House Study Bill 97 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON GRASSLEY) A BILL FOR An Act providing for the leasing of agricultural land by the 1 department of natural resources to beginning farmers. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1878YC (3) 85 da/sc

H.F. _____ Section 1. NEW SECTION . 456A.38 Lease to qualified 1 beginning farmers program. 2 1. As used in this section, unless the context otherwise 3 requires: 4 a. “Agricultural land” , “authority” , “beginning farmer” , and 5 “farming” mean the same as defined in section 175.2. 6 b. “Corn suitability rating” means the most recent soil 7 index published by Iowa state university which calculates soil 8 types based on their productivity for row crop production. 9 c. “Program” means the lease to qualified beginning farmers 10 program as provided in this section. 11 2. The department shall establish and administer a lease 12 to qualified beginning farmers program. The department shall 13 annually lease agricultural land that it holds or manages in 14 each county to qualified beginning farmers. The department 15 shall advertise the program in a manner that encourages wide 16 participation by qualified beginning farmers in each county 17 where such agricultural land for use in farming is available. 18 3. In order to execute a lease with the department, the 19 agricultural development authority must certify that the person 20 selected qualifies for the beginning farmer loan program 21 pursuant to section 175.12. The department shall select each 22 participating qualified beginning farmer by lot. 23 4. A qualified beginning farmer who executes a lease with 24 the department is not eligible to lease more than two hundred 25 forty acres of agricultural land from the department under this 26 section. The term of the lease shall not be for more than three 27 years. The department shall provide for terms, restrictions, 28 and conditions of the agricultural land’s use, including but 29 not limited to adopting generally accepted farming practices 30 and soil conservation practices, so long as such practices are 31 compatible with the department’s policies related to resource 32 management and outdoor recreation. The qualified beginning 33 farmer shall not sublease the agricultural land. The qualified 34 beginning farmer is not eligible to be selected twice by the 35 -1- LSB 1878YC (3) 85 da/sc 1/ 3

H.F. _____ department to participate in the program. 1 5. The department shall establish the lease amount based on 2 a commonly accepted method used by real estate appraisers to 3 calculate per acre land values, including by using the county’s 4 average corn suitability rating for agricultural land in the 5 county. The lease amount shall not increase for the term of 6 the lease. 7 6. The department is not required to lease agricultural 8 land under this program that it would not otherwise lease 9 for farming. The department may lease agricultural land 10 for farming under another program only after it has leased 11 agricultural land to all qualified beginning farmers 12 participating under this program. 13 EXPLANATION 14 The department of natural resources (DNR) currently 15 administers an agricultural lease program which allows persons 16 to farm such land under a three-year lease term (571 I.A.C. 17 21). This bill requires DNR to lease agricultural land that it 18 holds or manages in each county to qualified beginning farmers. 19 Generally, a beginning farmer is an individual, partnership, 20 family farm corporation, or family farm limited liability 21 company (Code chapter 9H) with a low or moderate net worth that 22 is engaged in farming (Code section 175.2). The agricultural 23 development authority establishes net worth requirements for 24 beginning farmers each year (Code section 175.2). In 2013, the 25 authority established the maximum net worth of $691,172 for 26 individuals participating in the beginning farmer loan program 27 (Code section 175.12). 28 In order to execute a lease, DNR would draw by lot the 29 names of qualified beginning farmers. A beginning farmer 30 selected by the department would have to be certified by the 31 agricultural development authority as qualified to participate 32 in its beginning farmer loan program. The beginning farmer 33 cannot lease more than 240 acres of agricultural land from 34 the department, cannot sublease the agricultural land, and 35 -2- LSB 1878YC (3) 85 da/sc 2/ 3

H.F. _____ cannot be selected again to participate in the program. The 1 term of the lease is for not more than three years. DNR is 2 required to establish the lease amount based on a commonly 3 accepted method used by real estate appraisers to calculate per 4 acre land values using the county’s corn suitability rating. 5 The department is not required to lease land that it would 6 not otherwise lease for farming. Any remaining land could be 7 leased under DNR’s agricultural lease program. 8 -3- LSB 1878YC (3) 85 da/sc 3/ 3