Senate File 2401 - Reprinted SENATE FILE 2401 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2393) (SUCCESSOR TO SSB 3174) (As Amended and Passed by the Senate April 2, 2024 ) A BILL FOR An Act regulating the marketing of grain, by providing for 1 fees paid by grain dealers and warehouse operators into 2 the grain depositors and sellers indemnity fund, and the 3 payment of claims to reimburse sellers and depositors for 4 losses covered by the fund, and including effective date 5 provisions. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 SF 2401 (2) 90 da/ns/mb

S.F. 2401 DIVISION I 1 CLAIMS AGAINST GRAIN DEPOSITORS AND SELLERS INDEMNITY FUND 2 Section 1. Section 203.15, subsection 6, Code 2024, is 3 amended by striking the subsection. 4 Sec. 2. Section 203D.1, subsection 2, Code 2024, is amended 5 by striking the subsection. 6 Sec. 3. Section 203D.1, subsection 14, paragraph b, Code 7 2024, is amended to read as follows: 8 b. “Purchased grain” does not include grain that is subject 9 to an exempt transaction based on documentation satisfactory 10 to the department showing that the grain dealer did any of the 11 following: 12 (1) Purchased the grain from the United States government or 13 any of its subdivisions or agencies. 14 (2) Purchased the grain from a person licensed as a grain 15 dealer in any jurisdiction. 16 (3) Purchased the grain under a credit-sale contract. 17 (4) (3) Entered the grain in the company-owned paid 18 position as a cancellation of a collateral warehouse receipt. 19 (5) (4) Entered the grain in the company-owned paid 20 position as an intra-company location transfer. 21 Sec. 4. Section 203D.1, subsection 16, Code 2024, is amended 22 to read as follows: 23 16. a. “Seller” means a person who sells grain which the 24 person has produced or caused to be produced to a licensed 25 grain dealer , but excludes a person who executes a credit-sale 26 contract as a seller as provided in section 203.15 . However, 27 “seller” 28 b. “Seller” does not include any of the following: 29 a. (1) A person licensed as a grain dealer in any 30 jurisdiction who sells grain to a licensed grain dealer. 31 b. (2) A person who sells grain that is not produced in 32 this state unless such grain is delivered to a licensed grain 33 dealer at a location in this state as the first point of sale. 34 Sec. 5. Section 203D.5, subsections 4 and 5, Code 2024, are 35 -1- SF 2401 (2) 90 da/ns/mb 1/ 4

S.F. 2401 amended to read as follows: 1 4. If on the last date of the fund’s assessment year as 2 provided in section 203D.3 the assets of the fund exceed eight 3 twelve million dollars, less any encumbered balances or pending 4 or unsettled claims, all of the following apply: 5 a. The participation fee shall be waived and shall not be 6 assessable or owing for the following assessment year of the 7 fund. However, the licensee shall continue to pay any owing 8 participation fee that was in effect on the prior September 1. 9 b. The per-bushel fee shall be waived and shall not be 10 assessable or owing. 11 5. The board shall reinstate the fees as provided in this 12 section if the assets of the fund, less any unencumbered 13 balances or pending or unsettled claims, are three five million 14 dollars or less. 15 Sec. 6. Section 203D.6, subsection 4, paragraph d, Code 16 2024, is amended to read as follows: 17 d. That the claim derives from a covered transaction. For 18 purposes of this paragraph, a claim derives from a covered 19 transaction if the claimant is a seller who delivered the 20 grain, and transferred title to the that grain , to a licensed 21 grain dealer other than by credit-sale contract within six 22 months of the incurrence date for a claim period as provided in 23 subsection 2 , or if the claimant is a depositor who delivered 24 the grain to a licensed warehouse operator. 25 Sec. 7. EMERGENCY RULES. The department of agriculture 26 and land stewardship shall adopt emergency rules under section 27 17A.4, subsection 3, and section 17A.5, subsection 2, paragraph 28 “b”, to implement the provisions of this division of this Act 29 and the adopted rules shall be effective July 1, 2024. The 30 rules adopted in accordance with this section shall also be 31 published as a notice of intended action as provided in section 32 17A.4. 33 Sec. 8. ASSESSMENT OF FEES. A grain dealer licensed under 34 chapter 203 who is a party to a credit-sale contract shall 35 -2- SF 2401 (2) 90 da/ns/mb 2/ 4

S.F. 2401 owe any participation fee or per-bushel fee assessed on grain 1 purchased under the credit-sale contract beginning on September 2 1 of the first assessment quarter pursuant to section 203D.3A. 3 Sec. 9. EFFECTIVE DATE. 4 1. Except as provided in subsection 2, this division of this 5 Act takes effect July 1, 2024. 6 2. The section of this division of this Act requiring 7 the department of agriculture and land stewardship to adopt 8 emergency rules takes effect upon enactment. 9 DIVISION II 10 ASSESSMENT YEAR 11 Sec. 10. Section 203D.3, subsection 3, Code 2024, is amended 12 to read as follows: 13 3. The assessment year of the fund begins September is the 14 same as the state fiscal year beginning on July 1 and ends 15 ending on August 31 June 30 . Assessment quarters of the fund 16 begin September on July 1, December October 1, March January 1, 17 and June April 1. The finances of the fund shall be calculated 18 on an accrual basis in accordance with generally accepted 19 accounting principles. 20 Sec. 11. Section 203D.5, subsection 1, Code 2024, is amended 21 to read as follows: 22 1. The board shall annually review the debits of and credits 23 to the grain depositors and sellers indemnity fund created 24 in section 203D.3 and shall determine whether to impose the 25 participation fee and per-bushel fee as provided in section 26 203D.3A , make adjustments to the fees effective on the previous 27 September July 1, or waive the fees as necessary to comply with 28 this section . The board shall make the determination not later 29 than May 1 of each year. The board shall impose the fees or 30 adjust the fees effective on the previous September July 1 in 31 accordance with chapter 17A . The imposition or adjustment of 32 the fees shall become effective as follows: 33 a. For the participation fee, on the following September 34 July 1. However, the licensee shall continue to pay the 35 -3- SF 2401 (2) 90 da/ns/mb 3/ 4

S.F. 2401 participation fee at the rate in effect on the prior September 1 July 1, until the licensee has paid the amount owing. 2 b. For a per-bushel fee, on the following September July 1. 3 Sec. 12. Section 203D.5, subsection 4, paragraph a, Code 4 2024, is amended to read as follows: 5 a. The participation fee shall be waived and shall not be 6 assessable or owing for the following assessment year of the 7 fund. However, the licensee shall continue to pay any owing 8 participation fee that was in effect on the prior September 9 July 1. 10 Sec. 13. CONTINGENT EFFECTIVE DATE. 11 1. This division of this Act takes effect on the publication 12 date of the issue of the Iowa administrative bulletin that 13 includes a notice by the secretary of agriculture stating that 14 the participation fee and per-bushel fee paid by grain dealers 15 and warehouse operators have been waived as provided in section 16 203D.5. 17 2. The department of agriculture and land stewardship shall 18 send a copy of the notice to the Code editor at least two 19 weeks prior to the publication date of the Iowa administrative 20 bulletin as described in subsection l. 21 -4- SF 2401 (2) 90 da/ns/mb 4/ 4