SSB 1205 (LSB 2529XC (3) 90)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON)

A BILL FOR

An Act providing for financing of certain agricultural commodity programs, by reducing and eliminating fees imposed on licensed grain dealers and warehouse operators, replacing those moneys with moneys collected from a percentage of state assessments imposed on the sale of corn and soybeans, increasing moneys deposited into the grain depositors and sellers indemnity fund, increasing indemnification amounts, and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 185.1, subsection 7, Code 2023, is amended to read as follows:
   7.  “Market development” means to engage improve the economic conditions of soybean production, storage, and marketing, by engaging in research and educational programs directed toward better and more efficient production, storage, and utilization of soybeans; to provide providing methods and means, including but not limited to, public relations and other promotion techniques for the maintenance of present markets; to provide ensuring the security of soybeans stored and marketed in commercial channels; providing for the development of new or larger domestic and foreign markets; and to provide providing for the prevention, modification, or elimination of trade barriers which obstruct the free flow of soybeans.
    Sec. 2.  Section 185.13, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  7.  Accept gifts or federal or state grants received by the board. Any moneys accepted by the board shall be deposited in an account of a qualified financial institution.
    Sec. 3.  Section 185.21, subsection 2, Code 2023, is amended to read as follows:
   2.  The state assessment shall be paid deposited into the soybean promotion marketing fund established in section 185.26.
    Sec. 4.  Section 185.26, Code 2023, is amended to read as follows:
   185.26  Administration Deposit of moneys collected from state assessment —— soybean marketing fund —— transfers.
   1.  The Moneys from the state assessment collected by the board from the sale of soybeans shall be deposited in a special fund known as the soybean promotion marketing fund, established in the office of the treasurer of state. The fund may also contain any gifts or federal or state grant received by the board. Moneys collected, deposited into in the soybean marketing fund, and transferred to the board, as provided in this chapter, shall be subject to audit by the auditor of state. The 
   2.  a.  Except as provided in paragraph “b”, the department of administrative services shall transfer moneys from the soybean marketing fund to the board for deposit into in an account known as the soybean checkoff account which shall be established by the board in a qualified financial institution. The department of administrative services shall transfer the moneys into to the soybean checkoff account as provided in a resolution adopted by the board. However, the department is only required to transfer moneys once during each day and only during hours when the offices of the state are open. From moneys collected, deposited, and transferred to the soybean checkoff account as provided in this section, the board shall first pay the costs of referendums, elections, and other expenses incurred in the administration of this chapter, before the transferred moneys may be expended to carry out the purposes of the board as provided in section 185.11. The board shall strictly segregate moneys in the soybean checkoff account from all other moneys of the board. Moneys in the soybean checkoff account shall be expended by the board exclusively for use as provided in section 185.28, including for carrying out the purposes of the board as provided in section 185.11. The soybean checkoff account shall be subject to audit by the auditor of state.
   b.  (1)  Except as otherwise provided in subparagraph (2), twenty-five percent of moneys deposited in the soybean marketing fund shall be transferred to the grain depositors and sellers indemnity fund created in section 203D.3 for use as provided in section 185.28.
   (2)  If the department of agriculture and land stewardship delivers a state assessment transfer suspension notice to the department of administrative services as provided in section 203D.3B, moneys that would otherwise be transferred to the grain depositors and sellers indemnity fund as described in subparagraph (1) shall instead be transferred to the soybean checkoff account for use by the board in the same manner provided in paragraph “a”.
   (3)  If the department of agriculture and land stewardship delivers a state assessment transfer reinstatement notice to the department of administrative services as provided in section 203D.3B, moneys that would otherwise be transferred to the soybean checkoff account under subparagraph (2) shall again be transferred to the grain depositors and sellers indemnity fund in the same manner described in subparagraph (1).
   c.  The department of administrative services is only required to transfer moneys under this subsection to the soybean checkoff account and the grain depositors and sellers indemnity fund once during each day and only during hours when the offices of the state are open.
   2.  3.  The fiscal year of the association shall commence on October 1 and end on September 30.
    Sec. 5.  Section 185.28, Code 2023, is amended to read as follows:
   185.28  Use of moneys —— appropriation appropriations.
   1.  All Except as provided in subsection 2, moneys collected, deposited, and transferred to or accepted by the board as provided in this chapter, are appropriated and shall be used for the administration of this chapter by the board and for the payment of claims by the board based upon obligations incurred in the performance of board activities and functions provided in this chapter.
   2.  Moneys transferred from the soybean marketing fund to the grain depositors and sellers indemnity fund as provided in section 185.26 are appropriated for use by the department of agriculture and land stewardship and the Iowa grain indemnity fund board as provided in chapter 203D.
    Sec. 6.  Section 185.30, Code 2023, is amended to read as follows:
   185.30  Bond.
   Every A person occupying a position of trust with the board and acting under any provisions a provision of this chapter shall provide post a bond in an amount required by the board. The premium for the bond shall be paid out of moneys transferred from in the soybean promotion fund to the board pursuant to checkoff account established in section 185.26.
    Sec. 7.  Section 185.33, Code 2023, is amended to read as follows:
   185.33  Report.
   The board shall each year prepare and submit a report summarizing the activities of the board under this chapter to the auditor of state and the secretary of agriculture. The report shall show all income, expenses, and other relevant information concerning fees moneys collected by the board, deposited by the board in an account, transferred to the board, and expended by the board under the provisions of this chapter.
    Sec. 8.  Section 185.34, subsection 2, paragraph b, subparagraph (2), Code 2023, is amended to read as follows:
   (2)  A public body for purposes of chapter 12C. Moneys deposited into the soybean checkoff account as established in section 185.26 shall be deemed to be public funds under chapter 12C.
    Sec. 9.  Section 185.34, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  Moneys deposited in the soybean marketing fund and transferred to the soybean checkoff account as established in section 185.26 or the grain depositors and sellers indemnity fund as provided in that section shall be deemed to be public funds under chapter 12C.
    Sec. 10.  Section 185.35, subsection 2, Code 2023, is amended to read as follows:
   2.  Subsection 1 does not apply to a any of the following: 
   a.  A communication or action taken by the board if any of the following applies:
   a.  (1)  The board may communicate or take action directed to an appropriate government official or government relating to the marketing of soybeans or soybean products to a foreign country.
   b.  (2)  The communication or action relates to the prevention, modification, or elimination of trade barriers.
   b.  Moneys transferred to the grain depositors and sellers indemnity fund as provided in section 185.26.
    Sec. 11.  Section 185C.1, subsection 9, Code 2023, is amended to read as follows:
   9.  “Market development” means to engage improve the economic conditions of corn production, storage, and marketing, by engaging in research and educational programs directed toward better and more efficient production, storage, and utilization of corn; to provide providing methods and means, including but not limited to, public relations and other promotion techniques for the maintenance of present markets; to provide ensuring the security of corn to be stored and marketed in commercial channels; providing for the development of new or larger domestic and foreign markets; and to provide providing for the prevention, modification, or elimination of trade barriers which obstruct the free flow of corn.
    Sec. 12.  Section 185C.11, subsection 1, Code 2023, is amended by adding the following new paragraphs:
   NEW PARAGRAPH.  j.  Administer the corn checkoff account as provided in section 185C.26.
   NEW PARAGRAPH.  k.  Accept gifts, rents, royalties, interest, license fees, or federal or state grants. Any moneys accepted by the board shall be deposited in an account of a qualified financial institution.
    Sec. 13.  Section 185C.21, subsection 1, Code 2023, is amended to read as follows:
   1.  The board shall determine and set the state assessment rate. State assessments collected pursuant to the promotional order shall be paid into the corn promotion marketing fund established in section 185C.26. Except as provided in subsection 2, a state assessment shall not exceed one-quarter of one cent per bushel upon corn marketed in this state. 
    Sec. 14.  Section 185C.24, subsections 1 and 2, Code 2023, are amended to read as follows:
   1.  The board shall be suspended and board operations and terms of members shall cease upon either any of the following events:
   a.  The state assessment is terminated pursuant to section 185C.25.
   b.  The state assessment is suspended pursuant to section 185C.25A.
   2.  However, notwithstanding subsection 1, the board shall continue to operate until proceeds remaining in moneys transferred from the corn promotion marketing fund to the corn checkoff account are disbursed. Disbursement shall be made as provided for payment the transfer of moneys under section 185C.26.
    Sec. 15.  Section 185C.26, Code 2023, is amended to read as follows:
   185C.26  Deposit of moneys —— corn promotion marketing fund —— transfers.
   1.  A Moneys from the state assessment collected by the Iowa corn promotion board from a the sale of corn shall be deposited in the office of the treasurer of state in a special fund known as the corn promotion marketing fund established in the office of the treasurer of state. The fund may include any gifts, rents, royalties, interest, license fees, or a federal or state grant received by the board. Moneys collected, deposited in the corn marketing fund, and transferred to the board as provided in this chapter shall be subject to audit by the auditor of state. The auditor of state may seek reimbursement for the cost of the audit from moneys deposited in the corn marketing fund as provided in this chapter. The department of administrative services shall transfer moneys from the fund 
   2.  a.  Except as provided in paragraph “b”, the department of administrative services shall transfer moneys deposited in the corn marketing fund to the board for deposit into in an account known as the corn checkoff account which shall be established by the board in a qualified financial institution. The department of administrative services shall transfer the moneys to the corn checkoff account as provided in a resolution adopted by the board. However, the department is only required to transfer moneys once during each day and only during hours when the offices of the state are open. From moneys collected, transferred to the corn checkoff account, the board shall first pay all the direct and indirect costs incurred by the secretary and the costs of referendums, elections, and other expenses incurred in the administration of this chapter, before the transferred moneys may be expended to carry for other uses as provided in section 185C.28, including for carrying out the purposes of this chapter as provided in section 185C.11.
   b.  (1)  Except as otherwise provided in subparagraph (2), twenty-five percent of moneys deposited in the corn marketing fund shall be transferred to the grain depositors and sellers indemnity fund created in section 203D.3 for use as provided in section 185C.28.
   (2)  If the department of agriculture and land stewardship delivers a state assessment transfer suspension notice to the department of administrative services as provided in section 203D.3B, moneys that would otherwise be transferred to the grain depositors and sellers indemnity fund as described in subparagraph (1) shall instead be transferred to the corn checkoff account for use by the board in the same manner provided in paragraph “a”.
   (3)  If the department of agriculture and land stewardship delivers a state assessment transfer reinstatement notice to the department of administrative services as provided in section 203D.3B, moneys that would otherwise be transferred to the corn checkoff account under subparagraph (2) shall again be transferred to the grain depositors and sellers indemnity fund in the same manner described in subparagraph (1).
   c.  The department of administrative services is only required to transfer moneys under this subsection to the corn checkoff account and the grain depositors and sellers indemnity fund once during each day and only during hours when the offices of the state are open.
    Sec. 16.  Section 185C.28, Code 2023, is amended to read as follows:
   185C.28  Use of moneys —— appropriation appropriations.
   1.  Moneys deposited in the corn promotion fund and transferred to Except as provided in subsection 2, moneys transferred or accepted by the board, as provided in section 185C.26, including federal moneys to the extent permitted by federal law, are appropriated and shall be used for the administration of this chapter and for the payment of claims based upon obligations incurred in the performance of activities and functions provided in this chapter.
   2.  Moneys transferred from the corn marketing fund to the grain depositors and sellers indemnity fund as provided in section 185C.26 are appropriated for use by the department of agriculture and land stewardship and the Iowa grain indemnity fund board as provided in chapter 203D.
    Sec. 17.  Section 185C.29, subsection 1, Code 2023, is amended to read as follows:
   1.  After the direct and indirect costs incurred by the secretary and the costs of elections, referendums, necessary board expenses, and administrative costs have been paid, at least seventy-five percent of the remaining moneys from a state assessment deposited in the corn promotion marketing fund shall be used to carry out the purposes of the board as provided in section 185C.11.
    Sec. 18.  Section 185C.30, Code 2023, is amended to read as follows:
   185C.30  Bond.
   Every person occupying a position of trust with the board and acting under any provisions a provision of this chapter shall give post a bond in such amount as may be required by the board, the. The premium for which the bond shall be paid out of moneys in the corn promotion fund checkoff account established in section 185C.26.
    Sec. 19.  Section 185C.33, Code 2023, is amended to read as follows:
   185C.33  Report.
   The board shall each year prepare and submit a report summarizing the activities of the board under this chapter to the auditor of state and the secretary of agriculture. The report shall show all income, expenses, and other relevant information concerning fees moneys collected by the board, deposited by the board into an account, transferred to the board, and expended by the board under the provisions of this chapter.
    Sec. 20.  Section 185C.34, Code 2023, is amended to read as follows:
   185C.34  Not a state agency —— public funds.
   1.  The Except as provided in subsection 2, the Iowa corn promotion board is not a state agency.
   2.  The board is deemed to be a public body for purposes of chapter 12C.
   3.  Moneys deposited in the corn marketing fund and transferred to the corn checkoff account as established in section 185C.26 or the grain depositors and sellers indemnity fund as provided in that section shall be deemed to be public funds under chapter 12C.
    Sec. 21.  Section 203.1, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  7A.  “Fund” means the grain depositors and sellers indemnity fund created in section 203D.3.
    Sec. 22.  Section 203.4, Code 2023, is amended to read as follows:
   203.4  Participation in indemnity fund required.
   A grain dealer licensed or required to be licensed pursuant to section 203.3 shall participate in and comply with the grain depositors and sellers indemnity fund as provided in chapter 203D.
    Sec. 23.  Section 203.5, subsections 1, 2, 3, and 4, Code 2023, are amended to read as follows:
   1.  a.  Upon the filing of an application on a form prescribed by the department and compliance with the terms and conditions of this chapter including rules of the department, the department shall issue the applicant a grain dealer’s license. The license expires at the end of the third calendar month following the close of the grain dealer’s fiscal year. A grain dealer’s license may be renewed annually by filing a renewal application on a form prescribed by the department. An application for renewal must be received by the department on or before the end of the third calendar month following the close of the grain dealer’s fiscal year.
   b.  The department shall not issue approve an application for the issuance or renewal of a grain dealer’s license unless the applicant pays to the department all of the following fees:
   (1)  For the issuance of a license, all of the following: a license fee imposed under section 203.6.
   (a)  A license fee imposed under section 203.6.
   (b)  (2)  (a)  A In addition to subparagraph (1), for the issuance of a license, a participation fee imposed under section 203D.3A chapter 203D, including section 203D.3B, and any delinquent participation fee imposed under a previous license as provided in that section chapter.
   (b)  This subparagraph is repealed July 1, 2025.
   (2)  (3)  For the renewal of a license, all of the following: a renewal fee imposed under section 203.6.
   (a)  A renewal fee imposed under section 203.6.
   (b)  (4)  (a)  A In addition to subparagraph (3), for the renewal of a license, a participation fee imposed under section 203D.3A chapter 203D, including section 203D.3B, and any delinquent participation fee as provided in that section chapter.
   (b)  This subparagraph is repealed July 1, 2025.
   (c)  (5)  (a)  A In addition to subparagraphs (3) and (4), for the renewal of a license, any per-bushel fee as provided in section 203D.3A chapter 203D, including section 203D.3B, and any delinquent per-bushel fee and penalty as provided in that section chapter.
   (b)  This subparagraph is repealed July 1, 2025.
   2.  a.  The department shall notify a licensed grain dealer of any delinquency in the payment of a participation fee or per-bushel fee as provided in section 203D.3A chapter 203D, including section 203D.3B. The department shall suspend the grain dealer’s license thirty days after delivering the notice unless the licensed grain dealer pays the delinquent fee.
   b.  This subsection is repealed July 1, 2025.
   3.  a.  The department may suspend or revoke the license of a grain dealer who discounts the purchase price paid for grain nominally for the participation fee or per-bushel fee as provided in section 203D.3A chapter 203D, including section 203D.3B, while that fee is not in effect.
   b.  This subsection is repealed July 1, 2025.
   4.  a.  A grain dealer license which that has expired may be reinstated by the department upon receipt the department’s approval of a proper renewal application, and receipt of the renewal fee and a reinstatement fee as provided in section 203.6, and any delinquent participation fee or per-bushel fee and penalty as provided in section 203D.3A. 
   b.  (1)  In addition to paragraph “a”, a grain dealer license that has expired may be reinstated by the department upon receipt of any delinquent participation fee or per-bushel fee and penalty as provided in chapter 203D, including section 203D.3B.
   (2)  This paragraph is repealed July 1, 2025.
   c.  The applicant must file the renewal application and pay the fees and penalty described in this subsection to the department within thirty days from the date of expiration of the grain dealer license.
    Sec. 24.  Section 203C.1, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  9A.  “Fund” means the grain depositors and sellers indemnity fund created in section 203D.3.
    Sec. 25.  Section 203C.12, Code 2023, is amended to read as follows:
   203C.12  Participation in fund required.
   A person licensed to operate a warehouse under this chapter shall participate in and comply with the grain depositors and sellers indemnity fund as provided in chapter 203D.
    Sec. 26.  Section 203C.37, subsections 1, 2, and 3, Code 2023, are amended to read as follows:
   1.  a.  Upon the filing of an application pursuant to section 203C.7 and compliance with the terms and conditions of this chapter including rules of the department, the department shall issue the applicant a warehouse operator’s license. The license expires at the end of the third calendar month following the close of the warehouse operator’s fiscal year. A warehouse operator’s license may be renewed annually by the filing of a renewal application on a form prescribed by the department pursuant to section 203C.7. An A renewal application for renewal must be received by the department on or before the end of the third calendar month following the close of the warehouse operator’s fiscal year.
   b.  The department shall not approve an application for the issuance or renewal of a warehouse operator’s license unless the applicant pays to the department all of the following fees:
   (1)  For the issuance of a license, all of the following: a license fee as provided in section 203C.33.
   (a)  A license fee imposed under section 203C.33.
   (b)  A participation fee imposed under section 203D.3A, and any delinquent participation fee imposed under a previous license as provided in that section.
   (2)  (a)  In addition to subparagraph (1), for the issuance of a license, a participation fee imposed under chapter 203D, including section 203D.3B, and any delinquent participation fee imposed under a previous license as provided in that chapter.
   (b)  This subparagraph is repealed July 1, 2025.
   (2)  (3)  For the renewal of a license, all of the following: a renewal fee as provided in section 203C.33.
   (a)  A renewal fee imposed under section 203C.33.
   (b)  A participation fee imposed under section 203D.3A, and any delinquent participation fee as provided in that section.
   (4)  (a)  In addition to subparagraph (3), a participation fee imposed under chapter 203D, including section 203D.3B, and any delinquent participation fee as provided in that chapter.
   (b)  This subparagraph is repealed July 1, 2025.
   2.  a.  The failure of a warehouse operator to file a renewal an application to renew a warehouse operator’s license and to pay a renewal fee as provided for in section 203C.33 and any delinquent participation fee as provided in section 203D.3A, on or before the end of the third calendar month following the close of the licensee’s fiscal year shall cause a license to expire.
   b.  (1)  In addition to paragraph “a”, the failure of a warehouse operator to file an application to renew a warehouse operator’s license and to pay a participation fee and any delinquent participation fee as provided in chapter 203D, including section 203D.3B, on or before the end of the third calendar month following the close of the licensee’s fiscal year shall cause a license to expire.
   (2)  This paragraph is repealed July 1, 2025.
   3.  a.  A warehouse license that has expired may be reinstated by the department upon receipt of a proper renewal application, to renew the warehouse operator’s license and the renewal fee and the reinstatement fee as provided for in section 203C.33, and any delinquent participation fee as provided in section 203D.3A.  The applicant must file the renewal application and pay the fees to the department within thirty days from the date that the warehouse license expires.
   b.  (1)  In addition to paragraph “a”, a warehouse license that has expired may be reinstated by the department upon receipt of any delinquent participation fee as provided in chapter 203D, including section 203D.3B. The applicant must pay the fee to the department within thirty days from the date that the warehouse license expires.
   (2)  This paragraph is repealed July 1, 2025.
    Sec. 27.  Section 203D.2, Code 2023, is amended to read as follows:
   203D.2  Persons participating in fund —— compliance.
   1.  All licensed grain dealers, including persons applying to be issued grain dealer licenses, as provided in chapter 203 and licensed warehouse operators, including persons applying to be issued warehouse operator licenses as provided in chapter 203C, shall participate in the fund.
   2.  a.  Participation in the fund by a licensed grain dealer includes complying with this chapter and chapter 203.
   b.  Participation in the fund by a licensed warehouse operator includes complying with this chapter and chapter 203C.
   3.  This section does not require participation in the fund to include payment of a fee for deposit into the fund.
    Sec. 28.  NEW SECTION.  203D.2A  Persons participating in fund —— payment into fund.
   1.  Participation in the fund by licensed grain dealers, including persons applying to be issued grain dealer licenses under chapter 203, includes payment into the fund of participation fees, per-bushel fees, and delinquency penalties as provided in this chapter, including section 203D.3B.
   2.  Participation in the fund by licensed warehouse operators, including persons applying to be issued warehouse operator licenses under chapter 203D, includes payment into the fund of participation fees as provided in this chapter, including section 203D.3B.
   3.  This section is repealed July 1, 2025.
    Sec. 29.  Section 203D.3, subsection 2, Code 2023, is amended to read as follows:
   2.  The fund consists of all of the following:
   a.  (1)  Participation fees paid to the department by licensed grain dealers and persons applying to be issued a grain dealer’s license dealer licenses as provided in this chapter, including section 203D.3A 203D.3B.
   (2)  This paragraph is repealed July 1, 2025.
   b.  (1)  Participation fees paid to the department by licensed warehouse operators and persons applying to be issued a warehouse operator’s license operator licenses as provided in this chapter, including section 203D.3A 203D.3B.
   (2)  This paragraph is repealed July 1, 2025.
   c.  (1)  Per-bushel fees paid to the department by licensed grain dealers as provided in this chapter, including section 203D.3A 203D.3B.
   (2)  This paragraph is repealed July 1, 2025.
   d.  (1)  Delinquency penalties as provided in this chapter, including section 203D.3B.
   (2)  This paragraph is repealed July 1, 2025.
   e.  The amount of the state assessment on soybeans collected pursuant to chapter 185 and transferred to the fund pursuant to section 185.26 and this chapter, including section 203D.3B.
   f.  The amount of the state assessment on corn collected pursuant to chapter 185C and transferred to the fund pursuant to section 185C.26 and this chapter, including section 203D.3B.
   e.  g.  Amounts collected by the state pursuant to legal action on behalf of the fund.
   f.  h.  Interest, earnings on investments, property, or securities acquired through the use of moneys in the fund.
    Sec. 30.  Section 203D.3A, Code 2023, is amended by adding the following new subsection:
   NEW SUBSECTION.  3.  This section is repealed July 1, 2025.
    Sec. 31.  NEW SECTION.  203D.3B  Grain depositors and sellers indemnity fund —— administration of fees.
   1.  The board shall annually review the debits of and credits to the grain depositors and sellers indemnity fund.
   2.  a.  Not later than May 1 of each year, the board shall determine whether to do all of the following:
   (1)  Impose, reinstate, adjust, or waive the participation fee as provided in this chapter, including sections 203D.3A and 203D.5.
   (2)  Impose, reinstate, adjust, or waive the per-bushel fee as provided in this chapter, including sections 203D.3A and 203D.5.
   b.  Based on the board’s determination, the board shall impose or reinstate the participation fee and per bushel fee, adjust those fees that were effective on the previous July 1, or waive those fees that were in effect on the previous July 1, in accordance with chapter 17A. The imposition, reinstatement, adjustment, or waiver of the fees shall become effective as follows:
   (1)  For the participation fee, on the following July 1. However, the grain dealer or warehouse operator shall continue to pay the participation fee at the rate in effect on the prior July 1 until the grain dealer or warehouse operator has paid the amount owing.
   (2)  For a per-bushel fee, on the following July 1.
   c.  This subsection is repealed July 1, 2025.
   3.  a.  Notwithstanding subsection 2, if on the last date of the grain depositors and sellers indemnity fund’s fiscal year as provided in section 203D.3, moneys in the fund exceed twenty million dollars, less any encumbered balances or pending or unsettled claims, all of the following apply:
   (1)  The participation fee shall be waived and shall not be assessable or owing for the following fiscal year of the fund. However, the grain dealer or warehouse operator shall continue to pay any owed participation fee that was in effect prior to July 1.
   (2)  The per-bushel fee shall be waived and shall not be assessable or owing.
   b.  Notwithstanding subsection 2, the participation fee and per-bushel fee shall be reinstated at any time if the moneys in the fund, less any unencumbered balances or pending or unsettled claims, equal ten million dollars or less.
   c.  This subsection is repealed July 1, 2025.
   4.  a.  Not later than May 1 of each year, the board shall determine whether to do all of the following:
   (1)  Suspend or reinstate the state assessment on soybeans as provided in section 185.26.
   (2)  Suspend or reinstate the state assessment on corn as provided in section 185C.26.
   b.  The fees described in this subsection shall be suspended or reinstated effective the following July 1.
   5.  a.  Notwithstanding subsection 4, if on the last date of the grain depositors and sellers indemnity fund’s fiscal year as provided in section 203D.3, moneys in the fund exceed twenty million dollars, less any encumbered balances or pending or unsettled claims, all of the following apply:
   (1)  The amount of the state assessment imposed on soybeans shall be suspended as provided in section 185.26.
   (2)  The amount of the state assessment imposed on corn shall be suspended as provided in section 185C.26.
   b.  Notwithstanding subsection 4, if at any time moneys in the fund do not exceed ten million dollars, less any encumbered balances or pending or unsettled claims, all of the following apply:
   (1)  The amount of the state assessment on soybeans shall be reinstated as provided in section 185.26.
   (2)  The amount of the state assessment on corn shall be reinstated as provided in section 185C.26.
   6.  a.  If the amounts of the state assessments imposed on soybeans and corn are suspended as provided in this section, the department of agriculture and land stewardship shall deliver a state assessment transfer suspension notice to the department of administrative services as provided in sections 185.26 and 185C.26.
   b.  If the amounts of the state assessments imposed on soybeans and corn are reinstated as provided in this section, the department of agriculture and land stewardship shall deliver a state assessment transfer reinstatement notice to the department of administrative services as provided in sections 185.26 and 185C.26.
    Sec. 32.  Section 203D.4, subsections 2 and 3, Code 2023, are amended to read as follows:
   2.  a.  The duties of the board include the review and determination of claims, and the review and approval of administrative costs of the fund. To carry out these duties, the board has the power to adopt rules regarding its organization and procedures for determining claims. Further, the 
   b.  (1)  The board shall approve rules proposed by the department for the administration of the participation fees and per-bushel fee prior to their adoption by the department.
   (2)  This paragraph is repealed July 1, 2025.
   c.  The board may provide comment and advice to the department in regard to the department’s administration of chapters 203 and 203C where the department’s policies and rules may affect the exposure of the fund to liability. However, the board shall not become actively involved in a determination by the department as to whether disciplinary action is to be taken against a particular licensee. The board is not a forum for review or appeal in regard to any particular action taken by the department against a licensee.
   3.  a.  The department through the grain warehouse bureau shall perform the administrative functions necessary for the operation of the board and the fund. Administrative costs approved by the board shall be paid from the fund. The rules of the department shall contain the rules of the board adopted for its organization and its procedures.
   b.  (1)  The department shall adopt rules for the administration of the participation fee and per-bushel fee upon the board’s approval of the rules proposed by the department.
   (2)  This paragraph is repealed July 1, 2025.
   c.  The secretary of agriculture, as president of the board as well as head of the department of agriculture and land stewardship, shall administer the department so as to minimize the risk of loss to the fund while protecting interests of depositors and sellers of grain. Policies and rules for the administration of chapters 203 and 203C which, as determined by the secretary of agriculture, may affect the exposure of the fund, shall be presented to the board for comment prior to their adoption by the department.
   d.  The department shall make reports to the board in regard to licensee investigations which may result in disciplinary action against a licensee and exposure of the fund. The reports may be discussed by the board in closed session pursuant to section 21.5, and are confidential. In making the report, the department shall make available to the board records of licensees which are otherwise confidential under section 22.7, 203.16, or 203C.24. However, a determination to take disciplinary action against a particular licensee shall be made exclusively by the department. A report to the board is not a prerequisite to disciplinary action against a licensee. Review of any action against a licensee, whether or not relating to the fund, shall be made exclusively through the department.
    Sec. 33.  Section 203D.5, Code 2023, is amended to read as follows:
   203D.5  Fees —— imposition, adjustment, or waiver Rates for participation and per-bushel fees.
   1.  The board shall annually review the debits of and credits to the grain depositors and sellers indemnity fund created in section 203D.3 and shall determine whether to impose the participation fee and per-bushel fee as provided in section 203D.3A, make adjustments to the fees effective on the previous July 1, or waive the fees as necessary to comply with this section. The board shall make the determination not later than May 1 of each year. The board shall impose the fees or adjust the fees effective on the previous July 1 in accordance with chapter 17A. The imposition or adjustment of the fees shall become effective as follows:
   a.  For the participation fee, on the following July 1. However, the licensee shall continue to pay the participation fee at the rate in effect on the prior July 1, until the licensee has paid the amount owing.
   b.  For a per-bushel fee, on the following July 1.
   2.  1.  a.  Except as provided in paragraph “b”, the The board shall determine the rate of a the participation fee owed by a licensee grain dealer participating in the fund. The rate of the participation fee shall be calculated as follows not exceed the greater of the following:
   (1)  (a)  For a licensed grain dealer For the fund’s fiscal year beginning July 1, 2023, not more than fourteen thousandths of a one cent per bushel assessed on all the grain dealer’s purchased grain. 
   (b)  For the fund’s fiscal year beginning July 1, 2023, a minimum of fifty dollars.
   (2)  (a)  For the fund’s fiscal year beginning July 1, 2024, not more than seven thousandths of one cent per bushel assessed on all the grain dealer’s purchased grain.
   (b)  For the fund’s fiscal year beginning July 1, 2024, a minimum of twenty-five dollars.
   b.  The board shall calculate the grain dealer’s purchased grain during the grain dealer’s last fiscal year at each location at which records are maintained for transactions of the grain dealer, as determined according to information submitted by the grain dealer to the department for the issuance or renewal of a license as provided in section 203.5.
   (2)  2.  a.  The board shall determine the rate of the participation fee owed by the warehouse operator participating in the fund. The rate of the participation fee shall not exceed the greater of the following:
   (1)  (a)  For a licensed warehouse operator For the fund’s fiscal year beginning July 1, 2023, not more than fourteen thousandths of a one cent per bushel of bulk grain storage capacity or five hundred dollars, whichever is less. 
   (b)  For the fund’s fiscal year beginning July 1, 2023, a minimum of fifty dollars.
   (2)  (a)  For the fund’s fiscal year beginning July 1, 2024, not more than seven thousandths of one cent per bushel of bulk grain storage capacity or two hundred fifty dollars, whichever is less.
   (b)  For the fund’s fiscal year beginning July 1, 2024, a minimum of twenty-five dollars.
   b.  The board shall calculate the warehouse operator’s bulk grain storage capacity for each warehouse licensed pursuant to section 203C.8 or five hundred dollars, whichever is less. The participation fee shall be determined using information provided to the department by the warehouse operator applying for the issuance or renewal of a license as provided in sections 203C.7 and 203C.37.
   b.  A licensee shall pay a participation fee of at least fifty dollars.
   3.  a.  The board shall determine the rate of the per-bushel fee owed by a grain dealer. The rate shall not exceed one-quarter the following: 
   (1)  For the fund’s fiscal year beginning July 1, 2023, not more than one-quarter cent per bushel assessed on all the grain dealer’s purchased grain.
   (2)  For the fund’s fiscal year beginning July 1, 2024, not more than one-eighth cent per bushel assessed on all the grain dealer’s purchased grain.
   b.  The board shall calculate the grain dealer’s purchased grain in the same manner as the grain dealer’s participation fee as provided in subsection 1.
   4.  If on the last date of the fund’s fiscal year as provided in section 203D.3 the assets of the fund exceed eight million dollars, less any encumbered balances or pending or unsettled claims, all of the following apply: This section is repealed July 1, 2025.
   a.  The participation fee shall be waived and shall not be assessable or owing for the following fiscal year of the fund. However, the licensee shall continue to pay any owing participation fee that was in effect on the prior July 1.
   b.  The per-bushel fee shall be waived and shall not be assessable or owing.
   5.  The board shall reinstate the fees as provided in this section if the assets of the fund, less any unencumbered balances or pending or unsettled claims, are three million dollars or less.
    Sec. 34.  Section 203D.6, subsection 8, Code 2023, is amended to read as follows:
   8.  Payment of claims.
   a.  Upon a determination that the claim is eligible for payment, the board shall provide for payment of ninety percent of the loss, as determined under subsection 5, but not more than three six hundred thousand dollars per claimant.
   b.  If at any time the board determines that there are insufficient funds moneys in the fund to make payment of all claims, the board may order that payment be deferred on specified claims. The department, upon the board’s instruction, shall hold those claims for payment until the board determines that the fund again contains there are sufficient assets moneys in the fund to pay deferred claims.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   BACKGROUND —— GRAIN DEPOSITORS AND SELLERS INDEMNITY FUND.  This bill amends provisions regulating grain dealers purchasing grain (Code chapter 203), and grain warehouse operators storing grain under bailment (Code chapter 203C). A grain dealer or warehouse operator must do business in this state under a license issued by the department of agriculture and land stewardship (DALS). The licensed grain dealer and licensed warehouse operator (licensees) pay license fees for deposit in the general fund (Code sections 203.6 and 203C.33). A person selling grain to a licensed grain dealer (seller) or depositing grain with a licensed warehouse operator (depositor) may be reimbursed for a loss incurred by the failure of the licensed grain dealer or licensed warehouse operator to honor a contractual obligation regarding the transaction (Code section 203D.6). Upon a determination that the claim is eligible for payment, the indemnity board provides for payment of 90 percent of the loss, but not more than $300,000. The indemnity board may defer a claim if there are insufficient assets in the fund to fully cover a loss. The indemnity fund is paid from several sources, including a participation fee paid by those grain dealers and warehouse operators (persons applying for or renewing a license) and a per-bushel fee paid only by grain dealers (Code sections 203D.3A and 203D.5). For grain dealers, the amount of the participation fee is based on purchased grain during the grain dealer’s last fiscal year, and for warehouse operators, the amount of the participation fee is based on warehouse storage capacity. The maximum amount of the participation fee is .014 of 1 cent per bushel of either purchased or stored grain with a minimum required amount of $50. The per-bushel fee is also based on purchased grain with a maximum of $0.25 per bushel. The moneys available in the indemnity fund are calculated by subtracting from the balance any unencumbered obligations or pending claims (Code section 203D.6). The fund is managed on a state fiscal year basis (July 1 to June 30). By May 1 of each year, the indemnity board may impose, reinstate, adjust, or waive the fees. However, if on the last date of the fund’s fiscal year, the moneys in the indemnity fund exceed a ceiling of $8 million, the two fees are waived. If at any time moneys in the indemnity fund are at a floor of $3 million or less, the indemnity fees are reinstated (Code section 203D.5).
   BACKGROUND —— CORN AND SOYBEAN CHECKOFFS. An excise tax or assessment is imposed on the first purchaser of a number of commodities as a pass-through (commonly referred to as a “checkoff”). The purpose of the assessment is to finance activities which involve improving market development which includes aspects related to the commodity’s production and market share, such as research and education. Depending upon the commodity, the assessment is implemented and administered under either a state or federal statute or both. An assessment takes effect, is continued, or is terminated on the basis of a majority vote of producers voting in a referendum conducted by the United States department of agriculture in the case of a federal assessment or DALS in the case of a state assessment. The checkoff moneys imposed due to the state or federal assessment are collected and expended pursuant to a promotional order under the direction of a governing body of elected producers (referred to as a board, committee, or council). For soybeans, the federal government has implemented and administers a federal assessment under the direction of the united soybean board (7 U.S.C. ch. 92) and Iowa has implemented and administers a state assessment under the direction of the Iowa soybean association board of directors (Code sections 185.3, 185.11, and 185.13). With the collection of the federal assessment, the maximum amount of the state assessment for soybeans is .25 of 1 percent of the net market price (Code section 185.21) without a right of refund. For corn, the state has implemented and administers a state assessment (Code chapter 185C) under the direction of the Iowa corn promotion board (Code sections 185C.8, 185C.11, and 185C.13). The maximum amount of the state assessment for corn is 3 cents per bushel (Code section 185C.21) subject to a right of refund (Code section 185C.27). For each commodity subject to a state assessment, including soybeans and corn, the collected checkoff moneys are deposited into a separate state-controlled fund established in the state treasury (state fund) and transferred by the department of administrative services (DAS) to an account in a qualified financial institution eligible to hold public funds (Code chapter 12C) and established by the governing body of the commodity organization; in this case the Iowa soybean association board of directors or Iowa corn promotion board.
   BILL’S PROVISIONS. The bill phases out the indemnity fees paid to DALS by licensed grain dealers and warehouse operators used to support the indemnity fund (Code sections 203D.3A and 203D.5). For the fiscal year of the fund beginning July 1, 2023, the amount of the indemnity fees remains the same; for the subsequent fiscal year of the fund, the two fees are reduced to 50 percent of the prior fiscal year’s amounts; and for subsequent fiscal years, the two fees are eliminated together with the repeal of statutory language authorizing them (Code sections 203D.3A and 203D.5). The bill replaces that funding source with checkoff moneys collected from state assessments imposed on soybeans and corn. The bill provides that market development for both soybeans and corn expressly includes the production, storage, and marketing of those commodities in commercial channels (amended Code sections 185.1 and 185C.1). The names of the state-controlled funds are changed, from the soybean promotion fund to the soybean marketing fund and from the corn promotion fund to the corn marketing fund (amended Code sections 185.26 and 185C.26). The account under the control of the Iowa corn promotion board is named “the corn checkoff account”. Under the bill, 25 percent of moneys in each fund is transferred to the indemnity fund and appropriated for use by DALS and the indemnity board to support claims for losses by depositors and sellers (for soybeans, amended Code sections 185.26 and 185.28, and for corn, amended Code sections 185C.26 and 185C.28). Moneys deposited into the soybean marketing fund or corn marketing fund and transferred to the soybean checkoff account, the corn checkoff account, or the indemnity fund are public funds (amended Code sections 185.34 and 185C.34). The bill increases the limits of the fund to a ceiling of $20 million, and a floor of $10 million. On May 1, the indemnity board must determine to suspend or reinstate the state assessments. However, if on the last date of the indemnity fund’s fiscal year, assets in the fund reach the $20 million ceiling, the state assessments are suspended and if at any time those moneys reach the $10 million floor, the state assessments are reinstated (new Code section 203D.3B). In either case, DALS must notify DAS of the suspension or reinstatement. Finally, the indemnity fund’s payout limit for a claim is increased to $600,000 (Code section 203D.6).