Relating to agriculture, including by providing for the powers and duties of the department of agriculture and land stewardship, including the promotion and regulation of commodities and products; the regulation of the transportation of agricultural commodities; the use of agricultural land; and taxation, including property taxes, excise and sales taxes, and income taxes; making penalties applicable; and including effective date and applicability provisions

GENERAL. This bill amends a number of Code chapters relating to agriculture, including providing for the powers and duties of the department of agriculture and land stewardship (DALS). The bill provides for the promotion and regulation of commodities and regulation by DALS, including fees, and the transportation of agricultural items by the department of transportation (DOT). The bill provides for the use of agricultural land, including agricultural tourism. The bill also provides for taxation, including property taxes, the excise tax, the sales and use tax, and income tax. DIVISION I —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP —— PROMOTION —— RENEWABLE FUEL INFRASTRUCTURE —— BACKGROUND.15). The purpose of the program is to finance the improvement of facilities used to store, blend, or dispense renewable fuels, commonly derived from corn or soybeans.17). DIVISION I —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP —— PROMOTION —— RENEWABLE FUEL INFRASTRUCTURE —— BILL’S PROVISIONS. This division increases the amount of moneys appropriated from the renewable fuel infrastructure fund each fiscal year for administrative costs incurred by DALS from $100,000 to $150,000. DIVISION II —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP —— PROMOTION —— BACKGROUND. Code chapter 189 authorizes DALS to administer a number of programs providing for the promotion of agriculture in this state.201).301).303).311). A farm or business enrolled in the choose Iowa program is provided a preference to participate in the choose Iowa food purchasing program.6).311). PART A —— GENERAL —— BILL’S PROVISIONS.2). The part amends the choose Iowa program by providing for the enrollment of persons actively engaged in producing, processing, or marketing Iowa agricultural products. PART B —— CHOOSE IOWA PROMOTIONAL PROGRAMS —— BILL’S PROVISIONS. Under this part, DALS may adopt administrative rules providing for criteria for enrollment in the choose Iowa promotion program. The part establishes a choose Iowa school purchasing program based on the current farm-to-school program, which is eliminated. Under the new program, an eligible participant is reimbursed on a matching basis with DALS contributing $1 for every $1 expended by the eligible participant. The division renames the choose Iowa food purchasing program to the choose Iowa food bank program. The part provides that to participate in the program, a farm or business must be enrolled as a member of the choose Iowa promotional program. The part eliminates a provision providing that not more than $200,000 may be used by DALS to reimburse Iowa food banks and Iowa emergency feeding organizations. The part eliminates a provision that terminates the program on July 1, 2030.25, which establishes an Iowa seal for agricultural products. PART C —— INNOVATION AND REVITALIZATION PROGRAMS —— BILL’S PROVISIONS. This part provides priority to a beginning farmer applying to participate in the dairy innovation and revitalization program. The part creates a butchery innovation revitalization program, modeled on the dairy innovation and revitalization program, that promotes the development, modernization, and expansion of this state’s butchery industry.370). DIVISION III —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP REGULATION —— ANIMAL HEALTH —— BACKGROUND. Code chapter 163 authorizes DALS to regulate animal health and specifically control infectious or contagious diseases (disease) afflicting livestock populations (Code chapter 163).2). DIVISION III —— ANIMAL HEALTH —— BILL’S PROVISIONS.2A). The division also provides that notwithstanding Code chapter 22, information collected by DALS relating to such disease is confidential, if the information identifies the name, address, and contact information of a person owning or caring for an animal suspected of or being affected with a disease; or any location where an animal suspected of or being affected with the disease has been kept. DIVISION IV —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP REGULATION —— WEIGHTS AND MEASURES —— BACKGROUND. DALS is authorized to regulate standard weights and measures under a number of Code chapters, with many of its provisions first published in the 1851 Code (Code chapters 210, 213, 214, and 215). Generally, standards must comply with or be supplied by the federal government or approved as being in compliance with those established by a United States agency, the national institute of standards and technology (NIST).1). DIVISION IV —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP —— REGULATION —— WEIGHTS AND MEASURES —— BILL’S PROVISIONS.1). The state metrologist is authorized to cooperate with NIST. A provision requiring all weights and measures sealed by the state metrologist to be impressed with the word “Iowa” is eliminated.1A). In lieu of an inspection, DALS may order the owner of the device or a service agency that installed, serviced, or repaired the device, to deliver to DALS one or more of the service agency’s most recent test reports documenting the device’s accuracy.41). The division makes several changes to enhance the Code’s readability including updating or correcting references to Code chapter 215.7). DIVISION V —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP REGULATION —— GRAIN MARKETING —— BACKGROUND. DALS regulates grain marketing transactions under three interrelated Code chapters. The first two Code chapters regulate grain marketers, including Code chapter 203 providing for the regulation of a grain dealer purchasing grain from a seller and Code chapter 203C providing for the regulation of a warehouse operator storing grain for a depositor. Code chapter 203D establishes the grain depositors and sellers indemnity fund (indemnity fund) created to indemnify a seller or depositor against a financial loss due to the management of the grain by grain dealer or warehouse operator.8).8).15). Under both Code chapters 203 and 203C, DALS regulates a grain dealer and warehouse operator by issuing a license and conducting inspections of their business operations.6). However, a class 1 license is required for a grain dealer who enters into a credit-sale contract regardless of the size of the grain dealer’s operation. A class 1 or class 2 licensee must annually submit to DALS a financial statement accompanied by an unqualified opinion based upon an audit performed by a certified public accountant (CPA) licensed in this state. In 2025, the general assembly enacted 2025 Iowa Acts, chapter 105 (2025 Act), which eliminated provisions that allowed a licensed grain dealer or licensed grain warehouse operator to submit a financial statement accompanied by a report of a state-licensed CPA based upon a review in lieu of an unqualified opinion.6A).6A). A license of a grain dealer or warehouse operator may cease due to any one of three causes, including revocation by DALS, cancellation by the grain dealer, or the expiration of the license by operation of law.10. Upon any of these causes, a seller may claim the purchase price for the sold grain, which may trigger a claim for a loss under the indemnity fund. DIVISION V —— DEPARTMENT OF AGRICULTURE AND LAND STEWARDSHIP —— REGULATION —— GRAIN MARKETING —— BILL’S PROVISIONS.6A by allowing a grain dealer (except a grain dealer entering into a credit-sale contract) or a warehouse operator to again submit a financial statement accompanied by a report of a state-licensed CPA based upon a review in lieu of an unqualified opinion.8 by providing that unless title to grain was previously transferred pursuant to an ordinary cash sale contract, title to grain sold by credit-sale contract is deemed to have transferred to the grain dealer upon two conditions: (1) the credit-sale contract is signed by both the grain dealer and the seller and (2) the grain dealer or another person has possession of the grain in accordance with the terms of the credit-sale contract. The bill provides that a claim for a loss incurred by a seller or depositor may be triggered by the filing of a bankruptcy petition by a grain dealer or warehouse operator.10, which describe those types of actions.6 by providing for the indemnification of a seller for grain purchased by a grain dealer that the seller was required to pay back later in bankruptcy. The claim may proceed upon a determination that an eligible repayment claim was filed with DALS by the seller as required by statute.6A by providing for the timeliness of a repayment claim in the case of a bankruptcy court’s default judgment. In that case, the seller must file a claim not later than 60 days after the court’s judgment or a settlement agreement is approved, whichever is later. DIVISION VI —— DEPARTMENT OF TRANSPORTATION REGULATION —— MOTOR VEHICLES. This division provides for the regulation of persons moving agricultural items on state highways and roads. PART A —— MILK HAULERS —— BACKGROUND.2). DOT is authorized to issue annual permits for the operation of vehicles or combinations of vehicles transporting fluid milk products to or from a milk plant, receiving station, or transfer station. The weight limitation is 96,000 pounds on primary roads and primary road extensions in cities. A person who violates the weight provisions is subject to a fine according to a schedule based on the number of pounds of overload beginning at $12. PART A —— MILK HAULERS —— BILL’S PROVISIONS. This part increases the weight limit to 136,000 pounds. DOT is required to adopt rules governing minimum distances for axle configurations. The part takes effect January 1, 2027. PART B —— IMPLEMENTS OF HUSBANDRY —— BACKGROUND.457 regulates the maximum length of a motor vehicle or combination of vehicles operated on the highways of this state. A trailer or semitrailer cannot have an overall length in excess of 53 feet when operating in a truck tractor-semitrailer combination. However, a lowboy semitrailer that is designed and exclusively used for the transportation of construction equipment may have an overall length not in excess of 57 feet.8A). PART B —— IMPLEMENTS OF HUSBANDRY —— BILL’S PROVISIONS. This part provides that an implement of husbandry (a vehicle or equipment used in agricultural production) has the same feet requirement as construction equipment. DIVISION VII —— AGRICULTURAL TOURISM —— BACKGROUND.4). DIVISION VII —— AGRICULTURAL TOURISM —— BILL’S PROVISIONS.3. The division provides that a farm includes a tree farm, and that a farm crop includes a plant used for energy or decoration. The division also provides that a farm crop described as edible or ornamental produce includes nuts, maple syrup, mushrooms, and Christmas trees. Finally, a farm crop includes lumber, pulpwood, cordwood, and honey. DIVISION VIII —— LAND USE —— BACKGROUND. Code chapter 335 provides for county zoning.27 provides that a county zoning ordinance does not apply to land, a farm house, farm barn, farm outbuilding, or other building or structure that is primarily adapted for an agricultural purpose.28 provides that a county cannot require a conditional use permit, special use permit, special exception, or variance for agricultural experiences on property primarily used for agricultural production. An agricultural experience is defined to include an agriculture-related activity, as a secondary use in conjunction with agricultural production, on a farm, which activity is open to the public. DIVISION VIII —— LAND USE —— BILL’S PROVISIONS.2 by providing that an agricultural purpose includes an agricultural tourism activity or event, value-added agricultural processing, direct-to-consumer marketing, or other farm-based enterprise that supports the economic viability of a farm.28 by providing that an agricultural experience includes tourism activities and events, such as recreational, entertainment, dining, celebratory, and overnight lodging opportunities offered on a working farm, so long as the farm’s primary use remains agricultural production. The division takes effect upon enactment. DIVISION IX —— PROPERTY TAX EXEMPTION —— QUALIFIED ABOVEGROUND STORAGE TANKS —— BACKGROUND.1).1 provides a descriptive list of property that is subject to assessment and taxation as real property (buildings, structures, or improvement attached to the land, or placed upon a foundation whether or not attached to the foundation). The Code section also provides a description of real property that is not subject to assessment and taxation as real property. DIVISION IX —— PROPERTY TAX EXEMPTION —— QUALIFIED ABOVEGROUND STORAGE TANKS —— BILL’S PROVISIONS. This division provides another exemption applicable to a qualified aboveground storage tank that would otherwise be subject to assessment and taxation as real property. The aboveground storage tank must have a capacity of 91,000 gallons or less, regardless of its use. The division makes inapplicable a provision in the “State Mandates Act” (Code chapter 25B) that governs the funding of a property tax credit or exemption (credit or exemption).7 provides that if a state enacts legislation creating a credit or exemption, a political subdivision (county, city, or school district) is required to extend to the taxpayer only that portion of the credit or exemption estimated by the department of revenue to be funded by a state appropriation. The division takes effect upon enactment and applies retroactively to assessment years beginning on or after January 1, 2025. DIVISION X —— EXCISE TAX ELIMINATION —— GRAIN HANDLING —— BACKGROUND.35 relates to the grain handling excise tax of one-fourth mill per bushel upon all grain handled (1/40 of 1 cent per bushel). For purposes of the excise tax, “handling or handled” means the receiving of grain at or in each elevator, warehouse, mill, processing plant, or other facility in this state in which it is received for storage, accumulation, sale, processing, or any other purpose.1). The amount of excise tax is calculated on the basis of a statement prepared by the department of revenue and filed by the person handling the grain and is due 60 days after the start of the calendar year. The statement records the total number of bushels handled by the person during the prior calendar year. The excise tax is entered on the tax list of the taxing district and revenue collected from the excise tax is distributed to the various taxing authorities within the taxing district in the same manner as general property taxes. DIVISION X —— EXCISE TAX ELIMINATION —— GRAIN HANDLING —— BILL’S PROVISIONS. This division eliminates the special excise tax provision on the handling of grain on January 1, 2027, and the excise tax is no longer assessable for grain handled on or after that date. The division makes inapplicable a provision in the “State Mandates Act” that governs the funding of a property tax credit or exemption. DIVISION XI —— SALES AND USE TAX EXEMPTION —— HONEYBEES —— BACKGROUND. Code chapter 423 provides for Iowa’s streamlined sales and use tax provisions.2). As a complement to the sales tax, the use tax is imposed on the purchase price of all tangible personal property or enumerated services purchased for use in Iowa and used in Iowa.5). DIVISION XI —— SALES AND USE TAX EXEMPTION —— HONEYBEES —— BILL’S PROVISIONS. This division provides a new sales and use tax exemption for the sale of honeybees. DIVISION XII —— INCOME TAX EXEMPTION —— BACKGROUND.5).7). PART A —— INCOME TAX EXEMPTION —— FARM TENANCIES —— BACKGROUND.7). In order to make this election, the retired farmer must either be disabled or at least 55 years old.17). A farm tenancy agreement is a writing that creates a leasehold in which the owner-lessor transfers that property to a tenant-lessee for farming including the production of a crop or livestock (Code chapter 562) in exchange for receiving a rent payment, including on a cash or commodity share basis.7(13)), or (2) the beginning farmer tax credit for the lease of agricultural assets (Code chapter 16, subchapter VIII, part 5, subpart B). PART A —— INCOME TAX EXEMPTION —— FARM TENANCIES —— BILL’S PROVISIONS. This part allows a retired farmer to exclude net income because a specific legal entity rather than the retired farmer is the holder of the farm tenancy (leased property). An individual who organizes and operates a business under one of several types of recognized legal or equitable entities may shield personal assets from creditors while income received by such entity is attributed (passes through) to the individual. Specifically, the amended provision applies to net income received by a partnership (general or limited), an S corporation, or a trust or estate (presumably subject to the restrictions of Code chapters 9 and 9I). In addition, the part expressly recognizes another pass-through entity referred to as a “disregarded entity” (DRE)., a limited liability company or “LLC”)., a membership interest in an LLC) must be owned by a single individual or a spousal couple. Income received by the DRE passes through the entity to the individual or spousal couple. The part provides that in the case of a DRE or grantor trust, the net income is deemed to be distributed to the sole owner. The part takes effect January 1, 2027, and applies to tax years beginning on and after that date. PART B —— VETERINARY PRACTICE —— BACKGROUND.226 establishes a rural veterinarian loan repayment program administered by the college student aid commission (commission). The purpose of the program is to provide for the repayment of a student loan to an individual who agrees to practice for four years as a licensed veterinarian in a rural area referred to as a rural service commitment area or a veterinary shortage area pursuant to a loan repayment agreement. The amount of repayment cannot exceed $15,000 annually or a total of $60,000 or the amount of the outstanding eligible loan. PART B —— VETERINARY PRACTICE —— BILL’S PROVISIONS. This part allows a licensed veterinarian participating in the rural veterinarian loan repayment program to exclude net income attributable to loan payments received under the program, subject to the restrictions provided in the program. The amount subject to the exclusion cannot exceed $15,000 per tax year, and an aggregate of $60,000 for all tax years. However, in any case, the excluded amount cannot exceed the amount of the outstanding eligible loan. The same exclusion applies to income attributable to a loan repayment received from two alternative sources. The first alternative source is a nongovernmental entity. In that case, the taxpayer must meet the same eligibility requirements and is subject to the same amount limitations as applies under the rural veterinarian loan repayment program administered by the commission. The second alternative source is under the federal veterinary medicine loan repayment program administered by the United States department of agriculture. In that case, the amount is limited to not more than the amount of the loan and related tax liability payments or $55,600 per year, whichever is less.