Senate Study Bill 3135 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON ZUMBACH) A BILL FOR An Act establishing a dairy processing and milk production 1 innovation and revitalization fund and program to be 2 administered by the economic development authority, in 3 consultation with the department of agriculture and land 4 stewardship, and creating a task force to explore the 5 feasibility of establishing an artisanal dairy processing 6 program at a community college or at an institution governed 7 by the state board of regents. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 5405XC (1) 89 da/ns

S.F. _____ Section 1. NEW SECTION . 15E.371 Dairy processing and milk 1 production innovation and revitalization fund and program. 2 1. As used in this section unless the context otherwise 3 requires: 4 a. “Department” means the department of agriculture and land 5 stewardship. 6 b. “Financial assistance” means assistance provided only 7 from the funds and assets legally available to the authority 8 pursuant to this section and includes assistance in the form of 9 grants, low-interest loans, and forgivable loans. 10 c. “Fund” means the dairy processing and milk production 11 innovation and revitalization fund. 12 d. “Located in” means the place or places at which 13 a business’s operations are located and where at least 14 ninety-eight percent of the business’s employees work, or where 15 employees that are paid at least ninety-eight percent of the 16 business’s payroll work. 17 e. “Program” means the dairy processing and milk production 18 innovation and revitalization program. 19 2. a. The fund is created in the state treasury under 20 the control of the authority and consists of any moneys 21 appropriated to the fund by the general assembly and any 22 other moneys available to or obtained or accepted by the 23 authority for placement in the fund. Moneys in the fund are 24 appropriated to the authority to award financial assistance as 25 provided under the program. The authority shall use any moneys 26 specifically appropriated for purposes of this section only for 27 the purposes of the program. 28 b. Notwithstanding section 8.33, moneys in the fund 29 that remain unencumbered or unobligated at the close of the 30 fiscal year shall not revert but shall remain available for 31 expenditure for the purposes designated until the close of the 32 succeeding fiscal year. 33 3. The authority, in consultation with the department, 34 shall establish and administer the program for the purpose of 35 -1- LSB 5405XC (1) 89 da/ns 1/ 6

S.F. _____ awarding financial assistance to eligible businesses engaged in 1 projects that do all of the following: 2 a. Expand or refurbish existing milk plants or establish a 3 new milk plant, operating pursuant to a permit issued pursuant 4 to section 192.111. 5 b. Expand or refurbish existing mobile dairy processing 6 units, or establish new mobile dairy processing units. 7 c. Rent building, refrigeration facilities, freezer 8 facilities, or equipment necessary to expand dairy processing 9 capacity, including mobile dairy or refrigeration units used 10 exclusively for dairy processing. 11 d. Incorporate methods and technologies that reduce farm 12 labor associated with milk production and storage, including 13 but not limited to the use of robotics and processes or systems 14 that operate using computerized equipment or machinery. 15 4. The authority, in consultation with the department, 16 shall establish eligibility criteria for the program by rule. 17 The eligibility criteria must include all of the following: 18 a. The business must be located in this state. 19 b. The business must not have been subject to any regulatory 20 enforcement action related to federal, state, or local 21 environmental, worker safety, food processing, or food safety 22 laws, rules, or regulations within the last five years. 23 c. The business must only employ individuals legally 24 authorized to work in this state. 25 d. The business must not currently be in bankruptcy. 26 e. The business must employ less than fifty individuals. 27 5. A business seeking financial assistance under this 28 section shall make application to the authority in the manner 29 prescribed by the authority by rule. 30 6. Applications shall be accepted during one or more 31 annual application periods to be determined by the authority 32 by rule. Upon reviewing and scoring all applications that are 33 received during an application period, and subject to funding, 34 the authority may, in consultation with the department, award 35 -2- LSB 5405XC (1) 89 da/ns 2/ 6

S.F. _____ financial assistance to eligible businesses. A financial 1 assistance award shall not exceed the amount of eligible 2 project costs included in the eligible business’s application. 3 Priority shall be given to eligible businesses whose proposed 4 project under subsection 3 will do any of the following: 5 a. Create new jobs. 6 b. Create or expand opportunities for local small-scale milk 7 producers to market pasteurized milk and milk products under 8 private labels. 9 c. Provide greater flexibility or convenience for local 10 small-scale farmers to have milk processed. 11 d. Reduce labor associated with the on-farm production and 12 storage of milk. 13 7. A business that is awarded financial assistance under 14 this section may apply for financial assistance under other 15 programs administered by the authority. 16 8. The authority shall, in consultation with the 17 department, adopt rules pursuant to chapter 17A to administer 18 this section. 19 Sec. 2. TASK FORCE —— ARTISANAL DAIRY PROCESSING PROGRAM. 20 1. The artisanal dairy processing program task force 21 is created within the department of agriculture and land 22 stewardship for the purpose of exploring the feasibility 23 of establishing an artisanal dairy processing program at a 24 community college or at an institution governed by the state 25 board of regents. 26 2. Members of the task force shall include all of the 27 following: 28 a. The secretary of agriculture or a designee of the 29 secretary, who shall serve as chairperson. 30 b. One member appointed by the president of northeast Iowa 31 community college. The member must be experienced in dairy 32 science or the dairy business. 33 c. Two members appointed by the president of Iowa state 34 university of science and technology. The members must be 35 -3- LSB 5405XC (1) 89 da/ns 3/ 6

S.F. _____ knowledgable about dairy science or the dairy business. One of 1 the members must be associated with the university’s extension 2 and outreach programs. 3 d. One member of the economic development authority 4 appointed by the director of the authority. The member must be 5 knowledgable regarding state finance programs. 6 e. Two members appointed by the executive director of the 7 Iowa state dairy association. The members must be actively 8 engaged in milk production. 9 f. Two members appointed by the secretary of agriculture. 10 The members must own or operate a milk plant. One of the 11 members must own or operate a small-to-medium-scale milk plant. 12 3. The members shall not be entitled to a per diem as 13 specified in section 7E.6. Members shall not be entitled to 14 actual and necessary expenses incurred while engaged in their 15 official duties. 16 4. The department of agriculture and land stewardship shall 17 provide the task force with staff and administrative support. 18 5. The task force shall consider staffing and equipment 19 requirements, potential enrollment numbers, overall employment 20 outlook for graduates, apprenticeship and internship 21 opportunities, program costs, curriculum, and regulatory and 22 legal requirements. 23 6. The task force shall submit a report by December 31, 24 2022, to the general assembly that includes the task force’s 25 findings and recommendations. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanation’s substance by the members of the general assembly. 29 This bill establishes a dairy processing and milk production 30 innovation and revitalization fund (fund) and program (program) 31 to be administered by the economic development authority 32 (authority), in consultation with the department of agriculture 33 and land stewardship (department), and creates a task force 34 to explore the feasibility of establishing an artisanal dairy 35 -4- LSB 5405XC (1) 89 da/ns 4/ 6

S.F. _____ processing program at a community college or at an institution 1 governed by the state board of regents. 2 The bill creates the fund in the state treasury under 3 the control of the authority, which consists of any moneys 4 appropriated to the fund by the general assembly and any other 5 moneys available to the authority for placement in the fund. 6 Moneys in the fund are appropriated to provide financial 7 assistance (assistance) as provided under the program. 8 “Financial assistance” is defined to include assistance in the 9 form of grants, low-interest loans, and forgivable loans. 10 The authority must use any moneys specifically appropriated 11 to the program only for purposes of supporting the program. 12 The appropriated moneys that remain unencumbered or unobligated 13 at the close of the fiscal year do not revert but remain 14 available for expenditure for the program until the close of 15 the succeeding fiscal year. 16 The authority, in consultation with the department, must 17 establish and administer the program for the purpose of 18 awarding assistance to eligible businesses for projects that 19 expand or refurbish an existing, or establish a new, milk 20 plant; expand or refurbish an existing, or establish a new, 21 mobile dairy processing unit; rent buildings, refrigeration 22 facilities, freezer facilities, or equipment necessary 23 to expand processing capacity, including mobile dairy or 24 refrigeration units; or incorporate methods and technologies 25 that reduce farm labor associated with milk production and 26 storage. 27 The authority, in consultation with the department, must 28 establish eligibility criteria for the program by rule, and 29 the criteria must include the requirements detailed in the 30 bill. A business seeking assistance under the program must 31 make application to the authority in the manner prescribed 32 by the authority by rule. Applications must be accepted 33 during one or more annual application periods determined 34 by the authority by rule. After reviewing and scoring all 35 -5- LSB 5405XC (1) 89 da/ns 5/ 6

S.F. _____ applications received during an application period, and subject 1 to funding, the authority, in consultation with the department, 2 may award assistance to eligible businesses. A financial 3 assistance award cannot exceed the amount of eligible project 4 costs included in an eligible business’s application. The 5 bill requires that priority be given to eligible businesses 6 whose proposed project will create new jobs; create or 7 expand opportunities for local small-scale milk producers 8 to market pasteurized milk and milk products under private 9 labels; provide greater flexibility or convenience for local 10 small-scale farmers to have milk processed; and reduce labor 11 associated with the on-farm production and storage of milk. 12 A business that is awarded assistance under the program may 13 apply for assistance under other programs administered by the 14 authority. 15 The authority, in consultation with the department, is 16 required to adopt rules to administer the fund and program. 17 An artisanal dairy processing program task force is 18 created within the department for the purpose of exploring 19 the feasibility of establishing an artisanal dairy processing 20 program at a community college or at an institution governed 21 by the state board of regents. Members of the task force 22 must include the secretary of agriculture or a designee and 23 representatives of various groups and organizations interested 24 in dairy processing and milk production. The department 25 must provide the task force with staff and administrative 26 support. The task force must consider staffing and equipment 27 requirements, potential enrollment numbers, overall employment 28 outlook for graduates, apprenticeship and internship 29 opportunities, program costs, curriculum, and regulatory and 30 legal requirements. 31 The bill requires the task force to submit a report by 32 December 31, 2022, to the general assembly that includes the 33 task force’s findings and recommendations. 34 -6- LSB 5405XC (1) 89 da/ns 6/ 6