House File 2253 - Introduced HOUSE FILE 2253 BY KELLEY and STAED A BILL FOR An Act relating to the provision of food to persons in need, 1 including the donation of food to be distributed by food 2 banks and emergency feeding organizations, the establishment 3 of prison gardens, and the exemption from the state sales 4 and use tax of the purchase price of tangible personal 5 property sold and services furnished to food banks, and 6 providing for appropriations. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 6026YH (5) 86 da/nh

H.F. 2253 DIVISION I 1 PROGRAMS ADMINISTERED BY DEPARTMENT OF HUMAN SERVICES AND IOWA 2 DEPARTMENT OF CORRECTIONS 3 Section 1. Section 190B.101, Code 2016, is amended to read 4 as follows: 5 190B.101 Definitions. 6 As used in this chapter subchapter , unless the context 7 otherwise requires: 8 1. “Department” means the department of revenue. 9 2. “Tax credit” means the from farm to food donation tax 10 credit as established in this chapter subchapter . 11 Sec. 2. NEW SECTION . 190B.201 Definitions. 12 As used in this subchapter, unless the context otherwise 13 requires: 14 1. “Department” means the department of human services. 15 2. “Eligible agricultural product” or “product” means any 16 commodity that is derived from an agricultural animal or crop, 17 both as defined in section 717A.1, which is intended for human 18 consumption as food in its raw or processed state. 19 3. “Emergency feeding organization” means an emergency 20 feeding organization as defined in section 7 U.S.C. §7501 that 21 operates at a congregate nutritional site. 22 4. “Food” means a substance which is used in whole or in 23 part for human consumption in compliance with federal and state 24 standards or requirements, including a donated food that meets 25 the requirements of the federal emergency food assistance 26 program, as provided in 7 C.F.R. pts. 250 and 251. 27 5. “Food bank” means a private nonprofit entity that meets 28 all of the following requirements: 29 a. The food bank is organized under chapter 504. 30 b. The food bank qualifies under section 501(c)(3) of the 31 Internal Revenue Code as an organization exempt from federal 32 income tax under section 501(a) of the Internal Revenue Code. 33 c. The food bank maintains an established operation 34 involving the provision of food or edible commodities or the 35 -1- LSB 6026YH (5) 86 da/nh 1/ 7

H.F. 2253 products thereof on a regular basis to persons in need or to 1 food pantries, soup kitchens, hunger relief centers, or other 2 food or feeding centers that, as an integral part of their 3 normal activities, provide meals or food on a regular basis to 4 persons in need. 5 6. “Iowa food bank association” or “association” means 6 a private nonprofit entity that meets all of the following 7 requirements: 8 a. The association is organized under chapter 504. 9 b. The association qualifies under section 501(c)(3) of the 10 Internal Revenue Code as an organization exempt from federal 11 income tax under section 501(a) of the Internal Revenue Code. 12 c. The association’s members include food banks, or 13 affiliations of food banks, that together serve all counties 14 in this state. 15 d. The association’s principal office is located in this 16 state. 17 Sec. 3. NEW SECTION . 190B.202 Administration —— use of 18 moneys and oversight. 19 1. This subchapter shall be administered by the department 20 of human services. In adopting rules and administering the 21 Iowa agricultural products clearance program established under 22 section 190B.204, the department shall cooperate with the 23 department of agriculture and land stewardship. 24 2. A program established in this subchapter shall be managed 25 by an Iowa food bank association selected by the department. 26 The association shall report to the department as required by 27 the department. 28 3. A program established in this subchapter shall be carried 29 out only to the extent that moneys are available to support 30 the program, including moneys to support the association’s 31 management functions, including but not limited to necessary 32 departmental staff support. The department may support a 33 program from moneys appropriated by the general assembly 34 for the program’s purpose and any other moneys available to 35 -2- LSB 6026YH (5) 86 da/nh 2/ 7

H.F. 2253 and obtained or accepted by the department from the federal 1 government or private sources. 2 Sec. 4. NEW SECTION . 190B.203 Management of programs —— 3 Iowa food bank association. 4 1. The department shall enter into a contract with an Iowa 5 food bank association to manage programs established under this 6 subchapter. 7 2. In managing a program, the association shall do all of 8 the following: 9 a. Acquire eligible agricultural products, including by 10 purchase. 11 b. Arrange for the processing and packaging of eligible 12 agricultural products into food, when such processing is 13 necessary to comply with federal and state food safety 14 regulations. 15 c. Provide for the storage and transportation of eligible 16 agricultural products. 17 d. Provide for the distribution of eligible agricultural 18 products. 19 3. In managing a program, the association shall to every 20 extent feasible create and expand significant economic benefits 21 in local communities. The association shall purchase products 22 and services from individuals and businesses located in this 23 state whenever the price is reasonably competitive and the 24 quality as intended. 25 Sec. 5. NEW SECTION . 190B.204 Iowa agricultural products 26 clearance program —— establishment and purpose. 27 1. The department shall establish an Iowa agricultural 28 products clearance program to be managed by an Iowa food bank 29 association selected by the department as provided in section 30 190B.203. 31 2. The purpose of the program is to acquire surplus 32 eligible agricultural products from agricultural producers and 33 other persons in order to prevent unnecessary waste, reduce 34 economic losses associated with paying for the processing 35 -3- LSB 6026YH (5) 86 da/nh 3/ 7

H.F. 2253 and transportation of such products that otherwise do not 1 have profitable markets, and to provide nutritional food to 2 low-income families and individuals who reside in this state 3 and to unemployed families and individuals who reside in this 4 state. 5 3. The Iowa food bank association managing the program 6 shall only distribute eligible agricultural products under the 7 program to Iowa food banks in this state and emergency feeding 8 organizations in this state. 9 Sec. 6. NEW SECTION . 190B.205 Iowa emergency food purchase 10 program —— establishment and purpose. 11 1. The department shall establish an Iowa emergency food 12 purchase program to be managed by an Iowa food bank association 13 selected by the department as provided in section 190B.203. 14 2. The purpose of the program is to relieve situations of 15 emergency experienced by families or individuals who reside in 16 this state, including low-income families and individuals and 17 unemployed families and individuals, by distributing food to 18 those persons. 19 3. The Iowa food bank association managing the program shall 20 only distribute food under the program to emergency feeding 21 organizations in this state. 22 Sec. 7. NEW SECTION . 904.302A Gardening program. 23 The director shall establish a gardening program for growing 24 and harvesting produce, including edible vegetables, at each 25 correctional facility operated by the department, to the 26 extent that the director determines that security and space 27 requirements allow for the garden’s creation and operation. 28 The director may appoint the farm operations administrator to 29 oversee the program. A garden established pursuant to the 30 program shall be tended by inmates of the correctional facility 31 as determined by the director. The produce harvested from 32 the garden may be used to feed the correctional facility’s 33 population or may be donated to a food bank as defined 34 in section 190B.201 designated by the director. The food 35 -4- LSB 6026YH (5) 86 da/nh 4/ 7

H.F. 2253 bank must be located in this state and in proximity to the 1 correctional facility where the garden is situated. Any excess 2 produce that is not used to feed the correctional facility’s 3 inmate population shall be donated to the designated food bank. 4 Sec. 8. APPROPRIATIONS. There is appropriated from the 5 general fund of the state to the department of human services 6 for the fiscal year beginning July 1, 2016, and ending June 7 30, 2017, the following amounts, or so much thereof as is 8 necessary, to be used for the purposes designated: 9 1. For purposes of supporting the Iowa agricultural 10 products clearance program provided in chapter 190B, subchapter 11 II, as enacted in this Act: 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 650,000 13 a. Of the amount appropriated in this subsection, up to 14 $500,000 shall be allocated for purposes of purchasing eligible 15 agricultural products for use as food, processing eligible 16 agricultural products into food, and packaging such processed 17 eligible agricultural products. 18 b. Of the amount appropriated in this subsection, up to 19 $100,000 shall be allocated for purposes of providing for the 20 storage and transportation of eligible agricultural products. 21 c. Of the amount appropriated in this subsection, up 22 to $50,000 shall be allocated for purposes of paying for 23 administrative functions performed by an Iowa food bank 24 association selected by the department to manage the program, 25 including salaries, support, maintenance, and miscellaneous 26 purposes. 27 2. For purposes of supporting the Iowa emergency food 28 purchase program provided in chapter 190B, subchapter II, as 29 enacted in this Act: 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250,000 31 DIVISION II 32 SALES TAX EXEMPTION FOR FOOD BANKS 33 Sec. 9. Section 423.3, Code 2016, is amended by adding the 34 following new subsection: 35 -5- LSB 6026YH (5) 86 da/nh 5/ 7

H.F. 2253 NEW SUBSECTION . 103. The sales price from the sale or 1 rental of tangible personal property, or services furnished, 2 to a food bank as defined in section 190B.201, which tangible 3 personal property or services are to be used by the food bank 4 for a charitable purpose. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 GENERAL. This bill provides for the distribution of raw 9 and processed food to two types of nonprofit organizations: 10 food banks and emergency feeding organizations, both of which 11 are involved in distributing food to low-income families and 12 individuals and unemployed families and individuals in this 13 state. The bill establishes three distribution programs, 14 two within the department of human services and including 15 appropriations, and one within the Iowa department of 16 corrections; and provides for a sales and use tax exemption. 17 PROGRAMS AND APPROPRIATIONS. An Iowa food bank association 18 which is an organization with its principal place of business 19 located in this state and comprised of food bank members, is 20 to manage two programs under a contract entered into with 21 the department of human services, which must oversee the 22 programs. The programs allow the association to purchase 23 or otherwise acquire: eligible agricultural products which 24 include both (1) food and (2) agricultural commodities that 25 can be processed into food. The program also provides for the 26 packaging, storing, and transporting of eligible agricultural 27 products to nonprofit organizations for distribution. The 28 Iowa agricultural products clearance program is established to 29 distribute eligible agricultural products to both food banks 30 and emergency feeding organizations. The Iowa emergency food 31 purchase program is established to distribute food only to 32 Iowa emergency feeding organizations. The bill appropriates 33 moneys from the general fund to the department to support 34 administration of the two programs and the contract. 35 -6- LSB 6026YH (5) 86 da/nh 6/ 7

H.F. 2253 A prison gardening program is to be established by the 1 director of the Iowa department of corrections. Under this 2 program, the director is to establish gardens subject to 3 security and space requirements at each correctional facility. 4 Any garden produce must be either consumed within the prison or 5 donated to a nonprofit corporation. 6 SALES TAX EXEMPTION. The bill exempts from the sales tax 7 the purchase price from the sale or rental of tangible personal 8 property, or services furnished, to a food bank if the property 9 or services are to be used by the food bank for a charitable 10 purpose. By operation of Code section 423.6, an item exempt 11 from the imposition of the sales tax is also exempt from the 12 use tax imposed in Code section 423.5. 13 -7- LSB 6026YH (5) 86 da/nh 7/ 7