H.F. 942 Section 1. NEW SECTION . 466B.51 Definitions. 1 As used in this subchapter, unless the context otherwise 2 requires: 3 1. “Commercial fertilizer” means the same as defined in 4 section 200.3. 5 2. “Commercial nitrogen-based fertilizer” means a commercial 6 fertilizer containing at least twenty-five percent total 7 nitrogen. 8 3. “Division” means the division of soil conservation and 9 water quality created within the department of agriculture and 10 land stewardship pursuant to section 159.5. 11 4. “Fund” means the innovative nutrient incorporation 12 incentive pilot program fund created in section 466B.55. 13 5. “Producer” means a person actively engaged in farming 14 agricultural land as those terms are defined in section 9H.1. 15 6. “Program” means the innovative nutrient incorporation 16 incentive pilot program created pursuant to section 466B.52. 17 7. a. “Qualifying crop production product” means a 18 commercially available product that, when applied to cropland 19 in conjunction with or as an alternative to a commercial 20 fertilizer, cost-effectively promotes optimum plant growth in a 21 manner that best reduces nitrogen as a nonpoint source of water 22 pollution. 23 b. “Qualifying crop production product” includes but is not 24 limited to a soil conditioner with nitrogen-fixing properties, 25 biological sources of nitrogen, and biofertilizers that improve 26 efficiencies in nitrogen management practices. 27 8. “Soil conditioner” means the same as defined in section 28 200.3. 29 Sec. 2. NEW SECTION . 466B.52 Innovative nutrient 30 incorporation incentive pilot program —— creation and goal. 31 1. An innovative nutrient incorporation incentive pilot 32 program is created. 33 2. a. The goal of the program is to encourage farmers to 34 best optimize commercial nitrogen-based fertilizer rates and, 35 -1- LSB 2154HV (3) 91 da/ns 1/ 5

H.F. 942 where appropriate, determine how commercial nitrogen-based 1 fertilizer application rates can be reduced by the threshold 2 limit of the lesser of fifteen percent or thirty pounds per 3 acre by incorporating identifiable cost-effective qualifying 4 crop production products and methodology. 5 b. The division may reevaluate and revise the goal of 6 the program after determining that commercial nitrogen-based 7 fertilizer application rates can be efficiently reduced more 8 than the threshold limit described in paragraph “a” . 9 Sec. 3. NEW SECTION . 466B.53 Program administration. 10 1. The program shall be administered by the division of soil 11 conservation and water quality. 12 2. The division may adopt rules as provided in chapter 17A 13 to administer this subchapter. 14 3. In administering the program, the division may do any of 15 the following: 16 a. Contract with another party, including a private person, 17 to develop, implement, and manage any part of the program 18 subject to the division’s direction and supervision. 19 b. Cooperate with any interested organization to the extent 20 that the interested organization elects to cooperate with the 21 division. 22 Sec. 4. NEW SECTION . 466B.54 Program requirements. 23 1. Each year, the division shall select qualified producers 24 to participate in the program according to criteria established 25 by the division. In selecting qualified producers, the 26 division shall consider applicants actively engaged in growing 27 field crops in all regions of the state. A selected producer 28 may reapply to participate in the program each year that the 29 program continues. 30 2. The division shall approve the use of qualifying crop 31 production products and application methods according to label 32 instructions and standards established by the division. 33 3. A selected producer using qualifying crop production 34 products must keep records as required by the division that 35 -2- LSB 2154HV (3) 91 da/ns 2/ 5

H.F. 942 document application methods, timing, and results as part of 1 the selected producer’s crop fertility plan. 2 4. The division may award a selected producer an incentive 3 payment for each acre that the selected producer applies 4 qualifying crop production products and methodology to meet 5 the goal provided in section 466B.52. The total amount of an 6 award shall not be less than five dollars for each acre used to 7 apply the qualifying crop production products and methodology. 8 Before selecting qualified producers each year, the division 9 may adjust the amount of the payment based on the number of 10 selected producers, the availability of moneys, the rate of 11 inflation, more cost-effective technologies, or less expensive 12 qualifying crop production products. 13 Sec. 5. NEW SECTION . 466B.55 Innovative nutrient 14 incorporation incentive pilot program fund. 15 1. An innovative nutrient incorporation incentive pilot 16 program fund is created in the state treasury under the 17 management and control of the division. 18 2. The fund shall include moneys appropriated by the general 19 assembly. The fund may include other moneys available to and 20 obtained or accepted by the division, including moneys from 21 public or private sources. 22 3. Moneys in the fund are appropriated to the division and 23 shall be used exclusively to carry out the provisions of this 24 subchapter as determined by the division. 25 4. a. Notwithstanding section 12C.7, interest or earnings 26 on moneys in the fund shall be credited to the fund. 27 b. Notwithstanding section 8.33, unencumbered and 28 unobligated moneys in the fund shall not revert but shall 29 remain available for expenditure for the purposes designated. 30 5. Any unencumbered or unobligated moneys in the fund upon 31 repeal of this subchapter pursuant to section 466B.59 shall be 32 transferred to the Iowa nutrient research fund created pursuant 33 to section 466B.46. 34 Sec. 6. NEW SECTION . 466B.56 Appropriation. 35 -3- LSB 2154HV (3) 91 da/ns 3/ 5

H.F. 942 For the fiscal year beginning July 1, 2025, and ending 1 June 30, 2026, and for each fiscal year thereafter, there is 2 appropriated from the general fund of the state to the fund the 3 amount of two million dollars. 4 Sec. 7. NEW SECTION . 466B.57 Innovative nutrient 5 incorporation incentive pilot program report. 6 On or before January 15, 2029, the division shall prepare 7 and deliver to the governor and general assembly an innovative 8 nutrient incorporation incentive pilot program report regarding 9 the status of the program, together with any findings and 10 recommendations regarding how producers in this state may best 11 utilize qualifying crop production products and methodology. 12 Sec. 8. NEW SECTION . 466B.58 Confidentiality. 13 Any information received, collected, or held under this 14 subchapter is a confidential record as provided in section 15 22.7, if the information identifies any of the following: 16 1. A person who holds a legal interest in the cropland used 17 in conducting the program or who has previously held a legal 18 interest in that cropland. 19 2. A person who is involved in managing the cropland used 20 in conducting the program or who has previously managed that 21 cropland. 22 3. The identifiable location of the cropland used in 23 conducting the program. 24 Sec. 9. NEW SECTION . 466B.59 Repeal. 25 This subchapter is repealed December 31, 2030. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanation’s substance by the members of the general assembly. 29 GENERAL. This bill amends Code chapter 466B, which includes 30 a number of subchapters that provide programs to improve 31 surface water quality. The bill creates a new Code subchapter 32 requiring the division of soil conservation and water quality 33 (division) within the department of agriculture and land 34 stewardship to administer an innovative nutrient incorporation 35 -4- LSB 2154HV (3) 91 da/ns 4/ 5

H.F. 942 incentive pilot program (pilot program) on cropland for four 1 crop years. 2 PILOT PROGRAM GOAL. The bill provides that the goal of 3 the pilot program is to encourage farmers to best optimize 4 commercial nitrogen-based fertilizer application rates, and 5 achieve a fertilizer threshold reduction limit of the lesser of 6 15 percent or 30 pounds per acre by incorporating identifiable 7 cost-effective qualifying crop production products and 8 methodology. 9 ADMINISTRATION AND FINANCING OF PILOT PROGRAM. The 10 bill allows the division to administer the pilot program or 11 contract with a person to administer the pilot program under 12 the division’s supervision. Each year, the division must 13 select qualified producers to participate in the program. The 14 division may award a selected producer an incentive payment for 15 each acre to which the selected producer applies qualifying 16 crop production products and methodology to meet the goal of 17 the pilot program. The bill creates a pilot program fund 18 that includes moneys appropriated from the general fund to 19 support the pilot program. For each fiscal year, $2 million 20 is appropriated from the general fund to support the pilot 21 program. 22 REPORT AND CONFIDENTIALITY OF CERTAIN INFORMATION. The bill 23 requires the division to prepare and deliver to the governor 24 and general assembly a report regarding the status of the pilot 25 program on or before January 15, 2029. Information acquired as 26 a part of the pilot program is a confidential record. 27 REPEAL. The new Code subchapter containing the bill’s 28 provisions is repealed December 31, 2030. 29 -5- LSB 2154HV (3) 91 da/ns 5/ 5