S.F. _____ H.F. _____ DIVISION I 1 IOWA-FOALED HORSES 2 Section 1. Section 99D.22, subsection 2, paragraph b, 3 subparagraph (3), Code 2024, is amended to read as follows: 4 (3) (a) Continuous For a thoroughbred foal, continuous 5 residency from December 31 until the foal is inspected if the 6 mare was bred by other than an Iowa registered stallion and is 7 not bred back to an Iowa registered stallion. 8 (b) For a standardbred foal or quarter horse foal, 9 continuous residency from January 31 until the foal is 10 inspected if the mare was bred by other than an Iowa registered 11 stallion and is not bred back to an Iowa registered stallion. 12 DIVISION II 13 AGRICULTURAL MARKETING 14 PART A 15 CHOOSE IOWA PROMOTIONAL PROGRAM 16 Sec. 2. Section 159.26, Code 2024, is amended by striking 17 the section and inserting in lieu thereof the following: 18 159.26 Definitions. 19 As used in this part, unless the context otherwise requires: 20 1. “Agricultural commodity” means an animal or plant, or raw 21 material originating from an animal or plant. 22 2. “Component” means an agricultural commodity that is 23 combined to form a product during processing. 24 3. “Farm” means land and associated structures used to 25 produce an agricultural commodity. 26 4. “Food item” means an agricultural commodity, or an item 27 processed from an agricultural commodity, that is fit for human 28 consumption. 29 5. “Fund” means the choose Iowa program fund established in 30 section 159.31. 31 6. “Horticulture item” means any of the following: 32 a. A nursery, floral, or greenhouse plant. 33 b. A product processed from a nursery, floral, or greenhouse 34 plant, including a seed, rooting, cutting, tissue culture, 35 -1- LSB 5372XD (5) 90 da/ns 1/ 12

S.F. _____ H.F. _____ seedling, or other propagation material. 1 7. “Natural fiber item” means fiber originating from 2 an agricultural commodity for use in processing, including 3 manufacturing into a textile, apparel, or other similar 4 product. 5 8. “Process” means to prepare a product that includes an 6 agricultural commodity alone or as a component. 7 9. a. “ Product” means an agricultural commodity that in its 8 raw or processed state is moveable at the time of its retail 9 sale. 10 b. “Product” includes but is not limited to a food item, 11 horticulture item, or natural fiber item. 12 10. “Program” means the choose Iowa promotional program 13 established in section 159.28. 14 Sec. 3. Section 159.28, Code 2024, is amended to read as 15 follows: 16 159.28 Choose Iowa promotional program. 17 1. The department shall establish and administer a choose 18 Iowa promotional program to advertise for retail sale on a 19 retail basis a food item that originates as an agricultural 20 commodity produced on an Iowa farm, and an Iowa product that 21 may include any of the following: 22 a. An agricultural commodity produced on an Iowa farm , 23 except that it may be prepared for sale by washing or packaging 24 in this state. 25 b. A product, if it is An agricultural commodity processed 26 in this state and any of its ingredients , if its components 27 originate as an agricultural commodity produced on an Iowa 28 farm. 29 2. a. The department may adopt rules further defining an 30 Iowa farm , Iowa agricultural commodity, and Iowa product; and 31 describing how an Iowa agricultural commodity originates on an 32 Iowa farm. 33 b. The department may adopt rules providing for the 34 acceptable use of ingredients originating a component that 35 -2- LSB 5372XD (5) 90 da/ns 2/ 12

S.F. _____ H.F. _____ originates from an agricultural commodities commodity not 1 produced on an Iowa farms farm . In adopting the rules, the 2 department may consider whether the ingredient component is 3 an incidental additive or other component that the department 4 determines is or insignificant part of an Iowa product . 5 Sec. 4. Section 159.29, subsections 1 and 5, Code 2024, are 6 amended to read as follows: 7 1. As part of the choose Iowa promotional program, the 8 department may establish a choose Iowa logo to identify a food 9 item originating as an agricultural commodity produced on an 10 Iowa farm an Iowa product . 11 5. The use of a choose Iowa logo does not do any of the 12 following: 13 a. Provide an express or implied guarantee or warranty 14 concerning the safety, fitness, merchantability, or use of a 15 food item product . 16 b. Supersede, revise, or replace a state or federal labeling 17 requirement, including but not limited to a provision in the 18 federal Fair Packaging and Labeling Act, 15 U.S.C. §1451 et 19 seq. 20 c. Indicate the grade, specification, standard, or value of 21 any food item agricultural commodity, component, or product . 22 Sec. 5. Section 159.31, subsection 1, Code 2024, is amended 23 to read as follows: 24 1. A choose Iowa promotional fund is established in 25 the state treasury under the management and control of the 26 department. 27 PART B 28 DAIRY INNOVATION 29 Sec. 6. Section 159.31A, subsection 3, paragraphs a and c, 30 Code 2024, are amended to read as follows: 31 a. Expand or refurbish existing milk plants or establish a 32 new milk plant, operating pursuant to a permit issued pursuant 33 to section 192.111 or 194.3A . 34 c. Rent buildings, refrigeration facilities, or freezer 35 -3- LSB 5372XD (5) 90 da/ns 3/ 12

S.F. _____ H.F. _____ facilities, or acquire equipment , if necessary to expand dairy 1 processing capacity, including mobile dairy or refrigeration 2 units used exclusively for dairy processing. 3 Sec. 7. Section 159.31A, subsection 7, Code 2024, is amended 4 to read as follows: 5 7. A business that is awarded financial assistance under 6 this section may apply for financial assistance under other 7 programs administered by the authority department . 8 PART C 9 VALUE-ADDED AGRICULTURAL GRANT FUND AND PROGRAM 10 Sec. 8. NEW SECTION . 159.31C Value-added agricultural grant 11 program fund. 12 1. A value-added agricultural grant program fund is 13 established in the state treasury under the management and 14 control of the department. 15 2. The fund shall include moneys appropriated by the general 16 assembly and other moneys available to and obtained or accepted 17 by the department, including moneys from public or private 18 sources. 19 3. Moneys in the fund are appropriated to the department for 20 the purpose of supporting the value-added agricultural grant 21 program established in section 159.31D. 22 4. a. Notwithstanding section 12C.7, interest or earnings 23 on moneys in the fund shall be credited to the fund. 24 b. Notwithstanding section 8.33, moneys in the fund that 25 remain unencumbered or unobligated at the end of a fiscal year 26 shall not revert. 27 Sec. 9. NEW SECTION . 159.31D Value-added agricultural grant 28 program. 29 There is established a value-added agricultural grant 30 program to identify, evaluate, and support projects and 31 services that add value to agricultural commodities produced 32 on Iowa farms, including by supporting new technologies and 33 marketing strategies. The department shall adopt rules as 34 necessary to administer the program. 35 -4- LSB 5372XD (5) 90 da/ns 4/ 12

S.F. _____ H.F. _____ DIVISION III 1 COMMERCIAL ESTABLISHMENTS 2 Sec. 10. Section 162.2, subsection 8, Code 2024, is amended 3 to read as follows: 4 8. “Commercial breeder” means a person, engaged in the 5 business of breeding dogs or cats, who sells, exchanges, or 6 leases dogs or cats in return for consideration, or who offers 7 to do so, whether or not the animals are raised, trained, 8 groomed, or boarded by the person. A person who owns or 9 harbors three or fewer breeding males or females is not a 10 commercial breeder. However, a person who breeds any number 11 of breeding male or female greyhounds for the purposes of 12 using them for pari-mutuel wagering at a racetrack as provided 13 in chapter 99D shall be considered a commercial breeder 14 irrespective of whether the person sells, leases, or exchanges 15 the greyhounds for consideration or offers to do so. 16 Sec. 11. Section 162.2B, subsection 1, paragraph b, Code 17 2024, is amended to read as follows: 18 b. For the issuance or renewal of a state license or permit, 19 one hundred seventy-five dollars. However, a commercial 20 breeder who owns, keeps, breeds, or transports a greyhound dog 21 for pari-mutuel wagering at a racetrack as provided in chapter 22 99D shall pay a different fee for the issuance or renewal of a 23 state license as provided in rules adopted by the department. 24 Sec. 12. Section 162.10A, subsection 2, Code 2024, is 25 amended to read as follows: 26 2. a. Except as provided in paragraph “b” or “c” , a 27 commercial establishment shall comply with rules that the 28 department adopts to implement subsection 1 . A commercial 29 establishment shall be regulated under this paragraph “a” 30 unless the person is a state licensee as provided in paragraph 31 “b” or a permittee as provided in paragraph “c” “b” . 32 b. A state licensee who is a commercial breeder owning, 33 breeding, transporting, or keeping a greyhound dog for 34 pari-mutuel wagering at a racetrack as provided in chapter 99D 35 -5- LSB 5372XD (5) 90 da/ns 5/ 12

S.F. _____ H.F. _____ may be required to comply with different rules adopted by the 1 department. 2 c. b. A permittee is not required to comply with rules 3 that the department adopts to implement a standard of care as 4 provided in subsection 1 for state licensees and registrants. 5 The department may adopt rules regulating a standard of care 6 for a permittee, so long as the rules are not more restrictive 7 than required for a permittee under the Animal Welfare Act. 8 However, the department may adopt prescriptive rules relating 9 to the standard of care. Regardless of whether the department 10 adopts such rules, a permittee meets the standard of care 11 required in subsection 1 if it voluntarily complies with rules 12 applicable to state licensees or registrants. A finding by 13 the United States department of agriculture that a permittee 14 complies with the Animal Welfare Act is not conclusive when 15 determining that the permittee provides a standard of care 16 required in subsection 1 . 17 Sec. 13. Section 717B.3, subsection 2, paragraph a, 18 subparagraph (2), subparagraph divisions (a) and (b), Code 19 2024, are amended to read as follows: 20 (a) A state licensee or registrant operating pursuant to 21 section 162.10A, subsection 2 , paragraph “a” or “b” . 22 (b) A permittee operating pursuant to section 162.10A, 23 subsection 2 , paragraph “c” “b” . 24 DIVISION IV 25 GRADE “A” MILK 26 Sec. 14. Section 192.101A, Code 2024, is amended by adding 27 the following new subsections: 28 NEW SUBSECTION . 1A. “Department” means the department of 29 agriculture and land stewardship. 30 NEW SUBSECTION . 5. “Secretary” means the secretary of 31 agriculture. 32 Sec. 15. Section 192.109, Code 2024, is amended to read as 33 follows: 34 192.109 Certification of grade “A” label. 35 -6- LSB 5372XD (5) 90 da/ns 6/ 12

S.F. _____ H.F. _____ The department of agriculture and land stewardship shall 1 annually biennially conduct a survey and based on that survey 2 certify all milk labeled grade “A” pasteurized and grade “A” 3 raw milk for pasteurization , and, in . In the event that a 4 survey shows the requirements for production, processing, and 5 distribution for such grade are not being complied with, the 6 that fact thereof shall be certified by the department to the 7 secretary of agriculture who shall proceed with the provisions 8 of section 192.107 for suspending the permit of the violator or 9 who, if the secretary did not issue such permit, shall withdraw 10 the grade “A” declared on the label. 11 Sec. 16. Section 192.111, subsection 1, paragraph a, 12 subparagraph (5), Code 2024, is amended to read as follows: 13 (5) A milk grader which must obtain a milk grader permit and 14 pay a license permit fee not greater than twenty dollars. 15 Sec. 17. Section 192.116, Code 2024, is amended to read as 16 follows: 17 192.116 Bacteriologists. 18 The department of agriculture and land stewardship may 19 employ dairy specialists or bacteriologists who shall devote 20 their full time to the improvement of sanitation in the 21 production, processing , and marketing of dairy products. 22 Said The dairy specialists and bacteriologists shall have 23 qualifications as to education and experience and such other 24 requirements as the secretary may require. 25 Sec. 18. Section 192.118, subsection 1, Code 2024, is 26 amended to read as follows: 27 1. To ensure uniformity in the tests and reporting, an 28 employee certified by the United States public health service 29 of the bacteriological laboratory of the department shall 30 annually certify, in accordance with rules adopted by the 31 department incorporating or incorporating by reference the 32 federal publication entitled “Evaluation of Milk Laboratories”, 33 all laboratories doing work in the sanitary quality of 34 milk and dairy products for public report. The approval by 35 -7- LSB 5372XD (5) 90 da/ns 7/ 12

S.F. _____ H.F. _____ the department shall be based on the evaluation of these 1 laboratories as to personnel training, laboratory methods 2 used, and reporting. The results on tests made by approved 3 laboratories shall be reported to the department on request, 4 on forms prescribed by the secretary of agriculture , and such 5 reports may be used by the department. 6 EXPLANATION 7 The inclusion of this explanation does not constitute agreement with 8 the explanation’s substance by the members of the general assembly. 9 GENERAL. This bill provides for the administration of 10 a number of programs and regulations by the department of 11 agriculture and land stewardship (DALS). Specifically, 12 the bill addresses the promotion of the native horse racing 13 industry by providing for the qualification of Iowa-foaled 14 horse breeds; agricultural marketing, by revising a number of 15 existing programs such as the choose Iowa promotional program 16 and choose Iowa fund, the dairy innovation program and fund, 17 and the value-added agricultural grant program and fund; the 18 regulation of commercial establishments that keep certain 19 nonagricultural animals for commercial purposes, by eliminating 20 special requirements related to greyhound racing; and the 21 regulation of permittees authorized to engage in the handling 22 of grade “A” milk and related dairy products. 23 IOWA-FOALED HORSES. DALS regulates the status and care 24 of race horses involved in pari-mutual wagering conducted 25 by persons licensed by the racing and gaming commission to 26 operate racetracks and manage associated purses. There are 27 three breeds of horses involved in such racing, including 28 thoroughbred horses, quarter horses, and standardbred horses. 29 For at least one race of each racing day, either a race must 30 be limited to Iowa-foaled horses or alternatively Iowa-foaled 31 horses must be given a weight advantage (Code section 99D.22). 32 At least 20 percent of all net purse moneys distributed to 33 each breed must be awarded in the form of Iowa breeder awards 34 or purse supplements to Iowa breeders. One criteria used to 35 -8- LSB 5372XD (5) 90 da/ns 8/ 12

S.F. _____ H.F. _____ determine a foal’s status as Iowa bred occurs in cases in which 1 the foal’s brood mare was bred by a stallion not recognized by 2 DALS as an Iowa registered stallion and was not bred back to an 3 Iowa registered stallion. In that case, the brood mare must 4 have continuous Iowa residency from December 31 until the foal 5 is inspected. The bill provides that for quarter horses and 6 standardbred horses, that beginning date is moved to January 7 31. 8 AGRICULTURAL MARKETING —— CHOOSE IOWA PROMOTIONAL PROGRAM 9 AND CHOOSE IOWA PROMOTIONAL FUND. In 2022, the general 10 assembly established the choose Iowa promotional program 11 (choose Iowa program) and choose Iowa fund administered by 12 DALS (2022 Iowa Acts, chapter 1152). The stated purpose of 13 the choose Iowa program and fund is to provide consumers a 14 choice to purchase a food item originating as an agricultural 15 commodity (commodity) produced on an Iowa farm or a food 16 item processed in Iowa using the commodity as an ingredient 17 (Code sections 159.26 through 159.31). As part of the choose 18 Iowa program, DALS may establish a choose Iowa logo (logo) 19 and register the logo for legal protection with the state or 20 the United States (e.g., by trademark or copyright). DALS 21 may also enter into a licensing agreement with a person who 22 applies to use the logo when selling a food item on a retail 23 basis. A choose Iowa fund was established to finance the 24 program. The fund includes fees paid by licensees and any 25 moneys appropriated by the general assembly. The bill uses 26 the term “product” to describe both raw and processed items 27 (i.e., moveable goods) that may be sold at retail using the 28 logo. It expands the program to include horticulture items (a 29 nursery, floral, or greenhouse plant) and natural fiber items 30 (e.g., wool). In all cases, the product must be a commodity 31 produced on an Iowa farm, a commodity produced on an Iowa farm 32 and processed in this state, or a commodity produced on an Iowa 33 farm and used as a component in a product processed in this 34 state. The bill changes the fund’s name to the choose Iowa 35 -9- LSB 5372XD (5) 90 da/ns 9/ 12

S.F. _____ H.F. _____ promotional fund. 1 AGRICULTURAL MARKETING —— DAIRY FUND’S INNOVATION FUND 2 AND PROGRAM. In 2023, the general assembly created a dairy 3 innovation fund (dairy fund) and program (dairy program) 4 (2023 Iowa Acts, chapter 101). The purpose of the dairy fund 5 and dairy program is to expand dairy processing capacity in 6 the state (Code section 159.31A). The dairy fund is used 7 to support financing eligible businesses participating in 8 the program in the form of grants, low-interest loans, or 9 forgivable loans. DALS is specifically required to finance 10 the expansion or refurbishing of existing milk plants or the 11 construction of new milk plants that process and package raw 12 milk into various milk and dairy products. Code chapter 13 192 regulates the production, processing, labeling, and 14 distribution (handling) of grade “A” milk and grade “A” milk 15 products according to sanitary requirements (Code section 16 192.102). Under the program, in order to receive financing, 17 a milk plant must be operated under a permit issued by DALS 18 pursuant to Code section 192.111. The bill provides that the 19 milk plant may also operate under a permit issued pursuant to 20 Code section 194.3A. Code chapter 194 governs the production, 21 delivery, and processing of the less common grade “B” milk 22 allowed for use in manufacturing dairy products. The bill also 23 provides that the financing may be used for the acquisition 24 and not just renting of dairy processing equipment. Finally, 25 the bill substitutes the term “department” for “authority” 26 in a provision that allows an eligible business receiving 27 financial assistance under the program to receive assistance 28 under another program. 29 AGRICULTURAL MARKETING —— VALUE-ADDED AGRICULTURAL GRANT 30 FUND AND PROGRAM. The bill establishes the value-added 31 agricultural grant program fund (value-added fund) and 32 value-added agricultural grant program (value-added program) 33 (new Code sections 159.31C and 159.31D). The value-added 34 fund is administered by DALS and includes moneys appropriated 35 -10- LSB 5372XD (5) 90 da/ns 10/ 12

S.F. _____ H.F. _____ by the general assembly, and other moneys available to DALS, 1 to support the value-added program. The purpose of the 2 value-added program is to support projects and services that 3 add value to agricultural commodities produced on Iowa farms 4 (e.g., by processing). The program has been enacted and 5 supported in recent DALS general appropriations Acts but not 6 codified (see 2021 Iowa Acts, chapter 143, section 12; 2022 7 Iowa Acts, chapter 1147, section 12; and 2023 Iowa Acts, 8 chapter 109, section 4). 9 REGULATION OF COMMERCIAL ESTABLISHMENTS. DALS regulates 10 commercial establishments that keep certain nonagricultural 11 animals for commercial purposes on a nonprofit or profit 12 basis, including an animal shelter, pound, or research 13 facility issued a certificate of registration (Code sections 14 162.3, 162.4, and 162.4A); a pet shop, boarding kennel, or 15 commercial kennel issued a state license (Code sections 162.5, 16 162.5A, and 162.6); or a dealer, commercial breeder, or public 17 auction who may elect to be either issued a state license or 18 a permit. A permit is issued if the person is licensed under 19 the federal Animal Welfare Act (7 U.S.C. ch. 54) by the United 20 States department of agriculture (Code sections 162.7, 162.8, 21 and 162.9A). Code chapter 162 provides special regulations 22 applicable to a greyhound dog if used for pari-mutuel wagering 23 at a licensed racetrack (racing greyhound) (Code chapter 99D). 24 The bill eliminates those special provisions. Currently, a 25 person is regulated as a commercial breeder and is subject to 26 license or permit requirements if the person breeds dogs or 27 cats in exchange for payment with an exception that applies 28 to a person who keeps three or fewer breeding greyhounds. 29 The exception does not apply to a person who breeds racing 30 greyhounds (Code section 162.2). A person applying for a 31 state license or permit is required to pay DALS $175 with 32 an exception for a person who keeps racing greyhounds (Code 33 section 162.2B). A person who keeps greyhounds must be issued 34 a state license and is subject to a fee established by DALS 35 -11- LSB 5372XD (5) 90 da/ns 11/ 12

S.F. _____ H.F. _____ rule which is currently $40 (21 IAC 67.17). A commercial 1 establishment is required to comply with standard of care 2 requirements including providing a kept animal with adequate 3 feed, adequate water, housing facilities, sanitary control, 4 grooming practices, and veterinary care as required by DALS 5 rule (Code section 162.10A). A state licensee who is a 6 commercial breeder keeping a racing greyhound may be required 7 to comply with different rules adopted by the department. 8 GRADE “A” MILK REGULATION. Iowa has adopted by reference 9 the model “Grade ‘A’ Pasteurized Milk Ordinance” as part of 10 its “Iowa Grade ‘A’ Milk Inspection Law” (Code chapter 192). 11 The bill makes several editorial changes to improve the Code’s 12 readability, including by defining the terms “department” 13 as the department of agriculture and land stewardship and 14 “secretary” as the secretary of agriculture, and using those 15 terms consistently throughout the Code chapter. In order to 16 handle raw milk for pasteurization and processing, a person 17 must be issued a permit by DALS (Code section 192.107; 21 18 IAC 68.2). Each year, DALS is required to conduct a survey 19 of permittees to verify that the milk they handle meets 20 requirements to be labeled grade “A” for pasteurization. The 21 bill provides that the survey is to be conducted every other 22 year. DALS may suspend or revoke a permit for a person who does 23 not comply with the sanitary requirements. 24 -12- LSB 5372XD (5) 90 da/ns 12/ 12