The Joint House Senate Budget Subcommittee for Agriculture and Natural Resources Appropriations voted out an appropriation measure (TLSB 500JA 82) largely identical to spending levels authorized last year by this panel. The measure was approved by affirmative Democratic member votes from each chamber with Republican members on the Committee voting no because they did not have complete budget information about the entire budget from Democratic Leaders and Committee chairs.  The Senate voted 3-aye to 1-nay for the measure and the House voted 5-aye to 4-nay.

The bill includes language inadvertently left out of a bill dealing with a $300,000 allocation from the Renewable Fuels Infrastructure fund to IDALS to support renewable motor fuel inspection. This operation was funded the first two years of the program in HF 2759 that authorized these annual allocations for FY-2007, and FY-2008.  The $43,403,037 general fund appropriation is allocated with $21,339,509 to IDALS (a $15,000 increase compared to salary adjust FY-2008 level) and $20,019,822 to DNR (a $250,000 decrease from salary adjusted FY-2008 levels).

The bill employs a considerable amount of switching-pocket change-shifting in which a number of  funding sources are shifted from EFF to general fund and visa-versa in round-about ways.  For example, while the IDALS Administrative Division is cut by $178,663, about $150,000 is restored by an increase in administrative charge that can be used from soil conservation program funded with EFF funds in which the administrative carve-out is increased from 5 percent to 7 percent, with the exception of cost-share that stays at 5 percent. Most of the IDALS Administrative Division appropriation reduction is redirected to Soil Conservation Commission expenses which increase under this bill $150,000 above last years’ level to a proposed FY-2009 $400,000 amount. The farm to school appropriation of $80,000 is switched from EFF to the general fund and $35,000 of last year’s $40,000 EFF appropriation for apiary purposes is funded with general fund monies to bring this function total amount to $75,000 (a cumulative reduction of $5,000 for apiary programs).

Other significant funding changes proposed by this bill include:

• A $20,000 general fund reduction of chronic wasting disease funding to a proposed FY-2009 level of $80,000.
• A $1,666 general fund rounding reduction for dairy product regulatory program.
• A $2,000 general fund rounding reduction for the Senior Farmers Market program.
• A $30,000 general fund reduction for the Emergency Veterinarian Rapid Response Service.
• A $3,000 general fund rounding reduction for the Grape & Wine Development fund, which is, however, $172,000 more than the cut recommended by the Governor because his staff didn’t understand funds for contract for services for this program had been executed, but the money was not yet expended.
• A $500,000 increase EFF appropriation to fund REAP, which brings the FY-2009 level to $16-million.
• An increase of $20,000 of EFF monies for agricultural drainage well closure activities to bring the FY-2009 level to $1.5-million.
• An increase of $15,000 of EFF monies for DNR water quantity research to bring the FY-2009 level to $495,000.
• An increase of $20,000 of EFF monies for the Loess Hills Authority to bring the FY-2009 level to $600,000.
• Elimination of EFF appropriations of $150,000; $235,000; and $50,000, which reflects the end of programs respectively for flood plain studies, livestock air quality monitoring, and DNR livestock database management efforts.
• A reduction of $50,000 of EFF appropriation for Resource Conservation Development efforts to bring the FY-2009 level to $270,000. 

Two major Gubernatorial IDALS & DNR funding recommendations of a $1-million for odor research and a $20-million appropriation for REAP were not incorporated in this budget.

The full Appropriations Committee is scheduled to debate HSB 784, the Agriculture and Natural Resources budget bill for FY 09, on Thursday, March 20.  In addition, two budget subcommittees, Economic Development and Education, were expected to finally approve budget bills on Thursday.

Agriculture  -- The Senate passed Senate File 2337 by a unanimous 47-aye vote.  SF 2337 provides the Association of Iowa Fairs with the authority and power to purchase liability insurance as a purchasing group pursuant to Iowa Code section 515E.8 that regulates group insurance purchasing entities in Iowa.  This legislation was been assigned to the House Agriculture Committee which has the bill on its Wednesday, March 19, 2008, agenda for consideration.  The measure should facilitate continuing ability of small fairs to purchase affordable liability insurance they need to operate.

Biomass – The use of cellulosic biomass is attracting action both in the business world and in the legislature. Cellulosic materials have long been looked at as a potential source of raw materials for biofuel production. 

The Economic Growth Committee passed HF 2639 (HSB 762), which creates a tax credit program for those who provide for or arrange the harvest and storage of residual cellulosic biomass and its delivery to a biofuel manufacturer. The tax credit can be applied against individual income tax for up to $10 per bushel and for up to $35,000 per year.

The tax credit is meant to encourage farmers to look at uses for the “leftovers” from their crops.  HF 2639 defines cellulosic materials as the remaining biomass not having any nutritional or caloric value for feeding to agricultural animals. This can include corn stalks, corn cobs, rice straw, seed husks, and even manure. One project in Emmetsburg is already looking for ways to utilize these materials.

The cellulosic project in Emmetsburg would make up to 30 million gallons of ethanol using corn husks and hulls. The project is scheduled for completion in 2011 and hopes to get farmers thinking about selling corn cobs and other materials to produce biofuels. It will be a couple more growing seasons before there is a great demand for materials, but progress is being made.

One of the main challenges of this new process involves the logistical challenges of harvesting and transporting the materials which farmers typically discard. HF 2639 is an important step in making this resource a more practical option. In addition, industries are working to develop machinery to assist in harvesting these untapped materials.

Governor’s Appointments – There were 186 Governor appointments to 75 separate Iowa Boards and Commissions. Some of them included:

Agricultural Development Authority, Kathleen Delate, Ames
Agricultural Development Authority, Gregory Steelsmith, Beaman
Agricultural Development Authority, Annette Townsley, Letts
Environmental Protection Commission, Scott Mahr, Coralville
Iowa Board of Veterinary Medicine, Tom Colvin, Runnells
Iowa Board of Veterinary Medicine, Rexanne Struve, Manning
Iowa Grain Indemnity Fund Board, Sharon Smith, Knoxville
Iowa Grain Indemnity Fund Board, Sandy Simpson, Onawa
Iowa Great Places Advisory Board, Thomas Hanafa, Council Bluffs
Iowa Great Places Advisory Board, Robert Fritsch, Dubque
Iowa Great Places Advisory Board, Dustin Heland-Embree, Estherville
Iowa Great Places Advisory Board, David Bernstein, Sioux City
Power Fund Board, Patricia Higby, Cedar Falls
Power Fund Board, Thomas Wind, Jefferson
Renewable Fuels and Co Products Advisory Committee, Laura Rowe, Minburn
Renewable Fuels and Co Products Advisory Committee, Carrie Dodds, New Virginia
Renewable Fuels and Co Products Advisory Committee, Kevin Lewis, Urbandale

Old Bills with New Numbers:

HF 2632 RENEWABLE FUELS (Agriculture; Successor to HSB 746) – Discussions continue between affected parties. 

HF 2639 RESIDUAL BIOMASS CREDIT (Successor to HSB 762) – Creates a residual biomass tax credit for individuals and businesses. Makes the credit $10 for each ton for residual cellulosic biomass containing less than 65% lignin, cellulose, or hemicellulose that is to be purchased by a bio-fuel manufacturer. (Referred to Ways and Means)

HF 2652 MANURE ODOR RESEARCH (Successor to HSB 679) - Requires ISU, in consultation with DALS and the DNR, to conduct research into odor mitigation efforts for livestock operations and evaluate efforts in assisting new livestock operations.

SSB 3281 RENEWABLE ENERGY RESOLUTION – Proposes a resolution endorsing a national initiative to increase energy production through agricultural production.

SSB 3276 CARRY FORWARD – Limits the carry forward for tax credits under the high quality job creation program to five years.

New Bills:

HF 2658 ALTERNATIVE ENERGY FUND (Kuhn) – Appropriates $1 million for the Iowa Energy Center for administering the Alternate Energy Revolving Loan Program.  (Appropriations) Rep. Kuhn said the appropriation is intended to increase the amount of money in the loan fund and the language of the bill maybe amended.