H.F. 580 Section 1. NEW SECTION . 159.31A Dairy innovation fund and 1 program. 2 1. As used in this section unless the context otherwise 3 requires: 4 a. “Financial assistance” means assistance provided only 5 from the moneys and assets legally available to the department 6 pursuant to this section and includes assistance in the form of 7 grants, low-interest loans, and forgivable loans. 8 b. “Fund” means the dairy innovation fund. 9 c. “Located in” means the place or places at which 10 a business’s operations are located and where at least 11 ninety-eight percent of the business’s employees work, or where 12 employees that are paid at least ninety-eight percent of the 13 business’s payroll work. 14 d. “Program” means the dairy innovation program. 15 2. a. The fund is created in the state treasury under 16 the control of the department and consists of any moneys 17 appropriated to the fund by the general assembly and any other 18 moneys available to or obtained or accepted by the department 19 for placement in the fund. Moneys in the fund are appropriated 20 to the department to award financial assistance as provided 21 under the program. The department shall use any moneys 22 specifically appropriated for purposes of this section only for 23 the purposes of the program. 24 b. Notwithstanding section 8.33, moneys in the fund 25 that remain unencumbered or unobligated at the close of the 26 fiscal year shall not revert but shall remain available for 27 expenditure for the purposes designated until the close of the 28 succeeding fiscal year. 29 3. The department shall establish and administer the 30 program for the purpose of awarding financial assistance to 31 eligible businesses engaged in projects that do all of the 32 following: 33 a. Expand or refurbish existing milk plants or establish a 34 new milk plant, operating pursuant to a permit issued pursuant 35 -1- LSB 2145HV (2) 90 da/ns 1/ 4

H.F. 580 to section 192.111. 1 b. Expand or refurbish existing mobile dairy processing 2 units, or establish new mobile dairy processing units. 3 c. Rent buildings, refrigeration facilities, freezer 4 facilities, or equipment necessary to expand dairy processing 5 capacity, including mobile dairy or refrigeration units used 6 exclusively for dairy processing. 7 d. Incorporate methods and technologies that reduce farm 8 labor associated with milk production and storage, including 9 but not limited to the use of robotics and processes or systems 10 that operate using computerized equipment or machinery. 11 4. The department shall establish eligibility criteria for 12 the program by rule. The eligibility criteria must include all 13 of the following: 14 a. The business must be located in this state. 15 b. The business must not have been subject to any regulatory 16 enforcement action related to federal, state, or local 17 environmental, worker safety, food processing, or food safety 18 laws, rules, or regulations within the last five years. 19 c. The business must only employ individuals legally 20 authorized to work in this state. 21 d. The business must not currently be in bankruptcy. 22 e. The business must employ less than fifty individuals. 23 5. A business seeking financial assistance under this 24 section shall make application to the department in the manner 25 prescribed by the department by rule. 26 6. Applications shall be accepted during one or more annual 27 application periods to be determined by the department by 28 rule. Upon reviewing and scoring all applications that are 29 received during an application period, and subject to funding, 30 the department may award financial assistance to eligible 31 businesses. A financial assistance award shall not exceed 32 the amount of eligible project costs included in the eligible 33 business’s application. Priority shall be given to eligible 34 businesses whose proposed project under subsection 3 will do 35 -2- LSB 2145HV (2) 90 da/ns 2/ 4

H.F. 580 any of the following: 1 a. Create new jobs. 2 b. Create or expand opportunities for local small-scale milk 3 producers to market pasteurized milk and milk products under 4 private labels. 5 c. Provide greater flexibility or convenience for local 6 small-scale farmers to have milk processed. 7 d. Reduce labor associated with the on-farm production and 8 storage of milk. 9 7. A business that is awarded financial assistance under 10 this section may apply for financial assistance under other 11 programs administered by the authority. 12 8. The department shall adopt rules pursuant to chapter 17A 13 to administer this section. 14 Sec. 2. DIRECTIONS TO CODE EDITOR —— NEW PART. The Code 15 editor is directed to organize section 159.31A, as enacted in 16 this Act, as a new part under chapter 159, subchapter II. 17 EXPLANATION 18 The inclusion of this explanation does not constitute agreement with 19 the explanation’s substance by the members of the general assembly. 20 This bill establishes a dairy innovation fund (fund) and 21 dairy innovation program (program) to be administered by the 22 department of agriculture and land stewardship (DALS). 23 The bill creates the fund in the state treasury under the 24 control of DALS, which consists of any moneys appropriated to 25 the fund by the general assembly and any other moneys available 26 to DALS for placement in the fund. Moneys in the fund are 27 appropriated to provide financial assistance (assistance) as 28 provided under the program. “Financial assistance” is defined 29 to include assistance in the form of grants, low-interest 30 loans, and forgivable loans. 31 DALS must use any moneys specifically appropriated to the 32 program only for purposes of supporting the program. The 33 appropriated moneys that remain unencumbered or unobligated 34 at the close of the fiscal year do not revert but remain 35 -3- LSB 2145HV (2) 90 da/ns 3/ 4

H.F. 580 available for expenditure for the program until the close of 1 the succeeding fiscal year. 2 DALS must establish and administer the program for the 3 purpose of awarding assistance to eligible businesses for 4 projects that expand or refurbish an existing, or establish 5 a new, milk plant; expand or refurbish an existing, or 6 establish a new, mobile dairy processing unit; rent buildings, 7 refrigeration facilities, freezer facilities, or equipment 8 necessary to expand processing capacity, including mobile 9 dairy or refrigeration units; and incorporate methods and 10 technologies that reduce farm labor associated with milk 11 production and storage. 12 DALS must establish eligibility criteria for the program 13 by rule, and the criteria must include the requirements 14 detailed in the bill. A business seeking assistance under the 15 program must make application to DALS in the manner prescribed 16 by DALS by rule. Applications must be accepted during one 17 or more annual application periods determined by DALS by 18 rule. After reviewing and scoring all applications received 19 during an application period, and subject to funding, DALS 20 may award assistance to eligible businesses. A financial 21 assistance award cannot exceed the amount of eligible project 22 costs included in an eligible business’s application. The 23 bill requires that priority be given to eligible businesses 24 whose proposed project will create new jobs; create or 25 expand opportunities for local small-scale milk producers 26 to market pasteurized milk and milk products under private 27 labels; provide greater flexibility or convenience for local 28 small-scale farmers to have milk processed; and reduce labor 29 associated with the on-farm production and storage of milk. 30 DALS is required to adopt rules to administer the fund and 31 program. 32 -4- LSB 2145HV (2) 90 da/ns 4/ 4