S.F. _____ Section 1. Section 162.2, subsection 8, Code 2011, is 1 amended to read as follows: 2 8. a. “Commercial breeder” means a person, engaged in the 3 business of breeding dogs or cats, who sells, exchanges, or 4 leases dogs or cats in return for consideration, or who offers 5 to do so, whether or not the animals dogs or cats are raised, 6 trained, groomed, or boarded by the person. A person who owns 7 or harbors three or fewer breeding males dogs or females cats 8 is not a commercial breeder. However, a person who breeds 9 any number of breeding male or female greyhounds for the 10 purposes of using them for pari-mutuel wagering at a racetrack 11 as provided in chapter 99D shall be considered a commercial 12 breeder irrespective of whether the person sells, leases, or 13 exchanges the greyhounds for consideration or offers to do so. 14 b. A dog or cat used for breeding includes either a female 15 or male. 16 Sec. 2. Section 162.2, Code 2011, is amended by adding the 17 following new subsections: 18 NEW SUBSECTION . 15A. “Financial institution” means 19 a state bank as defined in section 524.103, a state bank 20 chartered under the laws of any other state, a national 21 banking association, a federally chartered savings and loan 22 association, an out-of-state state chartered savings bank, a 23 financial institution chartered by the federal home loan bank 24 board, a non-Iowa chartered savings and loan association, or 25 an association incorporated or authorized to do business under 26 chapter 534. 27 NEW SUBSECTION . 15B. “Government entity” means the 28 federal government, including the United States department of 29 agriculture; the state, including the department; or a local 30 government, including a city as defined in section 362.2 or a 31 county as provided in chapter 331. 32 Sec. 3. NEW SECTION . 162.8A Commercial breeder —— evidence 33 of financial responsibility. 34 A person applying for the issuance of an authorization as a 35 -1- LSB 5668XC (3) 84 da/nh 1/ 8

S.F. _____ commercial breeder as provided in section 162.8 shall provide 1 the department with evidence of financial responsibility 2 as required in this section. The evidence of financial 3 responsibility shall be provided to the department before the 4 authorization is issued. 5 1. a. The evidence of financial responsibility shall 6 consist of a surety bond furnished by a surety authorized to 7 do business in this state or an irrevocable letter of credit 8 issued by a financial institution. 9 b. The evidence of financial responsibility shall be 10 continuous in nature. The surety shall provide at least ninety 11 days’ notice in writing to the person and the department 12 indicating the surety’s intent to cancel the surety bond and 13 the effective date of the cancellation. The person shall have 14 sixty days from the date of receipt of the surety’s notice of 15 cancellation to file a replacement. 16 2. The amount of the evidence of financial responsibility 17 shall be based on information included in the application as 18 certified by the person seeking to obtain the authorization. 19 a. The amount shall be based on the number of breeding dogs 20 and breeding cats owned by the person, calculated as follows: 21 (1) For a person who does not currently hold an 22 authorization as a commercial breeder, the calculation shall 23 be based on the greatest number of breeding dogs or breeding 24 cats owned by the person at any one time in the previous twelve 25 months or the greatest number of breeding dogs or breeding cats 26 that the person expects to own at any one time during the term 27 of the authorization, whichever is more. 28 (2) For a person who currently holds an authorization as 29 a commercial breeder, the calculation shall be based on the 30 greatest number of breeding dogs or breeding cats that the 31 person owned at any point during the term of the authorization. 32 b. Based on the calculation provided in paragraph “a” , the 33 amount of the evidence of financial responsibility shall be as 34 follows: 35 -2- LSB 5668XC (3) 84 da/nh 2/ 8

S.F. _____ (1) For owning twenty or more but not more than fifty 1 breeding dogs or breeding cats, ten thousand dollars. 2 (2) For owning more than fifty but not more than one hundred 3 breeding dogs or breeding cats, twenty thousand dollars. 4 (3) For owning more than one hundred but not more than two 5 hundred fifty breeding dogs or breeding cats, forty thousand 6 dollars. 7 (4) For owning more than two hundred fifty breeding dogs or 8 breeding cats, one hundred thousand dollars. 9 c. For purposes of paragraphs “a” and “b” , a person is 10 deemed to own a breeding dog or breeding cat even if the person 11 does not hold title to the breeding dog or breeding cat so long 12 as the person otherwise possesses or controls the breeding dog 13 or breeding cat. 14 3. The evidence of financial responsibility shall be 15 conditioned upon the person’s compliance with the provisions 16 of this chapter applicable to commercial breeders operating 17 pursuant to an authorization, during the term of the 18 authorization. 19 4. The surety’s or issuer’s liability extends to any 20 person who serves as the custodian of the dog or cat for all 21 actual and necessary expenses incurred by providing for care 22 or disposition of a breeding dog or breeding cat obtained as 23 provided in this subsection. 24 a. The custodian incurring the expense must have obtained 25 the dog as a direct result of an enforcement action taken 26 by a government entity against the person, or a criminal or 27 civil action in which a government entity is a party. The 28 enforcement action must be brought under any of the following: 29 (1) The federal Animal Welfare Act, 7 U.S.C. § 2131 et seq. 30 (2) This chapter or chapter 717B, including section 717B.4 31 or section 717B.5. 32 b. A person authorized as a commercial breeder may 33 relinquish the breeding dog or breeding cat to a government 34 entity or a custodian designated or approved by the government 35 -3- LSB 5668XC (3) 84 da/nh 3/ 8

S.F. _____ entity. The government entity may seize the breeding dog or 1 breeding cat pursuant to an enforcement action or court order 2 as provided by federal or state law. 3 c. The actual or necessary expenses incurred by a custodian 4 designated or approved to provide for the care or disposition 5 of the breeding dog or breeding cat as provided in this 6 subsection include all of the following: 7 (1) Maintenance, including but not limited to providing 8 veterinary examinations or treatment, sterilization, 9 transportation, housing, and sustenance. 10 (2) Disposition, including transfer of title to another 11 person or humane destruction in the same manner as provided in 12 section 162.13. 13 d. Any private or public entity other than the state 14 government or the United States government may be a custodian. 15 A local government may be a custodian. 16 5. A custodian may bring a legal action in order to be 17 indemnified for all actual and necessary expenses incurred when 18 the custodian provides for the care and disposition of the dog 19 or cat as provided in subsection 4. 20 a. The legal action may be taken against the surety on the 21 bond or issuer of the irrevocable letter of credit in district 22 court. The custodian may also be awarded court costs and 23 reasonable attorney fees, which shall be taxed as part of the 24 costs of the legal action. 25 b. The surety or issuer shall not be liable to pay for the 26 amount received by the custodian as a result of an order to pay 27 for dispositional expenses as provided in section 717B.4. 28 c. The aggregate liability of the surety or issuer shall not 29 exceed the amount of the evidence of financial responsibility. 30 6. a. The department shall adopt rules as required 31 to administer this section, including but not limited to 32 rules providing for qualifications for a surety or financial 33 institution, procedures for filing evidence of financial 34 responsibility, including replacement bonds or letters of 35 -4- LSB 5668XC (3) 84 da/nh 4/ 8

S.F. _____ credit, requirements for the cancellation of the evidence of 1 financial responsibility, and the liability of a surety or 2 issuer after cancellation. 3 b. The form and submission of the evidence of financial 4 responsibility shall be prescribed by the department. 5 Sec. 4. Section 162.12, Code 2011, is amended to read as 6 follows: 7 162.12 Denial or revocation of license or registration. 8 1. A certificate of registration may be denied The 9 department may deny an application for the issuance of an 10 authorization to any animal shelter, pound, or research 11 facility and a state license may be denied to any public 12 auction, boarding kennel, commercial kennel, pet shop, 13 commercial breeder, or dealer, or an existing certificate of 14 registration or state license a commercial establishment and 15 the department may be revoked by the secretary if, after public 16 hearing, it is determined suspend or revoke an authorization 17 issued to a commercial establishment if the department 18 determines that the housing facilities or primary enclosures 19 are inadequate under this chapter or if the feeding, watering, 20 cleaning, and housing practices at the pound, animal shelter, 21 public auction, pet shop, boarding kennel, commercial kennel, 22 research facility, or those practices by the commercial breeder 23 or dealer, employed by the commercial establishment are not in 24 compliance with this chapter or with the rules adopted pursuant 25 to this chapter . The premises of each registrant or state 26 licensee shall be open for inspection during normal business 27 hours. 28 2. The department shall deny an application for the issuance 29 of an authorization to operate as a commercial breeder and 30 shall revoke an authorization issued to a person operating as a 31 commercial breeder, if the person fails to comply with evidence 32 of financial responsibility requirements as provided in section 33 162.8A. 34 Sec. 5. Section 717B.1, Code 2011, is amended by adding the 35 -5- LSB 5668XC (3) 84 da/nh 5/ 8

S.F. _____ following new subsection: 1 NEW SUBSECTION . 3A. “Department” means the department of 2 agriculture and land stewardship. 3 Sec. 6. Section 717B.4, subsection 2, Code 2011, is amended 4 to read as follows: 5 2. The hearing to determine if the animal is a threatened 6 animal for purposes of disposition shall be a civil proceeding. 7 The hearing may be part of a hearing to determine the liability 8 of a surety who issued a surety bond or a financial institution 9 who issued an irrevocable letter of credit pursuant to 10 section 162.8A. If However, if the case is related to a 11 criminal proceeding, the disposition shall not be part of that 12 proceeding and shall not be considered a criminal penalty 13 imposed on a person found in violation of this chapter . 14 Sec. 7. Section 717B.4, subsection 3, Code 2011, is amended 15 by adding the following new paragraph: 16 NEW PARAGRAPH . 0c. A local authority shall be 17 indemnified under this section prior to bringing a claim for 18 indemnification on a surety bond or irrevocable letter of 19 credit submitted to the department as evidence of financial 20 responsibility pursuant to section 162.8A. 21 EXPLANATION 22 GENERAL. Commercial breeders of dogs or cats are required 23 to obtain a state license, or alternatively a permit if 24 federally licensed, from the department of agriculture and land 25 stewardship (Code section 162.2A). A license or permit is 26 generally referred to as an authorization. 27 EVIDENCE OF FINANCIAL RESPONSIBILITY —— APPLICATION AS 28 A COMMERCIAL BREEDER. This bill requires that a person 29 who applies for an authorization to operate as a commercial 30 breeder (either issuance or renewal of a license or permit) 31 must provide the department with evidence of financial 32 responsibility in the form of a surety bond or irrevocable 33 letter of credit issued by a financial institution (e.g., a 34 bank). 35 -6- LSB 5668XC (3) 84 da/nh 6/ 8

S.F. _____ FINANCIAL CONDITIONS ASSOCIATED WITH MAINTAINING AN 1 AUTHORIZATION. The bill requires a commercial breeder to 2 maintain the evidence of financial responsibility, including 3 by replacing any evidence that is canceled by the surety or 4 issuer. The amount of the evidence is based on the greatest 5 number of breeding dogs or cats owned or controlled by the 6 person at any one time during the past 12 months, ranging from 7 $10,000 to $100,000. 8 USE OF THE EVIDENCE OF FINANCIAL RESPONSIBILITY —— 9 CUSTODIANS. The evidence is used when the commercial breeder 10 transfers custody of the animal to another person designated 11 as the animal’s custodian. The purpose of the evidence of 12 financial responsibility is to reimburse the custodian for 13 the actual and necessary expenses incurred when providing for 14 the care and disposition of the dog or cat as a result of a 15 federal or state enforcement action. A custodian entitled 16 to be reimbursed for expenses includes any private or public 17 entity other than the state government or the United States 18 government. 19 DISPOSITIONAL PROCEEDINGS INVOLVING THREATENED ANIMALS. 20 The bill provides for cases in which there is a dispositional 21 proceeding in which a local government and the owner are 22 parties to determine the disposition of a threatened dog or cat 23 subject to alleged neglect or abuse (Code section 717B.5). The 24 dispositional proceeding may be joined with the proceeding to 25 determine the liability of the surety or issuer of irrevocable 26 letter of credit. In any case, the owner who is a party in a 27 dispositional proceeding is required to pay for the disposition 28 of the dog or cat prior to the surety or issuer. 29 DISCIPLINARY ACTION. The department is required to revoke 30 an authorization issued to a person operating as a commercial 31 breeder for failing to comply with financial responsibility 32 requirements. 33 CIVIL PENALTIES. A person who fails to maintain evidence 34 of financial responsibility is subject to a civil penalty as 35 -7- LSB 5668XC (3) 84 da/nh 7/ 8