The agreement came after the EPA threatened last year to step in and take over from the DNR clean water enforcement.
The Maschhoffs farm's spill happened Nov. 4, sending thousands of gallons of manure into a dry creek. Maschhoffs workers dug a pit to stop the manure flow and pumped manure back into a massive lagoon that holds millions of gallons.
In warmer months, the operation's manure is injected into the soil on about 590 acres of nearby farmland. In the winter months, when the ground is frozen, the lagoon fills with manure.
The DNR sent Maschhoffs a letter dated Nov. 19 that said its manure handling procedures resulted in a manure discharge that violated state law. It criticized the company for not reporting the spill within six hours as required. The DNR told the company to immediately apply manure from the lagoon to farmland and to prevent further discharges of manure.
"Be advised that this matter is being reviewed for consideration for enforcement action," the DNR said.
A DNR spokesman declined Tuesday to comment beyond the letter.
Enforcement could include up to $10,000 in fines imposed by the DNR, mandated operational changes, and a requirement that the operation obtain a permit under the federal Clean Water Act.
Maschhoffs responded with a letter dated Dec. 12 saying the company follows Iowa's regulations and that the spill was promptly stopped and the pipe repaired.
Company spokeswoman Julie Maschhoff said the creek into which manure flowed is not a real creek, but a drainage area in which the manure pooled and was contained. She said the manure never reached any of the state's waters.
"I think it is a very good example of how the regulations work when they are enforced. The facts are everything was done by the book. We reported the spill as soon as we discovered it."