House File 378 - Introduced HOUSE FILE 378 BY ISENHART and ANDERSON A BILL FOR An Act providing for a state assessment for clean water 1 imposed on agricultural commodities, including establishing 2 procedures for referendums to establish, continue, or 3 terminate the state assessment, the transfer of moneys to 4 the department of agriculture and land stewardship, state 5 sales and use taxes, the natural resources and outdoor 6 recreation fund, the establishment of a commission and fund 7 and the appropriation of moneys. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 1333HH (10) 87 da/rj

H.F. 378 DIVISION I 1 IOWA DAIRY INDUSTRY COMMISSION AND 2 IOWA STATE DAIRY ASSOCIATION 3 Section 1. Section 179.1, Code 2017, is amended by adding 4 the following new subsections: 5 NEW SUBSECTION . 01. “Assessment” means an excise tax on the 6 sale of milk which may include a state assessment for direct 7 use and a state assessment for clean water. 8 NEW SUBSECTION . 2A. “Federal Act” means the Dairy Product 9 Stabilization Act of 1983, 7 U.S.C. §4501 et seq. 10 NEW SUBSECTION . 3A. “National assessment” means an excise 11 tax on the sale of milk imposed pursuant to the federal Act. 12 NEW SUBSECTION . 10. “Secretary” means the secretary of 13 agriculture. 14 Sec. 2. Section 179.1, subsection 2, Code 2017, is amended 15 to read as follows: 16 2. The term “commission” shall mean “Commission” means the 17 Iowa dairy industry commission created in section 179.2 . 18 Sec. 3. Section 179.2, subsections 4, 5, 6, and 7, Code 19 2017, are amended to read as follows: 20 4. a. When a national promotional order is established by 21 the United States department of agriculture pursuant to the 22 Dairy Product Stabilization Act of 1983 federal Act , collection 23 of the excise tax state assessment for direct use described in 24 section 179.5 shall be suspended for the period in which the 25 national order is in effect. The commission shall continue to 26 operate thereafter for only the period of time necessary to pay 27 refunds and disburse the funds moneys remaining in the dairy 28 industry fund for the purposes enumerated in administering 29 this chapter . Upon completion of these acts, the existence of 30 the Iowa dairy industry commission shall be suspended. The 31 secretary of agriculture shall certify the suspension of the 32 commission as of a date certain to the Iowa dairy industry 33 commission and the Iowa state dairy association. When the 34 existence of the commission is suspended, the terms of office 35 -1- LSB 1333HH (10) 87 da/rj 1/ 131

H.F. 378 being served by individual commissioners shall terminate. 1 b. The establishment of a national promotional order shall 2 not affect the imposition of a state assessment for clean water 3 established pursuant to section 179.13A. 4 5. When the national promotional order expires, the period 5 of suspension of the excise tax state assessment for direct use 6 established in section 179.5 shall terminate and the secretary 7 of agriculture shall take the steps necessary to collect that 8 excise tax state assessment and otherwise fulfill the duties of 9 the commission, except that of expending funds moneys collected 10 under the excise tax that state assessment , until those 11 duties can be resumed by the reactivated commission. When the 12 national promotional order expires, the period of suspension of 13 the commission shall terminate. The secretary of agriculture 14 shall call the first meeting of the reactivated commission. 15 Upon reactivation, the commission shall reimburse the secretary 16 of agriculture for expenses incurred in carrying out the duties 17 provided in this subsection . 18 6. When the national dairy promotion program expires and 19 the suspension of the Iowa dairy industry commission terminates 20 pursuant to subsection 5 , all first purchasers shall, in a 21 manner designed to reflect their proportionate contributions 22 to the national dairy promotion program in its most recently 23 completed fiscal year, nominate two resident producers for each 24 of the sixteen offices of the commission. The secretary of 25 agriculture shall then appoint one nominee from each set of 26 two nominees as commissioners of the reactivated Iowa dairy 27 industry commission. The secretary of agriculture shall 28 stagger the terms of the reactivated commission resulting in 29 as nearly as possible one third of the commissioners serving 30 for one year, one third of the commissioners serving for two 31 years, and one third of the commissioners serving for three 32 years. After the initial staggering of terms by the secretary, 33 commissioners shall be appointed to three-year terms. 34 7. The establishment or expiration of a national 35 -2- LSB 1333HH (10) 87 da/rj 2/ 131

H.F. 378 promotional order shall not affect the imposition of a state 1 assessment for clean water established pursuant to section 2 179.13A. 3 7. 8. After the reactivated commission has been formed, 4 nominations for commissioners shall be made by first 5 purchasers in a manner designed to reflect their proportionate 6 contributions to the Iowa dairy industry commission in its most 7 recently completed fiscal year. 8 Sec. 4. Section 179.3, Code 2017, is amended by adding the 9 following new subsection: 10 NEW SUBSECTION . 10. To cooperate with the division of soil 11 conservation and water quality of the department of agriculture 12 and land stewardship in transferring moneys collected from 13 the state assessment for clean water to the clean water fund 14 created in section 466B.51. 15 Sec. 5. Section 179.4, Code 2017, is amended to read as 16 follows: 17 179.4 Expenditure of funds Use of moneys . 18 Funds collected through Moneys collected by the commission 19 from the excise tax are to state assessment for direct use 20 imposed pursuant to section 179.5 shall be used for purposes 21 of advertising and promotion, product, process, and nutrition, 22 dietetics, and physiology research, nutrition education, public 23 relations, research and development, and for other activities 24 that contribute to producer efficiency and productivity. 25 In addition, the commission shall use these funds moneys 26 to maintain existing markets, to make contributions to 27 organizations working toward the purposes of this section , 28 and to assist in the development of new or enlarged markets 29 for milk, both domestic and foreign. The primary purpose for 30 use of these funds moneys is to increase consumption of milk. 31 The commission may contract for advertising, publicity, sales 32 promotion, research, and educational services the committee 33 commission deems appropriate to further the objectives of this 34 section . 35 -3- LSB 1333HH (10) 87 da/rj 3/ 131

H.F. 378 Sec. 6. Section 179.5, Code 2017, is amended to read as 1 follows: 2 179.5 Excise tax State assessments —— administration of 3 moneys —— appropriation. 4 1. a. There is levied and imposed an excise tax a state 5 assessment for direct use on all producers within the state 6 at a rate of three-fourths of one percent of the gross value 7 of milk produced in the state and which may be continued by 8 special referendum as provided in section 179.13A . 9 b. There is imposed a state assessment for clean water on 10 all producers within the state at a rate established by the 11 commission not to exceed the rate of the state assessment for 12 direct use described in paragraph “a” , if the state assessment 13 for clean water is established or continued pursuant to section 14 179.13A. 15 2. All taxes levied and The state assessment for direct use 16 and the state assessment for clean water imposed under this 17 chapter shall be deducted from the sales price received by the 18 producer and shall be collected by the first purchaser, except 19 as follows: 20 a. If the producer produces milk from cows and sells the 21 milk directly to the consumer, the taxes each state assessment 22 shall be remitted by that producer. 23 b. If the producer sells milk to a first purchaser outside 24 the state, the taxes are each state assessment is due and 25 payable by that producer before the shipment is made, except 26 that the commission may make agreements with extra state 27 purchasers for the keeping of records and the collection of the 28 taxes each state assessment as necessary to secure the payment 29 of the taxes each state assessment within the time fixed by 30 this chapter . 31 3. All taxes levied and The state assessment for direct use 32 and the state assessment for clean water if established and 33 imposed under this chapter , and any other contributions made to 34 the dairy industry commission , shall be paid to and collected 35 -4- LSB 1333HH (10) 87 da/rj 4/ 131

H.F. 378 by the commission within thirty days after the end of the month 1 during which the milk was marketed. 2 4. The commission shall remit moneys collected from 3 the taxes state assessment for direct use and any other 4 contributions obtained by the commission to the treasurer of 5 the state each quarter, and at the same time shall render to 6 the director of the department of administrative services an 7 itemized and verified report showing the source from which 8 the taxes moneys collected from the state assessment for 9 direct use and voluntary contributions were obtained. All 10 taxes moneys collected from the state assessment for direct 11 use and voluntary contributions received, collected, and 12 remitted by the commission shall be placed in a special fund 13 by the treasurer of state and the director of the department 14 of administrative services, to be known as the “dairy industry 15 fund” to be used by the Iowa dairy industry commission for 16 the purposes set out in this chapter and to administer and 17 enforce the laws relative to this chapter . The department of 18 administrative services shall transfer moneys from the fund 19 to the commission for deposit into an account established 20 by the commission in a qualified financial institution. 21 The department shall transfer the moneys as provided in a 22 resolution adopted by the commission. However, the department 23 is only required to transfer moneys once during each day and 24 only during hours when the offices of the state are open. 25 Moneys deposited in the fund and transferred to the commission 26 as provided in this section are appropriated and shall be used 27 for the purpose of carrying out the provisions of this chapter . 28 5. The commission may deposit moneys collected from the 29 state assessment for clean water in a qualified financial 30 institution until transferred to the clean water fund 31 created in section 466B.51. During the period when a 32 national promotional order is in effect, the Iowa state dairy 33 association shall deposit the moneys collected from that 34 state assessment in a qualified financial institution until 35 -5- LSB 1333HH (10) 87 da/rj 5/ 131

H.F. 378 transferred to the clean water fund. If the state assessment 1 for clean water is terminated as provided in section 179.13A, 2 the remaining moneys collected from that state assessment shall 3 be immediately transferred to the clean water fund. 4 6. The commission may require that the invoice also show the 5 total amount of any state assessment for direct use deducted 6 from the sales price. If a national assessment is being 7 collected, the Iowa state dairy association may require that 8 the invoice for the national assessment also show the total 9 amount of any national assessment, if permitted by federal law. 10 If a state assessment for clean water is collected, the first 11 purchaser shall furnish the producer at the time of payment an 12 invoice showing the total amount of the state assessment for 13 clean water deducted from the sales price. 14 4. 7. a. A person from whom the excise tax provided in 15 this chapter a state assessment for direct use is collected 16 may, by application filed with the commission within thirty 17 days after the collection of the tax state assessment , have the 18 tax state assessment refunded to that person by the commission. 19 b. If a state assessment for direct use is imposed, a person 20 from whom a state assessment for clean water is collected 21 may file an application for a refund with the commission. 22 The application for a refund shall allow the person to elect 23 whether the refund is for the state assessment for direct 24 use or the state assessment for clean water or both. The 25 commission shall not approve an application unless the 26 application indicates the election. The commission shall 27 forward an approved application for a refund of the state 28 assessment to the division of soil conservation and water 29 quality for payment. 30 c. If a national assessment is imposed and a refund of the 31 national assessment is authorized, a person from whom a state 32 assessment for clean water is collected may file an application 33 for a refund with the Iowa state dairy association. The 34 application shall to the extent allowed by federal law allow 35 -6- LSB 1333HH (10) 87 da/rj 6/ 131

H.F. 378 the person to elect whether the refund is for the national 1 assessment or the state assessment for clean water or both. 2 The association shall forward the approved application for a 3 refund of the state assessment for clean water to the division 4 of soil conservation and water quality for payment. 5 Sec. 7. Section 179.6, Code 2017, is amended to read as 6 follows: 7 179.6 Records of producers, first purchasers. 8 Every producer shipping milk to a first purchaser outside of 9 Iowa who is not by agreement with the commission collecting the 10 tax state assessment for direct use or the state assessment for 11 clean water imposed by this chapter , and every first purchaser 12 within the state, and every producer distributing milk directly 13 to the consumer, shall keep a complete and accurate record of 14 all milk produced or purchased by the person during the period 15 for which an excise tax levy a state assessment is imposed 16 under this chapter . The records shall be in the form and 17 contain the information prescribed by the commission, shall be 18 preserved by the person charged with their making for a period 19 of two years, and shall be offered or submitted for inspection 20 at any time upon written or oral request by the commission or 21 its duly authorized agent or employee. 22 Sec. 8. Section 179.8, Code 2017, is amended to read as 23 follows: 24 179.8 Payment of expenses —— limitation. 25 1. No part of the expense incurred by the commission 26 shall be paid out of moneys in the state treasury except 27 moneys transferred to the commission from the dairy industry 28 fund. Moneys transferred from the fund to the commission, as 29 provided in section 179.5 , shall be used for the payment of 30 all salaries, and other expenses necessary, to carry out the 31 provisions of this chapter . However, in no event shall the 32 total expenses exceed the total taxes amount collected from the 33 state assessment for direct use collected and transferred from 34 the fund to the commission. 35 -7- LSB 1333HH (10) 87 da/rj 7/ 131

H.F. 378 2. No more than five percent of the excise tax collected 1 moneys collected from the state assessment for direct use and 2 received by the commission pursuant to section 179.5 shall be 3 utilized for administrative expenses of the commission. 4 Sec. 9. Section 179.9, Code 2017, is amended to read as 5 follows: 6 179.9 Investigations by commission. 7 The commission shall have the power to cause its authorized 8 agents to enter upon the premises of any person charged by this 9 chapter or by agreement with the commission with the collection 10 of the excise tax a state assessment for direct use or a state 11 assessment for clean water imposed by this chapter , and to 12 cause to be examined by any such agent any books, records, 13 documents, or other instruments bearing upon the amount of 14 moneys from such tax state assessment collected or to be 15 collected by such person; provided that the commission has 16 reasonable ground to believe that all moneys from the tax state 17 assessments herein levied has imposed have not been collected, 18 or if it has they have not been fully accounted for as herein 19 provided. 20 Sec. 10. Section 179.10, Code 2017, is amended to read as 21 follows: 22 179.10 Report. 23 The commission shall each year prepare and submit a report 24 summarizing the activities of the commission under this chapter 25 to the auditor of state and the secretary of agriculture . The 26 report shall show all income, expenses, and other relevant 27 information concerning fees the state assessment for direct 28 use collected and expended under this chapter . The report 29 shall also show the collection and transfer of moneys received 30 from any state assessment for clean water imposed under this 31 chapter. 32 Sec. 11. Section 179.13, Code 2017, is amended to read as 33 follows: 34 179.13 Referendum Initial referendum . 35 -8- LSB 1333HH (10) 87 da/rj 8/ 131

H.F. 378 1. a. At a time designated by the commission within 1 eighteen months after termination of the national promotional 2 order made pursuant to the Dairy Product Stabilization 3 federal Act of 1983 , the commission shall conduct a an initial 4 referendum under administrative procedures prescribed by the 5 department. 6 b. Upon signing a statement certifying to the department 7 that the person is a bona fide producer as defined in this 8 chapter , each producer is entitled to one vote in each initial 9 referendum. When the secretary is required to determine the 10 approval or disapproval of producers under this section , the 11 secretary shall consider the approval or disapproval of a 12 cooperative association of producers, engaged in a bona fide 13 manner in marketing milk, as the approval or disapproval of the 14 producers who are members of or contract with the cooperative 15 association of producers. If a cooperative association 16 elects to vote on behalf of its members, the cooperative 17 association shall provide each producer on whose behalf the 18 cooperative association is expressing approval or disapproval 19 with a description of the question presented in the initial 20 referendum together with a statement of the manner in which 21 the cooperative association intends to cast its vote on behalf 22 of the membership. The information shall inform the producer 23 of procedures to follow to cast an individual ballot if the 24 producer chooses to do so within the period of time established 25 by the secretary for casting ballots. The notification shall 26 be made at least thirty days prior to the initial referendum 27 and shall include an official ballot. The ballots shall be 28 tabulated by the secretary and the vote of the cooperative 29 association shall be adjusted to reflect the individual votes. 30 c. The department shall count and tabulate the ballots 31 filed during the initial referendum within thirty days of the 32 close of the initial referendum. If from the tabulation the 33 department determines that a majority of the total number of 34 producers voting in the initial referendum favors the proposal, 35 -9- LSB 1333HH (10) 87 da/rj 9/ 131

H.F. 378 the excise tax state assessment for direct use provided for in 1 this chapter shall be continued. The ballots cast pursuant 2 to this section constitute complete and conclusive evidence 3 for use in determinations made by the department under this 4 chapter . 5 2. The secretary may conduct a special referendum at any 6 time after the Iowa dairy industry commission is reactivated, 7 and shall hold a conduct a special referendum on request upon 8 receiving a petition of a representative group comprising ten 9 percent or more of the number of producers eligible to vote, 10 to determine whether the producers favor the termination or 11 suspension or termination of the excise tax state assessment 12 for direct use . The secretary shall suspend or terminate 13 collection of the excise tax within state assessment for direct 14 use no later than six months after the secretary determines 15 that suspension or termination of the excise tax state 16 assessment is favored by a majority of the producers voting 17 in the special referendum, and shall suspend or terminate the 18 excise tax state assessment in an orderly manner as soon as 19 practicable after the determination. 20 Sec. 12. NEW SECTION . 179.13A Referendums and special 21 questions —— establishment, increase, or termination of a state 22 assessment. 23 1. a. If a state assessment for direct use is established, 24 and upon receipt of a petition of producers that otherwise 25 complies with requirements to conduct an initial referendum 26 under section 179.13, subsection 1, the secretary shall conduct 27 a special referendum to determine whether to establish a state 28 assessment for clean water. 29 b. Upon receipt of a petition of producers that otherwise 30 complies with requirements to conduct an initial referendum 31 under section 179.13, the secretary shall include as part of 32 the initial referendum conducted pursuant to section 179.13, 33 subsection 1, a separate special question whether to establish 34 a state assessment for clean water, if the secretary determines 35 -10- LSB 1333HH (10) 87 da/rj 10/ 131

H.F. 378 the inclusion of the special question is cost-effective or the 1 petition demands inclusion. 2 c. The secretary shall conduct the special referendum under 3 this subsection or include the special question as part of an 4 initial or special referendum conducted under section 179.13, 5 subsection 1, in consultation with the commission and which 6 may be based on the same procedures for conducting an initial 7 referendum under section 179.13. 8 d. If the secretary determines that the establishment of 9 a state assessment for clean water is favored by a majority 10 of the producers voting in a special referendum under this 11 subsection or in an initial referendum conducted under section 12 179.13, subsection 1, that includes a special question as 13 provided in paragraph “b” , the state assessment shall commence 14 on a date determined by the secretary after consultation with 15 the commission but not later than six months after the date 16 that the special or initial referendum was conducted. 17 2. a. If a national assessment is being collected, and upon 18 receipt of a petition of producers that otherwise complies with 19 requirements to conduct an initial referendum under section 20 179.13, subsection 1, the secretary shall conduct a special 21 referendum to determine whether to establish a state assessment 22 for clean water. 23 b. Upon receipt of a petition of producers that otherwise 24 complies with requirements to conduct an initial referendum 25 under section 179.13, subsection 1, the secretary shall include 26 as part of the referendum to establish a national assessment, 27 a separate special question whether to establish a state 28 assessment for clean water, if the secretary determines the 29 inclusion of the special question complies with federal law and 30 either is cost-effective or the petition demands inclusion. 31 c. The secretary shall conduct the special referendum under 32 this subsection or include the special question as part of a 33 referendum to establish a national referendum in consultation 34 with the Iowa state dairy association and which may be based on 35 -11- LSB 1333HH (10) 87 da/rj 11/ 131

H.F. 378 the same procedures for conducting an initial referendum under 1 section 179.13, subsection 1, or a referendum to establish a 2 national assessment. 3 d. If the secretary determines that the establishment of a 4 state assessment for clean water is favored by a majority of 5 the producers voting in a special referendum conducted under 6 paragraph “a” or a referendum to establish a national assessment 7 that includes a special question as provided in paragraph “b” , 8 the state assessment shall commence on a date determined by 9 the secretary after consultation with the Iowa state dairy 10 association but not later than six months after the date that 11 the special referendum or referendum establishing a national 12 assessment was conducted. 13 3. a. If the rate of the national assessment has been 14 increased, and upon receipt of a petition of producers that 15 otherwise complies with requirements to conduct an initial 16 referendum under section 179.13, subsection 1, the secretary 17 shall conduct a special referendum to determine whether to 18 increase the rate of the state assessment for clean water to 19 a rate established by the Iowa state dairy association not to 20 exceed the rate of the national assessment. 21 b. Upon receipt of a petition of producers that otherwise 22 complies with requirements to conduct an initial referendum 23 under section 179.13, subsection 1, the secretary shall include 24 as part of a referendum to increase the rate of the national 25 assessment, a separate special question whether to increase 26 the rate of the state assessment for clean water at a rate 27 established by the Iowa state dairy association not to exceed 28 the increase in the national assessment, if the secretary 29 determines the inclusion of the special question complies 30 with federal law and is either cost-effective or the petition 31 demands inclusion. 32 c. The secretary shall conduct the special referendum under 33 this subsection, or include the special question as part of a 34 referendum to increase the national assessment, in consultation 35 -12- LSB 1333HH (10) 87 da/rj 12/ 131

H.F. 378 with the Iowa state dairy association and which may be based on 1 the same procedures for conducting an initial referendum under 2 section 179.13, subsection 1, or a referendum to increase the 3 rate of the national assessment. 4 d. If the national assessment is increased, and the 5 secretary determines that an increase in the state assessment 6 for clean water is favored by a majority of the producers 7 voting in a special referendum or referendum to increase 8 the rate of the national assessment, the rate of the state 9 assessment shall be increased on a date determined by the 10 secretary after consultation with the Iowa state dairy 11 association but not later than six months after the date that 12 the special referendum or referendum establishing a national 13 assessment was conducted. If a special referendum or special 14 question to increase the rate of the state assessment for clean 15 water does not pass, the result of the vote shall not affect 16 the existence or length of the period when the state assessment 17 is in effect. 18 4. a. If a state assessment for direct use is imposed, 19 and upon receipt of a petition of producers that otherwise 20 complies with requirements to conduct a special referendum 21 under section 179.13, subsection 2, the secretary shall conduct 22 a special referendum to determine whether to terminate the 23 state assessment for clean water. 24 b. Upon receipt of a petition of producers that otherwise 25 complies with requirements to conduct a special referendum 26 under section 179.13, subsection 2, the secretary shall include 27 as part of a special referendum to suspend or terminate the 28 state assessment for direct use conducted pursuant to section 29 179.13, subsection 2, a separate special question whether 30 to terminate the state assessment for clean water, if the 31 secretary determines the inclusion of the special question is 32 cost-effective or the petition demands inclusion. 33 c. The secretary shall conduct the special referendum under 34 this subsection or include the special question as part of a 35 -13- LSB 1333HH (10) 87 da/rj 13/ 131

H.F. 378 special referendum conducted under section 179.13, subsection 1 2, in consultation with the commission and which may be based 2 on the same procedures for conducting a special referendum 3 under section 179.13, subsection 2. 4 d. If the secretary determines that the termination of 5 a state assessment for clean water is favored by a majority 6 of the producers voting in a special referendum under this 7 subsection, or a special referendum conducted under section 8 179.13, subsection 2, the state assessment shall terminate on a 9 date determined by the secretary after consultation with the 10 commission but not later than six months after the date that 11 the special or initial referendum was conducted. The secretary 12 shall terminate the state assessment in an orderly manner as 13 soon as practical. 14 5. The secretary shall terminate the state assessment for 15 clean water upon determining that the state assessment for 16 direct use and the national assessment are terminated. The 17 secretary shall terminate the state assessment for clean water 18 in an orderly manner as soon as practical. 19 DIVISION II 20 IOWA BEEF CATTLE PRODUCERS ASSOCIATION —— EXECUTIVE COMMITTEE 21 Sec. 13. Section 181.1, subsection 10, Code 2017, is amended 22 to read as follows: 23 10. “State assessment” means an excise tax on the sale of 24 cattle imposed pursuant to this chapter which may include a 25 state assessment for direct use and a state assessment for 26 clean water . 27 Sec. 14. Section 181.2, Code 2017, is amended by adding the 28 following new subsection: 29 NEW SUBSECTION . 5. Cooperate with the division of soil 30 conservation and water quality of the department of agriculture 31 and land stewardship in transferring moneys collected from 32 the state assessment for clean water to the clean water 33 fund created in section 466B.51 and for being reimbursed for 34 reasonable expenses incurred in conducting an initial or 35 -14- LSB 1333HH (10) 87 da/rj 14/ 131

H.F. 378 special referendum to establish, continue, or terminate a state 1 assessment for clean water. 2 Sec. 15. Section 181.7A, Code 2017, is amended to read as 3 follows: 4 181.7A Commencement of federal assessment —— suspension and 5 recommencement of state assessment —— rate. 6 1. Prior to the commencement of the collection of 7 the federal assessment, the executive committee may seek 8 certification as a qualified state beef council within the 9 meaning of the federal Act. 10 2. The executive committee shall suspend the state 11 assessment for direct use upon collection of the federal 12 assessment. The state assessment for direct use shall 13 recommence upon the earlier of the following: 14 a. The noncollection of the federal assessment. The 15 recommenced state assessment for direct use shall be imposed 16 for a four-year period. Its effective date shall be the first 17 date for which the federal assessment is not collected. 18 b. The passage of a special referendum pursuant to section 19 181.19 regardless of whether a federal assessment is being 20 collected. 21 3. The rate of the recommenced state assessment shall be the 22 same as the rate that was last in effect under section 181.19 23 immediately prior to the suspension of the state assessment. 24 4. The state assessment for clean water shall continue to be 25 imposed during any period of suspension of the state assessment 26 for direct use so long as the state assessment for clean water 27 is not terminated pursuant to section 181.19A. 28 Sec. 16. Section 181.8, Code 2017, is amended to read as 29 follows: 30 181.8 Executive committee —— entering premises —— examining 31 records. 32 The executive committee may authorize its agents to enter 33 at a reasonable time upon the premises of any purchaser 34 charged by this chapter with remitting the a state assessment 35 -15- LSB 1333HH (10) 87 da/rj 15/ 131

H.F. 378 for direct use or a state assessment for clean water to the 1 executive committee , and to . The agents may examine records 2 and other instruments relating to the collection of the a state 3 assessment. However, the executive committee must first have 4 reasonable grounds to believe that the a state assessment has 5 not been remitted or fully accounted for. 6 Sec. 17. Section 181.11, Code 2017, is amended to read as 7 follows: 8 181.11 Collection of state assessment assessments . 9 1. A state assessment for direct use or a state assessment 10 for clean water imposed as provided in this chapter shall be 11 levied and collected from the purchaser on each sale of cattle 12 at a rate provided in this chapter . The state assessment for 13 direct use or a state assessment for clean water shall be 14 imposed on any person selling cattle and shall be deducted 15 by the purchaser from the price paid to the seller. The 16 purchaser, at the time of the sale, shall make and deliver to 17 the seller a separate invoice for each sale showing the names 18 and addresses of the seller and the purchaser, the number of 19 cattle sold, and the date of sale. The purchaser shall forward 20 the state assessment for direct use and any state assessment 21 for clean water to the executive committee at a time prescribed 22 by the executive committee, but not later than the last day of 23 the month following the end of the prior reporting period in 24 which the cattle are sold. 25 2. The executive committee may enter into arrangements with 26 persons purchasing cattle outside of this state for remitting 27 the state assessment for direct use and any state assessment 28 for clean water by such purchasers. 29 Sec. 18. Section 181.12, Code 2017, is amended to read as 30 follows: 31 181.12 Remission of state assessment assessments on 32 application. 33 1. a. A person from whom a state assessment for direct 34 use is collected may, by written application filed with the 35 -16- LSB 1333HH (10) 87 da/rj 16/ 131

H.F. 378 executive committee within ninety days after its collection, 1 have the amount remitted to the person by the executive 2 committee. 3 b. A person from whom a state assessment for clean water is 4 collected may, by written application filed with the council 5 as provided in paragraph “a” , have the amount remitted to the 6 person by the division of soil conservation and water quality 7 of the department of agriculture and land stewardship. Within 8 sixty days after its collection, the council shall transmit any 9 approved application to the division for a refund payment. 10 2. The information that the a state assessment described 11 in subsection 1 is refundable and the address of the executive 12 committee to which application for a refund may be made shall 13 appear on the invoice of sale form supplied by the purchaser to 14 the producer near the area on the form which shows the amount 15 of the state assessment paid. 16 3. a. The executive committee shall furnish uniform 17 application for refund forms and make the refund forms readily 18 available to all producers. 19 b. The form shall allow the applicant to elect whether the 20 refund is for the state assessment for direct use or the state 21 assessment for clean water or both. The council shall not 22 approve an application unless the application indicates the 23 election. A purchaser charged by this chapter with remitting 24 the a state assessment shall make the forms readily available 25 to all producers. 26 Sec. 19. Section 181.13, Code 2017, is amended to read as 27 follows: 28 181.13 Administration of moneys originating from state 29 assessment assessments —— appropriation. 30 1. a. All moneys, other than moneys from the state 31 assessments assessment for clean water imposed under this 32 chapter shall be paid to and collected by the executive 33 committee and deposited with the treasurer of state in a 34 separate cattle promotion fund which shall be created by the 35 -17- LSB 1333HH (10) 87 da/rj 17/ 131

H.F. 378 treasurer of state. The department of administrative services 1 shall transfer moneys from the fund to the executive committee 2 for deposit into an account established by the executive 3 committee in a qualified financial institution. The department 4 shall transfer the moneys as provided in a resolution adopted 5 by the executive committee. However, the department is only 6 required to transfer moneys once during each day and only 7 during hours when the offices of the state are open. From 8 the moneys , other than moneys from the state assessment for 9 clean water, collected, deposited, and transferred to the 10 executive committee, in accordance with the provisions of this 11 chapter , the executive committee shall first pay the costs 12 of referendums held pursuant to this chapter , the costs of 13 collection of such state assessments, and the expenses of its 14 agents. At least ten percent of the remaining moneys shall 15 be remitted to the association in proportions determined by 16 the executive committee, for use in a manner not inconsistent 17 with section 181.7 . The remaining moneys, with approval of a 18 majority of the executive committee, shall be expended as the 19 executive committee finds necessary to carry out the provisions 20 and purposes of this chapter . However, in no event shall the 21 total expenses exceed the total amount transferred from the 22 fund for use by the executive committee. 23 2. b. All moneys deposited in the cattle promotion fund and 24 transferred to the executive committee pursuant to this section 25 are appropriated and shall be used for the administration 26 of this chapter and for the payment of claims based upon 27 obligations incurred in the performance of activities and 28 functions set forth in this chapter . 29 3. c. If the state assessment for direct use is suspended 30 as provided in section 181.7A or a continuance special 31 referendum to continue the state assessment for clean water 32 fails to pass as provided in section 181.19A , moneys remaining 33 in the cattle promotion fund and transferred to the executive 34 committee shall continue to be transferred and expended in 35 -18- LSB 1333HH (10) 87 da/rj 18/ 131