Field Notes – Rural grocery and local foods bill further considered by Iowa House subcommittee

HF 550 (previously HF 59) — Support: Introduced by Reps. Brian Lohse and Chad Ingels, this Center priority bill creates the Grocer Reinvestment Program and the Local Food Processing Program as well as appropriates money for the grocery reinvestment and local food processing fund. The legislation directs the Iowa Economic Development Authority to create a grant program for new or current grocery stores. To be eligible, the grocery store must exist in and benefit a community with a population of 20,000 or fewer and not share a border with a city with a population of 40,000 or greater. Prioritization is given to projects focused on cost-saving efforts and business efficiency measures to ensure the long-term sustainability of stores. Grants are directed to help small, locally owned grocery stores sell perishable foods in rural communities. The House bill was considered by the Economic Growth and Technology Committee on Feb. 19 and passed unanimously. A subcommittee further considered the bill on March 26 and recommended its passage. It awaits consideration by the Appropriations Committee.

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Senate File (SF) 232 (previously Senate Study Bill [SSB] 1012) / HF 920 — Support: Introduced by the Senate Committee on Health and Human Services (HHS) by Chairperson Mike Klimesh and by 33 representatives in the House, this bill allocates funding to the Iowa Healthiest State Initiative to administer Double Up Food Bucks. This program doubles the investment for purchases of fruits and vegetables by Iowans participating in the Supplemental Nutrition Assistance Program (SNAP). It also specifically benefits local food producers who accept SNAP at farmers markets, grocery stores, and other local places of sale. The Senate bill was considered by the Senate HHS Committee on Feb. 10 and passed on a vote of 17-0. It was renumbered and awaits consideration by the Appropriations Committee; a subcommittee has been assigned, but a meeting has not yet been scheduled. The House version was introduced on March 12 and referred to the Appropriations Committee; a subcommittee has not yet been assigned.

HF 970 (previously HF 796 and House Study Bill [HSB] 216) — Monitor: Introduced by the House Committee on HHS by Chairperson Carter Nordman, this bill is similar to SF 232, also allocating funding to the Iowa Healthiest State Initiative to administer Double Up Food Bucks. However, there is an additional piece requiring Iowa HHS to request a waiver from the U.S. Department of Agriculture Food and Nutrition Service, providing limitations on eligible food purchases. The bill was considered by the House HHS Committee on March 3 and passed on a vote of 14-6. A subcommittee considered the bill on March 18 and recommended its passage. The Appropriations Committee passed the bill 14-8; it was renumbered and awaits consideration on the House floor.

HF 179 (previously HF 32) — Monitor: This legislation distinguishes two separate categories for food processing licenses: a category in which meat or poultry is processed on a farm or private residence, and a general category including all other processing locations. In 2023, the general assembly revised the methods used to calculate the annual license fees imposed on food processing plants. The updated correlating license fee structure is included in the bill. The bill passed through the Agriculture Committee on Jan. 28 on a vote of 23-0. A subcommittee further considered the bill on March 20 and recommended its passage. It awaits consideration by the Ways and Means Committee.

SF 525 (previously SSB 1158) / HF 851 (previously HSB 173) — Monitor: Introduced by Senate Committee on Agriculture by Chairperson Dawn Driscoll and House Committee on State Government by Chairperson Jane Bloomingdale, these companion bills require education on nutrition, agriculture, food, and natural resources to K-12 students related to the career and technical education components of instruction. They also require the Department of Education to apply for a waiver to update nutritional guidelines, creating exemptions for school lunch recommendations and prioritizing food groups in the following order: animal-based proteins, dairy products, vegetables, and fruits. The Senate version was considered by the Agriculture Committee on March 4 and passed on a vote of 11-4. It was renumbered and awaits consideration on the Senate floor. The House version was considered by the State Government Committee on March 5 and passed on a vote of 15-6. The House version passed on a vote of 60-36 on March 19. It was immediately messaged to the Senate and attached to SF 525 for consideration.

Senate Joint Resolution (SJR) 6 — Monitor: Introduced by 17 senators, this bill repeals the natural resources and outdoor recreation trust fund from the constitution and directs funds from an increased sales tax for the benefit of property tax relief. The bill was introduced on Feb. 17 and considered by a subcommittee on Feb. 19, which recommended its passage on a vote of 2-1. Although this bill has not made it through a committee, it is still alive and eligible for consideration, as joint resolutions are not subject to the funnel process.

HF 861 (previously HF 480) — Undecided: Introduced by five representatives, this bill removes the definition of beneficial use as it relates to water allocation permitting. Instead, the Iowa Department of Natural Resources would consider each permit request on a case-by-case basis when determining whether to grant a permit for the diversion, storage, or withdrawal of water, and must not be based on the category of use. After attending the subcommittee, Center staff learned of the limitations the current definition presents. We continue to research what the process is for permitting and other considerations to determine how to weigh in. The bill was considered by the Natural Resources Committee and passed on a vote of 20-1. It was renumbered and awaits consideration on the House floor.

HF 329 — Undecided: Introduced by Rep. Mike Sexton, this bill relates to the distribution of water exempt from taxation and the use of tax exemption certificates. With definitions for water utility and exemption certification provided, the bill requires a water utility to accept and retain a valid exemption certificate, rather than receiving the exemption itself. The water utility shall not unnecessarily require a person who presents a valid exemption certificate to obtain a sale or water service refund from the Department of Revenue. After attending the House subcommittee meeting, Center staff learned this bill was requested by Iowa Select Farms and may no longer be needed based on new interpretations of the current Iowa code. We continue to research the potential positive or negative implications for rural communities. The bill awaits consideration by the House Ways and Means Committee.

HSB 226 — Undecided: Introduced by the House Committee on Ways and Means Chairperson Bobby Kaufmann, this bill makes rural water districts a designated exempt entity for sales and use tax purposes. Center staff know rural water districts provide drinking water where private wells and municipalities do not. This bill cleans up the confusion the current code causes by allowing all purchases by rural water districts to be tax exempt. A subcommittee considered the bill on March 13 and recommended its passage. It awaits consideration by the House Ways and Means Committee.

HF 404 (previously HSB 81) — Support: Introduced by Chairperson Shannon Lundgren of the House Commerce Committee, this bill would establish a community solar facility program enabling any entity, including farms and small businesses, to own and operate a portion of a solar system that has at least three participants who subscribe to the community solar project. Subscribers would receive a credit to their energy bill based on the energy generated by the facility. The program would allow those who are unable to invest in individual solar systems to participate in a renewable energy project and capture energy savings. A community solar facility program offers additional options for Iowans to invest in solar energy generation to help meet the growing energy demand while helping to lower participants’ energy bills. This bill passed out of the Commerce Committee on Feb. 11 on a vote of 23-0. Amendments have been filed that would change the meaning of the bill and may prevent its progress moving forward. It awaits consideration on the House floor.

HF 834 (previously HSB 123) / SF 585 (previously SSB 1112) — Undecided: Introduced by Gov. Reynolds, these bills address a variety of energy and utility issues, including a new requirement for public utilities to file Integrated Resource Plans every five years with the Iowa Utilities Commission, a process commonly found in other states. While the bill creates more transparency for future energy plans, the legislation does not allow official public input in the process. Another key update provides further protections for farmers by requiring transmission line developers to uphold certain land restoration standards, an idea supported by the Center. The bills passed out of their respective House and Senate Commerce Committees. As companion bills, they are headed to their respective Appropriations Committees for more work on the Integrated Resource Plan components and other ratepayer issues. The House version was assigned to a subcommittee, but a meeting has not yet been scheduled. A subcommittee considered the Senate version yesterday, March 31, and recommended its passage.

HF 369 (previously HF 33) — Support: Introduced by Reps. Chad Ingels and Shannon Latham, this bill establishes an agriculture education grant program to expand high school students’ access to instruction related to agriculture, food, and natural resources. The bill was considered by the House Education Committee on Feb. 11 and passed on a vote of 23-0. A subcommittee considered the bill on March 26 and recommended passage. It awaits consideration by the Appropriations Committee.

SF 394 (previously SSB 1051) — Oppose: Introduced by Chairperson Jason Schultz of the Senate Judiciary Committee, this bill relates to pesticides and the duty to warn or label. It would provide pesticide companies civil liability protection in a court of law if their products meet sufficient duty to warn label requirements and are approved and registered by the Environmental Protection Agency. The bill was considered by the Senate Judiciary Committee on Feb. 19 and passed on a vote of 11-7. It was considered on the Senate floor and passed on a vote of 26-21; it was immediately messaged to the House for consideration.

HF 852 (previously HF 99) / SF 383 (previously SSB 1074) — Support: Introduced by House Commerce Committee Chair Rep. Shannon Lundgren and Senate Health and Human Services Committee Chair Sen. Mike Klimesh, these companion bills relate to pharmacy benefits managers, pharmacies, and prescription drugs. Fair pricing requirements allow rural pharmacies to be competitive and stay in business, preventing more areas of the state from losing local pharmacy services. The House version was considered by the House Commerce Committee on Feb. 11 and passed on a vote of 23-0. It has been renumbered and awaits consideration on the House floor. The Senate version was considered by the Senate Health and Human Services Committee on Feb. 19 and passed on a vote of 16-1. It was renumbered and awaits consideration on the Senate floor.

HF 209 (previously HF 15) — Undecided: Introduced by Rep. Brian Lohse, this bill creates a rural attorney recruitment assistance program. Rural counties and municipalities recruiting attorneys to practice in their areas would be eligible to apply for financial incentives through the College Student Aid Commission, providing program requirements are met. Center staff are researching the potential impact of this legislation, as it limits assistance to no more than five attorneys across the state. The House bill was considered by the House Judiciary Committee and passed on a vote of 21-0. A subcommittee considered this bill on March 25 and recommended passage; it awaits consideration by the Appropriations Committee.

HF 143 — Support: Introduced by Rep. Devon Wood, this bill creates a rural veterinary practice innovation and revitalization fund and program. Funding would be appropriated to assist veterinary practices in rural counties. The bill was introduced on Jan. 27 and referred to the Appropriations Committee but has not yet been assigned a subcommittee.

HF 235 — Undecided: Introduced by Rep. Henry Stone, this bill changes the general and rural county services levy rate limitation for upcoming fiscal years, allowing counties to adjust levy rates if property tax income is equal to or less than the expected general county service expenses. Center staff are monitoring this bill to better understand the monetary consequences for counties that have declining property tax income. The bill was introduced on Feb. 6 and referred to the Ways and Means Committee, but has not yet been assigned a subcommittee.

SF 270 / HSB 274 — Support: Introduced by Sen. Mike Klimesh and House Ways and Means Committee Chairperson Bobby Kaufmann, these bills create the Iowa Rural Development Tax Credit Program. Through an application process, the Iowa Economic Development Authority could award tax credits to qualifying businesses for investing in special capital contributions in rural areas. The Senate version was introduced and referred to the Ways and Means Committee, and a subcommittee was assigned on Feb. 18, but a meeting has not yet been scheduled. The House version was considered by a subcommittee on March 11, which recommended its passage; it awaits consideration by the House Ways and Means Committee.

HF 799 (previously HSB 143) / SF 522  (previously SSB 1160) — Undecided: Introduced by the Department of Agriculture and Land Stewardship, these bills seek to clean up some parts of the Iowa Code and make changes to a few sections, including those covering crop production nutrient application, animal health, and foreign disease threats, agriculture food processing and licensing fees, and agriculture marketing as it relates to the grain indemnity fund. Center staff are exploring the details of this large bill and how it would impact rural communities. The House bill was considered by the Agriculture Committee on March 3 and passed on a vote of 22-0. A subcommittee further considered the House version on March 26 and recommended its passage; it awaits consideration by the House Appropriations Committee. The Senate bill was considered by the Agriculture Committee on March 3 and passed on a vote of 15-0. A subcommittee further considered the Senate version on March 26 and recommended its passage; it awaits consideration by the Senate Ways and Means Committee.

HF 624 (previously HF 56) — Support: Introduced by Reps. Bill Gustoff, Derek Wulf, and Megan Jones, this bill allows net income earned, received, or reported from farm tenancy by an S corporation, a trust, or an estate to be excluded from a farmer’s taxable income. To be eligible, the farmer must have held the property that is under tenancy for 10 or more years. The bill was considered by the House Ways and Means Committee on Feb. 25 and passed on a vote of 24-0. It was renumbered, considered by the House floor on March 19, and passed on a vote of 96-0. The bill was immediately messaged to the Senate for consideration, where it has been referred to the Ways and Means committee. It was assigned a subcommittee, but a meeting has not yet been scheduled.