H.F. _____ Section 1. NEW SECTION . 15E.371 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 authority 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 authority and consists of any moneys 17 appropriated to the fund by the general assembly and any 18 other moneys available to or obtained or accepted by the 19 authority for placement in the fund. Moneys in the fund are 20 appropriated to the authority to award financial assistance as 21 provided under the program. The authority 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 authority shall establish and administer the program 30 for the purpose of awarding financial assistance to eligible 31 businesses engaged in projects that do all of the following: 32 a. Expand or refurbish existing milk plants or establish a 33 new milk plant, operating pursuant to a permit issued pursuant 34 to section 192.111. 35 -1- LSB 2145YC (3) 90 da/ns 1/ 4

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

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

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