity fund required.
31A grain dealer licensed or required to be licensed pursuant
32to section 203.3 shall participate in and comply with the grain
33depositors and sellers indemnity fund as provided in chapter
34203D.
35 Sec. 13. Section 203.5, Code 2023, is amended to read as
-5-1follows:
2203.5 License.
31. a. Upon the filing of an application on a form
4prescribed by the department and compliance with the terms and
5conditions of this chapter including rules of the department,
6the department shall issue the applicant a grain dealer’s
7license. The license expires at the end of the third calendar
8month following the close of the grain dealer’s fiscal year.
9A grain dealer’s license may be renewed annually by filing a
10renewal application on a form prescribed by the department. An
11application for renewal must be received by the department on
12or before the end of the third calendar month following the
13close of the grain dealer’s fiscal year.
14b. The department shall not issue approve an application for
15the issuance or renewal of a grain dealer’s license unless the
16applicant pays all of the following fees: to the department an
17issuance fee or renewal fee imposed under section 203.6.
18(1) For the issuance of a license, all of the following:
19(a) A license fee imposed under section 203.6.
20(b) A participation fee imposed under section 203D.3A,
21and any delinquent participation fee imposed under a previous
22license as provided in that section.
23(2) For the renewal of a license, all of the following:
24(a) A renewal fee imposed under section 203.6.
25(b) A participation fee imposed under section 203D.3A, and
26any delinquent participation fee as provided in that section.
27(c) A per-bushel fee as provided in section 203D.3A, and
28any delinquent per-bushel fee and penalty as provided in that
29section.
302. The department shall notify a licensed grain dealer
31of any delinquency in the payment of a participation fee or
32per-bushel fee as provided in section 203D.3A. The department
33shall suspend the grain dealer’s license thirty days after
34delivering the notice unless the licensed grain dealer pays the
35delinquent fee.
-6- 13. The department may suspend or revoke the license of a
2grain dealer who discounts the purchase price paid for grain
3nominally for the participation fee or per-bushel fee as
4provided in section 203D.3A while that fee is not in effect.
54. 2. A grain dealer license which that has expired may be
6reinstated by the department upon receipt of a proper renewal
7application, the a renewal fee, and a reinstatement fee as
8provided in imposed under section 203.6, and any delinquent
9participation fee or per-bushel fee and penalty as provided
10in section 203D.3A. The applicant must file the renewal
11application and pay the fees and penalty to the department
12 renewal fee and reinstatement fee within thirty days from the
13date of expiration of the grain dealer license.
145. 3. The department may cancel a license upon request
15of the licensee unless a complaint or information is filed
16against the licensee alleging a violation of a provision of
17this chapter.
186. 4. a. The department shall refund a fee imposed
19under section 203.6 that has been paid by an applicant to the
20department under this section if the department does not issue
21or renew a grain dealer’s license.
22b. The department shall prorate a fee imposed under section
23203.6 that has been paid by an applicant to the department
24under this section for the issuance or renewal of a license for
25less than a full year.
267. 5. The department may deny a license to an applicant
27if the applicant has had a license issued under this chapter
28or chapter 203C revoked within the past three years, the
29applicant has been convicted of a felony involving a violation
30of this chapter or chapter 203C, or the applicant is owned or
31controlled by a person who has had a license so revoked or who
32has been so convicted.
338. 6. The department may deny a license to an applicant if
34any of the following apply:
35a. The applicant has caused liability to the Iowa grain
-7-1depositors and sellers indemnity fund in regard to a license
2issued under this chapter or chapter 203C, and the liability
3has not been discharged, settled, or satisfied.
4b. The applicant is owned or controlled by a person who has
5caused liability to the fund through operations under a license
6issued under this chapter or chapter 203C and the liability has
7not been discharged, settled, or satisfied.
8 Sec. 14. Section 203.6, unnumbered paragraph 1, Code 2023,
9is amended to read as follows:
10The department shall charge impose the following license
11 fees for deposit in the general fund:
12 Sec. 15. Section 203C.1, Code 2023, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 9A. “Fund” means the grain depositors and
15sellers indemnity fund created in section 203D.3.
16 Sec. 16. Section 203C.12, Code 2023, is amended to read as
17follows:
18203C.12 Participation in fund required.
19A person licensed to operate a warehouse under this chapter
20shall participate in and comply with the grain depositors and
21sellers indemnity fund as provided in chapter 203D.
22 Sec. 17. Section 203C.33, subsection 1, unnumbered
23paragraph 1, Code 2023, is amended to read as follows:
24The department shall charge impose the following license
25 fees for deposit in the general fund:
26 Sec. 18. Section 203C.37, subsections 1, 2, and 3, Code
272023, are amended to read as follows:
281. a. Upon the filing of an application pursuant to section
29203C.7 and compliance with the terms and conditions of this
30chapter including rules of the department, the department
31shall issue the applicant a warehouse operator’s license.
32The license expires at the end of the third calendar month
33following the close of the warehouse operator’s fiscal year.
34A warehouse operator’s license may be renewed annually by the
35filing of a renewal application on a form prescribed by the
-8-1department pursuant to section 203C.7. An application for A
2 renewal application must be received by the department on or
3before the end of the third calendar month following the close
4of the warehouse operator’s fiscal year.
5b. The department shall not approve an application for the
6issuance or renewal of a warehouse operator’s license unless
7the applicant pays all of the following fees: to the department
8an issuance fee or renewal fee imposed under section 203C.33.
9(1) For the issuance of a license, all of the following:
10(a) A license fee imposed under section 203C.33.
11(b) A participation fee imposed under section 203D.3A,
12and any delinquent participation fee imposed under a previous
13license as provided in that section.
14(2) For the renewal of a license, all of the following:
15(a) A renewal fee imposed under section 203C.33.
16(b) A participation fee imposed under section 203D.3A, and
17any delinquent participation fee as provided in that section.
182. The failure of a warehouse operator to file a renewal
19application and to pay a renewal fee as provided for in imposed
20under section 203C.33 and any delinquent participation fee as
21provided in section 203D.3A, on or before the end of the third
22calendar month following the close of the licensee’s fiscal
23year shall cause a license to expire.
243. A warehouse license that has expired may be reinstated by
25the department upon receipt of a proper renewal application,
26the renewal fee, and the reinstatement fee as provided for in
27 imposed under section 203C.33, and any delinquent participation
28fee as provided in section 203D.3A. The applicant must file
29the renewal application and pay the fees renewal fee and
30reinstatement fee to the department within thirty days from the
31date that the warehouse license expires.
32 Sec. 19. Section 203D.1, Code 2023, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 15A. “State assessment” means the state
35assessment on corn imposed, suspended, or reinstated as
-9-1provided in sections 185C.26 and 203D.3B.
2 Sec. 20. Section 203D.2, Code 2023, is amended to read as
3follows:
4203D.2 Persons participating in fund — compliance.
51. All licensed grain dealers, including persons applying
6to be issued or renewed grain dealer licenses as provided
7in chapter 203, and licensed warehouse operators, including
8persons applying to be issued or renewed warehouse operator
9licenses as provided in chapter 203C, shall participate in the
10fund.
112. a. Participation in the fund by a licensed grain dealer
12includes complying with this chapter and chapter 203.
13b. Participation in the fund by a licensed warehouse
14operator includes complying with this chapter and chapter 203C.
153. This section does not require participation in the fund
16to include payment of a fee for deposit into the fund.
17 Sec. 21. Section 203D.3, subsection 2, Code 2023, is amended
18to read as follows:
192. The fund consists of all of the following:
20a. Participation fees paid to the department by licensed
21grain dealers and persons applying to be issued a grain
22dealer’s license as provided in section 203D.3A. The state
23assessment collected pursuant to chapter 185C and transferred
24to the fund pursuant to section 185C.26 and this chapter,
25including section 203D.3B.
26b. Participation fees paid to the department by licensed
27warehouse operators and persons applying to be issued a
28warehouse operator’s license as provided in section 203D.3A.
29c. Per-bushel fees paid to the department by licensed grain
30dealers as provided in section 203D.3A.
31d. Delinquency penalties.
32e. b. Amounts collected by the state pursuant to legal
33action on behalf of the fund.
34f. c. Interest, earnings on investments, property, or
35securities acquired through the use of moneys in the fund.
-10-1 Sec. 22. NEW SECTION. 203D.3B Grain depositors and sellers
2indemnity fund — administration of state assessment on corn.
31. The board shall annually review the debits of and credits
4to the grain depositors and sellers indemnity fund.
52. The state assessment shall be imposed effective July 1,
62023.
73. Beginning May 1, 2024, and not later than May 1 of
8each year thereafter, the board shall determine whether to
9suspend or reinstate the state assessment. The suspension or
10reinstatement of the state assessment is effective beginning
11on the following July 1.
124. a. Notwithstanding subsection 3, if on the last day of
13the fund’s fiscal year as provided in section 203D.3, moneys
14in the fund exceed twenty million dollars, less any encumbered
15balances or pending or unsettled claims, the state assessment
16shall be suspended effective on the first day of the following
17fiscal year.
18b. Notwithstanding subsection 3, if at any time moneys in
19the fund do not exceed ten million dollars, less any encumbered
20balances or pending or unsettled claims, the state assessment
21shall be reinstated effective on the first day of the following
22fiscal year.
235. a. If the state assessment is suspended as provided
24in this section, the department of agriculture and land
25stewardship shall immediately deliver a state assessment
26transfer suspension notice to the department of administrative
27services as provided in section 185C.26.
28b. If the state assessment is reinstated as provided in this
29section, the department of agriculture and land stewardship
30shall immediately deliver a state assessment transfer
31reinstatement notice to the department of administrative
32services as provided in section 185C.26.
33 Sec. 23. Section 203D.4, subsections 2 and 3, Code 2023, are
34amended to read as follows:
352. a. The duties of the board include the review and
-11-1determination of claims, and the review and approval of
2administrative costs of the fund. To carry out these
3duties, the board has the power to adopt rules regarding its
4organization and procedures for determining claims. Further,
5the board shall approve rules proposed by the department
6for the administration of the per-bushel fee prior to their
7adoption by the department.
8b. The board may provide comment and advice to the
9department in regard to the department’s administration of
10chapters 203 and 203C where the department’s policies and rules
11may affect the exposure of the fund to liability. However, the
12board shall not become actively involved in a determination by
13the department as to whether disciplinary action is to be taken
14against a particular licensee. The board is not a forum for
15review or appeal in regard to any particular action taken by
16the department against a licensee.
173. a. The department through the grain warehouse bureau
18 shall perform the administrative functions necessary for the
19operation of the board and the fund. Administrative costs
20approved by the board shall be paid from the fund. The rules
21of the department shall contain the rules of the board adopted
22for its organization and its procedures. The department shall
23adopt rules for the administration of the per-bushel fee upon
24the board’s approval of the rules proposed by the department.
25b. The secretary of agriculture, as president of the board
26as well as head of the department of agriculture and land
27stewardship, shall administer the department so as to minimize
28the risk of loss to the fund while protecting interests of
29depositors and sellers of grain. Policies and rules for the
30administration of chapters 203 and 203C which, as determined
31by the secretary of agriculture, may affect the exposure of
32the fund, shall be presented to the board for comment prior to
33their adoption by the department.
34c. The department shall make reports to the board in regard
35to licensee investigations which may result in disciplinary
-12-1action against a licensee and exposure of the fund. The
2reports may be discussed by the board in closed session
3pursuant to section 21.5, and are confidential. In making
4the report, the department shall make available to the board
5records of licensees which are otherwise confidential under
6section 22.7, 203.16, or 203C.24. However, a determination
7to take disciplinary action against a particular licensee
8shall be made exclusively by the department. A report to the
9board is not a prerequisite to disciplinary action against a
10licensee. Review of any action against a licensee, whether or
11not relating to the fund, shall be made exclusively through the
12department.
13 Sec. 24. Section 203D.6, subsection 8, Code 2023, is amended
14to read as follows:
158. Payment of claims.
16a. Upon a determination that the claim is eligible for
17payment, the board shall provide for payment of ninety percent
18of the loss, as determined under subsection 5, but not more
19than three six hundred thousand dollars per claimant.
20b. If at any time the board determines that there are
21insufficient funds moneys in the fund to make payment of
22all claims, the board may order that payment be deferred
23on specified claims. The department, upon the board’s
24instruction, shall hold those claims for payment until the
25board determines that the fund again contains there are
26 sufficient assets moneys in the fund to pay deferred claims.
27 Sec. 25. REPEAL. Sections 203D.3A and 203D.5, Code 2023,
28are repealed.
29EXPLANATION
30The inclusion of this explanation does not constitute agreement with
31the explanation’s substance by the members of the general assembly.
32BACKGROUND — GRAIN DEPOSITORS AND SELLERS INDEMNITY FUND.
33 This bill amends provisions regulating grain dealers purchasing
34grain (Code chapter 203), and grain warehouse operators storing
35grain under bailment (Code chapter 203C). A grain dealer
-13-1or warehouse operator must do business in this state under
2a license issued by the department of agriculture and land
3stewardship (DALS). The licensed grain dealer and licensed
4warehouse operator (licensees) pay license fees for deposit in
5the general fund (Code sections 203.6 and 203C.33). A person
6selling grain to a licensed grain dealer (seller) or depositing
7grain with a licensed warehouse operator (depositor) may be
8reimbursed for a loss incurred by the failure of the licensee
9to honor a contractual obligation regarding the transaction
10(Code section 203D.6). Upon a determination that the claim
11is eligible for payment, the Iowa grain indemnity fund board
12(indemnity board) provides for payment of 90 percent of the
13loss, but not more than $300,000. The indemnity board may
14defer a claim if there are insufficient assets in the fund to
15fully cover a loss. The indemnity fund is paid from several
16sources, including a participation fee paid by those grain
17dealers and warehouse operators (persons applying for or
18renewing a license) and a per-bushel fee paid only by those
19grain dealers (Code sections 203D.3A and 203D.5). For grain
20dealers, the amount of the participation fee is based on
21purchased grain during the grain dealer’s last fiscal year, and
22for warehouse operators, the amount of the participation fee
23is based on warehouse storage capacity. The maximum amount of
24the participation fee is .014 of 1 cent per bushel of either
25purchased or stored grain with a minimum required amount of
26$50. The per-bushel fee is also based on purchased grain with
27a maximum of $0.25 per bushel. The moneys available in the
28indemnity fund are calculated by subtracting from the balance
29any unencumbered obligations or pending claims (Code section
30203D.6). The indemnity fund is managed on a state fiscal year
31basis (July 1 to June 30). By May 1 of each year, the indemnity
32board may impose, reinstate, adjust, or waive the fees.
33However, if on the last date of the fund’s fiscal year, the
34moneys in the indemnity fund exceed a ceiling of $8 million,
35the two fees are waived. If at any time moneys in the indemnity
-14-1fund are at a floor of $3 million or less, the indemnity fees
2are reinstated (Code section 203D.5).
3BACKGROUND — CORN CHECKOFFS. An excise tax or “assessment”
4is imposed on the first purchaser of a number of commodities
5as a pass-through (commonly referred to as a “checkoff”).
6The purpose of the assessment is to finance activities which
7involve improving market development which includes aspects
8related to the commodity’s production and market share, such
9as research and education. Depending upon the commodity, the
10assessment is implemented and administered under either a state
11or federal statute or both. An assessment takes effect, is
12continued, or is terminated on the basis of a majority vote
13of producers voting in a referendum conducted by the United
14States department of agriculture in the case of a federal
15assessment or DALS in the case of a state assessment. The
16checkoff moneys imposed due to the state or federal assessment
17are collected and expended pursuant to a promotional order
18under the direction of a governing body of elected producers
19(referred to as a board, committee, or council). For corn,
20the state has implemented and administers a state assessment
21(Code chapter 185C) under the direction of the Iowa corn
22promotion board (Code sections 185C.8, 185C.11, and 185C.13).
23The maximum amount of the state assessment for corn is 3 cents
24per bushel (Code section 185C.21) subject to a right of refund
25(Code section 185C.27). For each commodity subject to a state
26assessment, including corn, the collected checkoff moneys are
27deposited into a separate state-controlled fund established
28in the state treasury (state fund) and transferred by the
29department of administrative services (DAS) to an account in a
30qualified financial institution eligible to hold public funds
31(Code chapter 12C) and established by the governing body of the
32commodity organization; in this case the Iowa corn promotion
33board.
34BILL’S PROVISIONS. The bill eliminates the indemnity fees
35paid to DALS by licensees used to support the indemnity fund
-15-1(Code sections 203D.3A and 203D.5). The bill replaces that
2funding source with checkoff moneys collected from state
3assessments imposed on corn. The bill provides that market
4development for corn expressly includes the production,
5storage, and marketing of corn in commercial channels (amended
6Code section 185C.1). The name of the state-controlled fund
7is changed from the corn promotion fund to the corn marketing
8fund (amended Code section 185C.26). The account under the
9control of the Iowa corn promotion board is named “the corn
10checkoff account”. Under the bill, 25 percent of moneys in the
11fund are transferred to the indemnity fund and appropriated
12for use by DALS and the indemnity board to support claims for
13losses by depositors and sellers (amended Code sections 185C.26
14and 185C.28). Moneys deposited into the corn marketing fund
15and transferred to the corn checkoff account or the indemnity
16fund are public funds (amended Code section 185C.34). The
17bill increases the limits of the indemnity fund to a ceiling
18of $20 million, and a floor of $10 million. On May 1, the
19indemnity board must determine to suspend or reinstate the
20state assessment. However, if on the last day of the indemnity
21fund’s fiscal year, moneys in the fund reach the $20 million
22ceiling, the state assessment is suspended, and if at any time
23those moneys reach the $10 million floor, the state assessment
24is reinstated (new Code section 203D.3B). In either case, DALS
25must notify DAS of the suspension or reinstatement. Finally,
26the indemnity fund’s payout limit for a claim is increased to
27$600,000 (Code section 203D.6).
-16-da/ns
2commodity programs, by reducing and eliminating fees imposed
3on licensed grain dealers and warehouse operators, replacing
4those moneys with moneys collected from a percentage of
5state assessments imposed on the sale of corn, increasing
6moneys deposited into the grain depositors and sellers
7indemnity fund, increasing indemnification amounts, and
8making appropriations.
9BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 185C.1, subsection 9, Code 2023, is
2amended to read as follows:
39. “Market development” means to engage improve the economic
4conditions of corn production, storage, and marketing, by
5engaging in research and educational programs directed toward
6better and more efficient production, storage, and utilization
7of corn; to provide providing methods and means, including but
8not limited to, public relations and other promotion techniques
9for the maintenance of present markets; to provide ensuring
10the security of corn to be stored and marketed in commercial
11channels; providing for the development of new or larger
12domestic and foreign markets; and to provide providing for the
13prevention, modification, or elimination of trade barriers
14which obstruct the free flow of corn.
15 Sec. 2. Section 185C.11, subsection 1, Code 2023, is amended
16by adding the following new paragraphs:
17 NEW PARAGRAPH. j. Administer the corn checkoff account as
18provided in section 185C.26.
19 NEW PARAGRAPH. k. Accept gifts, rents, royalties, interest,
20license fees, or federal or state grants. Any moneys accepted
21by the board shall be deposited in an account of a qualified
22financial institution.
23 Sec. 3. Section 185C.21, subsection 1, Code 2023, is amended
24to read as follows:
251. The board shall determine and set the state assessment
26rate. State assessments collected pursuant to the promotional
27order shall be paid into the corn promotion marketing fund
28established in section 185C.26. Except as provided in
29subsection 2, a state assessment shall not exceed one-quarter
30of one cent per bushel upon corn marketed in this state.
31 Sec. 4. Section 185C.24, subsections 1 and 2, Code 2023, are
32amended to read as follows:
331. The board shall be suspended and board operations and
34terms of members shall cease upon either any of the following
35events:
-1- 1a. The state assessment is terminated pursuant to section
2185C.25.
3b. The state assessment is suspended pursuant to section
4185C.25A.
52. However, notwithstanding subsection 1, the board
6shall continue to operate until proceeds remaining in moneys
7transferred from the corn promotion marketing fund to the corn
8checkoff account are disbursed. Disbursement shall be made
9as provided for payment the transfer of moneys under section
10185C.26.
11 Sec. 5. Section 185C.26, Code 2023, is amended to read as
12follows:
13185C.26 Deposit of moneys — corn promotion marketing fund
14— transfers.
151. A Moneys from the state assessment collected by the Iowa
16corn promotion board from a the sale of corn shall be deposited
17in the office of the treasurer of state in a special fund known
18as the corn promotion marketing fund established in the office
19of the treasurer of state. The fund may include any gifts,
20rents, royalties, interest, license fees, or a federal or state
21grant received by the board. Moneys collected, deposited
22in the corn marketing fund, and transferred to the board as
23provided in this chapter shall be subject to audit by the
24auditor of state. The auditor of state may seek reimbursement
25for the cost of the audit from moneys deposited in the corn
26marketing fund as provided in this chapter. The department of
27administrative services shall transfer moneys from the fund
282. a. Except as provided in paragraph “b”, the department
29of administrative services shall transfer moneys deposited
30in the corn marketing fundto the board for deposit into in
31 an account known as the corn checkoff account which shall be
32 established by the board in a qualified financial institution.
33The department of administrative services shall transfer the
34moneys to the corn checkoff account as provided in a resolution
35adopted by the board. However, the department is only required
-2-1to transfer moneys once during each day and only during hours
2when the offices of the state are open. From moneys collected,
3 transferred to the corn checkoff account, the board shall first
4pay all the direct and indirect costs incurred by the secretary
5and the costs of referendums, elections, and other expenses
6incurred in the administration of this chapter, before the
7transferred moneys may be expended to carry for other uses as
8provided in section 185C.28, including for carrying out the
9purposes of this chapter as provided in section 185C.11.
10b. (1) Except as otherwise provided in subparagraph (2),
11twenty-five percent of moneys deposited in the corn marketing
12fund shall be transferred to the grain depositors and sellers
13indemnity fund created in section 203D.3 for use as provided
14in section 185C.28.
15(2) If the department of agriculture and land stewardship
16delivers a state assessment transfer suspension notice to the
17department of administrative services as provided in section
18203D.3B, moneys that would otherwise be transferred to the
19grain depositors and sellers indemnity fund as described in
20subparagraph (1) shall instead be transferred to the corn
21checkoff account for use by the board in the same manner
22provided in paragraph “a”.
23(3) If the department of agriculture and land stewardship
24delivers a state assessment transfer reinstatement notice
25to the department of administrative services as provided in
26section 203D.3B, moneys that would otherwise be transferred to
27the corn checkoff account under subparagraph (2) shall again be
28transferred to the grain depositors and sellers indemnity fund
29in the same manner described in subparagraph (1).
30c. The department of administrative services is only
31required to transfer moneys under this subsection to the corn
32checkoff account and the grain depositors and sellers indemnity
33fund once during each day and only during hours when the
34offices of the state are open.
35 Sec. 6. Section 185C.28, Code 2023, is amended to read as
-3-1follows:
2185C.28 Use of moneys — appropriation appropriations.
31. Moneys deposited in the corn promotion fund and
4transferred to Except as provided in subsection 2, moneys
5transferred or accepted by the board, as provided in section
6185C.26, including federal moneys to the extent permitted
7by federal law, are appropriated and shall be used for
8the administration of this chapter and for the payment of
9claims based upon obligations incurred in the performance of
10activities and functions provided in this chapter.
112. Moneys transferred from the corn marketing fund to the
12grain depositors and sellers indemnity fund as provided in
13section 185C.26 are appropriated for use by the department of
14agriculture and land stewardship and the Iowa grain indemnity
15fund board as provided in chapter 203D.
16 Sec. 7. Section 185C.29, subsection 1, Code 2023, is amended
17to read as follows:
181. After the direct and indirect costs incurred by the
19secretary and the costs of elections, referendums, necessary
20board expenses, and administrative costs have been paid, at
21least seventy-five percent of the remaining moneys from a state
22assessment deposited in the corn promotion marketing fund and
23transferred to the corn checkoff account established in section
24185C.26 shall be used to carry out the purposes of the board as
25provided in section 185C.11.
26 Sec. 8. Section 185C.30, Code 2023, is amended to read as
27follows:
28185C.30 Bond.
29Every person occupying a position of trust with the board
30and acting under any provisions a provision of this chapter
31shall give post a bond in such amount as may be required by the
32board, the. The premium for which the bond shall be paid out of
33moneys in the corn promotion fund checkoff account established
34in section 185C.26.
35 Sec. 9. Section 185C.33, Code 2023, is amended to read as
-4-1follows:
2185C.33 Report.
3The board shall each year prepare and submit a report
4summarizing the activities of the board under this chapter to
5the auditor of state and the secretary of agriculture. The
6report shall show all income, expenses, and other relevant
7information concerning fees moneys collected by the board,
8deposited by the board into the corn marketing fund established
9in section 185C.26 or another account, transferred to the
10board, and expended by the board under the provisions of this
11chapter.
12 Sec. 10. Section 185C.34, Code 2023, is amended to read as
13follows:
14185C.34 Not a state agency — public funds.
151. The Except as provided in subsection 2, the Iowa corn
16promotion board is not a state agency.
172. The board is deemed to be a public body for purposes of
18chapter 12C.
193. Moneys deposited in the corn marketing fund and
20transferred to the corn checkoff account as established in
21section 185C.26 or the grain depositors and sellers indemnity
22fund as provided in that section shall be deemed to be public
23funds under chapter 12C.
24 Sec. 11. Section 203.1, Code 2023, is amended by adding the
25following new subsection:
26 NEW SUBSECTION. 7A. “Fund” means the grain depositors and
27sellers indemnity fund created in section 203D.3.
28 Sec. 12. Section 203.4, Code 2023, is amended to read as
29follows:
30203.4 Participation in indemnity fund required.
31A grain dealer licensed or required to be licensed pursuant
32to section 203.3 shall participate in and comply with the grain
33depositors and sellers indemnity fund as provided in chapter
34203D.
35 Sec. 13. Section 203.5, Code 2023, is amended to read as
-5-1follows:
2203.5 License.
31. a. Upon the filing of an application on a form
4prescribed by the department and compliance with the terms and
5conditions of this chapter including rules of the department,
6the department shall issue the applicant a grain dealer’s
7license. The license expires at the end of the third calendar
8month following the close of the grain dealer’s fiscal year.
9A grain dealer’s license may be renewed annually by filing a
10renewal application on a form prescribed by the department. An
11application for renewal must be received by the department on
12or before the end of the third calendar month following the
13close of the grain dealer’s fiscal year.
14b. The department shall not issue approve an application for
15the issuance or renewal of a grain dealer’s license unless the
16applicant pays all of the following fees: to the department an
17issuance fee or renewal fee imposed under section 203.6.
18(1) For the issuance of a license, all of the following:
19(a) A license fee imposed under section 203.6.
20(b) A participation fee imposed under section 203D.3A,
21and any delinquent participation fee imposed under a previous
22license as provided in that section.
23(2) For the renewal of a license, all of the following:
24(a) A renewal fee imposed under section 203.6.
25(b) A participation fee imposed under section 203D.3A, and
26any delinquent participation fee as provided in that section.
27(c) A per-bushel fee as provided in section 203D.3A, and
28any delinquent per-bushel fee and penalty as provided in that
29section.
302. The department shall notify a licensed grain dealer
31of any delinquency in the payment of a participation fee or
32per-bushel fee as provided in section 203D.3A. The department
33shall suspend the grain dealer’s license thirty days after
34delivering the notice unless the licensed grain dealer pays the
35delinquent fee.
-6- 13. The department may suspend or revoke the license of a
2grain dealer who discounts the purchase price paid for grain
3nominally for the participation fee or per-bushel fee as
4provided in section 203D.3A while that fee is not in effect.
54. 2. A grain dealer license which that has expired may be
6reinstated by the department upon receipt of a proper renewal
7application, the a renewal fee, and a reinstatement fee as
8provided in imposed under section 203.6, and any delinquent
9participation fee or per-bushel fee and penalty as provided
10in section 203D.3A. The applicant must file the renewal
11application and pay the fees and penalty to the department
12 renewal fee and reinstatement fee within thirty days from the
13date of expiration of the grain dealer license.
145. 3. The department may cancel a license upon request
15of the licensee unless a complaint or information is filed
16against the licensee alleging a violation of a provision of
17this chapter.
186. 4. a. The department shall refund a fee imposed
19under section 203.6 that has been paid by an applicant to the
20department under this section if the department does not issue
21or renew a grain dealer’s license.
22b. The department shall prorate a fee imposed under section
23203.6 that has been paid by an applicant to the department
24under this section for the issuance or renewal of a license for
25less than a full year.
267. 5. The department may deny a license to an applicant
27if the applicant has had a license issued under this chapter
28or chapter 203C revoked within the past three years, the
29applicant has been convicted of a felony involving a violation
30of this chapter or chapter 203C, or the applicant is owned or
31controlled by a person who has had a license so revoked or who
32has been so convicted.
338. 6. The department may deny a license to an applicant if
34any of the following apply:
35a. The applicant has caused liability to the Iowa grain
-7-1depositors and sellers indemnity fund in regard to a license
2issued under this chapter or chapter 203C, and the liability
3has not been discharged, settled, or satisfied.
4b. The applicant is owned or controlled by a person who has
5caused liability to the fund through operations under a license
6issued under this chapter or chapter 203C and the liability has
7not been discharged, settled, or satisfied.
8 Sec. 14. Section 203.6, unnumbered paragraph 1, Code 2023,
9is amended to read as follows:
10The department shall charge impose the following license
11 fees for deposit in the general fund:
12 Sec. 15. Section 203C.1, Code 2023, is amended by adding the
13following new subsection:
14 NEW SUBSECTION. 9A. “Fund” means the grain depositors and
15sellers indemnity fund created in section 203D.3.
16 Sec. 16. Section 203C.12, Code 2023, is amended to read as
17follows:
18203C.12 Participation in fund required.
19A person licensed to operate a warehouse under this chapter
20shall participate in and comply with the grain depositors and
21sellers indemnity fund as provided in chapter 203D.
22 Sec. 17. Section 203C.33, subsection 1, unnumbered
23paragraph 1, Code 2023, is amended to read as follows:
24The department shall charge impose the following license
25 fees for deposit in the general fund:
26 Sec. 18. Section 203C.37, subsections 1, 2, and 3, Code
272023, are amended to read as follows:
281. a. Upon the filing of an application pursuant to section
29203C.7 and compliance with the terms and conditions of this
30chapter including rules of the department, the department
31shall issue the applicant a warehouse operator’s license.
32The license expires at the end of the third calendar month
33following the close of the warehouse operator’s fiscal year.
34A warehouse operator’s license may be renewed annually by the
35filing of a renewal application on a form prescribed by the
-8-1department pursuant to section 203C.7. An application for A
2 renewal application must be received by the department on or
3before the end of the third calendar month following the close
4of the warehouse operator’s fiscal year.
5b. The department shall not approve an application for the
6issuance or renewal of a warehouse operator’s license unless
7the applicant pays all of the following fees: to the department
8an issuance fee or renewal fee imposed under section 203C.33.
9(1) For the issuance of a license, all of the following:
10(a) A license fee imposed under section 203C.33.
11(b) A participation fee imposed under section 203D.3A,
12and any delinquent participation fee imposed under a previous
13license as provided in that section.
14(2) For the renewal of a license, all of the following:
15(a) A renewal fee imposed under section 203C.33.
16(b) A participation fee imposed under section 203D.3A, and
17any delinquent participation fee as provided in that section.
182. The failure of a warehouse operator to file a renewal
19application and to pay a renewal fee as provided for in imposed
20under section 203C.33 and any delinquent participation fee as
21provided in section 203D.3A, on or before the end of the third
22calendar month following the close of the licensee’s fiscal
23year shall cause a license to expire.
243. A warehouse license that has expired may be reinstated by
25the department upon receipt of a proper renewal application,
26the renewal fee, and the reinstatement fee as provided for in
27 imposed under section 203C.33, and any delinquent participation
28fee as provided in section 203D.3A. The applicant must file
29the renewal application and pay the fees renewal fee and
30reinstatement fee to the department within thirty days from the
31date that the warehouse license expires.
32 Sec. 19. Section 203D.1, Code 2023, is amended by adding the
33following new subsection:
34 NEW SUBSECTION. 15A. “State assessment” means the state
35assessment on corn imposed, suspended, or reinstated as
-9-1provided in sections 185C.26 and 203D.3B.
2 Sec. 20. Section 203D.2, Code 2023, is amended to read as
3follows:
4203D.2 Persons participating in fund — compliance.
51. All licensed grain dealers, including persons applying
6to be issued or renewed grain dealer licenses as provided
7in chapter 203, and licensed warehouse operators, including
8persons applying to be issued or renewed warehouse operator
9licenses as provided in chapter 203C, shall participate in the
10fund.
112. a. Participation in the fund by a licensed grain dealer
12includes complying with this chapter and chapter 203.
13b. Participation in the fund by a licensed warehouse
14operator includes complying with this chapter and chapter 203C.
153. This section does not require participation in the fund
16to include payment of a fee for deposit into the fund.
17 Sec. 21. Section 203D.3, subsection 2, Code 2023, is amended
18to read as follows:
192. The fund consists of all of the following:
20a. Participation fees paid to the department by licensed
21grain dealers and persons applying to be issued a grain
22dealer’s license as provided in section 203D.3A. The state
23assessment collected pursuant to chapter 185C and transferred
24to the fund pursuant to section 185C.26 and this chapter,
25including section 203D.3B.
26b. Participation fees paid to the department by licensed
27warehouse operators and persons applying to be issued a
28warehouse operator’s license as provided in section 203D.3A.
29c. Per-bushel fees paid to the department by licensed grain
30dealers as provided in section 203D.3A.
31d. Delinquency penalties.
32e. b. Amounts collected by the state pursuant to legal
33action on behalf of the fund.
34f. c. Interest, earnings on investments, property, or
35securities acquired through the use of moneys in the fund.
-10-1 Sec. 22. NEW SECTION. 203D.3B Grain depositors and sellers
2indemnity fund — administration of state assessment on corn.
31. The board shall annually review the debits of and credits
4to the grain depositors and sellers indemnity fund.
52. The state assessment shall be imposed effective July 1,
62023.
73. Beginning May 1, 2024, and not later than May 1 of
8each year thereafter, the board shall determine whether to
9suspend or reinstate the state assessment. The suspension or
10reinstatement of the state assessment is effective beginning
11on the following July 1.
124. a. Notwithstanding subsection 3, if on the last day of
13the fund’s fiscal year as provided in section 203D.3, moneys
14in the fund exceed twenty million dollars, less any encumbered
15balances or pending or unsettled claims, the state assessment
16shall be suspended effective on the first day of the following
17fiscal year.
18b. Notwithstanding subsection 3, if at any time moneys in
19the fund do not exceed ten million dollars, less any encumbered
20balances or pending or unsettled claims, the state assessment
21shall be reinstated effective on the first day of the following
22fiscal year.
235. a. If the state assessment is suspended as provided
24in this section, the department of agriculture and land
25stewardship shall immediately deliver a state assessment
26transfer suspension notice to the department of administrative
27services as provided in section 185C.26.
28b. If the state assessment is reinstated as provided in this
29section, the department of agriculture and land stewardship
30shall immediately deliver a state assessment transfer
31reinstatement notice to the department of administrative
32services as provided in section 185C.26.
33 Sec. 23. Section 203D.4, subsections 2 and 3, Code 2023, are
34amended to read as follows:
352. a. The duties of the board include the review and
-11-1determination of claims, and the review and approval of
2administrative costs of the fund. To carry out these
3duties, the board has the power to adopt rules regarding its
4organization and procedures for determining claims. Further,
5the board shall approve rules proposed by the department
6for the administration of the per-bushel fee prior to their
7adoption by the department.
8b. The board may provide comment and advice to the
9department in regard to the department’s administration of
10chapters 203 and 203C where the department’s policies and rules
11may affect the exposure of the fund to liability. However, the
12board shall not become actively involved in a determination by
13the department as to whether disciplinary action is to be taken
14against a particular licensee. The board is not a forum for
15review or appeal in regard to any particular action taken by
16the department against a licensee.
173. a. The department through the grain warehouse bureau
18 shall perform the administrative functions necessary for the
19operation of the board and the fund. Administrative costs
20approved by the board shall be paid from the fund. The rules
21of the department shall contain the rules of the board adopted
22for its organization and its procedures. The department shall
23adopt rules for the administration of the per-bushel fee upon
24the board’s approval of the rules proposed by the department.
25b. The secretary of agriculture, as president of the board
26as well as head of the department of agriculture and land
27stewardship, shall administer the department so as to minimize
28the risk of loss to the fund while protecting interests of
29depositors and sellers of grain. Policies and rules for the
30administration of chapters 203 and 203C which, as determined
31by the secretary of agriculture, may affect the exposure of
32the fund, shall be presented to the board for comment prior to
33their adoption by the department.
34c. The department shall make reports to the board in regard
35to licensee investigations which may result in disciplinary
-12-1action against a licensee and exposure of the fund. The
2reports may be discussed by the board in closed session
3pursuant to section 21.5, and are confidential. In making
4the report, the department shall make available to the board
5records of licensees which are otherwise confidential under
6section 22.7, 203.16, or 203C.24. However, a determination
7to take disciplinary action against a particular licensee
8shall be made exclusively by the department. A report to the
9board is not a prerequisite to disciplinary action against a
10licensee. Review of any action against a licensee, whether or
11not relating to the fund, shall be made exclusively through the
12department.
13 Sec. 24. Section 203D.6, subsection 8, Code 2023, is amended
14to read as follows:
158. Payment of claims.
16a. Upon a determination that the claim is eligible for
17payment, the board shall provide for payment of ninety percent
18of the loss, as determined under subsection 5, but not more
19than three six hundred thousand dollars per claimant.
20b. If at any time the board determines that there are
21insufficient funds moneys in the fund to make payment of
22all claims, the board may order that payment be deferred
23on specified claims. The department, upon the board’s
24instruction, shall hold those claims for payment until the
25board determines that the fund again contains there are
26 sufficient assets moneys in the fund to pay deferred claims.
27 Sec. 25. REPEAL. Sections 203D.3A and 203D.5, Code 2023,
28are repealed.
29EXPLANATION
30The inclusion of this explanation does not constitute agreement with
31the explanation’s substance by the members of the general assembly.
32BACKGROUND — GRAIN DEPOSITORS AND SELLERS INDEMNITY FUND.
33 This bill amends provisions regulating grain dealers purchasing
34grain (Code chapter 203), and grain warehouse operators storing
35grain under bailment (Code chapter 203C). A grain dealer
-13-1or warehouse operator must do business in this state under
2a license issued by the department of agriculture and land
3stewardship (DALS). The licensed grain dealer and licensed
4warehouse operator (licensees) pay license fees for deposit in
5the general fund (Code sections 203.6 and 203C.33). A person
6selling grain to a licensed grain dealer (seller) or depositing
7grain with a licensed warehouse operator (depositor) may be
8reimbursed for a loss incurred by the failure of the licensee
9to honor a contractual obligation regarding the transaction
10(Code section 203D.6). Upon a determination that the claim
11is eligible for payment, the Iowa grain indemnity fund board
12(indemnity board) provides for payment of 90 percent of the
13loss, but not more than $300,000. The indemnity board may
14defer a claim if there are insufficient assets in the fund to
15fully cover a loss. The indemnity fund is paid from several
16sources, including a participation fee paid by those grain
17dealers and warehouse operators (persons applying for or
18renewing a license) and a per-bushel fee paid only by those
19grain dealers (Code sections 203D.3A and 203D.5). For grain
20dealers, the amount of the participation fee is based on
21purchased grain during the grain dealer’s last fiscal year, and
22for warehouse operators, the amount of the participation fee
23is based on warehouse storage capacity. The maximum amount of
24the participation fee is .014 of 1 cent per bushel of either
25purchased or stored grain with a minimum required amount of
26$50. The per-bushel fee is also based on purchased grain with
27a maximum of $0.25 per bushel. The moneys available in the
28indemnity fund are calculated by subtracting from the balance
29any unencumbered obligations or pending claims (Code section
30203D.6). The indemnity fund is managed on a state fiscal year
31basis (July 1 to June 30). By May 1 of each year, the indemnity
32board may impose, reinstate, adjust, or waive the fees.
33However, if on the last date of the fund’s fiscal year, the
34moneys in the indemnity fund exceed a ceiling of $8 million,
35the two fees are waived. If at any time moneys in the indemnity
-14-1fund are at a floor of $3 million or less, the indemnity fees
2are reinstated (Code section 203D.5).
3BACKGROUND — CORN CHECKOFFS. An excise tax or “assessment”
4is imposed on the first purchaser of a number of commodities
5as a pass-through (commonly referred to as a “checkoff”).
6The purpose of the assessment is to finance activities which
7involve improving market development which includes aspects
8related to the commodity’s production and market share, such
9as research and education. Depending upon the commodity, the
10assessment is implemented and administered under either a state
11or federal statute or both. An assessment takes effect, is
12continued, or is terminated on the basis of a majority vote
13of producers voting in a referendum conducted by the United
14States department of agriculture in the case of a federal
15assessment or DALS in the case of a state assessment. The
16checkoff moneys imposed due to the state or federal assessment
17are collected and expended pursuant to a promotional order
18under the direction of a governing body of elected producers
19(referred to as a board, committee, or council). For corn,
20the state has implemented and administers a state assessment
21(Code chapter 185C) under the direction of the Iowa corn
22promotion board (Code sections 185C.8, 185C.11, and 185C.13).
23The maximum amount of the state assessment for corn is 3 cents
24per bushel (Code section 185C.21) subject to a right of refund
25(Code section 185C.27). For each commodity subject to a state
26assessment, including corn, the collected checkoff moneys are
27deposited into a separate state-controlled fund established
28in the state treasury (state fund) and transferred by the
29department of administrative services (DAS) to an account in a
30qualified financial institution eligible to hold public funds
31(Code chapter 12C) and established by the governing body of the
32commodity organization; in this case the Iowa corn promotion
33board.
34BILL’S PROVISIONS. The bill eliminates the indemnity fees
35paid to DALS by licensees used to support the indemnity fund
-15-1(Code sections 203D.3A and 203D.5). The bill replaces that
2funding source with checkoff moneys collected from state
3assessments imposed on corn. The bill provides that market
4development for corn expressly includes the production,
5storage, and marketing of corn in commercial channels (amended
6Code section 185C.1). The name of the state-controlled fund
7is changed from the corn promotion fund to the corn marketing
8fund (amended Code section 185C.26). The account under the
9control of the Iowa corn promotion board is named “the corn
10checkoff account”. Under the bill, 25 percent of moneys in the
11fund are transferred to the indemnity fund and appropriated
12for use by DALS and the indemnity board to support claims for
13losses by depositors and sellers (amended Code sections 185C.26
14and 185C.28). Moneys deposited into the corn marketing fund
15and transferred to the corn checkoff account or the indemnity
16fund are public funds (amended Code section 185C.34). The
17bill increases the limits of the indemnity fund to a ceiling
18of $20 million, and a floor of $10 million. On May 1, the
19indemnity board must determine to suspend or reinstate the
20state assessment. However, if on the last day of the indemnity
21fund’s fiscal year, moneys in the fund reach the $20 million
22ceiling, the state assessment is suspended, and if at any time
23those moneys reach the $10 million floor, the state assessment
24is reinstated (new Code section 203D.3B). In either case, DALS
25must notify DAS of the suspension or reinstatement. Finally,
26the indemnity fund’s payout limit for a claim is increased to
27$600,000 (Code section 203D.6).
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