SSB 3052 (LSB 5372XD (5) 90)

SENATE/HOUSE FILE _____

BY  (PROPOSED DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP BILL)

A BILL FOR

An Act relating to agriculture, by providing for the administration of programs and regulations, and making appropriations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
IOWA-FOALED HORSES

    Section 1.  Section 99D.22, subsection 2, paragraph b, subparagraph (3), Code 2024, is amended to read as follows:
   (3)  (a)  Continuous For a thoroughbred foal, continuous residency from December 31 until the foal is inspected if the mare was bred by other than an Iowa registered stallion and is not bred back to an Iowa registered stallion.
   (b)  For a standardbred foal or quarter horse foal, continuous residency from January 31 until the foal is inspected if the mare was bred by other than an Iowa registered stallion and is not bred back to an Iowa registered stallion.
DIVISION II
AGRICULTURAL MARKETING

PART A
CHOOSE IOWA PROMOTIONAL PROGRAM
    Sec. 2.  Section 159.26, Code 2024, is amended by striking the section and inserting in lieu thereof the following:
   159.26  Definitions.
   As used in this part, unless the context otherwise requires:
   1.  “Agricultural commodity” means an animal or plant, or raw material originating from an animal or plant.
   2.  “Component” means an agricultural commodity that is combined to form a product during processing.
   3.  “Farm” means land and associated structures used to produce an agricultural commodity.
   4.  “Food item” means an agricultural commodity, or an item processed from an agricultural commodity, that is fit for human consumption.
   5.  “Fund” means the choose Iowa program fund established in section 159.31.
   6.  “Horticulture item” means any of the following:
   a.  A nursery, floral, or greenhouse plant.
   b.  A product processed from a nursery, floral, or greenhouse plant, including a seed, rooting, cutting, tissue culture, seedling, or other propagation material.
   7.  “Natural fiber item” means fiber originating from an agricultural commodity for use in processing, including manufacturing into a textile, apparel, or other similar product.
   8.  “Process” means to prepare a product that includes an agricultural commodity alone or as a component.
   9.  a.  “Product” means an agricultural commodity that in its raw or processed state is moveable at the time of its retail sale.
   b.  “Product” includes but is not limited to a food item, horticulture item, or natural fiber item.
   10.  “Program” means the choose Iowa promotional program established in section 159.28.
    Sec. 3.  Section 159.28, Code 2024, is amended to read as follows:
   159.28  Choose Iowa promotional program.
   1.  The department shall establish and administer a choose Iowa promotional program to advertise for retail sale on a retail basis a food item that originates as an agricultural commodity produced on an Iowa farm, and an Iowa product that may include any of the following:
   a.  An agricultural commodity produced on an Iowa farm, except that it may be prepared for sale by washing or packaging in this state.
   b.  A product, if it is An agricultural commodity processed in this state and any of its ingredients, if its components originate as an agricultural commodity produced on an Iowa farm.
   2.  a.  The department may adopt rules further defining an Iowa farm, Iowa agricultural commodity, and Iowa product; and describing how an Iowa agricultural commodity originates on an Iowa farm.
   b.  The department may adopt rules providing for the acceptable use of ingredients originating a component that originates from an agricultural commodities commodity not produced on an Iowa farms farm. In adopting the rules, the department may consider whether the ingredient component is an incidental additive or other component that the department determines is or insignificant part of an Iowa product.
    Sec. 4.  Section 159.29, subsections 1 and 5, Code 2024, are amended to read as follows:
   1.  As part of the choose Iowa promotional program, the department may establish a choose Iowa logo to identify a food item originating as an agricultural commodity produced on an Iowa farm an Iowa product.
   5.  The use of a choose Iowa logo does not do any of the following:
   a.  Provide an express or implied guarantee or warranty concerning the safety, fitness, merchantability, or use of a food item product.
   b.  Supersede, revise, or replace a state or federal labeling requirement, including but not limited to a provision in the federal Fair Packaging and Labeling Act, 15 U.S.C. §1451 et seq.
   c.  Indicate the grade, specification, standard, or value of any food item agricultural commodity, component, or product.
    Sec. 5.  Section 159.31, subsection 1, Code 2024, is amended to read as follows:
   1.  A choose Iowa promotional fund is established in the state treasury under the management and control of the department.

PART B
DAIRY INNOVATION
    Sec. 6.  Section 159.31A, subsection 3, paragraphs a and c, Code 2024, are amended to read as follows:
   a.  Expand or refurbish existing milk plants or establish a new milk plant, operating pursuant to a permit issued pursuant to section 192.111 or 194.3A.
   c.  Rent buildings, refrigeration facilities, or freezer facilities, or acquire equipment, if necessary to expand dairy processing capacity, including mobile dairy or refrigeration units used exclusively for dairy processing.
    Sec. 7.  Section 159.31A, subsection 7, Code 2024, is amended to read as follows:
   7.  A business that is awarded financial assistance under this section may apply for financial assistance under other programs administered by the authority department.

PART C
VALUE-ADDED AGRICULTURAL GRANT FUND AND PROGRAM
    Sec. 8.  NEW SECTION.  159.31C  Value-added agricultural grant program fund.
   1.  A value-added agricultural grant program fund is established in the state treasury under the management and control of the department.
   2.  The fund shall include moneys appropriated by the general assembly and other moneys available to and obtained or accepted by the department, including moneys from public or private sources.
   3.  Moneys in the fund are appropriated to the department for the purpose of supporting the value-added agricultural grant program established in section 159.31D.
   4.  a.  Notwithstanding section 12C.7, interest or earnings on moneys in the fund shall be credited to the fund.
   b.  Notwithstanding section 8.33, moneys in the fund that remain unencumbered or unobligated at the end of a fiscal year shall not revert.
    Sec. 9.  NEW SECTION.  159.31D  Value-added agricultural grant program.
   There is established a value-added agricultural grant program to identify, evaluate, and support projects and services that add value to agricultural commodities produced on Iowa farms, including by supporting new technologies and marketing strategies. The department shall adopt rules as necessary to administer the program.
DIVISION III
COMMERCIAL ESTABLISHMENTS

    Sec. 10.  Section 162.2, subsection 8, Code 2024, is amended to read as follows:
   8.  “Commercial breeder” means a person, engaged in the business of breeding dogs or cats, who sells, exchanges, or leases dogs or cats in return for consideration, or who offers to do so, whether or not the animals are raised, trained, groomed, or boarded by the person. A person who owns or harbors three or fewer breeding males or females is not a commercial breeder. However, a person who breeds any number of breeding male or female greyhounds for the purposes of using them for pari-mutuel wagering at a racetrack as provided in chapter 99D shall be considered a commercial breeder irrespective of whether the person sells, leases, or exchanges the greyhounds for consideration or offers to do so.
    Sec. 11.  Section 162.2B, subsection 1, paragraph b, Code 2024, is amended to read as follows:
   b.  For the issuance or renewal of a state license or permit, one hundred seventy-five dollars. However, a commercial breeder who owns, keeps, breeds, or transports a greyhound dog for pari-mutuel wagering at a racetrack as provided in chapter 99D shall pay a different fee for the issuance or renewal of a state license as provided in rules adopted by the department.
    Sec. 12.  Section 162.10A, subsection 2, Code 2024, is amended to read as follows:
   2.  a.  Except as provided in paragraph “b” or “c”, a commercial establishment shall comply with rules that the department adopts to implement subsection 1. A commercial establishment shall be regulated under this paragraph “a” unless the person is a state licensee as provided in paragraph “b” or a permittee as provided in paragraph “c” “b”.
   b.  A state licensee who is a commercial breeder owning, breeding, transporting, or keeping a greyhound dog for pari-mutuel wagering at a racetrack as provided in chapter 99D may be required to comply with different rules adopted by the department.
   c.  b.  A permittee is not required to comply with rules that the department adopts to implement a standard of care as provided in subsection 1 for state licensees and registrants. The department may adopt rules regulating a standard of care for a permittee, so long as the rules are not more restrictive than required for a permittee under the Animal Welfare Act. However, the department may adopt prescriptive rules relating to the standard of care. Regardless of whether the department adopts such rules, a permittee meets the standard of care required in subsection 1 if it voluntarily complies with rules applicable to state licensees or registrants. A finding by the United States department of agriculture that a permittee complies with the Animal Welfare Act is not conclusive when determining that the permittee provides a standard of care required in subsection 1.
    Sec. 13.  Section 717B.3, subsection 2, paragraph a, subparagraph (2), subparagraph divisions (a) and (b), Code 2024, are amended to read as follows:
   (a)  A state licensee or registrant operating pursuant to section 162.10A, subsection 2, paragraph “a” or “b”.
   (b)  A permittee operating pursuant to section 162.10A, subsection 2, paragraph “c” “b”.
DIVISION IV
GRADE “A” MILK

    Sec. 14.  Section 192.101A, Code 2024, is amended by adding the following new subsections:
   NEW SUBSECTION.  1A.  “Department” means the department of agriculture and land stewardship.
   NEW SUBSECTION.  5.  “Secretary” means the secretary of agriculture.
    Sec. 15.  Section 192.109, Code 2024, is amended to read as follows:
   192.109  Certification of grade “A” label.
   The department of agriculture and land stewardship shall annually biennially conduct a survey and based on that survey certify all milk labeled grade “A” pasteurized and grade “A” raw milk for pasteurization, and, in. In the event that a survey shows the requirements for production, processing, and distribution for such grade are not being complied with, the that fact thereof shall be certified by the department to the secretary of agriculture who shall proceed with the provisions of section 192.107 for suspending the permit of the violator or who, if the secretary did not issue such permit, shall withdraw the grade “A” declared on the label.
    Sec. 16.  Section 192.111, subsection 1, paragraph a, subparagraph (5), Code 2024, is amended to read as follows:
   (5)  A milk grader which must obtain a milk grader permit and pay a license permit fee not greater than twenty dollars.
    Sec. 17.  Section 192.116, Code 2024, is amended to read as follows:
   192.116  Bacteriologists.
   The department of agriculture and land stewardship may employ dairy specialists or bacteriologists who shall devote their full time to the improvement of sanitation in the production, processing, and marketing of dairy products. Said The dairy specialists and bacteriologists shall have qualifications as to education and experience and such other requirements as the secretary may require.
    Sec. 18.  Section 192.118, subsection 1, Code 2024, is amended to read as follows:
   1.  To ensure uniformity in the tests and reporting, an employee certified by the United States public health service of the bacteriological laboratory of the department shall annually certify, in accordance with rules adopted by the department incorporating or incorporating by reference the federal publication entitled “Evaluation of Milk Laboratories”, all laboratories doing work in the sanitary quality of milk and dairy products for public report. The approval by the department shall be based on the evaluation of these laboratories as to personnel training, laboratory methods used, and reporting. The results on tests made by approved laboratories shall be reported to the department on request, on forms prescribed by the secretary of agriculture, and such reports may be used by the department.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   GENERAL. This bill provides for the administration of a number of programs and regulations by the department of agriculture and land stewardship (DALS). Specifically, the bill addresses the promotion of the native horse racing industry by providing for the qualification of Iowa-foaled horse breeds; agricultural marketing, by revising a number of existing programs such as the choose Iowa promotional program and choose Iowa fund, the dairy innovation program and fund, and the value-added agricultural grant program and fund; the regulation of commercial establishments that keep certain nonagricultural animals for commercial purposes, by eliminating special requirements related to greyhound racing; and the regulation of permittees authorized to engage in the handling of grade “A” milk and related dairy products.
   IOWA-FOALED HORSES. DALS regulates the status and care of race horses involved in pari-mutual wagering conducted by persons licensed by the racing and gaming commission to operate racetracks and manage associated purses. There are three breeds of horses involved in such racing, including thoroughbred horses, quarter horses, and standardbred horses. For at least one race of each racing day, either a race must be limited to Iowa-foaled horses or alternatively Iowa-foaled horses must be given a weight advantage (Code section 99D.22). At least 20 percent of all net purse moneys distributed to each breed must be awarded in the form of Iowa breeder awards or purse supplements to Iowa breeders. One criteria used to determine a foal’s status as Iowa bred occurs in cases in which the foal’s brood mare was bred by a stallion not recognized by DALS as an Iowa registered stallion and was not bred back to an Iowa registered stallion. In that case, the brood mare must have continuous Iowa residency from December 31 until the foal is inspected. The bill provides that for quarter horses and standardbred horses, that beginning date is moved to January 31.
   AGRICULTURAL MARKETING —— CHOOSE IOWA PROMOTIONAL PROGRAM AND CHOOSE IOWA PROMOTIONAL FUND. In 2022, the general assembly established the choose Iowa promotional program (choose Iowa program) and choose Iowa fund administered by DALS (2022 Iowa Acts, chapter 1152). The stated purpose of the choose Iowa program and fund is to provide consumers a choice to purchase a food item originating as an agricultural commodity (commodity) produced on an Iowa farm or a food item processed in Iowa using the commodity as an ingredient (Code sections 159.26 through 159.31). As part of the choose Iowa program, DALS may establish a choose Iowa logo (logo) and register the logo for legal protection with the state or the United States (e.g., by trademark or copyright). DALS may also enter into a licensing agreement with a person who applies to use the logo when selling a food item on a retail basis. A choose Iowa fund was established to finance the program. The fund includes fees paid by licensees and any moneys appropriated by the general assembly. The bill uses the term “product” to describe both raw and processed items (i.e., moveable goods) that may be sold at retail using the logo. It expands the program to include horticulture items (a nursery, floral, or greenhouse plant) and natural fiber items (e.g., wool). In all cases, the product must be a commodity produced on an Iowa farm, a commodity produced on an Iowa farm and processed in this state, or a commodity produced on an Iowa farm and used as a component in a product processed in this state. The bill changes the fund’s name to the choose Iowa promotional fund.
   AGRICULTURAL MARKETING —— DAIRY FUND’S INNOVATION FUND AND PROGRAM. In 2023, the general assembly created a dairy innovation fund (dairy fund) and program (dairy program) (2023 Iowa Acts, chapter 101). The purpose of the dairy fund and dairy program is to expand dairy processing capacity in the state (Code section 159.31A). The dairy fund is used to support financing eligible businesses participating in the program in the form of grants, low-interest loans, or forgivable loans. DALS is specifically required to finance the expansion or refurbishing of existing milk plants or the construction of new milk plants that process and package raw milk into various milk and dairy products. Code chapter 192 regulates the production, processing, labeling, and distribution (handling) of grade “A” milk and grade “A” milk products according to sanitary requirements (Code section 192.102). Under the program, in order to receive financing, a milk plant must be operated under a permit issued by DALS pursuant to Code section 192.111. The bill provides that the milk plant may also operate under a permit issued pursuant to Code section 194.3A. Code chapter 194 governs the production, delivery, and processing of the less common grade “B” milk allowed for use in manufacturing dairy products. The bill also provides that the financing may be used for the acquisition and not just renting of dairy processing equipment. Finally, the bill substitutes the term “department” for “authority” in a provision that allows an eligible business receiving financial assistance under the program to receive assistance under another program. 
   AGRICULTURAL MARKETING —— VALUE-ADDED AGRICULTURAL GRANT FUND AND PROGRAM. The bill establishes the value-added agricultural grant program fund (value-added fund) and value-added agricultural grant program (value-added program) (new Code sections 159.31C and 159.31D). The value-added fund is administered by DALS and includes moneys appropriated by the general assembly, and other moneys available to DALS, to support the value-added program. The purpose of the value-added program is to support projects and services that add value to agricultural commodities produced on Iowa farms (e.g., by processing). The program has been enacted and supported in recent DALS general appropriations Acts but not codified (see 2021 Iowa Acts, chapter 143, section 12; 2022 Iowa Acts, chapter 1147, section 12; and 2023 Iowa Acts, chapter 109, section 4).
   REGULATION OF COMMERCIAL ESTABLISHMENTS. DALS regulates commercial establishments that keep certain nonagricultural animals for commercial purposes on a nonprofit or profit basis, including an animal shelter, pound, or research facility issued a certificate of registration (Code sections 162.3, 162.4, and 162.4A); a pet shop, boarding kennel, or commercial kennel issued a state license (Code sections 162.5, 162.5A, and 162.6); or a dealer, commercial breeder, or public auction who may elect to be either issued a state license or a permit. A permit is issued if the person is licensed under the federal Animal Welfare Act (7 U.S.C. ch. 54) by the United States department of agriculture (Code sections 162.7, 162.8, and 162.9A). Code chapter 162 provides special regulations applicable to a greyhound dog if used for pari-mutuel wagering at a licensed racetrack (racing greyhound) (Code chapter 99D). The bill eliminates those special provisions. Currently, a person is regulated as a commercial breeder and is subject to license or permit requirements if the person breeds dogs or cats in exchange for payment with an exception that applies to a person who keeps three or fewer breeding greyhounds. The exception does not apply to a person who breeds racing greyhounds (Code section 162.2). A person applying for a state license or permit is required to pay DALS $175 with an exception for a person who keeps racing greyhounds (Code section 162.2B). A person who keeps greyhounds must be issued a state license and is subject to a fee established by DALS rule which is currently $40 (21 IAC 67.17). A commercial establishment is required to comply with standard of care requirements including providing a kept animal with adequate feed, adequate water, housing facilities, sanitary control, grooming practices, and veterinary care as required by DALS rule (Code section 162.10A). A state licensee who is a commercial breeder keeping a racing greyhound may be required to comply with different rules adopted by the department.
   GRADE “A” MILK REGULATION. Iowa has adopted by reference the model “Grade ‘A’ Pasteurized Milk Ordinance” as part of its “Iowa Grade ‘A’ Milk Inspection Law” (Code chapter 192). The bill makes several editorial changes to improve the Code’s readability, including by defining the terms “department” as the department of agriculture and land stewardship and “secretary” as the secretary of agriculture, and using those terms consistently throughout the Code chapter. In order to handle raw milk for pasteurization and processing, a person must be issued a permit by DALS (Code section 192.107; 21 IAC 68.2). Each year, DALS is required to conduct a survey of permittees to verify that the milk they handle meets requirements to be labeled grade “A” for pasteurization. The bill provides that the survey is to be conducted every other year. DALS may suspend or revoke a permit for a person who does not comply with the sanitary requirements.