May 2024

Iowa Legislature passes many laws of interest to landowners and agricultural producers

The Iowa Legislature had a busy 2024 session, passing 187 bills through both the House and the Senate. This article reviews the enrolled bills of most interest to agricultural producers and landowners. Some of these bills still await the Governor’s signature. Most are effective July 1, 2024.

Expansion of Iowa’s Recreational Use Statute (HF 35)

HF 35 expands the liability protections of Iowa’s Recreational Use Statute, Iowa Code Chapter 461C, to apply to private railroad right-of-ways or crossings incorporated into or used as part of a recreational path or trail. It also expands covered recreational activities to include bicycle riding, jogging, and walking.

This recreational use statute, created to encourage private landowners to make their land and water open to the public for recreational purposes, generally provides that owners of property used for the listed recreational purposes do not owe a duty of care to keep the premises safe or to provide warnings of dangerous conditions, as long as they do not charge a fee for admission to their property.

This bill was passed by the Legislature on April 17, 2024, and signed by the Governor on May 1, 2024. It will go into effect July 1, 2024.

Trespass by Remotely Piloted Aircraft (HF 572)

This bill prohibits the use of remotely piloted aircraft (RPA), sometimes called UAVs or drones, over a homestead or over that part of a farmstead where agricultural animals are kept (secure farmstead area).  A homestead includes a home that is used as a principal residence and up to 400 feet of surrounding property. The secure farmstead area includes open feedlots, buildings, and up to 400 feet of surrounding property.

The newly created criminal offense of intrusion, which is a simple misdemeanor, is committed if a person knowingly flies an RPA over a homestead or a secure farmstead. The newly created criminal offense of surveillance, which is a serious misdemeanor, is committed if the RPA is equipped with a camera or other electronic equipment for recording images, sounds, and data. If either crime is committed by a person who has been previously convicted of the offense, the penalties are enhanced. A simple misdemeanor is punishable by confinement for no more than 30 days and a fine of at least $105 but not more than $855. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560. Any images, sounds, or data recorded in violation of the law must be destroyed.

Excepted from the prohibition are those flying with the consent of the owner, those flying for commercial or agricultural use in compliance with FAA rules, those flying the RPA more than 400 feet above the ground, utility companies, government entities, railroad companies, those collecting weather data, and the owner or lessee of the homestead or secure farmstead area. Attorney fees may also be awarded.

The bill allows owners or tenants of homesteads or secure farmstead areas to seek from a district court a two-year injunction to prevent RPA pilots from harassing them by controlling a flight over their property.

The bill was passed by the Legislature on April 2, 2024, and signed by the Governor on May 3, 2024. It will become effective July 1, 2024.

Landowner Deer Hunting License Expansion (HF 2015)

Current law allows resident landowners or tenants to secure two special deer hunting licenses for themselves or family members without charge.  The licensee, however, must first designate the season of use for each license secured. This bill allows the license to be used in any open season using the method authorized for that season. Only one deer can be harvested for each license.

This bill was passed by the Legislature on March 19, 2024, and signed by the Governor on April 10, 2024. It will be effective on July 1, 2024.

Allowing ATVs and UTVs on State Park Roadways (HF 2237)

This bill allows a registered all-terrain vehicle or off-road utility vehicle to be operated on state park road systems, including anywhere within the boundaries of a state park that a motor vehicle required to be registered under chapter 321 is authorized to operate.

This bill was passed by the Legislature on March 25, 2024, and signed by the Governor on May 1, 2024. It will be effective July 1, 2024.

Increased Poultry Processing Opportunities (HF 2257)

This bill was proposed by the Iowa Department of Agriculture and Land Stewardship to increase processing opportunities for small-scale poultry processors and producers. The bill applies the same standards in place for red meat processing to poultry processing, allowing state poultry processing facilities to perform both official inspected and custom-exempt processing at the same facility. Current law requires poultry processors to choose between doing only official or only custom processing.

This bill was passed by the Legislature on March 19, 2024, and signed by the Governor on May 1, 2024. It will be effective July 1, 2024.

Increasing Fines for Trespassing While Hunting (HF 2310)

The bill increases the fines for those who trespass while hunting. Any wildlife taken while committing the trespass will also be subject to seizure. The fines for trespassing while hunting increase from $260 to $500 for the first violation, from $645 to $1,000 for a second violation, and from $1,285 to $1,500 for a third or subsequent violation.

This bill was passed by the Legislature on April 1, 2024, and signed by the Governor on April 19, 2024. It will be effective July 1, 2024.

Liability Protection for Firearm Hold Agreements (HF 2421)

This bill authorizes a federal firearms licensee to enter into a firearm hold agreement with the owner of a firearm. Under such an agreement, the licensee will temporarily store the firearm and receive immunity from civil liability for related acts or omissions resulting in the personal injury or death of a person. This immunity does not extend to unlawful acts committed by the licensee.  This is a bill promoted by mental health advocates that is intended to encourage the prevention of suicide by firearm. Many other states have passed similar legislation.

This bill was passed by the Legislature on April 17, 2024, and signed by the Governor on May 1, 2024. It will be effective on July 1, 2024.

Restricting the Sale and Distribution of Consumable Hemp Products (HF 2605)

When the Legislature passed the Iowa Hemp Act in 2019, it legalized the sale and distribution of hemp, which was defined as cannabis having a maximum concentration of no more than .3 percent THC. This was the federal standard codified in the 2018 Farm Bill. Any plant with a THC concentration above .3 percent continues to be defined as marijuana, a Schedule I substance.  The Iowa Hemp Act also authorized the manufacture and sale of consumable hemp if regulations issued by the Department of Health and Human Services in 2021 are followed. Hemp products cannot be inhaled or smoked.

Since the regulations were implemented, manufacturers have been purchasing legal hemp and using those plants to produce consumable hemp products with THC amounts capable of producing intoxicating effects. Low-concentration hemp plants can yield high THC consumable products, such as drinks and edibles, which are legal in Iowa and not subject to age restrictions.

The new bill restricts the THC level in consumable hemp products to 4 milligrams per serving and 10 milligrams per container. Additionally, it restricts the sale of these consumable hemp products to those who are 21 and older and requires written notices warning consumers of the risks associated with the products. Finally, the new law will increase penalties. For example, it creates a civil penalty not to exceed $10,000 per day for a person who is engaged in the retail sale of a consumable hemp product and has failed to register with the Department of Health and Human Services (Retailers and manufacturers of consumable hemp must register).

This law was passed by the Legislature on April 2, 2024. It has not yet been signed by the Governor. If enacted, it will go into effect July 1, 2024.

Restoring the Capital Gain Exclusion for the Sale of Breeding and Dairy Livestock (HF 2649)

HF 2317, passed in 2022, limited the Iowa capital gain deduction to apply to gain from the sale of "Real property used in a farming business," beginning in tax year 2023. Except for a narrow provision allowing retired farmers to exclude the capital gain from the sale of breeding or dairy livestock when they liquidated their herds, the law eliminated the long-standing capital gain exclusion for the sale of livestock for non-retired farmers.

The 2024 bill restores prior law, allowing those who cull dairy or breeding livestock that have been held for the required period to exclude capital gain from the sale of that livestock from Iowa income.  This law applies to those farmers who earn more than 50 percent of their gross income from farming. The bill applies retroactively to include the 2023 tax year.

Those taxpayers who are eligible to amend their 2023 return to claim this deduction must wait for the Iowa Department of Revenue to amend the Iowa Form 100A to allow this retroactive change. Once the form is ready, the amended return must be filed on paper.

Note: Another bill related to HF 2317, HF 2666, was not enacted. This bill would have allowed retired farmers whose land is owned by an LLC, partnership, trust, or S corporation to qualify for the retired farmer rental income exclusion if they otherwise meet the requirements. Although this bill unanimously passed the House, it was not brought before the Senate for a vote.

The bill was passed on April 19, 2024, and signed by the Governor on May 15, 2024. It will apply retroactively to the 2023 tax year.

Enhanced Reporting and Penalties for Foreign Ownership of Agricultural Land (SF 2204)

Iowa’s law respecting the ownership of agricultural land by foreign (non-U.S.) entities or nonresident aliens continues to be among the most restrictive in the country. This bill seeks to enhance the reporting and accountability associated with the law. Currently, a foreign government or business or nonresident alien that owns agricultural land must only file a biennial report with the Secretary of State’s office. Although many restrictions prevent these entities from acquiring agricultural land, some exceptions do apply. One exception allows the foreign owners to purchase up to 320 acres of agricultural land for development. The purchaser must convert that land to a nonfarming purpose within five years.

The bill requires foreign purchasers of agricultural land to register with the Secretary of State’s office, in addition to continuing to file biennial reports. The registration must include the identity of the owners, the purpose for which the land will be used, the authority under which they are purchasing the property, and all other interests in agricultural land totaling 250 acres or more. Those currently owning agricultural land have 180 days to register. Registration reports and biennial reports are confidential and not available to the public. They may, however, be accessed by the Attorney General, the Governor, and the General Assembly for public policy purposes.

The bill requires the Secretary of State to create an annual summary of registrations and biennial reports. The bill also gives the Iowa Attorney General the right to subpoena records and require compliance with law. Finally, the law enhances penalties associated with violations. The civil penalty for failing to timely file a registration is increased to an amount not more than 25 percent of the county’s assessed value of the subject agricultural land for the previous year for "each offense."  Additionally, the civil penalty for failing to timely file a biennial report or filing false information in such report is increased to an amount of not more than $10,000.

This bill was passed by the Legislature on February 26, 2024, and signed by the Governor on April 9, 2024. It will be effective on July 1, 2024.

Misbranding of Imitation Meat and Egg Products (SF 2391)

This bill provides that a food product is misbranded as a meat product if all of the following apply: (1)  The food product is a manufactured-protein food product or the food product contains a manufactured-protein food product (trace amounts of plant proteins are insufficient to trigger the misbranded label); (2) the food product is offered for sale or sold by a food processing plant; and (3) a label for the product includes an "identifying meat term," without also containing a conspicuous and prominent "qualifying term" in close proximity to the meat term. Identifying meat terms include any phrase or word that suggests or describes a meat product, such as "broiler," or "drumstick" or "chop" or "cold cut." Qualifying terms include terms such as "cell-cultivated," "insect-based," "plant-based," or "veggie."

Manufactured-protein food products are defined by the bill as "cultivated-protein food products, insect-protein food products, or plant-protein food products."

The bill forbids the sale of misbranded products and authorizes stop orders and embargo orders. Inspections for misbranded food are to be initiated upon "credible complaints." Food processing plants that violate the law are subject to civil penalties up to $500, up to a maximum of $10,000 for violations arising out of the same transaction or occurrence.  Each day that a violation continues constitutes a separate offense. Food processing or food establishment licenses may not be suspended or revoked for violations of the misbranding law.

The bill also requires public universities, community colleges, and schools to establish policies to ensure they are not purchasing misbranded food products or cultivated-protein food products (often called "lab-grown meat").

A late amendment that became part of the bill also prevents fabricated eggs from being labeled as "eggs." As with the misbranding requirements for meat, the fabricated egg is not misbranded if the label contains a conspicuous and prominent qualifying term in close proximity to the "identifying egg term," which would include phrases or words such as "cage free," "hen," "yolk," "eggnog," or "quiche." Qualifying terms for eggs include words such as "fake," "imitation," or "vegan." Food processing plants cannot sell misbranded egg products, and the restrictions are enforceable with stop orders or embargo orders. The civil fine for violating the provisions is $500 per day, not to exceed $10,000 for the same transaction or occurrence. The license of a food processing plant will not be suspended or revoked if the establishment violates the egg misbranding restrictions. As with misbranded meat, public colleges, universities, and schools are prevented from purchasing misbranded egg products.

The most controversial section of the bill requires Iowa to seek a waiver from the USDA to prevent fabricated eggs from being eligible for purchase with SNAP or WIC benefits.

The bill was passed by the Legislature on April 10, 2024, and signed by the Governor on May 15, 2024. It will be effective July 1, 2024.

Trapping by Those under the Age of 16 (HF 2249)

The bill modifies Iowa Code § 483A.24(8) to allow those under the age of 16 to trap fur bearing animals without a license if they are accompanied by an adult with a fur harvester license.

The law was passed by the Legislature on April 10, 2024, and signed by the Governor on April 19, 2024. It will be effective July 1, 2024.

Consolidation of Snowmobile Permits (SF 2423)

Current law requires a person wishing to operate a snowmobile on public land, public ice, or a designated trail, to register the snowmobile with the Iowa Department of Natural Resources and to obtain a user permit from the DNR. Each permit costs $15. The bill removes the user permit requirement for an Iowa resident operating a snowmobile and increases the annual snowmobile registration fee from $15 to $30.

The law was passed by the Legislature on April 19, 2024, and was signed by the Governor on May 1, 2024. The law will be effective on July 1, 2024.

Individual Income Tax Rate Cuts (SF 2442)

The maximum Iowa individual income tax rate is currently scheduled to be 5.70 percent for 2024, 4.82 percent for 2025, and 3.9 percent for 2026 and beyond. In 2026 and beyond the rate is the same for all income.

This bill accelerates the scheduled rate cuts by changing the tax rate for all income in tax years 2025 and beyond to 3.8 percent. The bill also lowers the alternate income tax rate from 4.4% to 4.3% beginning in tax year 2025.

This bill was passed on April 19, 2024, and signed by the Governor on May 1, 2024. It will affect the 2025 and 2026 tax years.

Resolution Proposing Constitutional Amendment to Require a Single Individual Income Tax Rate (SJR 2004)

This resolution proposes a Constitutional amendment that would require all Iowa income to be taxed at the same rate. In other words, the amendment would prevent a future legislature from imposing a graduated tax rate. To become effective, the resolution must be ratified by the next General Assembly (91st) and then by a majority of the voters at a future election designated by the Legislature.

This resolution was passed on April 19, 2024.

This article originally appeared on the Center for Agricultural Law and Taxation website.

 

Kristine  A. Tidgren, Director, Center for Ag Law & Taxation, 515-294-6365, ktidgren@iastate.edu

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Kristine A. Tidgren

Director
Center for Ag Law & Taxation
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