House File 2296 - Introduced HOUSE FILE 2296 BY BYRNES A BILL FOR An Act imposing a fee on certain fertilizers to be credited to 1 the water quality initiative fund. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5888YH (2) 86 da/nh

H.F. 2296 Section 1. Section 200.8, subsection 4, Code 2016, is 1 amended to read as follows: 2 4. In addition to the fees imposed under subsection 1 , a 3 groundwater protection fee and water quality initiative fee 4 shall be imposed upon nitrogen-based fertilizer. The Each fee 5 shall be based upon the percentage of actual nitrogen contained 6 in the product. An eighty-two percent nitrogen solution shall 7 be taxed at a rate of seventy-five cents per ton. Other 8 nitrogen-based product formulations shall be taxed on the 9 percentage of actual nitrogen contained in the formulations 10 with the eighty-two percent nitrogen solution serving as the 11 base. The Each fee shall be paid to the secretary by each a 12 licensee registering to sell fertilizer to the secretary of 13 agriculture pursuant to section 200.5 . The fees collected 14 by the secretary under this subsection shall be deposited 15 in the agriculture management account of credited to the 16 groundwater protection fund or the water quality initiative 17 fund in the manner described in section 200.9 . The secretary 18 of agriculture shall adopt rules for the payment, filing, and 19 collection of groundwater protection the fees from paid by 20 licensees in conjunction with the collection of registration 21 and inspection fees paid by persons under subsection 1 . The 22 secretary shall, by rule, allow an exemption to from the 23 payment of this fee the groundwater protection fee and water 24 quality initiative fee for fertilizers which contain trace 25 amounts of nitrogen. 26 Sec. 2. Section 200.9, Code 2016, is amended to read as 27 follows: 28 200.9 Fertilizer Use of fees. 29 1. Fees collected by the secretary for licenses and 30 inspection fees under sections 200.4 and 200.8 , with 31 the exception of those fees collected for deposit in the 32 agriculture management account of the groundwater protection 33 fund, shall be deposited in the general fund of the state 34 and shall be subject to the requirements of section 8.60 . 35 -1- LSB 5888YH (2) 86 da/nh 1/ 3

H.F. 2296 Moneys deposited under this section to the general fund shall 1 be used only by the department secretary for the purpose of 2 inspection, sampling, analysis, preparation, and publishing 3 of reports and other expenses necessary for administration of 4 this chapter . The secretary may assign allocate moneys to 5 the Iowa agricultural experiment station for research, work 6 projects, and investigations as needed for the specific purpose 7 of improving the regulatory functions for enforcement of this 8 chapter . 9 2. Notwithstanding subsection 1, the groundwater protection 10 fee collected by the secretary pursuant to section 200.8, 11 subsection 4, shall be credited to the agriculture management 12 account of the groundwater protection fund created pursuant to 13 section 455E.11, subsection 2, paragraph “b” . The water quality 14 initiative fee collected by the secretary pursuant to section 15 200.8, subsection 4, shall be credited to the water quality 16 initiative fund created pursuant to section 466B.45. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 BILL. This bill provides that the groundwater protection 21 fee imposed on the sale of nitrogen-based fertilizer and 22 credited to the agriculture management account of the 23 groundwater protection fund would have a counterpart (water 24 quality initiative fee). The new fee would be imposed on the 25 same basis as the groundwater protection fee but would be 26 credited to the water quality initiative fund. 27 BACKGROUND —— FEES ON FERTILIZERS AND SOIL CONDITIONERS. 28 Each brand and grade of a commercial fertilizer or soil 29 conditioner must be registered with the department of 30 agriculture and land stewardship headed by the secretary of 31 agriculture (secretary) (Code section 200.5). A person who 32 is engaged in the manufacture or sale of fertilizers and soil 33 conditioners must obtain an annual license, register each 34 fertilizer or soil conditioner, and pay the associated fees 35 -2- LSB 5888YH (2) 86 da/nh 2/ 3

H.F. 2296 which are collected by the secretary (Code sections 200.4(1) 1 and 200.8(1)) and deposited into the general fund of the state 2 but are reserved for use by the secretary in administering 3 and enforcing regulations applying to fertilizers and soil 4 conditioners (Code sections 8.60 and 200.9). In addition 5 to fees reserved for use by the secretary, a nitrogen-based 6 fertilizer fee (groundwater protection fee) is required to be 7 paid by each licensee registering to sell fertilizer in this 8 state. Those fees are credited to the agriculture management 9 account of the groundwater protection fund to support projects 10 and programs designed to protect groundwater resources (Code 11 sections 200.9 and 455E.11(2)(b)). 12 BACKGROUND —— WATER QUALITY INITIATIVE FUND. The water 13 quality initiative fund is created in the state treasury under 14 the management of the soil conservation and water quality 15 division of the department (Code section 466B.45). The purpose 16 of the initiative fund is to support and administer projects to 17 reduce nutrients in surface waters from nonpoint sources in a 18 scientific, reasonable, and cost-effective manner (Code section 19 466B.42). 20 -3- LSB 5888YH (2) 86 da/nh 3/ 3