House File 2534 - Introduced HOUSE FILE 2534 BY ISENHART A BILL FOR An Act providing for a state assessment for clean water 1 imposed on agricultural commodities, including procedures 2 for referendums to establish, continue, or terminate the 3 state assessment, the transfer of moneys to the department 4 of agriculture and land stewardship, state sales and use 5 taxes, the natural resources and outdoor recreation trust 6 fund, the establishment of a commission and fund, and the 7 appropriation of moneys. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 5702YH (11) 89 da/ns

H.F. 2534 DIVISION I 1 IOWA DAIRY INDUSTRY COMMISSION AND 2 IOWA STATE DAIRY ASSOCIATION 3 Section 1. Section 179.1, Code 2022, 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 9 Production 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 2022, 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 2022, are amended to read as follows: 20 4. When a national promotional order is established by the 21 United States department of agriculture pursuant to the Dairy 22 Product Stabilization Act of 1983 federal Act , collection of 23 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 5702YH (11) 89 da/ns 1/ 134

H.F. 2534 being served by individual commissioners shall terminate. 1 5. When the national promotional order expires, the period 2 of suspension of the excise tax state assessment for direct use 3 established in section 179.5 shall terminate and the secretary 4 of agriculture shall take the steps necessary to collect that 5 excise tax state assessment and otherwise fulfill the duties of 6 the commission, except that of expending funds moneys collected 7 under the excise tax that state assessment , until those 8 duties can be resumed by the reactivated commission. When the 9 national promotional order expires, the period of suspension of 10 the commission shall terminate. The secretary of agriculture 11 shall call the first meeting of the reactivated commission. 12 Upon reactivation, the commission shall reimburse the secretary 13 of agriculture for expenses incurred in carrying out the duties 14 provided in this subsection . 15 6. When the national dairy promotion program expires and 16 the suspension of the Iowa dairy industry commission terminates 17 pursuant to subsection 5 , all first purchasers shall, in a 18 manner designed to reflect their proportionate contributions 19 to the national dairy promotion program in its most recently 20 completed fiscal year, nominate two resident producers for each 21 of the sixteen offices of the commission. The secretary of 22 agriculture shall then appoint one nominee from each set of 23 two nominees as commissioners of the reactivated Iowa dairy 24 industry commission. The secretary of agriculture shall 25 stagger the terms of the reactivated commission resulting in 26 as nearly as possible one third of the commissioners serving 27 for one year, one third of the commissioners serving for two 28 years, and one third of the commissioners serving for three 29 years. After the initial staggering of terms by the secretary, 30 commissioners shall be appointed to three-year terms. 31 7. The establishment or expiration of a national 32 promotional order shall not affect the imposition of a state 33 assessment for clean water established pursuant to section 34 179.13A. 35 -2- LSB 5702YH (11) 89 da/ns 2/ 134

H.F. 2534 7. 8. After the reactivated commission has been formed, 1 nominations for commissioners shall be made by first 2 purchasers in a manner designed to reflect their proportionate 3 contributions to the Iowa dairy industry commission in its most 4 recently completed fiscal year. 5 Sec. 4. Section 179.3, Code 2022, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 10. To cooperate with the division of soil 8 conservation and water quality of the department of agriculture 9 and land stewardship in transferring moneys collected from 10 the state assessment for clean water to the clean water fund 11 created in section 466B.51. 12 Sec. 5. Section 179.4, Code 2022, is amended to read as 13 follows: 14 179.4 Expenditure of funds Use of moneys . 15 Funds collected through Moneys collected by the commission 16 from the excise tax are to state assessment for direct use 17 imposed pursuant to section 179.5 shall be used for purposes 18 of advertising and promotion, product, process, and nutrition, 19 dietetics, and physiology research, nutrition education, public 20 relations, research and development, and for other activities 21 that contribute to producer efficiency and productivity. 22 In addition, the commission shall use these funds moneys 23 to maintain existing markets, to make contributions to 24 organizations working toward the purposes of this section , 25 and to assist in the development of new or enlarged markets 26 for milk, both domestic and foreign. The primary purpose for 27 use of these funds moneys is to increase consumption of milk. 28 The commission may contract for advertising, publicity, sales 29 promotion, research, and educational services the committee 30 commission deems appropriate to further the objectives of this 31 section . 32 Sec. 6. Section 179.5, Code 2022, is amended to read as 33 follows: 34 179.5 Excise tax State assessments —— administration of 35 -3- LSB 5702YH (11) 89 da/ns 3/ 134

H.F. 2534 moneys —— appropriation. 1 1. a. There is levied and imposed an excise tax a state 2 assessment for direct use on all producers within the state 3 at a rate of three-fourths of one percent of the gross value 4 of milk produced in the state and which may be continued by 5 special referendum as provided in section 179.13A . 6 b. There is imposed a state assessment for clean water on 7 all producers within the state at a rate established by the 8 commission not to exceed the rate of the state assessment for 9 direct use described in paragraph “a” , if the state assessment 10 for clean water is established or continued pursuant to section 11 179.13A. 12 2. All taxes levied and The state assessment for direct use 13 and the state assessment for clean water imposed under this 14 chapter shall be deducted from the sales price received by the 15 producer and shall be collected by the first purchaser, except 16 as follows: 17 a. If the producer produces milk from cows and sells the 18 milk directly to the consumer, the taxes each state assessment 19 shall be remitted by that producer. 20 b. If the producer sells milk to a first purchaser outside 21 the state, the taxes are each state assessment is due and 22 payable by that producer before the shipment is made, except 23 that the commission may make agreements with extra state 24 purchasers for the keeping of records and the collection of the 25 taxes each state assessment as necessary to secure the payment 26 of the taxes each state assessment within the time fixed by 27 this chapter . 28 3. All taxes levied and The state assessment for direct use 29 and the state assessment for clean water if established and 30 imposed under this chapter , and any other contributions made to 31 the dairy industry commission , shall be paid to and collected 32 by the commission within thirty days after the end of the month 33 during which the milk was marketed. 34 4. The commission shall remit moneys collected from 35 -4- LSB 5702YH (11) 89 da/ns 4/ 134

H.F. 2534 the taxes state assessment for direct use and any other 1 contributions obtained by the commission to the treasurer of 2 the state each quarter, and at the same time shall render to 3 the director of the department of administrative services an 4 itemized and verified report showing the source from which 5 the taxes moneys collected from the state assessment for 6 direct use and voluntary contributions were obtained. All 7 taxes moneys collected from the state assessment for direct 8 use and voluntary contributions received, collected, and 9 remitted by the commission shall be placed in a special fund 10 by the treasurer of state and the director of the department 11 of administrative services, to be known as the “dairy industry 12 fund” to be used by the Iowa dairy industry commission for 13 the purposes set out in this chapter and to administer and 14 enforce the laws relative to this chapter . The department of 15 administrative services shall transfer moneys from the fund 16 to the commission for deposit into an account established 17 by the commission in a qualified financial institution. 18 The department shall transfer the moneys as provided in a 19 resolution adopted by the commission. However, the department 20 is only required to transfer moneys once during each day and 21 only during hours when the offices of the state are open. 22 Moneys deposited in the fund and transferred to the commission 23 as provided in this section are appropriated and shall be used 24 for the purpose of carrying out the provisions of this chapter . 25 5. The commission may deposit moneys collected from the 26 state assessment for clean water in a qualified financial 27 institution until transferred to the clean water fund 28 created in section 466B.51. During the period when a 29 national promotional order is in effect, the Iowa state dairy 30 association shall deposit the moneys collected from that 31 state assessment in a qualified financial institution until 32 transferred to the clean water fund. If the state assessment 33 for clean water is terminated as provided in section 179.13A, 34 the remaining moneys collected from that state assessment shall 35 -5- LSB 5702YH (11) 89 da/ns 5/ 134

H.F. 2534 be immediately transferred to the clean water fund. 1 6. The commission may require that the invoice also show the 2 total amount of any state assessment for direct use deducted 3 from the sales price. If a national assessment is being 4 collected, the Iowa state dairy association may require that 5 the invoice for the national assessment also show the total 6 amount of any national assessment, if permitted by federal law. 7 If a state assessment for clean water is collected, the first 8 purchaser shall furnish the producer at the time of payment an 9 invoice showing the total amount of the state assessment for 10 clean water deducted from the sales price. 11 4. 7. a. A person from whom the excise tax provided in 12 this chapter a state assessment for direct use is collected 13 may, by application filed with the commission within thirty 14 days after the collection of the tax state assessment , have the 15 tax state assessment refunded to that person by the commission. 16 b. If a state assessment for direct use is imposed, a person 17 from whom a state assessment for clean water is collected 18 may file an application for a refund with the commission. 19 The application for a refund shall allow the person to elect 20 whether the refund is for the state assessment for direct 21 use or the state assessment for clean water or both. The 22 commission shall not approve an application unless the 23 application indicates the election. The commission shall 24 forward an approved application for a refund of the state 25 assessment to the division of soil conservation and water 26 quality for payment. 27 c. If a national assessment is imposed and a refund of the 28 national assessment is authorized, a person from whom a state 29 assessment for clean water is collected may file an application 30 for a refund with the Iowa state dairy association. The 31 application shall to the extent allowed by federal law allow 32 the person to elect whether the refund is for the national 33 assessment or the state assessment for clean water or both. 34 The association shall forward the approved application for a 35 -6- LSB 5702YH (11) 89 da/ns 6/ 134

H.F. 2534 refund of the state assessment for clean water to the division 1 of soil conservation and water quality for payment. 2 Sec. 7. Section 179.6, Code 2022, is amended to read as 3 follows: 4 179.6 Records of producers , —— first purchasers. 5 Every producer shipping milk to a first purchaser outside of 6 Iowa who is not by agreement with the commission collecting the 7 tax state assessment for direct use or the state assessment for 8 clean water imposed by this chapter , and every first purchaser 9 within the state, and every producer distributing milk directly 10 to the consumer, shall keep a complete and accurate record of 11 all milk produced or purchased by the person during the period 12 for which an excise tax levy a state assessment is imposed 13 under this chapter . The records shall be in the form and 14 contain the information prescribed by the commission, shall be 15 preserved by the person charged with their making for a period 16 of two years, and shall be offered or submitted for inspection 17 at any time upon written or oral request by the commission or 18 its duly authorized agent or employee. 19 Sec. 8. Section 179.8, Code 2022, is amended to read as 20 follows: 21 179.8 Payment of expenses —— limitation. 22 1. No Any part of the expense incurred by the commission 23 shall not be paid out of moneys in the state treasury except 24 moneys transferred to the commission from the dairy industry 25 fund. Moneys transferred from the fund to the commission, as 26 provided in section 179.5 , shall be used for the payment of 27 all salaries and other expenses necessary to carry out the 28 provisions of this chapter . However, in no event shall the 29 total expenses exceed the total taxes amount collected from the 30 state assessment for direct use collected and transferred from 31 the fund to the commission. 32 2. No more than five percent of the excise tax collected 33 moneys collected from the state assessment for direct use and 34 received by the commission pursuant to section 179.5 shall be 35 -7- LSB 5702YH (11) 89 da/ns 7/ 134

H.F. 2534 utilized for administrative expenses of the commission. 1 Sec. 9. Section 179.9, Code 2022, is amended to read as 2 follows: 3 179.9 Investigations by commission. 4 The commission shall have the power to cause its authorized 5 agents to enter upon the premises of any person charged by this 6 chapter or by agreement with the commission with the collection 7 of the excise tax a state assessment for direct use or a state 8 assessment for clean water imposed by this chapter , and to 9 cause to be examined by any such agent any books, records, 10 documents, or other instruments bearing upon the amount of 11 moneys from such tax state assessment collected or to be 12 collected by such person; provided that the commission has 13 reasonable ground to believe that all moneys from the tax state 14 assessments herein levied has imposed have not been collected, 15 or if it has they have not been fully accounted for as herein 16 provided. 17 Sec. 10. Section 179.10, Code 2022, is amended to read as 18 follows: 19 179.10 Report. 20 The commission shall each year prepare and submit a report 21 summarizing the activities of the commission under this chapter 22 to the auditor of state and the secretary of agriculture . The 23 report shall show all income, expenses, and other relevant 24 information concerning fees the state assessment for direct 25 use collected and expended under this chapter . The report 26 shall also show the collection and transfer of moneys received 27 from any state assessment for clean water imposed under this 28 chapter. 29 Sec. 11. Section 179.13, Code 2022, is amended to read as 30 follows: 31 179.13 Referendum Initial referendum . 32 1. a. At a time designated by the commission within 33 eighteen months after termination of the national promotional 34 order made pursuant to the Dairy Production Stabilization 35 -8- LSB 5702YH (11) 89 da/ns 8/ 134

H.F. 2534 federal Act of 1983 , 7 U.S.C. §4501 et seq. , the commission 1 shall conduct a an initial referendum under administrative 2 procedures prescribed by the department. 3 2. b. Upon signing a statement certifying to the department 4 that the person is a bona fide producer as defined in this 5 chapter , each producer is entitled to one vote in each initial 6 referendum. When the secretary is required to determine the 7 approval or disapproval of producers under this section , the 8 secretary shall consider the approval or disapproval of a 9 cooperative association of producers, engaged in a bona fide 10 manner in marketing milk, as the approval or disapproval of the 11 producers who are members of or contract with the cooperative 12 association of producers. If a cooperative association 13 elects to vote on behalf of its members, the cooperative 14 association shall provide each producer on whose behalf the 15 cooperative association is expressing approval or disapproval 16 with a description of the question presented in the initial 17 referendum together with a statement of the manner in which 18 the cooperative association intends to cast its vote on behalf 19 of the membership. The information shall inform the producer 20 of procedures to follow to cast an individual ballot if the 21 producer chooses to do so within the period of time established 22 by the secretary for casting ballots. The notification shall 23 be made at least thirty days prior to the initial referendum 24 and shall include an official ballot. The ballots shall be 25 tabulated by the secretary and the vote of the cooperative 26 association shall be adjusted to reflect the individual votes. 27 3. c. The department shall count and tabulate the ballots 28 filed during the initial referendum within thirty days of the 29 close of the initial referendum. If from the tabulation the 30 department determines that a majority of the total number of 31 producers voting in the initial referendum favors the proposal, 32 the excise tax state assessment for direct use provided for in 33 this chapter shall be continued. The ballots cast pursuant 34 to this section constitute complete and conclusive evidence 35 -9- LSB 5702YH (11) 89 da/ns 9/ 134

H.F. 2534 for use in determinations made by the department under this 1 chapter . 2 4. 2. The secretary may conduct a special referendum at any 3 time after the Iowa dairy industry commission is reactivated, 4 and shall hold a conduct a special referendum on request upon 5 receiving a petition of a representative group comprising ten 6 percent or more of the number of producers eligible to vote, 7 to determine whether the producers favor the termination or 8 suspension or termination of the excise tax state assessment 9 for direct use . The secretary shall suspend or terminate 10 collection of the excise tax within state assessment for direct 11 use no later than six months after the secretary determines 12 that suspension or termination of the excise tax state 13 assessment is favored by a majority of the producers voting 14 in the special referendum, and shall suspend or terminate the 15 excise tax state assessment in an orderly manner as soon as 16 practicable after the determination. 17 Sec. 12. NEW SECTION . 179.13A Referendums and special 18 questions —— establishment, increase, or termination of state 19 assessment. 20 1. a. If a state assessment for direct use is established, 21 and 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 conduct 24 a special referendum to determine whether to establish a state 25 assessment for clean water. 26 b. Upon receipt of a petition of producers that otherwise 27 complies with requirements to conduct an initial referendum 28 under section 179.13, the secretary shall include as part of 29 the initial referendum conducted pursuant to section 179.13, 30 subsection 1, a separate special question whether to establish 31 a state assessment for clean water, if the secretary determines 32 the inclusion of the special question is cost-effective or the 33 petition demands inclusion. 34 c. The secretary shall conduct the special referendum under 35 -10- LSB 5702YH (11) 89 da/ns 10/ 134

H.F. 2534 this subsection or include the special question as part of an 1 initial or special referendum conducted under section 179.13, 2 subsection 1, in consultation with the commission and which 3 may be based on the same procedures for conducting an initial 4 referendum under section 179.13. 5 d. If the secretary determines that the establishment of 6 a state assessment for clean water is favored by a majority 7 of the producers voting in a special referendum under this 8 subsection or in an initial referendum conducted under section 9 179.13, subsection 1, that includes a special question as 10 provided in paragraph “b” , the state assessment shall commence 11 on a date determined by the secretary after consultation with 12 the commission but not later than six months after the date 13 that the special or initial referendum was conducted. 14 2. a. If a national assessment is being collected, and upon 15 receipt of a petition of producers that otherwise complies with 16 requirements to conduct an initial referendum under section 17 179.13, subsection 1, the secretary shall conduct a special 18 referendum to determine whether to establish a state assessment 19 for clean water. 20 b. Upon receipt of a petition of producers that otherwise 21 complies with requirements to conduct an initial referendum 22 under section 179.13, subsection 1, the secretary shall include 23 as part of the referendum to establish a national assessment, 24 a separate special question whether to establish a state 25 assessment for clean water, if the secretary determines the 26 inclusion of the special question complies with federal law and 27 either is cost-effective or the petition demands inclusion. 28 c. The secretary shall conduct the special referendum under 29 this subsection or include the special question as part of a 30 referendum to establish a national referendum in consultation 31 with the Iowa state dairy association and which may be based on 32 the same procedures for conducting an initial referendum under 33 section 179.13, subsection 1, or a referendum to establish a 34 national assessment. 35 -11- LSB 5702YH (11) 89 da/ns 11/ 134

H.F. 2534 d. If the secretary determines that the establishment of a 1 state assessment for clean water is favored by a majority of 2 the producers voting in a special referendum conducted under 3 paragraph “a” or a referendum to establish a national assessment 4 that includes a special question as provided in paragraph “b” , 5 the state assessment shall commence on a date determined by 6 the secretary after consultation with the Iowa state dairy 7 association but not later than six months after the date that 8 the special referendum or referendum establishing a national 9 assessment was conducted. 10 3. a. If the rate of the national assessment has been 11 increased, and upon receipt of a petition of producers that 12 otherwise complies with requirements to conduct an initial 13 referendum under section 179.13, subsection 1, the secretary 14 shall conduct a special referendum to determine whether to 15 increase the rate of the state assessment for clean water to 16 a rate established by the Iowa state dairy association not to 17 exceed the rate of the national assessment. 18 b. Upon receipt of a petition of producers that otherwise 19 complies with requirements to conduct an initial referendum 20 under section 179.13, subsection 1, the secretary shall include 21 as part of a referendum to increase the rate of the national 22 assessment, a separate special question whether to increase 23 the rate of the state assessment for clean water at a rate 24 established by the Iowa state dairy association not to exceed 25 the increase in the national assessment, if the secretary 26 determines the inclusion of the special question complies 27 with federal law and is either cost-effective or the petition 28 demands inclusion. 29 c. The secretary shall conduct the special referendum under 30 this subsection, or include the special question as part of a 31 referendum to increase the national assessment, in consultation 32 with the Iowa state dairy association and which may be based on 33 the same procedures for conducting an initial referendum under 34 section 179.13, subsection 1, or a referendum to increase the 35 -12- LSB 5702YH (11) 89 da/ns 12/ 134

H.F. 2534 rate of the national assessment. 1 d. If the national assessment is increased, and the 2 secretary determines that an increase in the state assessment 3 for clean water is favored by a majority of the producers 4 voting in a special referendum or referendum to increase 5 the rate of the national assessment, the rate of the state 6 assessment shall be increased on a date determined by the 7 secretary after consultation with the Iowa state dairy 8 association but not later than six months after the date that 9 the special referendum or referendum establishing a national 10 assessment was conducted. If a special referendum or special 11 question to increase the rate of the state assessment for clean 12 water does not pass, the result of the vote shall not affect 13 the existence or length of the period when the state assessment 14 is in effect. 15 4. a. If a state assessment for direct use is imposed, 16 and upon receipt of a petition of producers that otherwise 17 complies with requirements to conduct a special referendum 18 under section 179.13, subsection 2, the secretary shall conduct 19 a special referendum to determine whether to terminate the 20 state assessment for clean water. 21 b. Upon receipt of a petition of producers that otherwise 22 complies with requirements to conduct a special referendum 23 under section 179.13, subsection 2, the secretary shall include 24 as part of a special referendum to suspend or terminate the 25 state assessment for direct use conducted pursuant to section 26 179.13, subsection 2, a separate special question whether 27 to terminate the state assessment for clean water, if the 28 secretary determines the inclusion of the special question is 29 cost-effective or the petition demands inclusion. 30 c. The secretary shall conduct the special referendum under 31 this subsection or include the special question as part of a 32 special referendum conducted under section 179.13, subsection 33 2, in consultation with the commission and which may be based 34 on the same procedures for conducting a special referendum 35 -13- LSB 5702YH (11) 89 da/ns 13/ 134

H.F. 2534 under section 179.13, subsection 2. 1 d. If the secretary determines that the termination of 2 a state assessment for clean water is favored by a majority 3 of the producers voting in a special referendum under this 4 subsection, or a special referendum conducted under section 5 179.13, subsection 2, the state assessment shall terminate on a 6 date determined by the secretary after consultation with the 7 commission but not later than six months after the date that 8 the special or initial referendum was conducted. The secretary 9 shall terminate the state assessment in an orderly manner as 10 soon as practical. 11 5. The secretary shall terminate the state assessment for 12 clean water upon determining that the state assessment for 13 direct use and the national assessment are terminated. The 14 secretary shall terminate the state assessment for clean water 15 in an orderly manner as soon as practical. 16 DIVISION II 17 IOWA BEEF CATTLE PRODUCERS ASSOCIATION —— EXECUTIVE COMMITTEE 18 Sec. 13. Section 181.1, subsection 10, Code 2022, is amended 19 to read as follows: 20 10. “State assessment” means an excise tax on the sale of 21 cattle imposed pursuant to this chapter which may include a 22 state assessment for direct use and a state assessment for 23 clean water . 24 Sec. 14. Section 181.2, Code 2022, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 5. Cooperate with the division of soil 27 conservation and water quality of the department of agriculture 28 and land stewardship in transferring moneys collected from 29 the state assessment for clean water to the clean water 30 fund created in section 466B.51 and for being reimbursed for 31 reasonable expenses incurred in conducting an initial or 32 special referendum to establish, continue, or terminate a state 33 assessment for clean water. 34 Sec. 15. Section 181.7A, Code 2022, is amended to read as 35 -14- LSB 5702YH (11) 89 da/ns 14/ 134

H.F. 2534 follows: 1 181.7A Commencement of federal assessment —— suspension and 2 recommencement of state assessment —— rate. 3 1. Prior to the commencement of the collection of 4 the federal assessment, the executive committee may seek 5 certification as a qualified state beef council within the 6 meaning of the federal Act. 7 2. The executive committee shall suspend the state 8 assessment for direct use upon collection of the federal 9 assessment. The state assessment for direct use shall 10 recommence upon the earlier of the following: 11 a. The noncollection of the federal assessment. The 12 recommenced state assessment for direct use shall be imposed 13 for a four-year period. Its effective date shall be the first 14 date for which the federal assessment is not collected. 15 b. The passage of a special referendum pursuant to section 16 181.19 regardless of whether a federal assessment is being 17 collected. 18 3. The rate of the recommenced state assessment shall be the 19 same as the rate that was last in effect under section 181.19 20 immediately prior to the suspension of the state assessment. 21 4. The state assessment for clean water shall continue to be 22 imposed during any period of suspension of the state assessment 23 for direct use so long as the state assessment for clean water 24 is not terminated pursuant to section 181.19A. 25 Sec. 16. Section 181.8, Code 2022, is amended to read as 26 follows: 27 181.8 Executive committee —— entering premises —— examining 28 records. 29 The executive committee may authorize its agents to enter 30 at a reasonable time upon the premises of any purchaser 31 charged by this chapter with remitting the a state assessment 32 for direct use or a state assessment for clean water to the 33 executive committee , and to . The agents may examine records 34 and other instruments relating to the collection of the a state 35 -15- LSB 5702YH (11) 89 da/ns 15/ 134

H.F. 2534 assessment. However, the executive committee must first have 1 reasonable grounds to believe that the a state assessment has 2 not been remitted or fully accounted for. 3 Sec. 17. Section 181.11, Code 2022, is amended to read as 4 follows: 5 181.11 Collection of state assessment assessments . 6 1. A state assessment for direct use or a state assessment 7 for clean water imposed as provided in this chapter shall be 8 levied and collected from the purchaser on each sale of cattle 9 at a rate provided in this chapter . The state assessment for 10 direct use or a state assessment for clean water shall be 11 imposed on any person selling cattle and shall be deducted 12 by the purchaser from the price paid to the seller. The 13 purchaser, at the time of the sale, shall make and deliver to 14 the seller a separate invoice for each sale showing the names 15 and addresses of the seller and the purchaser, the number of 16 cattle sold, and the date of sale. The purchaser shall forward 17 the state assessment for direct use and any state assessment 18 for clean water to the executive committee at a time prescribed 19 by the executive committee, but not later than the last day of 20 the month following the end of the prior reporting period in 21 which the cattle are sold. 22 2. The executive committee may enter into arrangements with 23 persons purchasing cattle outside of this state for remitting 24 the state assessment for direct use and any state assessment 25 for clean water by such purchasers. 26 Sec. 18. Section 181.12, Code 2022, is amended to read as 27 follows: 28 181.12 Remission of state assessment assessments on 29 application. 30 1. a. A person from whom a state assessment for direct 31 use is collected may, by written application filed with the 32 executive committee within ninety days after its collection, 33 have the amount remitted to the person by the executive 34 committee. 35 -16- LSB 5702YH (11) 89 da/ns 16/ 134

H.F. 2534 b. A person from whom a state assessment for clean water is 1 collected may, by written application filed with the council 2 as provided in paragraph “a” , have the amount remitted to the 3 person by the division of soil conservation and water quality 4 of the department of agriculture and land stewardship. Within 5 sixty days after its collection, the council shall transmit any 6 approved application to the division for a refund payment. 7 2. The information that the a state assessment described 8 in subsection 1 is refundable and the address of the executive 9 committee to which application for a refund may be made shall 10 appear on the invoice of sale form supplied by the purchaser to 11 the producer near the area on the form which shows the amount 12 of the state assessment paid. 13 3. a. The executive committee shall furnish uniform 14 application for refund forms and make the refund forms readily 15 available to all producers. 16 b. The form shall allow the applicant to elect whether the 17 refund is for the state assessment for direct use or the state 18 assessment for clean water or both. The council shall not 19 approve an application unless the application indicates the 20 election. A purchaser charged by this chapter with remitting 21 the a state assessment shall make the forms readily available 22 to all producers. 23 Sec. 19. Section 181.13, Code 2022, is amended to read as 24 follows: 25 181.13 Administration of moneys originating from state 26 assessment assessments —— appropriation. 27 1. a. All moneys, other than moneys from the state 28 assessments imposed , collected assessment for clean water under 29 this chapter shall be paid to and collected by the executive 30 committee and deposited with the treasurer of state in a 31 separate cattle promotion fund which shall be created by the 32 treasurer of state. The department of administrative services 33 shall transfer moneys from the fund to the executive committee 34 for deposit into an account established by the executive 35 -17- LSB 5702YH (11) 89 da/ns 17/ 134

H.F. 2534 committee in a qualified financial institution. The department 1 shall transfer the moneys as provided in a resolution adopted 2 by the executive committee. However, the department is only 3 required to transfer moneys once during each day and only 4 during hours when the offices of the state are open. From 5 the moneys , other than moneys from the state assessment for 6 clean water, collected, deposited, and transferred to the 7 executive committee, in accordance with the provisions of this 8 chapter , the executive committee shall first pay the costs 9 of referendums held pursuant to this chapter , the costs of 10 collection of such state assessments, and the expenses of its 11 agents. At least ten percent of the remaining moneys shall 12 be remitted to the association in proportions determined by 13 the executive committee, for use in a manner not inconsistent 14 with section 181.7 . The remaining moneys, with approval of a 15 majority of the executive committee, shall be expended as the 16 executive committee finds necessary to carry out the provisions 17 and purposes of this chapter . However, in no event shall the 18 total expenses exceed the total amount transferred from the 19 fund for use by the executive committee. 20 2. b. All moneys deposited in the cattle promotion fund and 21 transferred to the executive committee pursuant to this section 22 are appropriated and shall be used for the administration 23 of this chapter and for the payment of claims based upon 24 obligations incurred in the performance of activities and 25 functions set forth in this chapter . 26 3. c. If the state assessment for direct use is suspended 27 as provided in section 181.7A or a continuance special 28 referendum to continue the state assessment for clean water 29 fails to pass as provided in section 181.19A , moneys remaining 30 in the cattle promotion fund and transferred to the executive 31 committee shall continue to be transferred and expended in 32 accordance with the provisions of this chapter until exhausted. 33 2. a. All moneys collected from the state assessment for 34 clean water imposed under this chapter shall be paid to and 35 -18- LSB 5702YH (11) 89 da/ns 18/ 134