House Study Bill 162 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON GRASSLEY) A BILL FOR An Act relating to the state government, by providing for 1 the transfer of powers and duties from the agricultural 2 development authority to the Iowa finance authority, 3 the composition of the Iowa finance authority board of 4 directors, the administration of programs by the board, the 5 implementation of law by the board, and including effective 6 date provisions. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 2145YC (11) 85 da/rj

H.F. _____ DIVISION I 1 GENERAL PROVISIONS 2 Section 1. Section 16.1, subsection 1, Code 2013, is amended 3 by adding the following new paragraphs: 4 NEW PARAGRAPH . 0c. “Board” means the Iowa finance authority 5 board of directors created pursuant to section 16.2. 6 NEW PARAGRAPH . 0j. “Executive director” means the executive 7 director of the Iowa finance authority as appointed pursuant to 8 section 16.6. 9 Sec. 2. NEW SECTION . 16.1A Creation —— administration of 10 programs. 11 1. The Iowa finance authority is created, and constitutes 12 a public instrumentality and agency of the state exercising 13 public and essential governmental functions. 14 2. The authority shall undertake and administer the 15 following: 16 a. Programs established under this chapter to assist in 17 attainment of adequate housing for low-or moderate-income 18 families, elderly families, and families which include one or 19 more persons with disabilities, and to undertake the various 20 finance programs under this chapter. 21 b. Programs which assist qualified farmers or agricultural 22 producers, including beginning farmers, as provided in chapter 23 175. 24 3. The Iowa finance authority board of directors shall have 25 general control, supervision, and regulation of all authority 26 programs established under this chapter and chapter 175. The 27 authority is charged with the broad administrative authority 28 to make, administer, interpret, construe, repeal, and execute 29 the rules, and to administer, interpret, construe, and execute 30 the laws of this state relating to such programs. The board 31 may, by resolution, delegate to the executive director or other 32 authority employee such of its powers, under such terms and 33 conditions, as it deems appropriate. 34 4. A program established in this chapter may be combined 35 -1- LSB 2145YC (11) 85 da/rj 1/ 11

H.F. _____ with any other program authorized in this chapter, under 1 chapter 175, or under a federal program in order to facilitate 2 as far as practicable the acquisition of agricultural land 3 and property by beginning farmers or to facilitate the 4 implementation of permanent soil and water conservation 5 practices and the acquisition of conservation farm equipment as 6 provided in chapter 175. 7 Sec. 3. Section 16.2, subsection 1, Code 2013, is amended 8 to read as follows: 9 1. The Iowa finance authority is established, and 10 constituted a public instrumentality and agency of the state 11 exercising public and essential governmental functions, to 12 undertake programs which assist in attainment of adequate 13 housing for low or moderate income families, elderly 14 families, and families which include one or more persons with 15 disabilities, and to undertake the various finance programs. 16 The powers of the authority are vested in and shall be 17 exercised by a an Iowa finance authority board of directors. 18 The board shall be composed of nine members appointed by the 19 governor subject to confirmation by the senate. 20 a. No Not more than five members shall belong to the same 21 political party. 22 b. As far as possible, the governor shall include within 23 the membership persons who represent community and housing 24 development industries, housing finance industries, the real 25 estate sales industry, elderly families, minorities, lower 26 income families, very low income families, families which 27 include persons with disabilities, average taxpayers, local 28 government, business interests, and any other person specially 29 interested in community housing, finance, or small business. 30 c. At least two members shall be individuals engaged in 31 actual farming operations who are specially interested in 32 family farm development. 33 Sec. 4. Section 16.103, subsection 1, Code 2013, is amended 34 to read as follows: 35 -2- LSB 2145YC (11) 85 da/rj 2/ 11

H.F. _____ 1. Make secured and unsecured loans for both the acquisition 1 and the construction of projects on terms the authority 2 determines. Any loan made with respect to any project for 3 which a loan may be made pursuant to chapter 175 shall be made 4 only upon the request and with the consent of the agricultural 5 development authority. The loans A loan may be made to any 6 person or entity including, but not limited to, a city , a or 7 county , and the agricultural development authority for projects 8 a project approved by the Iowa finance authority. The Iowa 9 finance authority may take any action which is reasonable and 10 lawful to protect its security and to avoid losses from its 11 loans. 12 Sec. 5. Section 175.2, subsection 1, paragraph e, Code 2013, 13 is amended to read as follows: 14 e. “Authority” means the agricultural development Iowa 15 finance authority established created in section 175.3 16.1A . 16 Sec. 6. Section 175.2, subsection 1, Code 2013, is amended 17 by adding the following new paragraphs: 18 NEW PARAGRAPH . 0h. “Board” means the Iowa finance authority 19 board of directors created pursuant to section 16.1A. 20 NEW PARAGRAPH . 0k. “Executive director” means the executive 21 director of the Iowa finance authority appointed pursuant to 22 section 16.6. 23 Sec. 7. Section 175.3, Code 2013, is amended by striking the 24 section and inserting in lieu thereof the following: 25 175.3 Authority —— administration of this chapter. 26 1. The authority shall administer this chapter in addition 27 to its administration of chapter 16. 28 2. In administering this chapter, the authority shall do all 29 of the following: 30 a. Provide for programs which assist beginning farmers in 31 purchasing agricultural land and agricultural improvements and 32 depreciable agricultural property for the purpose of farming, 33 and programs which provide financing to farmers for permanent 34 soil and water conservation practices on agricultural land 35 -3- LSB 2145YC (11) 85 da/rj 3/ 11

H.F. _____ within the state or for the acquisition of conservation farm 1 equipment, and programs to assist farmers within the state in 2 financing operating expenses and cash flow requirements of 3 farming. 4 b. Develop programs to assist qualified agricultural 5 producers within the state with financing other capital 6 requirements or operating expenses. 7 3. A program established in this chapter may be combined 8 with any other program established in this chapter, a program 9 established in chapter 16, or a federal program in order 10 to facilitate as far as practicable the acquisition of 11 agricultural land and property by beginning farmers or to 12 facilitate the implementation of permanent soil and water 13 conservation practices and the acquisition of conservation farm 14 equipment. 15 4. The board shall have general control, supervision, 16 and regulation of all authority programs established under 17 this chapter in the same manner as provided for in chapter 16 18 pursuant to section 16.1A. 19 Sec. 8. Section 175.4, subsection 11, Code 2013, is amended 20 to read as follows: 21 11. It is necessary to create an agricultural development 22 authority to encourage ownership of farms by beginning farmers 23 by providing purchase money loans to beginning farmers who are 24 not able to obtain adequate capital elsewhere to provide such 25 funds and to lower costs through the use of public financing. 26 Sec. 9. Section 175.5, unnumbered paragraph 1, Code 2013, 27 is amended to read as follows: 28 In the performance of its duties, implementation of its 29 powers, selection of specific programs and projects to receive 30 its assistance as provided in section 175.3 , the authority 31 shall be guided by the following principles: 32 Sec. 10. Section 175.6, unnumbered paragraph 1, Code 2013, 33 is amended to read as follows: 34 The authority has all of the general powers needed to carry 35 -4- LSB 2145YC (11) 85 da/rj 4/ 11

H.F. _____ out its purposes and duties, and to exercise its specific 1 powers , under this chapter including but not limited to the 2 power to do any of the following : 3 Sec. 11. Section 175.8, subsection 1, unnumbered paragraph 4 1, Code 2013, is amended to read as follows: 5 The authority shall submit to the governor and to the members 6 of the general assembly as request it, not later than January 7 15 of each year, a complete and economically designed and 8 reproduced As part of the authority’s report setting forth: 9 required in section 16.7, the authority shall detail its 10 activities under this chapter, which shall include all of the 11 following: 12 Sec. 12. Section 175.8, subsections 3 and 4, Code 2013, are 13 amended to read as follows: 14 3. For fiscal years beginning on or after July 1, 2007, 15 the auditor of state shall conduct an annual audit of the 16 agricultural development authority to be paid from resources 17 of the authority notwithstanding any other audit conducted on 18 behalf of the authority’s board of directors. The auditor of 19 state may acquire the services of an outside audit firm, if 20 necessary, to conduct the audit as required in this subsection . 21 4. 3. The authority’s executive director , appointed 22 pursuant to section 175.7 , shall report semiannually to the 23 general assembly’s standing committees on government oversight 24 regarding the operations of the authority. 25 Sec. 13. Section 175.26, Code 2013, is amended by striking 26 the section and inserting in lieu thereof the following: 27 175.26 Conflicts of interest. 28 The requirements and procedures for conflicts of interest 29 by a member or employee of the authority set forth in section 30 16.3A shall also apply to this chapter. 31 Sec. 14. REPEAL. Sections 175.7 and 175.11, Code 2013, are 32 repealed. 33 Sec. 15. EFFECTIVE DATE. This division of this Act takes 34 effect on July 1, 2013. 35 -5- LSB 2145YC (11) 85 da/rj 5/ 11

H.F. _____ DIVISION II 1 COORDINATING PROVISIONS 2 Sec. 16. Section 7C.4A, subsection 4, Code 2013, is amended 3 to read as follows: 4 4. Twenty-one percent of the state ceiling shall be 5 allocated to qualified small issue bonds issued for first-time 6 beginning farmers under chapter 175 . However, at any time 7 during the calendar year the governor’s designee, with 8 the approval of the Iowa agricultural development finance 9 authority, may determine that a lesser amount need be allocated 10 to qualified small issue bonds for first-time beginning 11 farmers and on that date this lesser amount shall be the amount 12 allocated for those bonds and the excess shall be allocated 13 under subsection 7 . 14 Sec. 17. Section 12.28, subsection 1, paragraph b, Code 15 2013, is amended to read as follows: 16 b. “State agency” means a board, commission, bureau, 17 division, office, department, or branch of state government. 18 However, state agency does not mean the state board of regents, 19 institutions governed by the board of regents, or authorities 20 created under chapter 16 , 175 , 257C , or 261A . 21 Sec. 18. Section 12.30, subsection 1, paragraph a, Code 22 2013, is amended to read as follows: 23 a. “Authority” means a department, or public or quasi-public 24 instrumentality of the state including but not limited to the 25 authority created under chapter 12E , 16 , 175 , 257C , 261A , or 26 463C , which has the power to issue obligations, except that 27 “authority” does not include the state board of regents or 28 the Iowa finance authority to the extent it acts pursuant to 29 chapter 260C . “Authority” also includes a port authority created 30 under chapter 28J . 31 Sec. 19. Section 16.1, subsection 1, paragraph b, Code 2013, 32 is amended to read as follows: 33 b. “Authority” means the Iowa finance authority established 34 created in section 16.2 16.1A . 35 -6- LSB 2145YC (11) 85 da/rj 6/ 11

H.F. _____ Sec. 20. Section 159.18, subsection 1, Code 2013, is amended 1 to read as follows: 2 1. As used in this section , “farm programs” includes, but 3 is not limited to, financial incentive programs established 4 within the division of soil conservation of the department of 5 agriculture and land stewardship as provided in section 161A.70 6 and the beginning farmer loan program administered by the 7 agricultural development Iowa finance authority as provided in 8 section 175.12 . 9 Sec. 21. Section 422.7, subsection 19, Code 2013, is amended 10 to read as follows: 11 19. Subtract interest earned on bonds and notes issued by 12 the agricultural development Iowa finance authority as provided 13 in section 175.17, subsection 10 . 14 Sec. 22. Section 422.35, subsection 13, Code 2013, is 15 amended to read as follows: 16 13. Subtract the interest earned from bonds and notes issued 17 by the agricultural development Iowa finance authority as 18 provided in section 175.17, subsection 10 . 19 Sec. 23. Section 455B.291, subsection 2, Code 2013, is 20 amended to read as follows: 21 2. “Authority” means the Iowa finance authority established 22 created in section 16.2 16.1A . 23 Sec. 24. Section 502.201, subsection 9B, Code 2013, is 24 amended to read as follows: 25 9B. Agricultural development Iowa finance authority. Any 26 security issued by the agricultural development Iowa finance 27 authority under chapter 175 . 28 Sec. 25. EFFECTIVE DATE. This division of this Act takes 29 effect on July 1, 2013. 30 DIVISION III 31 TRANSITIONAL PROVISIONS —— GENERAL 32 Sec. 26. ADMINISTRATIVE RULES AND OTHER ACTIONS AND 33 DOCUMENTS. Any rule, regulation, form, order, or directive 34 promulgated by agricultural development authority under the 35 -7- LSB 2145YC (11) 85 da/rj 7/ 11

H.F. _____ umbrella of the department of agriculture and land stewardship 1 pursuant to section 175.3, Code 2013, as required to administer 2 and enforce the provisions of chapter 175 shall continue in 3 full force and effect until amended, repealed, or supplemented 4 by affirmative action of the Iowa finance authority. 5 Sec. 27. PENDING ADMINISTRATIVE OR JUDICIAL PROCEEDINGS. 6 1. An administrative or judicial proceeding arising under 7 chapter 175 pending on the effective date of this division of 8 this Act shall not be affected due to this Act. 9 2. Any cause of action or statute of limitation relating 10 to an action taken by a party in a matter arising under 11 chapter 175 shall not be affected by this Act, except that 12 the Iowa development authority shall replace the agricultural 13 development authority as a party. 14 3. The department of agriculture and land stewardship 15 or the office of attorney general acting on behalf of the 16 agricultural development authority in an administrative or 17 judicial proceeding shall not be affected as result of this 18 Act. Any statue of limitation shall apply to the parties as if 19 this Act had not been enacted. 20 Sec. 28. PERSONNEL. Any personnel in the state merit system 21 of employment who are transferred due to the effect of this Act 22 shall be so transferred without any loss in salary, benefits, 23 or accrued years of service. 24 Sec. 29. REPLACEMENT ITEMS. Any replacement of signs, 25 logos, stationery, insignia, uniforms, and related items that 26 are made due to the effect of this Act shall be done as part of 27 the normal replacement cycle for such items. 28 Sec. 30. IOWA FINANCE AUTHORITY BOARD OF DIRECTORS. Nothing 29 in this Act requires that a member serving on the Iowa finance 30 authority board of directors serve for less than a term of 31 office specified in section 16.2. However, two directors whose 32 terms end after the effective date of this division of this Act 33 shall be replaced by two individuals who are engaged in actual 34 farming operations as required in section 16.2, as amended by 35 -8- LSB 2145YC (11) 85 da/rj 8/ 11

H.F. _____ this Act. 1 Sec. 31. OUTSTANDING LEGAL OBLIGATIONS AND RIGHTS. Any 2 interest in real property, tangible personal property, 3 or intangible personal property held by the agricultural 4 development authority shall be transferred to the Iowa finance 5 authority. Any property right, security interest, or lien 6 held by the agricultural development authority shall vest in 7 the Iowa finance authority without an instrument of transfer 8 including but not limited to a deed, contract, or endorsement. 9 However, nothing in this section prohibits the execution of 10 such instrument if the Iowa finance authority determines it 11 is necessary or prudent. Any debt, obligation, or liability 12 incurred by the agricultural development authority shall be 13 assumed by the Iowa finance authority, and shall continue 14 according to the same terms and conditions as applied to the 15 agricultural development authority. Any right or benefit 16 arising from a legal instrument in which the agricultural 17 development authority was a party shall be transferred to the 18 Iowa finance authority and shall continue as if the transfer 19 had not occurred. 20 Sec. 32. EFFECTIVE DATE. This division of this Act takes 21 effect July 1, 2013. 22 DIVISION IV 23 TRANSITIONAL PROVISIONS —— REQUIREMENTS OF THE IOWA FINANCE 24 AUTHORITY AND THE AGRICULTURAL DEVELOPMENT AUTHORITY 25 Sec. 33. GENERAL. The Iowa finance authority shall provide 26 for the implementation of this Act according to a schedule 27 approved by the Iowa finance authority’s board of directors 28 which is consistent with this Act. 29 Sec. 34. EMERGENCY RULEMAKING. The Iowa finance authority 30 may adopt emergency rules under section 17A.4, subsection 3, 31 and section 17A.5, subsection 2, paragraph “b”, to implement 32 the provisions of this Act, and the rules shall be effective 33 July 1, 2013, unless a later date is specified in the rules. 34 Any rules adopted in accordance with this section shall also be 35 -9- LSB 2145YC (11) 85 da/rj 9/ 11

H.F. _____ published as a notice of intended action as provided in section 1 17A.4. 2 Sec. 35. INTERAUTHORITY COOPERATION. The agricultural 3 development authority shall assist the Iowa finance authority 4 in implementing this Act by providing for an effective 5 transition of powers and duties from one authority to the other 6 authority under chapter 175 and related administrative rules. 7 Sec. 36. EFFECTIVE UPON ENACTMENT. This division of this 8 Act, being deemed of immediate importance, takes effect upon 9 enactment. 10 EXPLANATION 11 GENERAL. This bill provides that the powers and duties 12 of the agricultural development authority are transferred to 13 the Iowa finance authority. The agricultural development 14 authority administers programs under Code chapter 175 to assist 15 farmers, including beginning farmers, to start or expand their 16 operations. The Iowa finance authority administers programs 17 under Code chapter 16 to assist low-or moderate-income families 18 in attaining housing. 19 ADMINISTRATION. The agricultural development authority 20 is currently housed in the department of agriculture and 21 land stewardship. The Iowa finance authority and the 22 agricultural development authority are each headed by a board 23 of directors and each authority is supervised by an executive 24 director. Each authority is required to cooperate with lending 25 institutions in providing for affordable credit; and each may 26 issue bonds and notes in order to finance its programs. 27 OTHER SUBSTANTIVE CHANGES. The bill makes two other 28 substantive changes. It provides that the Iowa finance 29 authority board of directors has broad administrative authority 30 to make, interpret and construe its rules, and interpret and 31 construe the laws of this state relating to such programs. 32 The bill requires that two members of the board be involved 33 in farming. It eliminates a provision which requires the 34 state auditor to perform an annual audit of the agricultural 35 -10- LSB 2145YC (11) 85 da/rj 10/ 11

H.F. _____ development authority. Currently, the state auditor may 1 periodically perform audits of the Iowa finance authority. 2 TRANSITIONAL PROVISIONS. The bill includes a number of 3 transitional provisions to assist the Iowa finance authority in 4 accomplishing the transfer and to effectuate the transfer of 5 legal rights and obligations. 6 The transitional provisions relate to the validity of 7 existing rules, regulations, forms, orders, and directives; 8 pending legal actions; the transfer of personnel; and the 9 replacement of items bearing the name of the agricultural 10 development authority. The bill provides for the transfer of 11 interests in real property, tangible personal property, and 12 intangible personal property as well as debts, obligations, 13 or liabilities incurred by the agricultural development 14 authority and any right or benefit obtained by the agricultural 15 development authority (e.g., through outstanding contracts). 16 The bill also provides that two members of the Iowa finance 17 authority’s board of directors may serve out their terms before 18 being replaced by persons involved in farming. Finally, the 19 bill authorizes the Iowa fiance authority to provide for the 20 implementation of the bill according to a schedule adopted by 21 its board of directors, provides the authority with emergency 22 rulemaking authority, and requires that the two authorities 23 cooperate in implementing the transition. 24 Generally, the bill takes effect on July 1. However, 25 provisions which authorize the Iowa development authority to 26 implement the bill take effect upon enactment. 27 -11- LSB 2145YC (11) 85 da/rj 11/ 11