Senate Study Bill 3138 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON APPROPRIATIONS BILL BY CHAIRPERSON DVORSKY) A BILL FOR An Act relating to providing food to persons in need, including 1 the donation of food to be distributed by food banks and 2 emergency feeding organizations, the establishment of prison 3 gardens, and the exemption from the state sales and use tax 4 of the purchase price of tangible personal property sold 5 and services furnished to food banks, and providing for 6 appropriations. 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 8 TLSB 5669XC (3) 86 da/nh

S.F. _____ DIVISION I 1 FOOD DONATION ON STATE CAPITOL PREMISES 2 Section 1. NEW SECTION . 2.43A Food served on state capitol 3 premises. 4 The secretary of the senate and the chief clerk of the house 5 of representatives shall require any person who is approved 6 to sponsor an event within or on the grounds of the state 7 capitol during which the person offers food to all members of 8 the general assembly during a legislative session to offer 9 to donate any unconsumed food to a food bank or an emergency 10 feeding organization as defined in section 190B.201. The 11 legislative council may also require any person who is approved 12 by the legislative council to sponsor an event within or on the 13 grounds of the state capitol during which the person provides 14 food to offer to donate any unconsumed food to a food bank or 15 emergency feeding organization as defined in section 190B.201. 16 DIVISION II 17 FOOD DONATION PROGRAMS ADMINISTERED BY DEPARTMENT OF HUMAN 18 SERVICES 19 Sec. 2. Section 190B.101, Code 2016, is amended to read as 20 follows: 21 190B.101 Definitions. 22 As used in this chapter subchapter , unless the context 23 otherwise requires: 24 1. “Department” means the department of revenue. 25 2. “Tax credit” means the from farm to food donation tax 26 credit as established in this chapter subchapter . 27 Sec. 3. NEW SECTION . 190B.201 Definitions. 28 As used in this subchapter, unless the context otherwise 29 requires: 30 1. “Department” means the department of human services. 31 2. “Eligible agricultural product” or “product” means any 32 commodity that is derived from an agricultural animal or crop, 33 both as defined in section 717A.1, which is intended for human 34 consumption as food in its raw or processed state. 35 -1- LSB 5669XC (3) 86 da/nh 1/ 8

S.F. _____ 3. “Emergency feeding organization” means an emergency 1 feeding organization as defined in section 7 U.S.C. §7501 that 2 operates at a congregate nutritional site. 3 4. “Food” means a substance which is used in whole or in 4 part for human consumption in compliance with federal and state 5 standards or requirements, including a donated food that meets 6 the requirements of the federal emergency food assistance 7 program, as provided in 7 C.F.R. pts. 250 and 251. 8 5. “Food bank” means a private nonprofit entity that meets 9 all of the following requirements: 10 a. The food bank is organized under chapter 504. 11 b. The food bank qualifies under section 501(c)(3) of the 12 Internal Revenue Code as an organization exempt from federal 13 income tax under section 501(a) of the Internal Revenue Code. 14 c. The food bank maintains an established operation 15 involving the provision of food or edible commodities or the 16 products thereof on a regular basis to persons in need or to 17 food pantries, soup kitchens, hunger relief centers, or other 18 food or feeding centers that, as an integral part of their 19 normal activities, provide meals or food on a regular basis to 20 persons in need. 21 6. “Iowa food bank association” or “association” means 22 a private nonprofit entity that meets all of the following 23 requirements: 24 a. The association is organized under chapter 504. 25 b. The association qualifies under section 501(c)(3) of the 26 Internal Revenue Code as an organization exempt from federal 27 income tax under section 501(a) of the Internal Revenue Code. 28 c. The association’s members include food banks, or 29 affiliations of food banks, that together serve all counties 30 in this state. 31 d. The association’s principal office is located in this 32 state. 33 Sec. 4. NEW SECTION . 190B.202 Administration —— use of 34 moneys and oversight. 35 -2- LSB 5669XC (3) 86 da/nh 2/ 8

S.F. _____ 1. This subchapter shall be administered by the department 1 of human services. In adopting rules and administering the 2 Iowa agricultural products clearance program established under 3 section 190B.204, the department shall cooperate with the 4 department of agriculture and land stewardship. 5 2. A program established in this subchapter shall be managed 6 by an Iowa food bank association selected by the department. 7 The association shall report to the department as required by 8 the department. 9 3. A program established in this subchapter shall be carried 10 out only to the extent that moneys are available to support 11 the program, including moneys to support the association’s 12 management functions, including but not limited to necessary 13 departmental staff support. The department may support a 14 program from moneys appropriated by the general assembly 15 for the program’s purpose and any other moneys available to 16 and obtained or accepted by the department from the federal 17 government or private sources. 18 Sec. 5. NEW SECTION . 190B.203 Management of programs —— 19 Iowa food bank association. 20 1. The department shall enter into a contract with an Iowa 21 food bank association to manage programs established under this 22 subchapter. 23 2. In managing a program, the association shall do all of 24 the following: 25 a. Acquire eligible agricultural products, including by 26 purchase. 27 b. Arrange for the processing and packaging of eligible 28 agricultural products into food, when such processing is 29 necessary to comply with federal and state food safety 30 regulations. 31 c. Provide for the storage and transportation of eligible 32 agricultural products. 33 d. Provide for the distribution of eligible agricultural 34 products. 35 -3- LSB 5669XC (3) 86 da/nh 3/ 8

S.F. _____ 3. In managing a program, the association shall to every 1 extent feasible create and expand significant economic benefits 2 in local communities. The association shall purchase products 3 and services from individuals and businesses located in this 4 state whenever the price is reasonably competitive and the 5 quality as intended. 6 Sec. 6. NEW SECTION . 190B.204 Iowa agricultural products 7 clearance program —— establishment and purpose. 8 1. The department shall establish an Iowa agricultural 9 products clearance program to be managed by an Iowa food bank 10 association selected by the department as provided in section 11 190B.203. 12 2. The purpose of the program is to acquire surplus 13 eligible agricultural products from agricultural producers and 14 other persons in order to prevent unnecessary waste, reduce 15 economic losses associated with paying for the processing 16 and transportation of such products that otherwise do not 17 have profitable markets, and to provide nutritional food to 18 low-income families and individuals who reside in this state 19 and to unemployed families and individuals who reside in this 20 state. 21 3. The Iowa food bank association managing the program 22 shall only distribute eligible agricultural products under the 23 program to Iowa food banks in this state and emergency feeding 24 organizations in this state. 25 Sec. 7. NEW SECTION . 190B.205 Iowa emergency food purchase 26 program —— establishment and purpose. 27 1. The department shall establish an Iowa emergency food 28 purchase program to be managed by an Iowa food bank association 29 selected by the department as provided in section 190B.203. 30 2. The purpose of the program is to relieve situations of 31 emergency experienced by families or individuals who reside in 32 this state, including low-income families and individuals and 33 unemployed families and individuals, by distributing food to 34 those persons. 35 -4- LSB 5669XC (3) 86 da/nh 4/ 8

S.F. _____ 3. The Iowa food bank association managing the program shall 1 only distribute food under the program to emergency feeding 2 organizations in this state. 3 Sec. 8. NEW SECTION . 904.302A Gardening program. 4 The director shall establish a gardening program for growing 5 and harvesting produce, including edible vegetables, at each 6 correctional facility operated by the department, to the 7 extent that the director determines that security and space 8 requirements allow for the garden’s creation and operation. 9 The director may appoint the farm operations administrator to 10 oversee the program. A garden established pursuant to the 11 program shall be tended by inmates of the correctional facility 12 as determined by the director. The produce harvested from 13 the garden may be used to feed the correctional facility’s 14 population or may be donated to a food bank as defined 15 in section 190B.201 designated by the director. The food 16 bank must be located in this state and in proximity to the 17 correctional facility where the garden is situated. Any excess 18 produce that is not used to feed the correctional facility’s 19 inmate population shall be donated to the designated food bank. 20 Sec. 9. APPROPRIATIONS. There is appropriated from the 21 general fund of the state to the department of human services 22 for the fiscal year beginning July 1, 2016, and ending June 23 30, 2017, the following amounts, or so much thereof as is 24 necessary, to be used for the purposes designated: 25 1. For purposes of supporting the Iowa agricultural 26 products clearance program provided in chapter 190B, subchapter 27 II, as enacted in this Act: 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 650,000 29 a. Of the amount appropriated in this subsection, up to 30 $500,000 shall be allocated for purposes of purchasing eligible 31 agricultural products for use as food, processing eligible 32 agricultural products into food, and packaging such processed 33 eligible agricultural products. 34 b. Of the amount appropriated in this subsection, up to 35 -5- LSB 5669XC (3) 86 da/nh 5/ 8

S.F. _____ $100,000 shall be allocated for purposes of providing for the 1 storage and transportation of eligible agricultural products. 2 c. Of the amount appropriated in this subsection, up 3 to $50,000 shall be allocated for purposes of paying for 4 administrative functions performed by an Iowa food bank 5 association selected by the department to manage the program, 6 including salaries, support, maintenance, and miscellaneous 7 purposes. 8 2. For purposes of supporting the Iowa emergency food 9 purchase program provided in chapter 190B, subchapter II, as 10 enacted in this Act: 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250,000 12 DIVISION III 13 SALES TAX EXEMPTION FOR FOOD BANKS 14 Sec. 10. Section 423.3, Code 2016, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 103. The sales price from the sale or 17 rental of tangible personal property, or services furnished, 18 to a food bank as defined in section 190B.201, which tangible 19 personal property or services are to be used by the food bank 20 for a charitable purpose. 21 EXPLANATION 22 The inclusion of this explanation does not constitute agreement with 23 the explanation’s substance by the members of the general assembly. 24 GENERAL. This bill provides for the distribution of raw 25 and processed food to two types of nonprofit organizations: 26 food banks and emergency feeding organizations, both of which 27 are involved in distributing food to low-income families 28 and individuals and unemployed families and individuals in 29 this state. The bill provides for the donation of food by 30 sponsors of legislative events conducted on the premises of 31 the state capitol; the establishment of three distribution 32 programs, two within the department of human services and 33 including appropriations, and one within the Iowa department of 34 corrections; and a sales and use tax exemption. 35 -6- LSB 5669XC (3) 86 da/nh 6/ 8

S.F. _____ FOOD SERVED ON STATE CAPITOL PREMISES. The bill relates to 1 legislative-sponsored events at which food is offered within 2 or on the grounds of the state capitol. During a legislative 3 session, a sponsor conducting an event to which all legislative 4 members are invited must offer to donate unconsumed food to a 5 nonprofit organization under the direction of the secretary 6 of the senate or chief clerk of the house of representatives. 7 The legislative council may also require that a legislative 8 council-approved sponsor of an event located on the same 9 premises offer to donate unconsumed food to a nonprofit 10 organization. 11 PROGRAMS AND APPROPRIATIONS. An Iowa food bank association 12 which is an organization with its principal place of business 13 located in this state and comprised of food bank members, is 14 to manage two programs under a contract entered into with 15 the department of human services, which must oversee the 16 programs. The programs allow the association to purchase 17 or otherwise acquire: eligible agricultural products which 18 include both (1) food and (2) agricultural commodities that 19 can be processed into food. The program also provides for the 20 packaging, storing, and transporting of eligible agricultural 21 products to nonprofit organizations for distribution. The 22 Iowa agricultural products clearance program is established to 23 distribute eligible agricultural products to both food banks 24 and emergency feeding organizations. The Iowa emergency food 25 purchase program is established to distribute food only to 26 Iowa emergency feeding organizations. The bill appropriates 27 moneys from the general fund to the department to support 28 administration of the two programs and the contract. 29 A prison gardening program is to be established by the 30 director of the Iowa department of corrections. Under this 31 program, the director is to establish gardens subject to 32 security and space requirements at each correctional facility. 33 Any garden produce must be either consumed within the prison or 34 donated to a nonprofit corporation. 35 -7- LSB 5669XC (3) 86 da/nh 7/ 8

S.F. _____ SALES TAX EXEMPTION. The bill exempts from the sales tax 1 the purchase price from the sale or rental of tangible personal 2 property, or services furnished, to a food bank if the property 3 or services are to be used by the food bank for a charitable 4 purpose. By operation of Code section 423.6, an item exempt 5 from the imposition of the sales tax is also exempt from the 6 use tax imposed in Code section 423.5. 7 -8- LSB 5669XC (3) 86 da/nh 8/ 8