Iowa Legislature: Bulletin_12_13

Bulletin 12-13-2023

Front matter not included

ARC 7195CCapital Investment Board, Iowa[123]Notice of Intended Action

Proposing rulemaking related to agency realignment and providing an opportunity for public comment

The Iowa Capital Investment Board hereby proposes to rescind Chapter 1, “Iowa Capital Investment Board – Administration,” Chapter 2, “Tax Credit for Investments in Qualifying Businesses and Community-Based Seed Capital Funds,” Chapter 3, “Tax Credit for Investments in Venture Capital Funds,” and Chapter 4, “Investment Tax Credits Relating to Investments in a Fund of Funds Organized by the Iowa Capital Investment Corporation,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 15E.63(11) as amended by 2023 Iowa Acts, House File 688, section 18.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 15E.Purpose and Summary Pursuant to Part IV of Executive Order 10, the Department of Revenue was directed on November 21, 2023, to propose this Notice of Intended Action to rescind the remaining chapters for the Iowa Capital Investment Board. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023. After review of the Iowa Administrative Code pursuant to Iowa Code section 15E.63(11) as amended by 2023 Iowa Acts, House File 688, the Department determined that the rules for the Board can be rescinded in their entirety. Effective June 20, 2013, the Board and the Iowa Fund of Funds are governed by the program wind-up and future repeal provisions of Iowa Code section 15E.72. Chapters 1 and 4 relate to functions of the Board prior to the wind-down that are no longer applicable. Chapter 2 relates to a program administered by the Iowa Economic Development Authority that no longer involves the Board, making rules on its role no longer relevant. The Iowa Economic Development Authority has its own rules and statutes on the program in Iowa Code sections 15E.41 through 15E.46 and 261—Chapter 115. Chapter 3 describes a tax credit that was previously administered by the Board but that was repealed in 2010.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Alana Stamas Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.350.3932 Email: alana.stamas@iowa.gov Public Hearing If requested, public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 9:30 a.m. Via video/conference call January 3, 2024 2 to 2:30 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Alana Stamas before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 123—Chapter 1.

ITEM 2. Rescind and reserve 123—Chapter 2.

ITEM 3. Rescind and reserve 123—Chapter 3.

ITEM 4. Rescind and reserve 123—Chapter 4.ARC 7131CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to organization and administration and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 1, “Organization and Administration,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 17A.3 and 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 368.9 and 368.10.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 1 and adopt a new chapter in lieu thereof. The proposed new chapter will omit statutory language from the rules and use more concise language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 12:30 to 12:45 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 8:30 to 8:45 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 1 and adopt the following new chapter in lieu thereof: CHAPTER 1ORGANIZATION AND ADMINISTRATION

263—1.1(368) Description. The primary function of the city development board is to supervise city development actions, including annexations, consolidations, discontinuances, incorporations and severances for the state of Iowa, pursuant to the provisions of Iowa Code chapter 368. Detailed information about the board’s policies and procedures can be found in Iowa Code chapter 368, in rules adopted by the board, and at www.iowaeda.com/land-planning.

263—1.2(368) Office of the board. All official communications, including submissions and requests, may be addressed to City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315, or to cdb@iowaeda.com.

263—1.3(368) Membership and quorum requirements. The board annually elects from its members a chairperson and vice-chairperson at the first regular meeting of the calendar year. Three members of the board constitute a quorum, and a quorum must be present in order for the board to take action. The affirmative vote of a majority of board members is necessary for action taken by the board.

263—1.4(368) Meetings. The board conducts regular meetings at least every other month at 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315, or at such other location as the board may designate. The chairperson or the chairperson’s designee prepares an agenda for each meeting, listing matters to be addressed. Meetings of the board are subject to the requirements of Iowa Code chapter 21. These rules are intended to implement Iowa Code sections 368.9 and 368.10. ARC 7132CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to agency procedure for rulemaking and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 2, “Agency Procedure for Rule Making,” Iowa Administrative Code, and to adopt a new Chapter 2, “Agency Procedure for Rulemaking.”Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 17A.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 2 and adopt a new chapter in lieu thereof. The new chapter will omit statutory language from the rules and clarify how the Board can be contacted regarding its rules. Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 12:45 to 1 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 8:45 to 9 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 2 and adopt the following new chapter in lieu thereof: CHAPTER 2AGENCY PROCEDURE FOR RULEMAKING

263—2.1(17A) Incorporation by reference. The city development board incorporates by this reference all such matters in Iowa Code chapter 17A that relate to procedures for rulemaking.

263—2.2(17A) Contact information. 2.2(1) General. Inquiries about board rules and the rulemaking process may be directed to City Development Board, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315. 2.2(2) Comments on proposed rules. Any public comment on a Notice of Intended Action or similar document relating to rules may be directed to City Development Board, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315, or as directed in the Notice of Intended Action or similar document. These rules are intended to implement Iowa Code chapter 17A.ARC 7133CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to petitions for rulemaking and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 3, “Petitions for Rule Making,” Iowa Administrative Code, and to adopt a new Chapter 3, “Petitions for Rulemaking.”Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 17A.17.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 3 and adopt a new chapter in lieu thereof. The proposed new chapter will clarify how to access the Uniform Rules on Agency Procedure and will omit unnecessary words.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 1 to 1:15 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 9 to 9:15 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 3 and adopt the following new chapter in lieu thereof: CHAPTER 3PETITIONS FOR RULEMAKING The city development board hereby adopts, with the following exceptions and amendments, the Uniform Rules on Agency Procedure relating to petitions for rulemaking, which are published at www.legis.iowa.gov/docs/publications/ACOD/767408.pdf.

263—3.1(17A) Petition for rulemaking. In lieu of “(designate office)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. In lieu of “(AGENCY NAME)” as the caption of the petition form, insert “BEFORE THE CITY DEVELOPMENT BOARD”.

263—3.3(17A) Inquiries. In lieu of “(designate official by full title and address)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. These rules are intended to implement Iowa Code section 17A.7.ARC 7134CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to declaratory orders and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 4, “Declaratory Orders,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 17A.9.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 4 and adopt a new chapter in lieu thereof. The new chapter will clarify how to access the Uniform Rules on Agency Procedure and will omit unnecessary words. Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 1:15 to 1:30 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 9:15 to 9:30 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 4 and adopt the following new chapter in lieu thereof: CHAPTER 4DECLARATORY ORDERS The city development board hereby adopts, with the following exceptions and amendments, the Uniform Rules on Agency Procedure relating to declaratory orders, which are published at www.legis.iowa.gov/docs/publications/ACOD/767408.pdf.

263—4.1(17A) Petition for declaratory order. In lieu of “(designate agency)”, insert “city development board”. In lieu of “(designate office)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. In lieu of “(AGENCY NAME)” as the caption on the petition form, insert “BEFORE THE CITY DEVELOPMENT BOARD”.

263—4.2(17A) Notice of petition. In lieu of “___ days (15 or less)”, insert “15 days”.

263—4.3(17A) Intervention. 4.3(1) In lieu of “___ days”, insert “15 days”.

263—4.5(17A) Inquiries. In lieu of “(designate official by full title and address)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. These rules are intended to implement Iowa Code section 17A.9.ARC 7135CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to fair information practices and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 5, “Fair Information Practices,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 386.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 22.11.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 5 and adopt a new chapter in lieu thereof. The new chapter will clarify how to access the Uniform Rules on Agency Procedure and will omit unnecessary words.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 1:30 to 1:45 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 9:30 to 9:45 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 5 and adopt the following new chapter in lieu thereof: CHAPTER 5FAIR INFORMATION PRACTICES The city development board hereby adopts, with the following exceptions and amendments, the Uniform Rules on Agency Procedure relating to fair information practices, which are published at www.legis.iowa.gov/docs/publications/ACOD/767408.pdf.

263—5.1(17A,22) Definitions. As used in this chapter: "Agency." In lieu of “(official or body issuing these rules)”, insert “city development board”.

263—5.3(17A,22) Requests for access to records. 5.3(1) Location of record. In lieu of “(insert agency head)”, insert “city development board”. In lieu of “(insert agency name and address)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. 5.3(2) Office hours. In lieu of “(insert customary office hours and, if agency does not have customary office hours of at least thirty hours per week, insert hours specified in Iowa Code section 22.4)”, insert “8 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays”. 5.3(7) Fees. c. Supervisory fee.In lieu of “(specify time period)”, insert “two hours”.

263—5.6(17A,22) Procedure by which additions, dissents, or objections may be entered into certain records. In lieu of “(designate office)”, insert “City Development Board, Iowa Economic Development Authority, 1963 Bell Avenue, Suite 200, Des Moines, Iowa 50315”. These rules are intended to implement Iowa Code section 22.11.ARC 7136CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to waiver rules and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 6, “Waiver Rules,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 17A.9A.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 6 and adopt a new chapter in lieu thereof. The new chapter will omit repetition of statutory language and clarify Board policies and procedures regarding waivers.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 1:45 to 2 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 9:45 to 10 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 6 and adopt the following new chapter in lieu thereof: CHAPTER 6WAIVER RULES

263—6.1(17A) Definitions. "Board" means the same as defined in Iowa Code section 368.1(3). "Petitioner" means a person who petitions an agency for the waiver of a rule. "Waiver" means the same as defined in Iowa Code section 17A.9A(5) as applied to an action by the board.

263—6.2(17A) Scope. This chapter outlines generally applicable standards and a uniform process for the granting of individual waivers from rules adopted by the board in situations where no other more specifically applicable law provides for waivers. To the extent another more specific provision of law governs the issuance of a waiver from a particular rule, the more specific provision shall supersede this chapter with respect to any waiver from that rule.

263—6.3(17A) Applicability. The board may grant a waiver of a rule as permitted by Iowa Code section 17A.9A(1).

263—6.4(17A) Criteria for waiver. In response to a petition completed pursuant to rule 263—6.6(17A), the board may issue a waiver if the board makes the applicable findings in Iowa Code section 17A.9A(2).

263—6.5(17A) Filing of petition. A petition for a waiver must be submitted in writing to the board as follows: 6.5(1) Pending matters. If the petition relates to a pending petition or application for city development action, the petition requesting a waiver shall be filed in the pending proceeding, using the caption of that matter. 6.5(2) Other. If the petition does not relate to a pending matter, the petition may be submitted to the board chairperson.

263—6.6(17A) Content of petition. A petition for waiver shall include the following information where applicable and known to the requester:

The name, address, and telephone number of the entity or person for whom a waiver is requested and the case number of any related city development proceeding.
A description and citation of the specific rule from which a waiver is requested.
The specific waiver requested, including the precise scope and duration.
The relevant facts that the petitioner believes would justify a waiver under each of the four criteria described in Iowa Code section 17A.9A(2). This statement shall include a signed statement from the petitioner attesting to the accuracy of the facts provided in the petition and a statement of reasons that the petitioner believes will justify a waiver.
A history of any prior contacts between the board and the petitioner relating to the activity affected by the proposed waiver, including a description of each related city development action by the requester within the past five years.
Any information known to the requester regarding the board’s treatment of similar cases.
The name, address, and telephone number of any public agency or political subdivision that might be affected by the granting of a waiver.
The name, address, and telephone number of any entity or person who would be adversely affected by the granting of a petition, including all parties to the proceeding if the petition relates to a matter pending before the board.
The name, address, and telephone number of any person with knowledge of the relevant facts relating to the proposed waiver.

263—6.7(17A) Additional information. Prior to issuing an order granting or denying a waiver, the board may request additional information from the petitioner relative to the petition and surrounding circumstances. If the petition was not filed in a contested case, the board may, on its own motion or at the petitioner’s request, schedule a meeting between the petitioner and the board’s chair, or a committee of the board, or a quorum of the board.

263—6.8(17A) Notice. The board will acknowledge a petition upon receipt. The board shall ensure that, within 30 days of the receipt of the petition, notice of the pendency of the petition and a concise summary of its contents have been provided to all persons to whom notice is required by any provision of law. In addition, the board may give notice to other persons. To accomplish this notice provision, the board may require the petitioner to serve the notice on all persons to whom notice is required by any provision of law or who may be impacted by the requested waiver and provide a written statement to the board attesting that notice has been provided.

263—6.9(17A) Hearing procedures. The provisions of Iowa Code sections 17A.10 to 17A.18A regarding contested case hearings apply to any petition for a waiver filed within a pending city development action pursuant to subrule 6.5(1). If a petition for waiver is filed with the board pursuant to subrule 6.5(2), the provisions of Iowa Code sections 17A.10 to 17A.18A apply to board proceedings for a waiver only when the board so provides by rule or order or is required to do so by statute.

263—6.10(17A) Ruling. Iowa Code section 17A.9A(3) describes certain procedural aspects for considering a petition for waiver and issuing a ruling thereon, including the burden of persuasion; the manner in which a petition for waiver must be evaluated; the limits of the waiver, if one is issued; and the circumstances under which the board may place a condition on the waiver. When the rule from which a waiver is sought establishes administrative deadlines, the board shall balance the special individual circumstances of the petitioner with the overall goal of uniform treatment of all similarly situated persons. The board shall have the sole discretion to decide whether to grant a waiver. 6.10(1) Form of ruling. An order granting or denying a waiver shall be in writing and shall contain a reference to the particular person and rule or portion thereof to which the order pertains, a statement of the relevant facts and reasons upon which the action is based, and a description of the precise scope and duration of the waiver, if one is issued. 6.10(2) Time for ruling. The board shall grant or deny a petition for a waiver as soon as practicable but, in any event, shall do so within 90 days of its receipt, unless the petitioner agrees to a later date. However, if a petition is filed in a pending city development action, the board shall grant or deny the petition no later than the time at which the final decision in that matter is issued. 6.10(3) When deemed denied. Failure of the board to grant or deny a petition within the required time period shall be deemed a denial of that petition by the board. However, the board shall remain responsible for issuing an order denying a waiver. 6.10(4) Service of order. Within seven days of its issuance, any order issued under this chapter shall be transmitted to the petitioner or the person to whom the order pertains and to any other person entitled to such notice by any provision of law. 6.10(5) Filing of waiver ruling. Within 60 days of granting or denying a waiver, the board shall submit information as required by Iowa Code section 17A.9A(4).

263—6.11(17A) Cancellation of a waiver. A waiver issued by the board pursuant to this chapter may be withdrawn, canceled, or modified if, after appropriate notice and hearing, the board issues an order finding any of the following:

The petitioner or the person who was the subject of the waiver order withheld or misrepresented material facts relevant to the propriety or desirability of the waiver;
The alternative means for ensuring that the public health, safety and welfare will be adequately protected after issuance of the waiver order have been demonstrated to be insufficient; or
The subject of the waiver order has failed to comply with all conditions contained in the order.

263—6.12(17A) Violations. Violation of a condition in a waiver order shall be treated as a violation of the particular rule for which the waiver was granted. As a result, the recipient of a waiver under this chapter who violates a condition of the waiver may be subject to the same remedies or penalties as a person who violates the rule at issue.

263—6.13(17A) Defense. After the board issues an order granting a waiver, the order is a defense within its terms and the specific facts indicated therein for the person to whom the order pertains in any proceeding in which the rule in question is sought to be invoked. These rules are intended to implement Iowa Code section 17A.9A.ARC 7137CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to voluntary annexation and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 7, “Voluntary Annexation,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 368.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 7 and adopt a new chapter in lieu thereof. The new chapter will omit repetition of statutory language and consolidate other redundant language that was previously repeated in multiple rules within the chapter. Additionally, the new chapter will clarify Board policies and procedures. The citation in the proposed chapter to rule 263—8.10(368) is to that rule as proposed in the Notice of Intended Action for 263—Chapter 8 (ARC 7138C, IAB 12/13/23).Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 2 to 2:30 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 10 to 10:30 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 7 and adopt the following new chapter in lieu thereof: CHAPTER 7VOLUNTARY ANNEXATION

263—7.1(368) Purpose and scope. This chapter addresses the requirements and processes for city development board approval of voluntary annexation within another city’s urbanized area; voluntary annexation, including property without the owner’s consent; and boundary adjustments between cities by petition and consent. Such requests for board approval shall be initiated pursuant to Iowa Code section 368.7 or 368.25A and this chapter. A city’s request for board approval of such actions will be referred to in this chapter as a petition.

263—7.2(368) Contents of petition. This rule describes the information and documentation a city is required to include in its petition. 7.2(1) Landowner application requirements. The board will verify that each landowner’s application for annexation includes the items required by Iowa Code section 368.7(1)“c” and is dated and signed by all owners of record or their authorized representatives. If voluntary annexation is requested for a parcel of land being sold on contract, the contract seller and the contract buyer should both approve the application. If voluntary annexation is requested for property owned by a business organization or entity other than a natural person or persons, the applicant should provide documentation establishing authorization to act on behalf of the owner entity. 7.2(2) City requirements. In addition to any applicable landowner applications submitted in compliance with subrule 7.2(1), a city’s petition must include all of the following: a. A general statement of the proposed annexation, briefly describing the current and expected use of the annexation territory, any services that the city currently provides to the territory, and the reasons for a landowner’s request for annexation, if known. b. A statement indicating whether the city is a party to an existing moratorium agreement entered pursuant to Iowa Code section 368.4 and, if so, whether the proposed annexation is consistent with the terms of that agreement. c. A complete legal description of the territory proposed to be annexed, including the right-of-way to the center line of all secondary roads adjoining the territory. If the applicable county and city have entered an agreement pursuant to Iowa Code chapter 28E that allows exclusion of the right-of-way, a copy of the agreement shall be included with the petition. d. Documentation that the county auditor has verified the accuracy and completeness of the legal description of all territory proposed to be annexed and verified current ownership of the parcel(s) included in the proposed territory. If the auditor fails to respond to the city’s request for verification within 14 days, the city may provide a copy of the request and a statement indicating that no response was received. e. A map clearly showing the entire boundary of the existing city, all territory proposed to be annexed, adjacent roadways, and the relationship of the territory to the petitioning city and, if the annexation territory is within the urbanized area of another city, the relationship of the territory to the neighboring city. More than one map may be submitted if necessary to provide all information required by this paragraph. f. A statement indicating whether state-owned property or county-owned road right-of-way has been included in the proposed annexation and, if so, certification that the city has complied with the notice requirements of Iowa Code section 368.5. If the territory proposed for annexation includes right-of-way for a state highway, documentation of consultation with the Iowa department of transportation should also be included. g. Certification that the city has complied with all applicable notice and hearing requirements of Iowa Code section 368.7, including proof of mailing of the application and affidavit of publication of the required public notice. If railway right-of-way or public land is included without the written consent of the owner or agency with jurisdiction over the public land, the city shall certify notice was given to the owner or agency as required by Iowa Code section 368.7(1)“c.” For purposes of calculating the required period of notice, business days include Monday through Friday of each week, except legal holidays as set forth in Iowa Code section 4.1(34). h. A city council resolution approving the landowner’s application, including, if applicable, the terms of the transition of city taxes as provided by Iowa Code sections 368.7(5) and 368.11(3)“m.” 7.2(3) Additional information for petitions, including nonconsenting landowners. In addition to the information to be included pursuant to subrule 7.2(2), a petition that includes property without the consent of the owner(s) must provide the additional information indicated in this subrule. a. Names and addresses of all owners of land included without the owners’ consent and a legal description of all land owned by each nonconsenting owner. b. Documentation submitted pursuant to paragraph 7.2(2)“d” relating to county auditor verification, including verification of the legal description of land owned by each nonconsenting owner. c. The acreage of each parcel or parcels owned by each voluntary applicant and nonconsenting landowner, the acreage of any railroad right-of-way included pursuant to Iowa Code section 368.7(1), and the acreage of any state- or county-owned property included pursuant to Iowa Code section 368.5. d. A calculation showing the percentage of the territory for which voluntary annexation applications have been received by the city and the percentage of territory included without the consent of the owner(s), prepared in a manner consistent with Iowa Code section 368.7(1)“a.” Only contiguous land area may be considered for purposes of calculating the amount of the land area which may be included without the owner’s consent. e. A map indicating the relationship of the parcels included without the consent of the owner(s) to the rest of the territory and to the city. f. The city council’s resolution approving the annexation submitted pursuant to paragraph 7.2(2)“h” that must set forth the reason(s) that land is included without the consent of the owner(s).

263—7.3(368) Filing. A city shall send two copies of its petition, including all supporting documentation, to the board. The petition will be deemed filed with the board on the date it is received by board staff. Board staff will acknowledge receipt of a petition.

263—7.4(368) Staff review. Within two weeks of receiving a petition filed pursuant to this chapter, board staff will review the petition to determine whether the city has included all required information. If the petition is incomplete, staff shall notify the petitioning city, identifying the required item(s) omitted and offering the city an opportunity to provide the omitted information prior to submission of the petition to the board.

263—7.5(368) Submission to the board—notice. 7.5(1) A petition filed pursuant to this chapter will be considered by the board at the first board meeting conducted 31 or more days after the petition is filed. The board shall provide notice of all meetings at which the board will consider a petition to the petitioning city and the entities required by Iowa Code section 368.7(3) to receive notice of an application. Such notices will be provided by regular mail. 7.5(2) If rule 263—7.8(368) applies, the board may proceed as described in that rule at a board meeting less than 31 days after the petition is filed, at the request of the petitioning city. However, if the board considers a petition pursuant to this subrule, the filings to complete an annexation approved by the board will only be made if no other petition for any or all of the applicable territory is filed with the board within 30 days of the filing of the petition.

263—7.6(368) Amendment of petition. 7.6(1) After a petition has been filed with the board, it may not be amended to include additional territory. 7.6(2) A city may, upon its own motion or at the request of the board, seek amendment to delete one or more parcels included in the territory proposed for annexation. a. A motion to amend a petition may be made at any time prior to issuance of the board order approving or denying the petition. b. The board shall provide notice of a proposed amendment to all owners of land included in the petition, the entities required by Iowa Code section 368.7(3) to receive notice of an application, and all other parties of record in the board proceeding. Such notices will be provided by regular mail. c. A party to the proceeding may file a resistance to the motion to amend within 14 days of the date of service of notice provided pursuant to paragraph 7.6(2)“b.” d. The board may grant a motion to amend a petition if it determines that the amendment serves the public interest.

263—7.7(368) Initial board review. 7.7(1) The board shall review all petitions filed pursuant to this chapter to determine compliance with the requirements of Iowa Code chapter 368 and this chapter. If a petition is incomplete or otherwise not in compliance with the requirements of Iowa Code chapter 368 or this chapter, the board may request further information from a landowner or city or may dismiss the petition. 7.7(2) If the annexation requested in the petition is barred pursuant to Iowa Code section 368.17, the board shall deny the petition, stating in its order the reason(s) for the denial.

263—7.8(368) Board proceedings on unanimous petitions when no conflicting petition is received within 30 days. 7.8(1) Applicability. Petitions will be considered pursuant to this rule when all territory proposed for annexation is included upon application of the owner, by notice to the owner of railway right-of-way pursuant to Iowa Code section 368.7(1), or by notice to the Iowa attorney general or a county attorney pursuant to Iowa Code section 368.5. 7.8(2) Information considered. Any interested person or party may submit written comment prior to or at the time of board consideration of the petition. The board may: a. Allow an opportunity for oral comment; b. Consider public documents; or c. Request additional information from affected cities, counties or persons, including any of the information required to be included in a petition for involuntary city development action pursuant to Iowa Code section 368.11(3). 7.8(3) Criteria. The board shall consider whether the proposed annexation serves the public interest and may consider the criteria for approval of involuntary city development actions, as set forth in Iowa Code section 368.16.

263—7.9(368) Board proceedings on petitions which include nonconsenting landowners. 7.9(1) Applicability. Petitions will be considered pursuant to this rule when not more than 20 percent of the land area of the territory proposed for annexation is included without the consent of the owner, pursuant to Iowa Code section 368.7(1)“a.” 7.9(2) Hearing and information considered. a. If a petition to which this rule applies is complete and in proper form, the board will conduct a public hearing on the petition. The board shall provide notice of the hearing to all owners of land included in the petition, the petitioning city, the entities required by Iowa Code section 368.7(3) to receive notice of an application, and the state department of transportation. Such notice shall be provided by regular mail sent at least ten days prior to the hearing. b. The board hearing will be conducted informally. Representatives of the petitioning city shall be given an opportunity to explain the proposed annexation, the city’s reason for including nonconsenting landowners, and any other information the city believes will assist the board in acting on the petition. The county, all owners of property within the territory proposed for annexation, the regional planning authority, affected public utilities, and any other person affected by the annexation will be provided an opportunity to submit information to the board during the hearing or in writing prior to the hearing. c. The board may request additional information from the city, county or other persons, including any of the information required to be included in a petition for involuntary city development action pursuant to Iowa Code section 368.11(3). 7.9(3) Criteria. The board shall consider the same criteria as set forth in subrule 7.8(3). The board may not approve a petition considered pursuant to this rule unless the board finds that the land of the nonconsenting owners was included to avoid creating an island or create more uniform boundaries. A petition considered pursuant to this rule shall not be approved unless four members of the board vote in favor of approving the petition.

263—7.10(368) Board proceedings when one or more conflicting petitions are received within 30 days. 7.10(1) Applicability. Petitions will be considered pursuant to this rule if any other petitions containing common territory are submitted to the board pursuant to Iowa Code chapter 368 within 30 days. If all conflicting petitions are validly dismissed or denied by the board, the board will proceed on a remaining petition as if no conflicting petition had been filed. 7.10(2) Hearing and information considered. If conflicting petition(s) are complete and in proper form, the board shall consider any petitions, including voluntary application(s) submitted by a landowner pursuant to Iowa Code section 368.7(4), and shall conduct a public hearing pursuant to the procedure set forth in subrule 7.9(2). 7.10(3) Criteria. Within 90 days of receipt of the petition, the board or a committee appointed by the board shall meet to assess the petition, including voluntary application(s) submitted by a landowner and any evidence received at the public hearing. If the petition meets the applicable requirements of Iowa Code chapter 368, the board or committee shall approve the petition unless the board makes an applicable finding as described in Iowa Code section 368.7(4)“a.” 7.10(4) Conversion to an involuntary petition. If the petition is not approved, the board shall issue an order setting forth its reason(s) for failing to approve the petition and requiring conversion of the petition into an involuntary petition. Within 30 days of the board’s order issued pursuant to this subrule, the city shall withdraw its petition or convert its petition into an involuntary petition containing all information required by Iowa Code section 368.11 and any rules adopted by the board applicable to involuntary petitions. 7.10(5) Local committee. Following conversion to an involuntary petition, the board shall order appointment of a special local committee to consider all pending petitions for annexation of common territory, pursuant to Iowa Code section 368.14A and rule 263—8.10(368). The special local committee shall conduct a public hearing to receive evidence and comment on all petitions pending before it. The committee will determine the order of presentation prior to commencement of the hearing. The committee will conduct the hearing pursuant to 263—Chapter 9. 7.10(6) Committee action. The committee shall, within a reasonable time following conclusion of the public hearing, meet to determine appropriate means to resolve the common territory issues among the petitions before it. a. The committee shall resolve common territory issues by amending or denying one or more of the pending petitions. b. Upon resolution of the common territory issues, the committee shall proceed with consideration of each remaining petition in accordance with Iowa Code sections 368.16 and 368.17 and any applicable rules adopted by the board. c. A petition converted to an involuntary petition pursuant to subrule 7.10(4) that contains some land without the consent of the owner shall not be approved unless at least four of the board members and at least one-half of the local representatives vote in favor of approval. d. The committee shall issue a separate decision setting forth its findings and conclusions relating to each of the petitions. The committee shall file its decision with the board and promptly notify the parties of the decision, as required by Iowa Code section 368.19. 7.10(7) Board action. Upon receipt of a committee decision approving all or a portion of a petition pursuant to subrule 7.10(6), the board shall proceed in acting on the decision pursuant to 263—Chapter 10.

263—7.11(368) Board proceedings when a conflicting involuntary petition was filed more than 30 days before a voluntary petition. 7.11(1) Applicability. Petitions will be considered pursuant to this rule if a petition that includes voluntary application(s) submitted by a landowner is filed more than 30 days following filing of a conflicting involuntary petition filed pursuant to Iowa Code section 368.11 and 263—Chapter 8. 7.11(2) Delay. The board will receive the petition including voluntary application(s) submitted by a landowner and table action on it until processing of the petition for involuntary annexation is complete. 7.11(3) Same city. If the petition including voluntary application(s) submitted by a landowner proposes to annex territory to the same city filing the involuntary petition, the board may proceed on the voluntary petition pursuant to rule 263—7.8(368).

263—7.12(368) Board proceedings on boundary adjustments between cities by petition and consent. 7.12(1) Petition. A petition to sever real property from one city and to annex the same real property to another city shall be initiated pursuant to Iowa Code section 368.25A. The petition pursuant to this rule shall be in substantially the same form as a petition submitted pursuant to Iowa Code section 368.7 and rule 263—7.2(368). 7.12(2) Hearing and information considered. If the petition is complete and in proper form, the board shall hold a public hearing on the severance, annexation, and any agreement between the cities pursuant to the procedure set forth in subrule 7.9(2). The board shall give notice of the public hearing in the same manner as notice given pursuant to Iowa Code section 368.11(5). The board may request additional information from the city, county or other persons, including any of the information required to be included in a petition for involuntary city development action pursuant to Iowa Code section 368.11(3). 7.12(3) Criteria. The board shall consider the same criteria as set forth in subrule 7.8(3).

263—7.13(368) Board decisions—costs. 7.13(1) Board approval. If the board approves a petition considered pursuant to this chapter, the board shall issue a written decision and provide a copy of the decision to the clerk of the annexing city; the entities required by Iowa Code section 368.7(3) to receive notice of an application; the state department of transportation; and any other parties of record in the board’s proceeding, including, if applicable, a city from which territory is severed pursuant to rule 263—7.12(368). Upon expiration of the time for appeal, the board shall file with the secretary of state and record with the county recorder of each county containing a portion of the city or territory involved copies of the board’s proceedings, as required by Iowa Code section 368.20(2). The cost of recording the board order shall be paid by the city to which territory is annexed. 7.13(2) Board denial. If the board denies a petition considered pursuant to this chapter, the board shall issue an order setting forth the reasons for the denial. A copy of the order shall be provided to the clerk of any impacted city, the entities required by Iowa Code section 368.7(3) to receive notice of an application, the state department of transportation, and any other party of record in the board’s proceeding. These rules are intended to implement Iowa Code chapter 368.ARC 7138CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to petitions for involuntary city development action and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 8, “Petitions for Involuntary City Development Action,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 368.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 8 and adopt a new chapter with the same title in lieu thereof. The proposed chapter will omit repetition of statutory language and clarify Board policies and procedures.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 2:30 to 3 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 10:30 to 11 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 8 and adopt the following new chapter in lieu thereof: CHAPTER 8PETITIONS FOR INVOLUNTARY CITY DEVELOPMENT ACTION[Prior to 12/11/02, see 263—Ch 2]

263—8.1(368) Purpose. This chapter addresses the requirements and processes for city development board approval of petitions for involuntary city development action, including incorporation, discontinuance, annexation, severance, or consolidation. Such petitions shall be initiated pursuant to Iowa Code section 368.11 or 368.13 and this chapter. The body or bodies initiating the petition will be referred to in this chapter as the petitioner.

263—8.2(368) Contents of the petition. This rule describes the information and documentation a petitioner is required to include in its petition. 8.2(1) General requirements. The petition must provide all applicable information required by Iowa Code section 368.11(3). The petition must clearly identify the petitioner, the proposed action, and the name and address of each property owner within the affected territory. Affected territory shall be identified by complete legal description including, if applicable, right-of-way to the center line of secondary roads. The petition shall state that it does not propose any action prohibited by Iowa Code section 368.17. The petition shall include an overview of the proposed action and briefly describe the affected city or cities, the affected territory and the reasons for the proposed action. 8.2(2) Moratorium. The petition shall contain a statement indicating whether an applicable city is a party to an existing moratorium agreement entered pursuant to Iowa Code section 368.4 and, if so, whether the proposed annexation is consistent with the terms of the agreement. 8.2(3) Map. The map or maps included in the petition shall clearly show all boundaries of the affected city or cities and all affected territory, adjacent roadways, the relationship of the affected territory to any city, and all geographic features deemed relevant to the proposed action. If the petition proposes incorporation, the proposed city boundary shall be shown. The board may request that the petitioner provide information demonstrating the existing and anticipated use of the territory. 8.2(4) County auditor verification. The petition shall include documentation that the county auditor has verified the accuracy and completeness of the legal description of all affected territory and verified current ownership of the parcel(s) included. If the auditor fails to respond to the petitioner’s request for verification within 14 days, the petitioner may provide a copy of the request and a statement indicating that no response was received. 8.2(5) Assessed valuations. The petition shall include the assessed valuation and classification assigned for tax purposes (agricultural, residential, commercial, etc.) for each parcel of platted and unplatted land within the affected territory. Documentation shall be provided that the information required by this subrule has been verified in writing by the applicable city or county assessor. If the assessor fails to provide the requested verification within 14 days, the petitioner may provide a copy of the request and a statement indicating that the verification was not provided. 8.2(6) Population density. Population density shall be delineated for the existing city, for the territory, and for the resulting city if the proposal is approved. Population density shall be expressed as persons per acre if the petition proposes annexation or persons per square mile if the petition proposes incorporation, discontinuance, severance or consolidation. 8.2(7) Population growth. If the petition seeks annexation, consolidation or incorporation, the petition shall include projected population growth for the city and the territory. Population projections shall be for a 10- or 20-year period and may be taken from an existing comprehensive plan or may be calculated based on relevant data if no comprehensive plan exists. 8.2(8) Regulations and projections. The petition shall include a description of current and proposed zoning regulations that apply to the affected territory. Projected development and land use patterns shall be described as if existing land use regulations will be continued and as if new applicable land use regulations would be applied after annexation, if approved. Residential, commercial, and industrial development projections shall be provided based on population projections for the city and territory.If the petition proposes annexation, the amount of vacant developable land within the existing corporate limits and within the territory, as well as an estimate of the amount of developable land needed to accommodate future growth, shall be provided. 8.2(9) Topography. Topographical information shall be in map and narrative form. Maps shall include any affected city and the affected territory and shall consist of contour lines at ten-foot intervals as may be taken from contour maps of the United States Geological Survey or any other source acceptable to the board. A narrative description shall identify flood plains, drainage areas, drainage ways, slopes and bluffs. In petitions proposing annexation or incorporation, the narrative shall also address potential impacts of topography on development of urban uses and the extension of municipal services. 8.2(10) Plans. Petitions shall describe plans for disposal of assets, assumption of liabilities, and provision of services as applicable to the action requested in the petition. a. Petitions for annexation, consolidation and incorporation shall describe existing and proposed municipal services and facilities, including but not limited to water supply, sewage disposal, police and fire protection, and street and road maintenance, and the estimated cost of providing proposed services. b. Petitions for annexation shall describe the capability of the existing city sewage system; water system; transportation infrastructure; park and recreation system; and police, fire, and public works departments to accommodate the addition of territory and projected development. The petition shall also include an analysis of existing bonding capacity and bonded indebtedness and the assets a city may receive including property tax, increase in municipal bonding capacity, state and federal shared revenues, special assessment policies, revenue bonds, user fees, and federal funds where applicable. c. Petitions for incorporation shall describe the capability of the proposed city to develop a sewage system; water system; transportation infrastructure; park and recreation system; and police, fire, and public works departments to accommodate the territory proposed for incorporation and an explanation of the assets the proposed city may receive, including property tax, an increase in municipal bonding capacity, state and federal shared revenues, special assessment policies, revenue bonds, user fees, and federal funds where applicable. d. Petitions for severance and discontinuance shall describe the adequacy of sewage disposal, water supply, police and fire protection, and other municipal services being provided to the territory by the city. Such petitions shall also include a statement of the capability and intent of the county in which the city or territory is located to assume responsibility for police protection, street and road maintenance and repair, and other services and an analysis of the capability of the township fire district to provide fire protection. e. Petitions for discontinuance shall include an inventory of all real estate, funds, and personal property owned by the city and all existing liabilities of the city, and a proposal for disposition of all assets and satisfaction or assumption of all liabilities. 8.2(11) Committee consideration. The petition shall include documentation to allow assessment of the relevant considerations for committee approval in Iowa Code section 368.16. 8.2(12) Service agreements. The petition shall identify services that may be provided through agreement with township fire districts and rural water and sanitary districts and proposed agreements with any county or city for police protection, ambulance service, or any other service deemed to be of importance to the proposed boundary adjustment and shall present examples of existing service agreements. 8.2(13) Shared roads. The petition shall include a proposed formal agreement between affected municipal corporations and counties for the maintenance and improvement and traffic control of any road that is divided as a result of an incorporation or a boundary adjustment.

263—8.3(368) Preliminary notice and public meeting. A petitioner initiating an involuntary city development proceeding shall comply with the applicable notice, publication, and public meeting requirements contained in Iowa Code section 368.11. For purposes of calculating the required period of notice, business days include Monday through Friday of each week, except legal holidays as set forth in Iowa Code section 4.1(34). Proof of substantial compliance with these requirements, including copies of certified mail receipts, certification of publication of notice of the meeting, minutes of the public meeting and copies of the documents received at the meeting, shall accompany each petition submitted pursuant to this chapter.

263—8.4(368) Filing and service. The petitioner shall send two copies of a petition, including all supporting documentation, to the board. A petition will be deemed filed with the board on the date it is received by board staff. The board shall acknowledge receipt of the petition. The petitioner shall serve notice of the filing as required by Iowa Code section 368.11(1) within seven days of filing a petition with the board. The petitioner shall file proof of compliance with the service requirement with the board.

263—8.5(368) Costs. All costs that are incurred in drafting a petition, preparing supporting documents, mailing and publishing notices and other preliminary proceedings and the cost of recording, if the proposal is approved, shall be borne by the petitioner.

263—8.6(368) Staff review of petition. Within two weeks of receiving a petition filed pursuant to this chapter, board staff will review the request to determine whether the petitioner has filed all required information. If the petition is incomplete, staff shall notify the petitioner, identifying the required item(s) omitted and offering the petitioner an opportunity to provide the omitted information prior to submission of the petition to the board.

263—8.7(368) Submission of petition to the board—notice. A petition filed pursuant to this chapter will be considered by the board at the first meeting conducted 31 days or more after the petition is filed. The board shall provide the petitioner with notice of all meetings at which the board will consider the petition.

263—8.8(368) Board review of petition—waiver. Upon submission of a petition, the board shall review the petition for substantial compliance with Iowa Code section 368.11 and this chapter. In conducting this review, the board will presume that factual assertions made within the petition are accurate. The board may, however, request and examine appropriate public records or request additional information from the petitioner if deemed necessary to its review. The board may waive any requirement of this chapter upon finding the requirement inapplicable to the petition under review.

263—8.9(368) Board action on petition. The board shall accept for further proceedings any petition that it finds to be in substantial compliance with Iowa Code section 368.11 and this chapter. The board may dismiss a petition pursuant to Iowa Code section 368.12.

263—8.10(368) Formation of local committee. If the petition is accepted by the board for further proceedings, the board shall direct the appointment of local representatives to a committee as required by Iowa Code section 368.14. Committee appointments shall be made by resolutions of the appropriate governing bodies within 45 days of issuance of the board’s order. The resolutions shall state that the local representative selected is qualified to serve on the committee pursuant to Iowa Code section 368.14. Copies of the resolutions and the address and telephone number of each local representative shall be promptly submitted to the board. In the event a city or county fails to timely notify the board of appointment of its local representative, the committee may conduct its proceedings in the absence of that local representative so long as a quorum is present. These rules are intended to implement Iowa Code chapter 368.ARC 7139CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to committee proceedings on petitions for involuntary city development action and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 9, “Committee Proceedings on Petitions for Involuntary City Development Action,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A and 368.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 9 and adopt a new chapter with the same name in lieu thereof. The proposed chapter will omit repetition of statutory language and clarify Board policies and procedures. Citations to rules in 263—Chapter 8 are to the newly proposed chapter in the Notice of Intended Action for 263—Chapter 8 (ARC 7138C, IAB 12/13/23).Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 3 to 3:30 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 11 to 11:30 a.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 9 and adopt the following new chapter in lieu thereof: CHAPTER 9COMMITTEE PROCEEDINGS ON PETITIONS FOR INVOLUNTARY CITY DEVELOPMENT ACTION[Prior to 12/11/02, see 263—Ch 3]

263—9.1(368) Formation of committee. A committee formed pursuant to Iowa Code section 368.14 and rule 263—8.10(368) shall conduct proceedings consistent with Iowa Code sections 368.15 through 368.19. The board shall notify all parties that the committee has been formed and direct the parties to file all motions, pleadings, and submissions relating to the petition with the committee, in care of the board.

263—9.2(368) Meetings. Meetings of the committee shall be conducted in compliance with Iowa Code chapter 21. 9.2(1) Scheduling. Committee hearings shall be scheduled by the board and may be tentatively scheduled when the board accepts a petition. Board staff shall verify the availability of local representatives to participate on the scheduled hearing date and will notify the board if the local representatives are not all available on the date initially selected by the board. 9.2(2) Quorum. A quorum of the committee, as established by Iowa Code section 368.14, must be present in order for the committee to conduct a meeting or hearing. 9.2(3) Chairperson. The chairperson of the board, or the chairperson’s designee, shall serve as chairperson of all committee proceedings. 9.2(4) Notice. Notice of the time, place, and purpose of each meeting shall be provided by regular mail to all parties, posted at the office of the board, and made available to all interested persons upon request. Notice of a committee public hearing will also be published as required by Iowa Code section 368.15. 9.2(5) Meeting format or location. The committee chairperson may, on the chairperson’s own motion or as requested by a party, order hearings or argument to be held by electronic means in which all parties have an opportunity to participate. The chairperson will consider convenience of the witnesses or parties, as well as the nature of the case, when a meeting format or location is chosen. Objections, if any, shall be filed with the committee and served on all parties at least three business days in advance of the hearing.

263—9.3(368) Parties to proceedings. An individual or entity may become a party by filing a written appearance identifying one person upon whom the board or committee may serve all orders or correspondence. The written appearance may be filed with the party’s initial filing in the proceeding or may be filed after the proceeding has been docketed. If available, the appearance shall include reference to the applicable docket numbers. The city for which the boundary adjustment is proposed, any city whose urbanized area contains the territory, and any county or regional planning authority that contains the territory will be considered a party without filing an appearance.

263—9.4(368) Filing of documents. Each party shall serve any document that it files with the board or committee on all other parties and provide proof of service. The board or committee shall give all parties a copy of any document filed with the board or committee that was not served on all other parties or that was provided by someone other than a party. All parties shall have an opportunity to comment on any such document either orally or in writing as the board or committee so specifies. Except as otherwise provided by law, a document is deemed filed at the time it is received by board staff. 9.4(1) Form of motions. a. No technical form for motions is required. Prehearing motions must be in writing, state the grounds for relief, and state the relief sought. b. Any party may file a written response to a motion within ten days after the motion is served, unless the time period is extended or shortened by the committee. c. In ruling on a motion, the committee may consider a failure to respond within the required time period as evidence of a lack of objection to the motion. 9.4(2) Proof of service. a. Proof of mailing includes either a legible United States Postal Service nonmetered postmark on the envelope, a certificate of service, a notarized affidavit, or a certification in substantially the following form:I certify under penalty of perjury and pursuant to the laws of Iowa that, on (date of mailing), I mailed copies of (describe document) addressed to the (insert board title) and to the names and addresses of the parties listed below by depositing the same in (a United States post office mailbox with correct postage properly affixed or state interoffice mail).(Date) (Signature) b. The committee chairperson may by order permit service or filing of a particular document by email or similar electronic means, unless precluded by a provision of law. In the absence of such an order, electronic transmission shall not satisfy service or filing requirements but may be used to supplement service or filing. 9.4(3) Time requirements. a. Time shall be computed as provided in Iowa Code section 4.1(34). b. For good cause, the committee may extend or shorten the time to take any action, except as precluded by statute. Except for good cause stated in the record, before extending or shortening the time to take any action, the committee shall afford all parties an opportunity to be heard or to file written arguments.

263—9.5(17A) Ex parte communication. 9.5(1) There shall be no communication, directly or indirectly, between the committee members that would constitute prohibited ex parte communications pursuant to Iowa Code section 17A.17. Nothing in this provision is intended to preclude the committee members from seeking the advice or help of board staff or persons other than those with a personal interest in, or advocating in, either the case under consideration or a pending factually related case involving the same parties as long as those persons do not directly or indirectly communicate to a committee member any ex parte communications they have received of a type that the committee member would be prohibited from receiving or that furnish, augment, diminish, or modify the evidence in the record. 9.5(2) Prohibitions on ex parte communications pursuant to subrule 9.5(1) commence with the receipt of a petition for board members and with appointment to a committee for local representatives and continue for as long as the case is pending. 9.5(3) To avoid prohibited ex parte communications, notice must be given in a manner reasonably calculated to give all parties a fair opportunity to participate in any communications with the committee. Notice of written communications shall be provided in compliance with rule 263—9.4(368) and may be supplemented by telephone, email or other means of notification. Where permitted, oral communications may be initiated through electronic means including all parties or their representatives. 9.5(4) Committee members may communicate with each other without notice or opportunity for parties to participate, provided that a quorum of the committee is not present. 9.5(5) Board staff or other persons may be present in deliberations or otherwise advise the committee members without notice or opportunity for parties to participate as long as they are not disqualified from participating in the making of a proposed or final decision under any provision of law and they comply with subrule 9.5(1). 9.5(6) Communications with the committee members involving uncontested scheduling or procedural matters do not require notice or opportunity for parties to participate. Parties should notify other parties prior to initiating such contact with committee members when feasible and shall notify other parties when seeking to continue hearings or other deadlines pursuant to rule 263—9.9(368). 9.5(7) A committee member who receives a prohibited ex parte communication must initially determine if the effect of the communication is so prejudicial as to warrant disqualification pursuant to rule 263—9.6(17A). If disqualification is warranted, a copy of any prohibited written communication, all written responses to the communication, a written summary stating the substance of any prohibited oral or other communication not available in written form for disclosure, all responses made, and the identity of each person from whom the committee member received a prohibited ex parte communication shall be submitted for inclusion in the record under seal by protective order. If the committee member determines that disqualification is not warranted, the documents identified in this subrule shall be included in the record of the proceeding and served on all parties. Any party desiring to rebut the prohibited communication must be allowed the opportunity to do so upon written request filed within ten days after notice of the communication. 9.5(8) Promptly after being assigned to serve as committee member, a committee member shall disclose to all parties material factual information received through ex parte communication prior to such assignment unless the factual information has already been or shortly will be disclosed pursuant to Iowa Code section 17A.13(2) or through discovery. Factual information contained in a petition or similar document need not be separately disclosed by the committee member as long as such documents have been or will shortly be provided to the parties. 9.5(9) The committee may render a proposed or final decision imposing appropriate sanctions for violations of this rule including default, a decision against the offending party, censure, or suspension or revocation of the privilege to practice before the committee.

263—9.6(17A) Disqualification. 9.6(1) A committee member shall withdraw from participation in the making of any proposed or final decision in a proceeding pursuant to this chapter if that person: a. Has a personal bias or prejudice concerning a party or a representative of a party; b. Has personally investigated or advocated, in connection with that case, the specific controversy underlying that case, another pending factually related contested case, or a pending factually related controversy that may culminate in a contested case involving the same parties; c. Is subject to the authority, direction or discretion of any person who has personally investigated or advocated in connection with that contested case, the specific controversy underlying that contested case, or a pending factually related contested case or controversy involving the same parties; d. Has acted as counsel to any person who is a private party to that proceeding within the past two years; e. Has a personal financial interest in the outcome of the case or any other significant personal interest that could be substantially affected by the outcome of the case; f. Has a spouse or relative within the third degree of relationship who (1) is a party to the case, or an officer, director or trustee of a party; (2) is a lawyer in the case; (3) is known to have an interest that could be substantially affected by the outcome of the case; or (4) is likely to be a material witness in the case; or g. Has any other legally sufficient cause to withdraw from participation in the decision making in that case. 9.6(2) The term “personally investigated” means taking affirmative steps to interview witnesses directly or to obtain documents or other information directly. The term “personally investigated” does not include general direction and supervision of assigned investigators, unsolicited receipt of information that is relayed to assigned investigators, review of another person’s investigative work product in the course of determining whether there is probable cause to initiate a proceeding, or exposure to factual information while performing other board functions, including fact gathering for purposes other than investigation of the matter that culminates in a contested case. Factual information relevant to the merits of a contested case received by a person who later serves as committee member in that case shall be disclosed if required by Iowa Code section 17A.17(3) and subrules 9.5(9) and 9.6(3). 9.6(3) If a committee member knows of information that might reasonably be deemed a basis for disqualification and decides voluntary withdrawal is unnecessary, that person shall submit the relevant information for the record by affidavit, including a statement of the reasons for the determination that withdrawal is unnecessary. 9.6(4) If a party asserts disqualification on any appropriate ground, the party shall file a motion supported by an affidavit pursuant to Iowa Code section 17A.17(7). The motion must be filed as soon as practicable after the reason alleged in the motion becomes known to the party. 9.6(5) If, during the course of the hearing, a party first becomes aware of evidence of bias or other grounds for disqualification, the party may move for disqualification but must establish the grounds by the introduction of evidence into the record.

263—9.7(368) Prehearing activities. 9.7(1) Prehearing conference. An informal conference of parties may be ordered at the discretion of the committee chairperson or at the request of any party prior to a hearing in any proceeding. A written request for prehearing conference or an order for prehearing conference on the committee chairperson’s own motion shall be filed not less than ten days prior to the hearing date. A prehearing conference shall be scheduled not less than five business days prior to the hearing date. a. Notice of a prehearing conference shall be provided as described in subrule 9.2(4). b. A prehearing conference may be ordered for the purpose of formulating issues and considering the following: (1) The simplification of issues. (2) The necessity or desirability of amending the petition or other filings for the purpose of clarification, amplification or limitation. (3) Stipulations of law or fact or on the admissibility of exhibits. (4) The procedure at the hearing. (5) The propriety of prior mutual exchange of prepared testimony and exhibits between or among the parties. (6) Such other matters as may aid in the simplification of the evidence and disposition of the proceeding. c. Action agreed upon at the conference shall be made a part of the record in such manner as may be prescribed by the committee chairperson at the close of the conference. 9.7(2) Discovery. Parties involved in involuntary boundary adjustment proceedings shall follow the discovery procedures specified in the Iowa Rules of Civil Procedure. At the public hearings, such evidence may be introduced and entered into the record if the evidence would otherwise be admissible. a. Discovery procedures applicable in civil actions apply to proceedings conducted pursuant to this chapter. Unless lengthened or shortened by these rules or by order of the committee chairperson, time periods for compliance with discovery shall be as provided in the Iowa Rules of Civil Procedure. b. Any motion relating to discovery shall allege that the moving party has previously made a good-faith attempt to resolve the discovery issues involved with the opposing party. Motions in regard to discovery shall be ruled upon by the committee. Opposing parties shall be afforded the opportunity to respond within ten days of the filing of the motion unless the time is shortened as provided in subrule 9.4(3). The committee may rule on the basis of the written motion and any response or may order argument on the motion. c. Interrogatories, depositions and other documents and evidence discovered shall not be submitted to the committee prior to the public hearings. Evidence obtained in discovery may be used in the boundary adjustment proceeding if that evidence would otherwise be admissible in that proceeding. 9.7(3) Subpoenas. Witnesses who are subpoenaed are entitled to the same fees as subpoenaed witnesses in the district court of Iowa. These fees shall be paid by the party at whose insistence the testimony is to be given. Service of subpoenas shall be in like manner as provided by law for service of subpoenas in the district court of Iowa. a. Board staff shall issue subpoenas upon written request. Subpoenas issued may compel the attendance of witnesses at depositions or hearings and may compel the production of books, papers, records, and other real evidence. A command to produce evidence or to permit inspection may be joined with a command to appear at depositions or hearings or may be issued separately. b. A request for a subpoena shall include the following information, as applicable: (1) The name, address and telephone number of the person requesting the subpoena; (2) The name and address of the person to whom the subpoena shall be directed; (3) The date, time and location at which the person shall be commanded to attend and give testimony; (4) Whether the testimony is requested in connection with a deposition or hearing; (5) A description of the books, papers, records or other real evidence requested; (6) The date, time and location for production or inspection and copying. c. Each subpoena shall contain, as applicable: (1) The caption of the case; (2) The name, address and telephone number of the person who requested the subpoena; (3) The name and address of the person to whom the subpoena is directed; (4) The date, time and location at which the person is commanded to appear; (5) Whether the testimony is commanded in connection with a deposition or hearing; (6) A description of the books, papers, records or other real evidence the person is commanded to produce; (7) The date, time, and location for production, or inspection and copying; (8) The time within which a motion to quash or modify the subpoena must be filed; (9) The signature, address and telephone number of the board’s administrator or designee; (10) The date of issuance; (11) A return of service. d. Board staff shall mail or provide the subpoenas to the requesting party. The person who requested the subpoena is responsible for serving the subpoena upon the subject of the subpoena and providing copies of the subpoena to all parties to the proceeding. e. Any person who is aggrieved or adversely affected by compliance with the subpoena, or any party who desires to challenge the subpoena, must, within 14 days after service of the subpoena, or before the time specified for compliance if such time is less than 14 days, file with the committee a motion to quash or modify the subpoena. The motion shall describe the legal reasons why the subpoena should be quashed or modified, and may be accompanied by legal briefs or factual affidavits. f. Upon receipt of a timely motion to quash or modify a subpoena, the committee may issue a decision. The committee may quash or modify the subpoena, deny the motion, or issue an appropriate protective order. Prior to ruling on the motion, the committee may schedule oral argument or hearing by electronic means or in person.

263—9.8(368) Notice of public hearings. Notices shall comply with subrule 9.2(4). 9.8(1) Notice of the public hearing shall include: a. A statement of the time, place and nature of the hearing; b. A statement of the legal authority and jurisdiction under which the hearing is to be held; c. A reference to the particular sections of the statutes and rules involved; and d. A short and plain statement of the matters asserted. 9.8(2) Notice of the public hearing shall comply with Iowa Code section 362.3 and chapter 21.

263—9.9(368) Continuance. Hearings or proceedings relating to matters that are within the jurisdiction of the committee may be continued by the committee, and notice thereof shall be given to all parties. Prior to the commencement of the hearing or other proceeding, a party may, upon written motion to the committee, request a continuance. Copies of said written motion must include proof of service upon all parties to the proceedings. All parties shall have an opportunity to file resistances to said motion, and the committee may, in its discretion, allow the parties to present oral arguments relative to the motion pursuant to rule 263—9.4(368). A party may, during said hearing or proceeding, but not ex parte, request a continuance. All parties shall have an opportunity to comment on a request for a continuance made at the hearing either orally or in writing as specified by the committee. 9.9(1) A written application for a continuance shall: a. Be made at the earliest possible time and no less than seven days before the hearing except in case of unanticipated emergencies; b. State the specific reasons for the request; and c. Be signed by the requesting party or the party’s representative. 9.9(2) An oral application for a continuance may be made if the committee waives the requirement for a written motion. However, a party making such an oral application for a continuance must confirm that request by written application within five days after the oral request unless that requirement is waived by the committee. No application for continuance shall be made or granted without notice to all parties except in an emergency where notice is not feasible. 9.9(3) In determining whether to grant a continuance, the committee may require documentation of any grounds for continuance, and may consider: a. Prior continuances; b. The interests of all parties; c. The likelihood of informal settlement; d. The existence of an emergency; e. Any objection; f. Any applicable time requirements; g. The existence of a conflict in the schedules of counsel, parties or witnesses; h. The timeliness of the request; and i. Other relevant factors. 9.9(4) Board staff may enter an order granting an uncontested application for a continuance. Upon consultation with the committee chairperson or the chairperson’s designee, board staff may deny an uncontested application for a continuance or rule on a contested application for continuance. 9.9(5) If a hearing is continued prior to the commencement of the hearing, notice of the continued hearing will be given as required in rule 263—9.8(368).

263—9.10(368) Public hearings. 9.10(1) General provisions. a. Public hearings shall be held on dates and at locations determined by the committee. The hearing shall be held in a place open to the public. b. The committee shall, prior to serving notice, make the petition or plan available for public inspection. The committee shall ensure that the petition or plan is available on or before the date of notice and publication. c. Before testimony is presented, the record shall show the identity of the committee members present, identity of the assistant attorney general and board staff, identity of the primary parties and their representatives, and the fact that all testimony is being recorded. The chairperson may also outline any ground rules and time limitations to allow all parties an opportunity to speak. The committee chairperson or assistant attorney general representing the committee may make a brief opening statement, including a summary of actions taken by the committee prior to the hearing. d. The committee chairperson shall be in control of the proceedings and have the authority to admit or exclude testimony or other evidence and to rule on all motions and objections. e. The committee shall listen to testimony and arguments from all those concerned and may ask questions of anyone at any point during any hearing. f. Legal counsel shall be at the discretion and expense of any party to the proceedings. g. Parties appearing before the committee should select one or two persons to serve as primary spokespersons for their positions. h. Any objection with respect to the conduct of the hearing, including an objection to the introduction of evidence, may be stated either orally or in writing, shall be accompanied by a short statement of the grounds of such objections, and shall be included in the record. No such objection shall be deemed waived by further participation by the objector in the hearing or proceeding. i. The committee may adjourn a hearing for good cause from time to time, upon request of either party or legal counsel representing the committee, for the purpose of a fair hearing. j. The committee chairperson shall maintain the decorum of the hearing and may refuse to admit or may expel anyone whose conduct is disorderly. 9.10(2) Format of public hearings. The format of the public hearings will generally follow the procedure outlined below. However, the committee chairperson may tailor the format to the nature of the case. The petitioners shall have the burden of proof and shall present their evidence first. Other parties in the case will present their evidence following the petitioners as determined by the committee chairperson. The format will generally permit each party an opportunity to make an opening statement, including the names of any witnesses to be called to explain the party’s basic arguments, and to present testimony, evidence and exhibits in support of the party’s arguments. a. After each party’s presentation, questions may be asked of the presenters by members of the committee. Then the other parties may ask questions and cross-examine witnesses. Then others who are not parties may ask questions of the presenters. b. After the cross-examination and questioning are completed, there will be a comment period during which those who are not parties may make comments expressing their views regarding the petition. Those who wish to comment need not preregister with the committee prior to the hearing but need only to sign up at the time of the hearing. The committee chairperson may limit the length of the comments when a large number of people wish to testify. c. After the comment period, the parties will be offered an opportunity for rebuttal to evidence presented during the hearing. The petitioner will have the final opportunity for rebuttal. d. At the conclusion of all presentation of evidence, each party shall be permitted an opportunity for a closing statement summarizing its arguments. e. Failure to appear. (1) If a party to a hearing fails to appear, that party shall be deemed to have waived opportunity for the hearing or to participate in the hearing unless there is a show of good cause for such failure. (2) If a petitioner fails to appear at a proceeding, the hearing may be dismissed or postponed at the discretion of the committee or the committee may approve the petition on the basis of verified proof and affidavits, if any, filed in the case, which shall be considered as having been offered in evidence at the hearing by the petitioner. 9.10(3) Testimony at hearings. At the public hearing, evidence may be presented in narrative form or question and answer form for each witness at the discretion of the committee chairperson. a. At the public hearing, all parties shall be allowed the opportunity to cross-examine witnesses and be given an opportunity for rebuttal. b. The committee members have the right to examine witnesses at any stage of the witnesses’ testimony. The committee chairperson may limit questioning in a manner consistent with law. 9.10(4) Evidence. Rules of evidence shall be those set forth in Iowa Code section 17A.14. a. The committee chairperson shall rule on admissibility of evidence and may, where appropriate, take official notice of facts in accordance with all applicable requirements of law. b. Any party may object to specific evidence or may request limits on the scope of any examination or cross-examination. Such an objection must be timely and shall be accompanied by a brief statement of the grounds upon which it is based. The objection, the ruling on the objection, and the reasons for the ruling shall be noted in the record. The committee chairperson may rule on the objection at the time it is made or may reserve a ruling until the written decision. c. Whenever evidence is ruled inadmissible, the party offering that evidence may submit an offer of proof on the record. The party making the offer of proof for excluded oral testimony shall briefly summarize the testimony or, with permission of the committee chairperson, present the testimony. If the excluded evidence consists of a document or exhibit, it shall be marked as part of an offer of proof and inserted in the record. d. Individuals unable to attend a public hearing may submit written comments to the committee. Written comments shall become part of the permanent file of the hearing. e. When any material or relevant matter offered in evidence by any party is embraced in a book, paper or document containing other matter not material or relevant, the party offering the same shall plainly designate the matter so offered. If, in the judgment of the committee, such immaterial or irrelevant matter would unnecessarily encumber the record, such book, paper or document will not be received in evidence as a whole, but the material or relevant portions thereof, if otherwise admissible, may be read into the record or a true copy thereof supplied in the form of an exhibit. f. The committee may take note of appropriate public documents and records of a general scientific or technical nature by notice to all parties involved, limiting the time within which such parties may object to the accuracy of the facts sought to be proved from such documents or records. g. The party seeking admission of an exhibit must provide opposing parties with an opportunity to examine the exhibit prior to the ruling on its admissibility. Copies of documents shall be provided to opposing parties. Copies shall also be furnished to members of the committee. All exhibits admitted into evidence shall be appropriately marked, and the original exhibit shall be made part of the record. Written or printed materials shall be in sufficient quantity to supply one copy for each member of the committee and one copy for all other parties to the proceedings. h. Stipulation of facts is encouraged. The committee chairperson may make decisions based on stipulated facts. i. At any stage of the hearing or after the close of the hearing but prior to decision, the committee may call for further evidence to be presented by the parties concerned. All parties shall be given a copy of said additional evidence and shall have an opportunity to comment on said evidence either orally or in writing as the committee so specifies. 9.10(5) Record of public hearing. a. Oral proceedings shall be recorded. b. Board staff shall prepare an official record of all proceedings, including testimony and exhibits. Testimony taken by a mechanical recording device may be incorporated by reference if a transcript is not made. Transcription of the oral proceedings will be retained by the board for two years following the decision or until the case is resolved, whichever is later. c. Upon request, the board shall provide a copy of the whole record or any portion of the record. The requesting party may be required to pay the cost of preparing a copy of the record. 9.10(6) Posthearing brief. The committee shall allow ten days after the final public hearing within which the parties may file briefs. a. Unless otherwise ordered by the committee chairperson, initial briefs shall be filed simultaneously by all parties. Briefs shall contain a concise statement of the case. Arguments shall be based on evidence introduced during the proceeding and shall specify the portions of the record where the evidence is found. No new evidence may be included in the posthearing briefs absent a request from the committee and compliance with paragraph 9.10(4)“i.” The initial brief of the party who bears the burden of proof shall include all arguments it intends to offer in its brief in support of its case and against the record case of the adverse party or parties. b. Reply briefs shall also be filed simultaneously, but only by those parties filing initial briefs, on a schedule set by the committee chairperson. A reply brief shall be confined to refuting arguments made in the brief of an adverse party. c. A copy of such briefs shall be given to the committee and all parties and shall be accompanied by written evidence of service upon all parties. d. A party’s failure to address an issue by brief shall not be deemed a waiver of that issue and shall not preclude the committee from deciding the issue on the basis of evidence appearing in the record. e. The committee chairperson may set a date and time for oral argument (including a time limit for argument), either in addition to or in lieu of briefs, when deemed necessary or in the public interest by the chairperson. Failure to discuss in oral argument points properly made in the briefs shall not be deemed a waiver thereof.

263—9.11(368) Committee decision. 9.11(1) After the final public hearing and filing of briefs, the committee will meet to decide whether or not to approve the petition. a. Notice of the meeting will be provided pursuant to subrule 9.2(4). b. The committee may consider all information and arguments presented at the public hearing and in the briefs that were filed. c. No additional oral or written testimony will be taken or considered. d. The committee may conduct its deliberations in closed session pursuant to Iowa Code section 21.5 but shall announce its decision in open session. e. Within 90 days after the final public hearing, the committee shall approve or disapprove the petition or plan and shall file its written decision for record. f. The committee may amend the petition or plan prior to approving it. g. Decisions shall be in writing and rendered following the hearing. The decision shall include: (1) Identification of parties and basic issues. (2) Summary of findings of fact. (3) Summary of conclusions of law. (4) Ruling. (5) Reasons for ruling. (6) Order for implementation of the decision. 9.11(2) Committee decisions, orders or rulings shall be signed by the chairperson or the chairperson’s authorized designee. Copies of the written decision shall be mailed to the parties. 9.11(3) A request for a decision that seeks only a change in the effective date shall be made by motion filed, served and acted upon in a like manner as other motions.

263—9.12(368) Appeal of a committee decision. 9.12(1) An appeal of a committee decision or the legality of an election on the proposed boundary adjustment may be made pursuant to Iowa Code sections 17A.19 and 368.22. 9.12(2) Within 30 days of being notified of the filing of an appeal, board staff shall transmit a certified copy of the entire record of proceedings to the reviewing court. By stipulation of all parties to the appeal, the record of the proceedings may be shortened.

263—9.13(368) Rehearing procedures. 9.13(1) Any party to a boundary adjustment proceeding may file an application for rehearing of the committee decision to approve or disapprove a proposed boundary adjustment. 9.13(2) The application for rehearing shall be filed within 20 days of the date of the committee decision as specified in the order. If no date is specified in the order, the date of the committee decision is the date it is mailed or the date of delivery if service is by another means. 9.13(3) The party applying for rehearing shall transmit a copy of the application for rehearing to all parties to the proceeding on the date of filing with the committee. If the application does not contain a certificate of service, the board shall file copies of the application on all parties, with the time for response beginning then. 9.13(4) Contents of application. a. An application for rehearing shall specify the findings of fact and conclusions of law claimed to be erroneous and include a brief statement of the grounds of error. b. The application shall state whether the applicant desires reconsideration of all or part of the committee decision on the existing record and whether, on the basis of paragraph 9.13(4)“c,” the applicant requests an opportunity to provide additional evidence. c. A party may request the taking of additional evidence only by establishing: (1) The facts or other evidence arose after the original proceeding; (2) The party offering such evidence could not reasonably have provided such evidence at the original proceeding; or (3) The party offering the additional evidence was misled by any party as to the necessity for offering such evidence at the original proceeding. d. No further hearing will be granted when it is apparent that the added evidence will merely be cumulative. e. Any party may object to or resist an application for rehearing by filing a resistance with the committee within ten days of the filing of the application. f. The committee may grant or deny an application with or without a hearing on the application. (1) The application for rehearing shall be deemed denied unless the committee grants the application within 20 days of its filing. (2) An order granting or denying an application for rehearing is deemed issued on the date it is mailed by the committee or the date it is received if another method of delivery is used. (3) If the committee grants an application for rehearing, the committee may schedule oral argument or rehearing on the application if additional evidence will be received. If additional evidence will not be received, the committee may issue a ruling without oral argument or hearing. The committee may, on the request of a party or on its own motion, order or permit the parties to provide written argument on one or more designated issues. (4) If the committee denies an application, the committee shall proceed as if no application had been filed. These rules are intended to implement Iowa Code chapters 17A and 368.ARC 7140CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to board proceedings on petitions for involuntary boundary change after committee approval and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 10, “Board Proceedings on Petitions for Involuntary Boundary Change After Committee Approval,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 368 and section 17A.19.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 10 and adopt a new chapter in lieu thereof. The proposed new chapter will omit repetition of statutory language and clarify Board policies and procedures. Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 2, 2024 3:30 to 4 p.m. 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review January 9, 2024 11:30 a.m. to 12 noon 1963 Bell Avenue Des Moines, Iowa Registration information for online participation may be found at www.iowaeda.com/red-tape-review Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 263—Chapter 10 and adopt the following new chapter in lieu thereof: CHAPTER 10BOARD PROCEEDINGS ON PETITIONS FOR INVOLUNTARY BOUNDARY CHANGE AFTER COMMITTEE APPROVAL

263—10.1(368) Election. If a petition or plan is approved, the board shall submit the proposal at an election held pursuant to Iowa Code section 368.19, regardless of appeal or applications for rehearing filed pursuant to rule 263—9.13(368).

263—10.2(368) Final order. The board will issue an order stating the boundary change is complete in conjunction with the procedure after approval specified in Iowa Code section 368.20 and include such order with documents filed or recorded.

263—10.3(368) Record. 10.3(1) The record of an involuntary boundary adjustment proceeding shall include the following as applicable: a. The original petition or plan and any amendment; b. Proofs of service and publication of required public hearing notices; c. All pleadings filed with the board and committee and any answers or rulings on the pleadings; d. The public hearing transcript and all evidence received at public hearing; e. All briefs and documents filed on the board or committee by parties to the proceedings and all other filings made by those not parties; f. Public documents referenced by the board or committee; g. The committee’s findings of fact, conclusions of law and determination; h. The board’s election order; i. Certification and proof of publication of election results; j. The board’s final order. 10.3(2) The record shall be opened when a petition is filed with the board and shall be closed when the board has issued its final order.

263—10.4(368) Appeal. 10.4(1) When an appeal is filed pursuant to Iowa Code section 368.22, the appellant shall notify the board and provide a copy of the appeal. 10.4(2) Within 30 days after the filing of the petition, the board shall transmit to the reviewing court the original or a certified copy of the entire record of the case that is the subject of the petition. By stipulation of all parties to the review proceedings, the record of such a case may be shortened.

263—10.5(368) Board supervision of proposal execution. The board shall proceed accordingly in the following cases: 10.5(1) Discontinuance. The board will supervise discontinuance of a city pursuant to Iowa Code section 368.21. The board shall take control of all city balances, property, and records during the six-month period following the last notice of discontinuance published by the board. Upon the close of the six-month period, the board shall determine the extent of any unpaid allowed claims and such determination shall be verified by a certified public accountant or by the state auditor. In the case of unpaid allowed claims, the board shall approve payment from the discontinued city’s account or shall direct the appropriate governing body to levy the necessary taxes. 10.5(2) Boundary adjustment. The board may, upon request of the applicable governing bodies, provide advisory assistance in implementation of an annexation, severance, or consolidation. 10.5(3) Consolidation. After a consolidation has been approved in an election held pursuant to Iowa Code section 368.19, the board may authorize the cities to continue to operate as individual cities until an election of a new city council has been held and the result certified. The election of a new city council shall be held within 90 days of the date of the appeal period authorized by Iowa Code section 368.22. These rules are intended to implement Iowa Code section 17A.19 and chapter 368. ARC 7141CCity Development Board[263]Notice of Intended Action

Proposing rulemaking related to identification and annexation of islands and providing an opportunity for public comment

The City Development Board hereby proposes to rescind Chapter 11, “Islands—Identification and Annexation,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 368.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, 1991 Iowa Acts, House File 182.Purpose and Summary Pursuant to Executive Order 10, the Board proposes to rescind Chapter 11. The Board was directed to initiate this Notice of Intended Action. The chapter describes the process by which islands (as defined in Iowa Code section 368.1(10)) were identified by county boards of supervisors and annexed to surrounding cities by the Board pursuant to 1991 Iowa Acts, House File 182. The legislation granted the Board the authority to annex islands to surrounding cities that were identified prior to January 15, 1992, and also prevented the creation of additional islands after the effective date of the Act. Because the time period for identification and annexation of islands has passed and no additional islands can be created, the chapter is obsolete. Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 263—Chapter 6. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 9, 2024. Comments should be directed to: Lisa Connell Iowa Economic Development Authority 1963 Bell Avenue, Suite 200 Des Moines, Iowa 50315 Phone: 515.348.6163 Email: lisa.connell@iowaeda.com Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rulemaking may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 263—Chapter 11.ARC 7194CEducational Examiners Board[282]Notice of Intended Action

Proposing rulemaking related to complaints, investigations, and contested case hearings and providing an opportunity for public comment

The Educational Examiners Board hereby proposes to amend Chapter 11, “Complaints, Investigations, Contested Case Hearings,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 272.2(15) as amended by 2023 Iowa Acts, House File 430.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 272.2.Purpose and Summary 2023 Iowa Acts, House File 430, directs the Board to adopt rules related to retention of records, public notice, the evaluation of past complaints, and investigations. This proposed rulemaking implements that legislation.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 282—Chapter 6. Public Comment Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Beth Myers Board of Educational Examiners 701 East Court Avenue, Suite A Des Moines, Iowa 50309-0147 Fax: 515.281.7669 Email: beth.myers@iowa.gov Public Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: January 31, 2024 1 to 2 p.m. Board Room 701 East Court Avenue, Suite A Des Moines, Iowa Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Amend subrule 11.4(9) as follows: 11.4(9) Confidentiality. All complaint files, investigation files, other investigation reports, and other investigation information in the possession of the board or its employees or agents, which relate to licensee discipline, are privileged and confidential, and are not subject to discovery, subpoena, or other means of legal compulsion for their release to a person other than the respondent and the board and its employees and agents involved in licensee discipline, and are not admissible in evidence in a judicial or administrative proceeding other than the proceeding involving licensee discipline. However, investigative information in the possession of the board or its employees or agents which is related to licensee discipline may be disclosed to appropriate licensing authorities within this state, the appropriate licensing authorities in another state, the District of Columbia, or a territory or country in which the licensee is licensed or has applied for a license.Records related to written complaints shall be collected and retained and shall be evaluated if a similar complaint has been filed against the same licensed practitioner. Afinding of probable cause, a final written decision, anda finding of fact by the board in a disciplinary proceeding isconstitute a public record.

ITEM 2. Amend rule 282—11.5(272) as follows:

282—11.5(272) Investigation of complaints or license reports. The chairperson of the board or the chairperson’s designee may request an investigator to investigate the complaint or report received by the board from another state, territory or other jurisdiction concerning license or certificate revocation or suspension pursuant to subrule 11.4(7); providing that the jurisdictional requirements have been met on the face of the complaint. The investigation shall be limited to the allegations contained on the face of the complaint. The investigator may consult an assistant attorney general concerning the investigation or evidence produced from the investigation. Upon completion of the investigation, the investigator shall prepare a report of the investigation for consideration by the board in determining whether probable cause exists.The investigation of the complaint shall be finalized even if the licensed practitioner resigns or surrenders the practitioner’s license, certificate, authorization, or statement of recognition during the investigation. The board shall investigate whether or not an administrator who is employed by the school that employs a licensed practitioner who is the subject of an investigation initiated under Iowa Code section 272.15(1)“a” as amended by 2023 Iowa Acts, House File 430, filed a written complaint and whether or not the administrator was required to report to the board pursuant to Iowa Code section 272.15 as amended by 2023 Iowa Acts, House File 430.ARC 7193CEducational Examiners Board[282]Notice of Intended Action

Proposing rulemaking related to renewal or extension fees and providing an opportunity for public comment

The Educational Examiners Board hereby proposes to amend Chapter 12, “Fees,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 17A.6 as enacted by 2023 Iowa Acts, House File 688, and sections 272.2 and 272.10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 272.10.Purpose and Summary 2023 Iowa Acts, House File 672, creates a new renewal option with a reduced fee. 2023 Iowa Acts, House File 688, directs all agencies to adopt rules related to fees. This proposed rulemaking implements that legislation.Fiscal Impact No new costs are anticipated; however, agency revenues will be reduced by an estimated $116,000 per year. Twenty-five percent of fees collected annually by the Board are credited to the General Fund, and the reduction in fees will result in a decrease of approximately $37,000 to the General Fund annually. Jobs Impact The rulemaking will help with recruitment and retention for educators.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 282—Chapter 6. Public Comment Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Beth Myers Board of Educational Examiners 701 East Court Avenue, Suite A Des Moines, Iowa 50309-0147 Fax: 515.281.7669 Email: beth.myers@iowa.gov Public Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: January 31, 2024 1 to 2 p.m. Board Room 701 East Court Avenue, Suite A Des Moines, Iowa Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Amend rule 282—12.2(272) as follows:

282—12.2(272) Fees for the renewal or extension of licenses, certificates, statements of professional recognition, and authorizations. The fee for the renewal or extension of a license, certificate, statement of professional recognition, or authorization shall be $85 unless otherwise specified below:

The renewal of the paraeducator certificate shall be $40.
The renewal of the behind-the-wheel authorization shall be $40.
A one-year extension for renewal of a coaching authorization shall be $40.
A one-year extension of the initial license shall be $25. This extension may be issued if the applicant needs one additional year to meet the experience requirement for the standard license, but has met Iowa teaching standards, pursuant to rule 282—20.4(272).
AThe fee shall be $25 fee for an extension of the initial administrator license, which may be issued instead of renewing the initial administrator license if the applicant verifies one of the criteria listed in 282—subrule 20.8(2).
The fee for the renewal of a license, certificate, statement of professional recognition, or authorization for practitioners with a master’s degree or higher who have ten or more years of experience in education shall be $50.

ARC 7169CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to general accreditation standards and providing an opportunity for public comment

The State Board of Education hereby proposes to amend Chapter 12, “General Accreditation Standards,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 256.7(5).State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, Senate File 496.Purpose and Summary This proposed rulemaking addresses items required by Senate File 496. These deal with age-appropriate instruction; requirements for library programs, including library materials and online availability of library catalogs; compliance with newly enacted Iowa Code section 279.80 (related to the provision of any “program, curriculum, test, survey, questionnaire, promotion, or instruction relating to gender identity or sexual orientation to students in kindergarten through grade six”); and provisions with parental rights for accurate information regarding their children’s gender identity. The proposed rulemaking contains new enforcement mechanisms in addition to those currently existing under Chapter 12. Those new enforcement mechanisms are required by Senate File 496.Fiscal Impact There is an unknown fiscal impact to the Iowa Department of Education. The estimated fiscal impact for districts was set out in the Fiscal Note prepared for Senate File 496, available at www.legis.iowa.gov/docs/publications/FN/1370427.pdf.Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.281.8661 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2:30 to 3 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10:30 to 11 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Strike “multicultural and gender fair” wherever it appears in 281—Chapter 12 and insert “age-appropriate, multicultural, and gender fair” in lieu thereof.

ITEM 2. Strike “Multicultural and gender fair” wherever it appears in 281—Chapter 12 and insert “Age-appropriate, multicultural, and gender fair” in lieu thereof:

ITEM 3. Strike “multicultural, gender fair” wherever it appears in 281—Chapter 12 and insert “age-appropriate, multicultural, and gender fair” in lieu thereof:

ITEM 4. Adopt the following new definitions of “Age-appropriate” and “Sex act” in rule 281—12.2(256): "Age-appropriate," with the exception of the human growth and development, means topics, messages, and teaching methods suitable to particular ages or age groups of children and adolescents, based on developing cognitive, emotional, and behavioral capacity typical for the age or age group. “Age-appropriate” does not include any material with descriptions or visual depictions of a sex act. A reference or mention of a sex act in a way that does not describe or visually depict a sex act as defined in these rules is not included in the previous sentence. For purposes of human growth and development instruction required by Iowa Code section 279.50, “age-appropriate” means topics, messages, and teaching methods suitable to particular ages or age groups of children and adolescents, based on developing cognitive, emotional, and behavioral capacity typical for the age or age group. "Sex act" means any sexual contact between two or more persons by any of the following:

Penetration of the penis into the vagina or anus.
Contact between the mouth and genitalia or mouth and anus or by contact between the genitalia of one person and the genitalia or anus of another person.
Contact between the finger, hand, or other body part of one person and the genitalia or anus of another person, except in the course of examination or treatment by a person licensed pursuant to Iowa Code chapters 148, 148C, 151, or 152.
Ejaculation onto the person of another.
Use of artificial sexual organs or substitutes therefore in contact with the genitalia or anus.
The touching of a person’s own genitals or anus with a finger, hand, or artificial sexual organ or other similar device at the direction of another person.

ITEM 5. Adopt the following new paragraph 12.3(12)"d": d. General. Each school district shall establish a kindergarten through grade 12 library program that is consistent with Iowa Code section 280.6 and with the educational standards established in this chapter, contains only age-appropriate materials, and supports the student achievement goals of the total school curriculum. (1) If, after investigation, the department determines that a school district or an employee of a school district has violated the provisions of this paragraph related to library programs containing only age-appropriate materials, beginning January 1, 2024, the school district or employee of the school district, as applicable, shall be subject to the following: 1. For the first violation of this paragraph, the department shall issue a written warning to the board of directors of the school district or the employee, as applicable. 2. For a second or subsequent violation of this paragraph, if the department finds that a school district knowingly violated this paragraph, the superintendent of the school district shall be subject to a hearing conducted by the board of educational examiners, which may result in disciplinary action. 3. For a second or subsequent violation of this paragraph, if the department finds that an employee of the school district who holds a license, certificate, authorization, or statement of recognition issued by the board of educational examiners knowingly violated this paragraph, the employee shall be subject to a hearing conducted by the board of educational examiners, which may result in disciplinary action. (2) This paragraph relates solely to library programs operated by the district, which means library programs over which the district exercises administrative control. (3) Concerning enforcement provisions relating to library books containing only age-appropriate materials, the department may exercise enforcement discretion if any violation is voluntarily and permanently corrected prior to the department making a determination of a violation. (4) For library collections that serve multiple grade ranges, the district will exercise reasonable physical, administrative, and technological controls to ensure that students have access to age-appropriate materials based on the students’ age and grade. (5) In complying with the requirements in Iowa Code section 279.77(3) as enacted by 2023 Iowa Acts, Senate File 496, section 13, the district, if it does not make available a comprehensive list of all books available to all students in libraries offered by the district on its website in real time, must post an updated list at least two times per calendar year.

ITEM 6. Adopt the following new subrules 12.3(15) and 12.3(16): 12 12.3 3(15) Compliance with Iowa Code section 279.80. a. A school district shall not provide any program, curriculum, test, survey, questionnaire, promotion, or instruction relating to gender identity or sexual orientation to students in kindergarten through grade six. b. “Gender identity” and “sexual orientation” have the meanings given in Iowa Code section 216.2. c. In monitoring and enforcing this subrule, the department will not conclude that a neutral statement regarding sexual orientation or gender identity violates Iowa Code section 279.80 as enacted by 2023 Iowa Acts, Senate File 496, or this subrule. 12 12.3 3(16) Parental rights in education. a. A school district shall not knowingly give false or misleading information to the parent or guardian of a student regarding the student’s gender identity or intention to transition to a gender that is different than the sex listed on a student’s official birth certificate or certificate issued upon adoption if the certificate was issued at or near the time of the student’s birth. b. If a student enrolled in a school district requests an accommodation that is intended to affirm the student’s gender identity from a licensed practitioner employed by the school district, including a request that the licensed practitioner address the student using a name or pronoun that is different than the name or pronoun assigned to the student in the school district’s registration forms or records, the licensed practitioner shall report the student’s request to an administrator employed by the school district, and the administrator shall report the student’s request to the student’s parent or guardian. Concerning a student’s request to use a name that is different from the name on the student’s registration forms or records, that request is governed by this subrule only if the request is an accommodation intended to affirm a student’s gender identity. c. If, after investigation, the department determines that a school district or an employee of a school district has violated this subrule, the school district or employee of the school district, as applicable, shall be subject to the following: (1) For the first violation of this subrule, the department shall issue a written warning to the board of directors of the school district or the employee, as applicable. (2) For a second or subsequent violation of this subrule, if the department finds that a school district knowingly violated this subrule, the superintendent of the school district shall be subject to a hearing conducted by the board of educational examiners, which may result in disciplinary action. (3) For a second or subsequent violation of this subrule, if the department finds that an employee of the school district who holds a license, certificate, authorization, or statement of recognition issued by the board of educational examiners knowingly violated this subrule, the employee shall be subject to a hearing conducted by the board of educational examiners, which may result in disciplinary action. d. Concerning enforcement of this subrule, the department may exercise enforcement discretion if any violation is voluntarily and permanently corrected prior to the department making a determination of a violation.ARC 7158CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to PACE program and gap tuition assistance program and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 25, “Pathways for Academic Career and Employment Program; Gap Tuition Assistance Program,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 260H.8 and 260I.11.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 260H and 260I.Purpose and Summary This proposed rulemaking is directed by Executive Order 10. After review and Regulatory Analysis, the Department of Education identified many instances of overly restrictive language and language that duplicates statutory text verbatim. The rulemaking eliminates that language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1 to 1:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9 to 9:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 25 and adopt the following new chapter in lieu thereof: CHAPTER 25PATHWAYS FOR ACADEMIC CAREER AND EMPLOYMENT PROGRAM; GAP TUITION ASSISTANCE PROGRAMDIVISION IGENERAL PROVISIONS

281—25.1(260H,260I) Definitions. "Department" means the Iowa department of education. "Director" means the director of the Iowa department of education. "Dislocated worker" means an individual eligible for services and benefits under the federal Trade Adjustment Act of 2002, P.L. 107-210. To be eligible, an individual must meet both criteria 1 and 2, plus any one of criteria 3 through 8:

The individual is registered for the selective service, if applicable; and
The individual is a citizen or national of the United States, a lawfully admitted permanent resident alien, a lawfully admitted refugee or parolee or an individual authorized by the Attorney General to work in the United States.
The individual:
Has been laid off or terminated, and
Is eligible for or has exhausted entitlement to unemployment compensation, and
Is unlikely to return to the individual’s previous industry or occupation; or
The individual:
Is in receipt of a notice of layoff or termination from employment, and
Will be entitled to unemployment compensation at the time of layoff or termination, and
Is unlikely to return to the individual’s previous industry or occupation; or
The individual:
Has been laid off or terminated, or has received a termination notice, and
Has been employed for a duration of time to sufficiently demonstrate attachment to the workforce, and
Is not eligible for unemployment compensation due to insufficient earnings, or has performed services for an employer not covered under the unemployment compensation law, and
Is unlikely to return to the individual’s previous industry or occupation; or
The individual has been laid off or terminated, or has received notice of layoff or termination, as a result of a permanent closure of or any substantial layoff at a plant, facility or enterprise; or
The individual was formerly self-employed and is unemployed from the individual’s business; or
The individual:
Is a displaced homemaker who has been providing unpaid services to family members in the home, and
Has been dependent on the income of another family member, and is no longer supported by that income, and
Is unemployed or underemployed, and
Is experiencing difficulty in obtaining or upgrading employment.

"Federal poverty level" means the most recently revised poverty income guidelines published by the federal Department of Health and Human Services. "IWD" means the Iowa workforce development department. "Low skilled" means an adult individual who is basic skills deficient, has lower level digital literacy skills, has an education below a high school diploma, or has a low level of educational attainment that inhibits the individual’s ability to compete for skilled occupations that provide opportunity for a self-sufficient wage. "State board" means the Iowa state board of education. "Underemployed" means an adult individual who is working less than 30 hours per week, or who is employed any number of hours per week in a job that is substantially below the individual’s skill level and that does not lead to self-sufficiency. "Unemployed" means an adult individual who is involuntarily unemployed and is actively engaged in seeking employment.DIVISION IIPATHWAYS FOR ACADEMIC CAREER AND EMPLOYMENT (PACE) PROGRAM

281—25.2(260) PACE program. The pathways for academic career and employment program (hereinafter referred to as PACE) is established to provide funding to community colleges for the development of projects that will lead to gainful, quality, in-state employment for members of target populations by providing them with both effective academic and employment training to ensure gainful employment and customized support services. 25.2(1) Target populations. Individuals included in target populations are those individuals who meet one or more of the following: a. Are deemed by definition to be low skilled. b. Earn incomes at or below 250 percent of the federal poverty level. c. Are unemployed. d. Are underemployed. e. Are dislocated workers. 25.2(2) Eligibility criteria for projects. Projects eligible for funding for PACE are to be projects that further the ability of members of target populations to secure gainful, quality employment; that further partnerships linking community colleges to industry and nonprofit organizations; and that further the following program outcomes: a. Enabling members of the target populations to: (1) Acquire and demonstrate competency in basic skills. (2) Acquire and demonstrate competency in a specified technical field. (3) Complete a specified level of postsecondary education. (4) Earn a national career readiness certificate. (5) Obtain employer-validated credentials. (6) Secure gainful employment in high-quality, local jobs. b. Meeting economic and employment goals, including: (1) Economic and workforce development requirements in each region served by the community colleges as defined by local advisory boards established pursuant to Iowa Code section 84A.4. (2) Needs of industry partners in areas including but not limited to the fields of information technology, health care, advanced manufacturing, transportation and logistics, and any other industry designated as in-demand by a local advisory board established pursuant to Iowa Code section 84A.4.

281—25.3(260H) Program component requirements. Program components for a PACE project implemented at a community college are to meet the terms of Iowa Code section 260H.5.

281—25.4(260H) Pipeline program. Each community college receiving funding for PACE is to meet the terms of Iowa Code section 260H.6.

281—25.5(260H) Career pathways and bridge curriculum development program. Each community college receiving funding for PACE is to meet the terms of Iowa Code section 260H.7.

281—25.6(260H) Pathway navigators. A community college may use moneys for the PACE program to employ pathway navigators to assist students as specified in Iowa Code section 260H.7A.DIVISION IIIGAP TUITION ASSISTANCE PROGRAM

281—25.7(260I) Gap tuition assistance program. A gap tuition assistance program is established to provide funding to community colleges for need-based tuition assistance to enable applicants to complete continuing education certificate training programs for in-demand occupations. 25.7(1) Applicants for tuition assistance. Eligibility for tuition assistance will be based on financial need. Eligibility criteria are set forth in Iowa Code sections 260I.3 and 260I.4. 25.7(2) Eligible costs. Costs of an eligible certificate program are set forth in Iowa Code section 260I.5. 25.7(3) Eligible certificate programs. For the purposes of this division, “eligible certificate program” means a program satisfying the criteria in Iowa Code section 260I.6.

281—25.8(260I) Initial assessment. An eligible applicant for tuition assistance under this division is subject to an initial assessment administered by the community college pursuant to Iowa Code section 260I.7. In assessing an applicant under this division, a community college will use the national career readiness certificate; an assessment eligible under the Adult Education and Family Literacy Act, 20 U.S.C. Ch. 73, and approved by the department for use in an adult education and literacy program; or an established process utilizing valid measures for determining preparedness for the eligible certificate program, which may include processes for measuring academic preparedness used by the community college for placement of students into credit coursework.

281—25.9(260I) Program interview. An eligible applicant for tuition assistance under this division is subject to an initial interview with the gap tuition assistance coordinator for the community college receiving the application. This interview is subject to the provision of Iowa Code section 260I.8.

281—25.10(260I) Participation requirements. Participating individuals are subject to the provisions of Iowa Code section 260I.9.

281—25.11(260I) Oversight. Statewide oversight, evaluation, and reporting efforts for the gap tuition assistance program are coordinated by the department pursuant to the terms of Iowa Code section 260I.10. 25.11(1) A steering committee consisting of the Iowa department of education, the Iowa workforce development department, and community college continuing education deans and directors is established to determine if the performance measures of the gap tuition assistance program are being met and to correct any deficiencies. The steering committee will meet at least quarterly to evaluate and monitor the performance of the gap tuition assistance program. 25.11(2) A common intake tracking system is established pursuant to Iowa Code section 260I.10(2). 25.11(3) The steering committee will develop the required program criteria for PACE and gap tuition assistance-certified programs to be eligible for tuition assistance and program funding. These criteria will be developed based on best practices in the development and delivery of career pathway programs that provide a clear sequence of education coursework and credentials aligned with regional workforce skill needs; clearly articulate from one level of instruction to the next; combine occupational skills and remedial adult education; lead to the attainment of a credential or degree; assist with job placement; and provide wraparound social and socioeconomic support services with the goal of increasing the individual’s skills attainment and employment potential. 25.11(4) To ensure efficient delivery of services, the department, in consultation with the community colleges, may redistribute funds available to the community colleges for purposes of this division. These rules are intended to implement Iowa Code chapters 260H and 260I.ARC 7159CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to workforce training and economic development funds and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 27, “Workforce Training and Economic Development Funds,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 256.7.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 260C.18A.Purpose and Summary This proposed rulemaking is in response to Executive Order 10. After review and Regulatory Analysis, the Department of Education determined the current Chapter 27 contains many instances of overly restrictive language and language that duplicates statutory text verbatim. This rulemaking eliminates that language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1 to 1:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9 to 9:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 27 and adopt the following new chapter in lieu thereof: CHAPTER 27WORKFORCE TRAINING AND ECONOMIC DEVELOPMENT FUNDS

281—27.1(260C) Definitions. "Community college" "college" means a community college established under Iowa Code chapter 260C. "Department" means the Iowa department of education. "Fund" "funds" means the workforce training and economic development funds created by Iowa Code section 260C.18A and allocated to each community college. "Project" means a training or educational activity funded under this chapter. "State board" "board" means the Iowa state board of education. "Targeted areas" means the areas of advanced manufacturing; information technology and insurance; alternative and renewable energy, including the alternative and renewable energy sectors listed in Iowa Code section 476.42(1)“a”; and life sciences, which include the areas of biotechnology, health care technology, and nursing care technology.

281—27.2(260C) Funds allocation. A fund is created and the department will allocate moneys as specified in Iowa Code section 260C.18A(2).

281—27.3(260C) Community college workforce and economic development fund plans and progress reports. Each community college, to receive its allocation for the forthcoming fiscal year, is to prepare and submit to the department for state board consideration the following items for the fiscal year. 27.3(1) Workforce training and economic development fund plan. Each college will adopt a workforce training and economic development fund plan for the upcoming year that outlines the community college’s proposed use of moneys appropriated to its fund. Plans are to be based on fiscal years and submitted to the department, in a manner prescribed by the department, by September 30 for the current fiscal year allocation. Plans are to describe how the college proposes to allocate funds to support individual allowable uses pursuant to rule 281—27.4(260C) and the planned amount to be used to support targeted areas. 27.3(2) Progress reports. Each college that receives an allocation of moneys pursuant to rule 281—27.2(260C) will prepare an annual progress report detailing the plan’s implementation. The report is to be submitted to the department by September 30 of each year in a manner and form as prescribed by the department. The report will provide information regarding projects supported by the college’s fund, including the number of participants enrolled in each program, the number of participants who complete each program, the dollars spent on each allowable use pursuant to rule 281—27.4(260C), the dollars spent in targeted areas, and other data necessary to report on state program performance metrics.

281—27.4(260C) Use of funds. Moneys deposited into each community college fund are to be expended as specified in Iowa Code section 260C.18A. Any individual project using over $1 million of moneys from a workforce training and economic development fund requires prior approval from the state board.

281—27.5(260C) Annual plan and progress report approval. 27.5(1) The state board will review and consider approval of reports and plans submitted pursuant to rule 281—27.3(260C). 27.5(2) The state board may reject a plan or progress report for any of the following reasons, including: a. Incomplete information or data; b. Failure to comply with rule 281—27.4(260C); c. Project not operated in compliance with state or federal law. 27.5(3) If the state board does not accept a college’s annual progress report, the college is subject to the following actions as prescribed by the board based upon the severity of the noncompliance or default, including: a. The withholding of a portion of new fiscal year moneys based upon amounts awarded deemed to be ineligible; b. Tighter oversight and control of the college’s fund by the department; c. Loss of funds for one year; d. Other action deemed appropriate by the board. These rules are intended to implement Iowa Code section 260C.18A.ARC 7160CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to high school equivalency diplomas and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 32, “High School Equivalency Diploma,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 259A.5.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 259A.Purpose and Summary This proposed rulemaking rescinds and replaces Chapter 32 related to high school equivalency diplomas. The Department of Education is proposing to remove unduly restrictive rule language. The Department is also proposing to remove an age restriction for High School Equivalency Test (HiSET) takers who are in the juvenile justice system (proposed subrule 32.2(3)). That age restriction is contrary to the underlying statute. In reviewing this chapter, the Department consulted with colleagues at the Iowa Department of Workforce Development.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1 to 1:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9 to 9:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 32 and adopt the following new chapter in lieu thereof: CHAPTER 32HIGH SCHOOL EQUIVALENCY DIPLOMA

281—32.1(259A) Definitions. As used in this chapter: "Adult education and literacy program" means the same as defined in 877—Chapter 32. "Approved program" means any defined option established under this chapter for the completion of a high school equivalency diploma that has been approved by the department. "Approved test" means the entire battery of subtests given under a high school equivalency test adopted by the department and administered at department-approved testing sites. "Contact hour" means the same as described in 281—Chapter 21. "Continuous enrollment" means a participant has not exited from the approved program as defined in the federal Workforce Innovation and Opportunity Act (34 CFR §361.150(c)), as effective on December 13, 2023). "Demonstrated competence" means the ability to apply the knowledge and skills required to perform critical functions specific to a program of study. Competencies that measure the attainment of the knowledge, skills, and abilities equivalent to a high school program of study are to be aligned with content standards for adult education as referenced in 877—Chapter 32 and twenty-first century learning skills. "Department" means the Iowa department of education. "Eligible institution" means an entity as described in 877—Chapter 32. "High school credit" means credit awarded for the successful completion of a secondary course or demonstrated competence equivalent to one-half unit as defined in 281—Chapter 12. "High school equivalency diploma" means the credential granted by the department to adults who did not graduate from high school and are unable to receive a high school diploma through traditional means but who are able to demonstrate attainment of the knowledge, skills, and abilities that are equivalent to those that would be attained in a high school program of study. "Resident" means an individual who satisfies the provisions of 281—subrule 21.2(11). "Twenty-first century learning skills" means the same as defined in 281—Chapter 12. "Work-site learning" means a planned and supervised work experience, equivalent to the training services defined in the federal Workforce Innovation and Opportunity Act, 29 U.S.C. §3174(c)(3)(D), as effective on December 13, 2023, that follows workplace laws and regulations, including the minimum wage prescribed by Iowa law or the federal Fair Labor Standards Act, if applicable.

281—32.2(259A) Eligibility to participate. 32.2(1) No one under 16 years and nine months of age is allowed to participate in an approved program, with the exception of a person who is at least 16 years of age and satisfies one or more of the following conditions: a. Is a resident of an Iowa juvenile institution; b. Is an active participant in Job Corps; or c. Is under the supervision of a probation office. 32.2(2) Anyone 16 years and nine months of age or older who is not enrolled in a secondary school nor is a high school graduate is permitted to apply for enrollment in an approved program. The requirements for admission into an approved program are: a. Proof of age and, for an applicant under 18 years of age, consent of the applicant’s parent or guardian. b. For an applicant under 19 years of age, verification of nonenrolled status from the last high school attended. c. Completion of a comprehensive intake by an eligible institution. For purposes of this chapter, the intake includes all of the following: (1) Assessment of the applicant’s reading level and career interests and aptitudes. (2) Discussion of program options available to the applicant regarding completion of a high school equivalency diploma, to include the requirements, expectations, benefits, and limitations of each option. (3) Development of a plan for the completion of one of the options discussed and subsequent activities necessary to work toward an identified goal, career pathway, occupation, or further education. 32.2(3) An eligible participant who successfully completes an approved program will not be awarded a high school equivalency diploma until the participant reaches 18 years of age and the participant’s ninth grade class has graduated from high school. This subrule does not apply to eligible participants described in paragraphs 32.2(1)“a” through “c,” who may receive their diploma at any time after completion.

281—32.3(259A) By whom administered. An approved program is to be administered by an eligible institution, which may provide one or more approved programs. The department will maintain a process by which an eligible institution may apply to offer an approved program.

281—32.4(259A) Diploma, transcript, verification fees. Upon payment to the department or its designee of a fee for the actual cost of production and distribution of a high school equivalency diploma, transcript, or verification letter not to exceed $20 per document, the department will issue a high school equivalency diploma, transcript, or verification letter to an applicant who has achieved the minimum standards established in this chapter. Upon payment to the department or its designee of a fee for the actual cost of verification and issuance of a duplicate diploma, transcript, and verification letter not to exceed $20, the department or its designee will issue a duplicate diploma, transcript, or provide verification to the applicant or person authorized by the applicant to request these documents. Approved providers must track and submit to the department evidence of the applicant’s completion of the program requirements for the issuance of a high school equivalency diploma.

281—32.5(259A) Application, course, and testing fees. The applicant or the applicant’s supporting agency is to pay an application, course, or testing fee to cover only necessary and reasonable testing or program costs. Fees paid directly to an approved program are considered program income and are to adhere to the federal Office for Management and Budget Uniform Guidance cost principles, as codified in 2 CFR §200.80, effective as of December 13, 2023.

281—32.6(259A) High school equivalency diploma program based on a department-approved test. The department will award a high school equivalency diploma to an applicant who achieves the appropriate minimum standard scores on an approved test. 32.6(1) Validity of test scores. Scores on an approved test remain valid for a period of five years from the date of the first subtest taken. If an applicant has not earned a high school equivalency diploma within this five-year period, the applicant must retake any expired subtest. The only exception is for test series that expire prior to the five-year period, in which case all previously taken subtests are void. 32.6(2) Retest. Any applicant not achieving the minimum standard test score on any subtest in effect at the time of testing is permitted to apply for retest. Applicants may retest twice per calendar year, provided one of the following conditions is met: a. A period of three months from the date of initial testing has elapsed; or b. The applicant completes instruction in an adult education and literacy program in each subject area to be retested. This instruction is to be certified by an official of the adult education and literacy program provider to the test administrator authorized to release the retest.

281—32.7(259A) High school equivalency diploma program based on attainment of high school credits. The department will award a high school equivalency diploma to an applicant who demonstrates completion of an approved program consisting of at least 36 high school credits. The approved program will be inclusive of the graduation requirements established under 281—Chapter 12 and consist of at least eight high school credits in English or communications; six credits in mathematics; six credits in science; six credits in social studies, including government; and ten elective credits that meet the requirements of subrule 32.7(4). 32.7(1) Award of prior credit. The applicant is to provide certified, translated transcripts from any Iowa school district, accredited public or nonpublic high school, or regionally accredited college or university to document completion of credits earned that are equivalent to those required in an approved program established under this rule. Additional documentation may be requested to validate credits earned. 32.7(2) Minimum participation requirement. An eligible applicant is to demonstrate competence through continuous enrollment in an approved program for a minimum of two high school credits. 32.7(3) Minimum graduation requirements. If the applicant is not continuously enrolled in an approved program, the applicant becomes subject to the minimum graduation requirements applicable to the date of reenrollment. 32.7(4) Electives. a. Coursework for electives will align with twenty-first century learning skills and be classified in one of the following five areas: (1) Civic literacy; (2) Health literacy; (3) Technology literacy; (4) Financial literacy; (5) Employability skills. b. Work-site learning may be counted toward an elective, under the following conditions: (1) Evidence of prior work-site learning will be evaluated using a state-developed assessment tool and may be awarded a maximum of two high school credits. Credit earned for prior work-site learning will not be counted toward the minimum participation requirement, as described in subrule 32.7(2). (2) Current work-site learning will be evaluated using a state-developed assessment tool and may be awarded a maximum of two high school credits. Credit earned for current work-site learning may be counted toward the minimum participation requirement, as described in subrule 32.7(2). 32.7(5) Postsecondary credit. Credit awarded by a regionally accredited postsecondary institution for the successful completion of a course that applies toward the requirements of a postsecondary credential, including a certificate, diploma, or associate, bachelor, or graduate-level degree program, will be accepted to fulfill the requirements for the satisfactory completion of a program as follows: a. One postsecondary semester credit or its equivalent is equal to one-third high school credit. The resulting high school credit may be used to satisfy either a core or elective credit requirement of an approved program. b. Twenty contact hours of noncredit postsecondary coursework is equal to one-third high school credit provided the coursework is aligned to regional career pathways and occupational needs. This credit can be used to satisfy an elective credit requirement of an approved program.

281—32.8(259A) High school equivalency diploma program based on postsecondary degree. 32.8(1) Postsecondary degree from a United States postsecondary institution. The department will award a high school equivalency diploma to a resident applicant who presents an associate degree or higher that includes general education coursework and is awarded by a regionally accredited postsecondary institution. The applicant is to provide official transcripts to an adult education and literacy program to document completion of program requirements. 32.8(2) Postsecondary degree from a foreign postsecondary institution. The department will award a high school equivalency diploma to a resident applicant who presents a postsecondary degree equivalent to an associate degree or higher, provided that the following conditions are met: a. The applicant presents to an adult education and literacy program an official transcript from an institution of higher education attesting to the completion of the program of study for the postsecondary degree. If the transcript is not in English, the applicant will also provide a certified translation. b. The applicant is a United States citizen or meets both of the following conditions: (1) Demonstrates proficiency in speaking, listening, reading, and writing as defined by the department’s approved English language proficiency standards; and (2) Has successfully completed a course in government or civics education as a component of an approved program. These rules are intended to implement Iowa Code chapter 259A.ARC 7162CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to educational standards and program requirements for children’s residential facilities and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 35, “Educational Standards and Program Requirements for Children’s Residential Facilities,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 282.34.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 282.34.Purpose and Summary This proposed rulemaking is pursuant to Executive Order 10. After review and Regulatory Analysis, the Department of Education identified many instances of overly restrictive language and language that duplicates statutory text verbatim. This rulemaking eliminates that language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1:30 to 2 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9:30 to 10 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 35 and adopt the following new chapter in lieu thereof: CHAPTER 35EDUCATIONAL AND PROGRAM STANDARDS FOR CHILDREN’S RESIDENTIAL FACILITIES

281—35.1(282) General. All school-age children, including children younger than 5 years of age and older than 18 years of age who are eligible children to receive special education, who are living in any children’s residential facility providing residential care to children within the state of Iowa, which is not otherwise exempted by the Iowa Code, are to be provided an appropriate education.

281—35.2(282) Definitions. For purposes of this chapter, the following definitions apply: "Child" "children" means an individual or individuals under 18 years of age. A child is “school-age” if the child is at least 5 years of age on September 15 but not more than 21 years of age or if the child is younger than 5 years of age or older than 18 years of age and is an eligible child to receive special education. "Children’s residential facility" means the same as defined in Iowa Code section 237C.1(3) and may also be referred to as a “private facility.” It does not include any facility that houses school-age children and children eligible to receive special education who are under the jurisdiction of the department of corrections, department of health and human services, board of regents, or other governmental agency and that has current authority to offer direct instruction to children from funding available to one of the above agencies.

281—35.3(282) Establishing an appropriate educational program. A children’s residential facility may accept any child of school age or a child who is eligible to receive special education services only after it has been issued a certificate of approval by the department of health and human services and has established an appropriate educational program and services under this chapter. 35.3(1) A private facility will establish an appropriate educational program using one of the options provided in Iowa Code section 282.34(1). 35.3(2) Any contract established by the private facility with a school district or accredited nonpublic school is to include, at a minimum, the physical location of the educational program and educational services; the parties involved; the purpose of the contract; the program description in detail; the powers, duties and authority of each party to the contract; the jurisdiction of each party to the contract; the dispute resolution procedure; specifications of the services that are contracted, if any, and how costs are to be calculated; billing procedures; how each legal, testing, and reporting obligation will be met; ownership of property belonging to the party that paid the cost or contributed the item; contract amendment procedures; contract approval procedures; contract renewal and termination procedures; duration of the contract; cross indemnification; application of laws, rules and regulations; binding effect; severability; assurances; and signature of the school board with legal power to authorize the terms of the contract. Any contract developed under this rule is to be submitted to the department of education for review and approval by the director of the department prior to enactment. A contract that fails to comply with any of the provisions of this chapter is void. 35.3(3) Children residing in a private facility who need treatment or security throughout the day shall have classrooms made available at the site of the private facility at no cost to the school district providing the instructional program or instructional supervision. The classroom is to meet the requirements for educational space for children in accordance with the Iowa Code, administrative rules, and state fire marshal regulations. 35.3(4) Nothing included in this chapter regulates religious education curricula of any private facility.

281—35.4(282) Notices, fees, and reporting. 35.4(1) A private facility is to comply with Iowa Code sections 282.34(1)“b” and 282.34(1)“c.” 35.4(2) If the educational programs and educational services are provided by or through the public school district of location, only fees related to the educational programs and educational services that are authorized by the Iowa Code, including but not limited to Iowa Code chapter 282, may be charged. The public school district cannot charge nonresident students a higher fee than resident students. 35.4(3) A private facility is to comply with requests by the Iowa department of education for basic educational and financial information.

281—35.5(282) Provision of appropriate educational services. 35.5(1) A private facility is to fully cooperate with the area education agency and school district in which the facility is located to fulfill the area education agency’s responsibilities for child find under 281—Chapter 41, including making a child available for evaluation and provision of services for which the child is eligible. 35.5(2) If a child does not need treatment or security by a private facility in such a time or manner as is needed to remain on the campus of the private facility, a child with an individual education plan is to be provided special education instruction and related services with other nondisabled children within the least restrictive environment to the maximum extent appropriate. 35.5(3) The area education agency in which the private facility is located, the school district of residence, and other appropriate public or private agencies or private individuals involved with the care or placement of a child will cooperate with the school district in which the private facility is located in sharing educational information, textbooks, curricula, assignments, and materials to plan and to provide for the appropriate education of the child living in a private facility and to ensure academic credit is granted to the child for instructional time earned upon discharge from the private residential facility. 35.5(4) A private facility that houses eligible children who are four years of age by September 15 of the school year will notify the parents or legal guardians of these eligible children about the opportunities to access quality preschool programs. Children whose parents are Iowa residents may access the statewide voluntary preschool program under 281—Chapter 16 at no cost to the parents, and transportation will be provided by the public school district in which the statewide voluntary preschool provider is located from its statewide voluntary preschool programs funding. Children whose parents are not Iowa residents may access the statewide voluntary preschool programs, if space is available, through a tuition and transportation agreement with the public school district in which the statewide voluntary preschool program provider is located. These rules are intended to implement Iowa Code section 282.34.ARC 7161CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to extracurricular interscholastic competition and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 36, “Extracurricular Interscholastic Competition,” Iowa Administrative Code, and adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 256.46 and 280.13.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 256.46 and 280.13.Purpose and Summary This proposed rulemaking rescinds and replaces Chapter 36 on interscholastic athletic eligibility. The Department of Education proposes removing numerous unnecessarily restrictive terms, obsolete language on all-star contests, an unnecessary requirement that the organizations file documents with the Department (as opposed to keeping them for the Department’s inspection), and unnecessary language that merely restates statutory text. Additionally, the Department proposes clarifying that the burden of proving eligibility in disputes lies with the athlete. The Department also proposes reducing the penalty for a failing grade from 30 days to 20 days, to be equitable between sports seasons.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1:30 to 2 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9:30 to 10 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 36 and adopt the following new chapter in lieu thereof: CHAPTER 36TITLE VIINTERSCHOLASTIC COMPETITIONEXTRACURRICULAR INTERSCHOLASTIC COMPETITION

281—36.1(280) Definitions. "Associate member school" means a nonaccredited nonpublic school that has been granted associate member status by any corporation, association, or organization registered with the department pursuant to Iowa Code section 280.13, upon approval by the department based upon proof of compliance with:

Iowa Code section 279.19B, and rules adopted by the department related to the qualifications of the affected teaching staff, and
The student eligibility rules of this chapter.

Associate membership is subject to the requirements, dues, or other obligations established by the organization for which associate membership is sought. "Coach" means an individual, with coaching endorsement or authorization as required by Iowa law, employed by a school district under the provisions of an extracurricular athletic contract or employed by a nonpublic school in a position responsible for an extracurricular athletic activity. “Coach” also includes an individual who instructs, diagnoses, prescribes, evaluates, assists, or directs student learning of an interscholastic athletic endeavor on a voluntary basis on behalf of a school or school district. "Compete" means participating in an interscholastic contest or competition and includes dressing in full team uniform for the interscholastic contest or competition as well as participating in pregame warm-up exercises with team members. “Compete” does not include any managerial, recordkeeping, or other noncompetitor functions performed by a student on behalf of a member or associate member school. "Department" means the Iowa department of education. "Dropout" means a student who quit school because of extenuating circumstances over which the student had no control or who voluntarily withdrew from school. This does not include a student who has been expelled or one who was doing failing work when the student voluntarily dropped from school. "Executive board" means the governing body authorized under a constitution or bylaws to establish policy for an organization registered under this chapter. "Executive officer" means the executive director or secretary of each governing organization. "Member school," for purposes of this chapter, means a public school or accredited nonpublic school that has been granted such status by any corporation, association, or organization registered with the department pursuant to Iowa Code section 280.13. "Parent" means the natural or adoptive parent having actual bona fide custody of a student. "Student" means a person under 20 years of age enrolled in grades 9 through 12. For purposes of these rules, ninth grade begins with the summer immediately following eighth grade. The rules contained herein apply uniformly to all students. "Superintendent" means a superintendent of a local school or a duly authorized representative. "Varsity" means the highest level of competition offered by one school or school district against the highest level of competition offered by an opposing school or school district.

281—36.2(280) Registered organizations. Organizations registered with the department include the following: 36.2(1) Iowa High School Athletic Association (hereinafter association). 36.2(2) Iowa Girls’ High School Athletic Union (hereinafter union). 36.2(3) Iowa High School Music Association (hereinafter music association). 36.2(4) Iowa High School Speech Association (hereinafter speech association). 36.2(5) Unified Iowa High School Activities Federation (hereinafter federation).

281—36.3(280) Filings by organizations. Each organization will maintain a current file of the following items, available for inspection by the department: 36.3(1) Constitution and bylaws, approved by the state board of education. 36.3(2) Current membership and associate membership lists. 36.3(3) Organization policies. 36.3(4) Minutes of all meetings of organization boards. 36.3(5) Proposed constitution and bylaw amendments or revisions. 36.3(6) Audit reports. 36.3(7) General bulletins. 36.3(8) Other information pertinent to clarifying organization administration.

281—36.4(280) Executive board. 36.4(1) Membership. Each organization will have an executive board, containing some representation from school administrators, teachers, and elective school officers; provided, however, that the membership will include the following: a. One member who is a member of a school board in Iowa, appointed by the Iowa association of school boards to represent the lay public. b. One member, who is either a coach, sponsor or director of an activity sponsored by the organization to which the member is elected and who works directly with the students or the program. This member is to be elected by ballot of the member schools, the vote to be cast by the school’s designated representative of the organization involved. 36.4(2) Organization elections. The election procedure for each organization is to be conducted as provided by the organization’s constitution, which is to set criteria for protecting the voter’s anonymity and ensuring adequate notice of elections. In addition, one representative designated by the department director will be present at the counting of all ballots and will validate election results. 36.4(3) Federation membership. The federation, in addition to conforming to other requirements in this rule, will have in its membership the executive board of the association, union, music association, speech association, and school administrators of Iowa.

281—36.5(280) Fiscal provisions. 36.5(1) Salary. No remuneration, salary, or remittance may be made to any member of an executive board, representative council or advisory committee of an organization for the member’s service. 36.5(2) Expenses. Travel and actual expenses of executive board members, representative council members, advisory committee members, and officers may be paid from organizational funds only when on official business for the organization. Actual expenses are to be paid for travel for transportation outside the state, along with necessary and reasonable expenses that are to be itemized. Itemized accounting of the travel and business expenses of employees are to be furnished to the department in an annual report on a form prescribed by the department. 36.5(3) Financial report. Full and detailed reports of all receipts and expenditures are to be filed annually with the department. 36.5(4) Bond. The executive board of each activity organization will purchase a blanket fidelity bond from a corporate surety approved by the executive board, conditioned upon the faithful performance of the duties of the executive officer, the members of the executive board, and all other employees of the activity organization. Such blanket bond is to be in a penal amount set by the executive board and is to be the sum of 50 percent of the largest amount of moneys on hand in any 30-day period during the preceding fiscal year, and 20 percent of the net valuation of all assets of the activity organization as of the close of the last fiscal year, but such bond will in no case be in an amount less than $10,000. 36.5(5) Audit. a. General.The financial condition and transaction of all organizations will be examined once each year, or more often if directed by the director of education, by either a certified public accountant chosen by the organization or by a committee chosen by the organization and approved by the director of education. b. Examinations by auditors.Auditors have the right while making the examination to examine all organization papers, books, records, tickets, and documents of any of the officers and employees of the organizations, and have the right in the presence of the custodian or deputy to have access to the cash drawers and cash in the official custody of the officer and to the records of any depository that has funds of the organization in its custody. c. Access to records.Upon request, organizations will make available to the department or its delegated representative all records, data, written policies, books, accounts, and other materials relating to any or all aspects of their operations.

281—36.6(280) Appearance before state board. At the request of the state board of education or its executive officer, members of the governing boards and employees of the organizations will appear before and give a full accounting and details on the aforesaid matters to the state board of education.

281—36.7(280) Interscholastic athletics. In addition to the requirements of rule 281—36.8(280), organizations will implement the provisions described below for participants in interscholastic athletic competition. 36.7(1) Physical examination. Every year each student will present to the student’s superintendent a certificate signed by a licensed physician and surgeon, osteopathic physician and surgeon, osteopath, qualified doctor of chiropractic, licensed physician assistant, or advanced registered nurse practitioner, to the effect that the student has been examined and may safely engage in athletic competition.Each doctor of chiropractic licensed as of July 1, 1974, is to affirm on each certificate of physical examination completed that the affidavit required by Iowa Code section 151.8 is on file with the Iowa board of chiropractic.The certificate of physical examination is valid for the purpose of this rule for one calendar year. A grace period not to exceed 30 calendar days is allowed for expired physical certifications. 36.7(2) Sportsmanship. It is the clear obligation of member and associate member schools to ensure that their contestants, coaches, and spectators in all interscholastic competitions practice the highest principles of sportsmanship, conduct, and ethics of competition. The governing organization has the authority to penalize any member school, associate member school, contestant, or coach in violation of this obligation. 36.7(3) Awards. At no time may any student accept an award of cash. 36.7(4) Interstate competition. Every student participating in interstate athletic competition on behalf of the student’s school must meet the eligibility rules. 36.7(5) Competition seasons. The length of training periods and competition seasons is determined solely by the governing organization. 36.7(6) Tournaments. The number and type of state tournaments for the various sports is solely determined by the organization. In scheduling and conducting these tournaments, the organization has the final authority for determining the tournament eligibility of all participants. Organization bylaws are to provide for a timely method of seeking an internal review of initial decisions regarding tournament eligibility. 36.7(7) Ineligible player competition. Member or associate member schools that permit or allow a student to compete in an interscholastic competition in violation of the eligibility rules or that permit or allow a student who has been suspended to so compete are subject to penalties imposed by the executive board. The penalties may include forfeiture of contests or events or both, involving any ineligible student(s); adjustment or relinquishment of conference/district/tournament standings; and return of team awards or individual awards or both.If a student who has been declared ineligible or who has been suspended is permitted to compete in an interscholastic competition because of a current restraining order or injunction against the school, registered organization, or department, and if such restraining order or injunction subsequently is voluntarily vacated, stayed, reversed, or finally determined by the courts not to justify injunctive relief, the penalties listed above may be imposed. This rule is intended to implement Iowa Code section 280.13.

281—36.8(280) Eligibility requirements. 36.8(1) Local eligibility and student conduct rules. Local boards of education may impose additional eligibility requirements not in conflict with these rules. Nothing herein is to be construed to prevent a local school board from declaring a student ineligible to participate in interscholastic competition by reason of the student’s violation of rules adopted by the school pursuant to Iowa Code sections 279.8 and 279.9. A member or associate member school shall not allow any student, including any transfer student, to compete until such time as the school has reasonably reliable proof that the student is eligible to compete for the member or associate member school under these rules. 36.8(2) Scholarship rules. a. All contestants are to be enrolled and in good standing in a school that is a member or associate member in good standing of the organization sponsoring the event. b. All contestants who have attained the age of 20 years old are not eligible. c. All contestants will receive credit in at least four subjects, each of one period or “hour” or the equivalent thereof, at all times. To qualify under this rule, a “subject” will meet the requirements of 281—Chapter 12. Coursework taken from a postsecondary institution and for which a school district or accredited nonpublic school grants academic credit toward high school graduation is used in determining eligibility. No student is to be denied eligibility if the student’s school program deviates from the traditional two-semester school year. (1) Each contestant shall be passing all coursework for which credit is given and making adequate progress toward graduation requirements at the end of each grading period. Grading period, graduation requirements, and any interim periods of ineligibility are determined by local policy. For purposes of this subrule, “grading period” means the period of time at the end of which a student in grades 9 through 12 receives a final grade and course credit is awarded for passing grades. (2) If at the end of any grading period a contestant is given a failing grade in any course for which credit is awarded, the contestant is ineligible to dress for and compete in the next occurring interscholastic athletic contests and competitions in which the contestant is a contestant for 20 consecutive calendar days unless the student has already served a period of ineligibility for 20 consecutive calendar days in another school-sponsored activity. A student will not serve multiple periods of ineligibility because of a failing grade. d. A student with a disability who has an individualized education program will not be denied eligibility on the basis of scholarship if the student is making adequate progress, as determined by school officials, toward the goals on the student’s individualized education program, unless the course in which the student receives a failing grade has no relationship to those goals. e. A student who meets all other qualifications may be eligible to participate in interscholastic athletics for a maximum of eight consecutive semesters upon entering the ninth grade for the first time. However, a student who engages in athletics during the summer following eighth grade is also eligible to compete during the summer following twelfth grade. Extenuating circumstances, such as health, may be the basis for an appeal to the executive board that may extend the eligibility of a student when the executive board finds that the interests of the student and interscholastic athletics will be benefited. f. All member schools will provide appropriate interventions and necessary academic supports for students who fail or who are at risk to fail. g. A student is academically eligible upon entering the ninth grade. h. A student is not eligible to participate in an interscholastic sport if the student has, in that same sport, participated in a contest with or against, or trained with, a National Collegiate Athletic Association (NCAA), National Junior College Athletic Association (NJCAA), National Association of Intercollegiate Athletics (NAIA), or other collegiate governing organization’s sanctioned team. A student may not participate with or against high school graduates if the graduates represent a collegiate institution or if the event is sanctioned or sponsored by a collegiate institution. Nothing in this subrule precludes a student from participating in a one-time tryout with or against members of a college team with permission from the member school’s administration and the respective collegiate institution’s athletic administration. i. No student is eligible to participate in any given interscholastic sport if the student has engaged in that sport professionally. j. The local superintendent of schools, with the approval of the local board of education, may give permission to a dropout student to participate in athletics upon return to school if the student is otherwise eligible under these rules. k. Remediation of a failing grade by way of summer school or other means does not affect the student’s ineligibility. All failing grades will be reported to any school to which the student transfers. 36.8(3) General transfer rule. A student who transfers from a school in another state or country or from one member or associate member school to another member or associate member school shall be ineligible to compete in interscholastic athletics for a period of 90 consecutive school days, as defined in 281—Chapter 12, exclusive of summer enrollment, unless one of the exceptions listed in paragraph 36.8(3)“a” applies. The period of ineligibility applies only to varsity level contests and competitions. In ruling upon the eligibility of transfer students, the executive board will consider the factors motivating student changes in residency, which it may consider from both direct and circumstantial evidence. Unless otherwise provided in these rules, a student intending to establish residency must show that the student is physically present in the district for the purpose of making a home and not solely for school or athletic purposes. a. Exceptions. The executive officer or executive board will consider and apply the following exceptions in formally or informally ruling upon the eligibility of a transfer student and may make eligibility contingent upon proof that the student has been in attendance in the new school for at least ten school days: (1) Upon a contemporaneous change in parental residence, a student is immediately eligible if the student transfers to the new district of residence or to an accredited nonpublic member or associate member school located in the new school district of residence. In addition, if with a contemporaneous change in parental residence, the student had attended an accredited nonpublic member or associate member school immediately prior to the change in parental residence, the student may have immediate eligibility if the student transfers to another accredited nonpublic member or associate member school. For purposes of this subparagraph, a contemporaneous change in parental residence includes a change in a student’s residence from the residence of one parent or guardian to the residence of a different parent or guardian. (2) If the student is attending in a school district as a result of a whole-grade sharing agreement between the student’s resident district and the new school district of attendance, the student is immediately eligible. (3) A student who has attended high school in a district other than where the student’s parent(s) resides, and who subsequently returns to live with the student’s parent(s), becomes immediately eligible in the parent’s resident district. (4) A student whose residence changes due to any of the following circumstances set forth in Iowa Code section 256.46 is immediately eligible provided the student meets all other eligibility requirements in these rules and those set by the school of attendance. For purposes of Iowa Code section 256.46(1)“d,” participation in a foreign exchange program is based on a J-1 visa issued by the United States government, unless the student attends the school primarily for athletic purposes. (5) A transfer student who attends in a member or associate member school that is a party to a cooperative student participation agreement, as defined in rule 281—36.13(280), with the member or associate member school the student previously attended is immediately eligible in the new district to compete in those interscholastic athletic activities covered by the cooperative agreement. (6) Any student whose parents change district of residence but who remains in the original district without interruption in attendance continues to be eligible in the member or associate member school of attendance. (7) A special education student whose attendance center changes due to a change in placement agreed to by the district of residence is eligible in either the resident district or the district of attendance, but not both. (8) A student who is found by the attending district to be a homeless child or youth as defined in rule 281—33.2(256). (9) In any transfer situation not provided for elsewhere in this chapter, the executive board will exercise its administrative authority to make any eligibility ruling that it deems to be fair and reasonable. The executive board will consider the motivating factors for the student transfer, which it may consider from both direct and circumstantial evidence. The determination will be made in writing with the reasons for the determination clearly delineated. The burden of proving entitlement to administrative discretion under this provision lies with the party seeking it. b. In ruling upon the transfer of students who have been emancipated by marriage or have reached the age of majority, the executive board will consider all circumstances with regard to the transfer to determine if it is principally for school or athletic purposes, in which case participation will not be approved. c. A student who participates in the name of a member or associate member school during the summer following eighth grade is ineligible to participate in the name of another member or associate member school in the first 90 consecutive school days of ninth grade unless a change of residence has occurred after the student began participating in the summer. d. A school district that has more than one high school in its district will set its own eligibility policies regarding intradistrict transfers, subject to Iowa Code section 279.82(6) as enacted by 2023 Iowa Acts, Senate File 496. 36.8(4) Open enrollment transfer. The transfer of a student in grades 9 through 12 whose transfer of schools had occurred due to a request for open enrollment is governed by Iowa Code section 282.18(9). 36.8(5) Eligibility for other enrollment options. a. Shared-time students.A nonpublic school student who is enrolled only part-time in the public school district of the student’s residence under a “shared-time” provision or for driver education is not eligible to compete in interscholastic athletics in the public school district. b. Dual enrollment.A student who receives competent private instruction, not in an accredited nonpublic or public school, may seek dual enrollment in the public school of the student’s resident district and is eligible to compete in interscholastic athletic competition in the resident school district provided the student meets the eligibility requirements of these rules and those set by the public school of attendance.If a student seeking such dual enrollment is enrolled in an associate member school of the union or association, the student is eligible for and may participate in interscholastic athletic competition only for the associate member school or a school with which the associate member school is in a cooperative sharing agreement. (Eligibility in such case is governed by rule 281—36.1(280).)Any ineligibility imposed under this chapter begins with the first day of participation under dual enrollment. Any period of ineligibility applies only to varsity level contests and competitions. c. Competent private instruction.A student who receives competent private instruction, and is not dual-enrolled in a public school, may participate in and be eligible for interscholastic athletics at an accredited nonpublic school if the student is accepted by that school and the student meets the eligibility requirements of this chapter and those set by the accredited nonpublic school where the student participates. Application will be made to the accredited nonpublic school on a form provided by the department.If a student seeking such participation is enrolled in an associate member school of the union or association, the student is eligible for and may participate in interscholastic athletic competition only for the associate member school or a school with which the associate member school is in a cooperative sharing agreement. (Eligibility in such case is governed by rule 281—36.1(280).)Any ineligibility imposed under this chapter begins with the first day of participation with the accredited nonpublic school. Any period of ineligibility applies only to varsity level contests and competitions. 36.8(6) Summer camps and clinics and coaching contacts out of season. a. School personnel, whether employed or volunteers, of a member or associate member school shall not coach that school’s student athletes during the school year in a sport for which the school personnel are currently under contract or are volunteers, outside the period from the official first day of practice through the finals of tournament play. However, school personnel may coach a senior student from the coach’s school in an all-star contest once the senior student’s interscholastic athletic season for that sport has concluded. In addition, volunteer or compensated coaching personnel shall not require students to participate in any activities outside the season of that coach’s sport as a condition of participation in the coach’s sport during its season. b. A summer team or individual camp or clinic held at a member or associate member school facility shall not conflict with sports in season. Coaching activities between June 1 and the first day of fall sports practices will not conflict with sports in season. The associations in their discretion may establish a dead period up to 14 calendar days in length. During a dead period, coaches will not be allowed to have contact with students. c. Penalty. A school whose volunteer or compensated coaching personnel violate this rule is ineligible to participate in a governing organization-sponsored event in that sport for one year with the violator(s) coaching. 36.8(7) Nonschool team participation. The local school board will, by policy, determine whether or not participation in nonschool athletic events during the same season is permitted and provide penalties for students who may be in violation of the board’s policy. This rule is intended to implement Iowa Code sections 256.46, 280.13 and 282.18.

281—36.9(280) Executive board review. A student, parent of a minor student, or school contesting the ruling of a student’s eligibility based on these rules, other than subrule 36.8(1) or paragraph 36.8(2)“b,” “c,” “d,” “f,” or “k” or based on a challenge to a local district finding that a student was not subject to a founded incident of harassment or bullying, or a school contesting a penalty imposed under paragraph 36.8(6)“b,” will state the basis of the objections in writing, addressed to the executive officer of the board of the governing organization. Upon request of a student, parent of a minor student, or a school, the executive officer will schedule a hearing before the executive board on or before the next regularly scheduled meeting of the executive board but not later than 20 calendar days following the receipt of the objections unless a later time is mutually agreeable. The executive board will give at least five business days’ written notice of the hearing. The executive board will consider the evidence presented and issue findings and conclusions in a written decision within five business days of the hearing and will mail a copy to the appellant. The burden of proving entitlement to relief under this rule lies with the party seeking it.

281—36.10(280) Appeals to director. If the claimant is still dissatisfied, an appeal may be made in writing to the director of education by giving written notice of the appeal to the state director of education with a copy by registered mail to the executive officer of the governing organization. An appeal is to be in the form of an affidavit and be filed within ten business days after the date of mailing of the decision of the governing organization. The director of education will establish a date for hearing within 20 calendar days of receipt of written notice of appeal by giving at least 5 business days’ written notice of hearing to the appellant unless another time is mutually agreeable. The procedures for hearing adopted by the state board of education and found at 281—Chapter 6 are applicable, except that the decision of the director is final. Appeals to the executive board and the state director are not contested cases under Iowa Code section 17A.2(5). The burden of proving entitlement to relief under this rule lies with the party seeking it.

281—36.11(280) Organization policies. The constitution or bylaws of organizations sponsoring contests for participation by member schools will reflect the following policies: 36.11(1) Expenditure policy. It is the expenditure policy of each organization, after payment of costs incurred in rules 281—36.6(280) through 281—36.9(280) and legitimate expenses for housing, equipment and supplies including by agreement with other organizations having a mutual interest in interscholastic activities, to use all receipts to promote and fiscally sponsor those extracurricular interscholastic contests and competitions deemed by the organization to be most beneficial to all eligible students enrolled in member schools. Organizations with large revenues may provide assistance in staff, space, equipment and the transfer of funds to other organizations whose contests or competitions do not generate sufficient moneys to carry out an adequate program in their areas of service. Each organization will make an annual payment to the federation to cover the necessary expenditures of the federation. The amount of this payment will be determined by the federation. 36.11(2) Calendar of events. The federation will establish yearly in advance a calendar of events for the interscholastic contests and competitions sponsored by the organizations. 36.11(3) Information to local member schools. The federation will distribute to member schools the yearly calendar of events and other information believed by officers of the federation to be helpful to local school officials in providing a comprehensive program of extracurricular interscholastic contests or competitions. 36.11(4) Participation. Participation in interscholastic contests or competitions will be by school teams only and not selected individuals, with the exception of individual sports events such as wrestling, track, cross country, golf, tennis, and music and speech activities. 36.11(5) Contests outside Iowa. Out-of-state contest participation by a member school is limited to regularly scheduled interscholastic activities. 36.11(6) Promoting interstate contests. No activity organization is to sponsor interstate contests or competition between individuals, teams or groups. 36.11(7) Chaperones. It is the responsibility of all school districts to see that all teams or contestants are properly chaperoned when engaged in interscholastic activities. 36.11(8) Membership. Membership in an organization is limited to schools accredited by the department or approved by the department solely for purposes of associate membership in a registered organization.

281—36.12(280) Eligibility in situations of district organization change. Notwithstanding any other provision of this chapter, in the event eligibility of one or more students is jeopardized or in question as a result of actions beyond their control due to pending reorganization of school districts approved by the voters under Iowa Code chapter 275; action of the district boards of directors under Iowa Code section 274.37; or the joint employment of personnel and sharing of facilities under Iowa Code section 280.15 and the result is a complete discontinuance of the high school grades, or discontinuance of the high school grades pursuant to Iowa Code section 282.7(1), the boards of directors of the school districts involved may, by written agreement, determine the eligibility of students for the time the district of residence does not provide an activity program governed by this chapter. When the respective boards have not provided by written agreement for the eligibility of students whose eligibility is jeopardized or questioned four weeks prior to the normal established time for beginning the activity, students or parents of students involved may request a determination of eligibility from the governing body of the organization involved. All parties directly interested will be given an opportunity to present their views to the governing board.A determination of eligibility by the governing board will be based upon fairness and the best interests of the students.In the event that one or more parties involved in the request for determination before the governing board are dissatisfied with the decision of the governing board, an appeal may be made by the dissatisfied party to the director of the department under the provisions of rule 281—36.10(280). A decision of the director in the matter is final.The above provisions apply insofar as applicable to changes of organization entered into between two or more nonpublic schools. This rule is intended to implement Iowa Code section 280.13.

281—36.13(280) Cooperative student participation. Notwithstanding any other provision of this chapter, in the event a member or associate member school does not directly make participation in an interscholastic activity available to its students, the governing board of the member or associate member school may, by formally adopted policy if among its own attendance centers, or by written agreement with the governing board of another member or associate member school, provide for the eligibility of its students in interscholastic activities provided by another member or associate member school. The eligibility of students under a policy, insofar as applicable, or a written agreement is conditioned upon the following: 36.13(1) All terms and conditions of the agreement are in writing; 36.13(2) The attendance boundary of each school that is party to the agreement is contiguous to or contained within the attendance boundary of one of the other schools, unless the activity is not offered at any school contiguous to the party district, or all schools that are contiguous refuse to negotiate an agreement with the party district, in which case the contiguous requirement may be waived by the applicable governing organization. For the purposes of this rule, a nonpublic school member will utilize the attendance boundaries of the public school in which its attendance center is located; 36.13(3) Any interscholastic activity not available to students of the schools participating in the agreement may be included in the agreement. A school’s students may be engaged in cooperative activities under the terms of only one agreement.However, if several schools are in a consortia cooperative agreement for a specific activity, they are not precluded from having a separate agreement with one or more of the same schools for a different activity as long as all schools of the consortia agree to such a separate agreement; 36.13(4) Agreements will be for a minimum of one school year. Amendments may be made to agreements, including allowing additional member schools to join an existing agreement, without necessarily extending the time of existence of the agreement; 36.13(5) All students participating under the agreement are enrolled in one of the schools, are in good standing, and meet all other eligibility requirements of these rules; 36.13(6) A copy of the written agreement between the governing boards of the particular schools involved, and all amendments to the agreement, will be filed with the appropriate governing organization(s) no later than April 30 for the subsequent year, unless exception is granted by the organization for good cause shown. The agreements and amendments are deemed approved unless denied by the governing organization(s) within ten calendar days; 36.13(7) It is the purpose of this rule to allow individual students participation in interscholastic competition in activities not available to them at the school they attend, through local policy or arrangements made between the governing boards of the schools involved, so long as the interscholastic activities of other schools are not substantially prejudiced. Substantial prejudice includes situations where a cooperative effort may result in an unfair domination of an activity or substantial disruption of activity classifications and management. In the event an activity organization determines, after investigation, that an agreement between schools that was developed under the terms of this rule results in substantial prejudice to other schools engaged in the activity, or the terms of the agreement are not in conformity with the purpose and terms of this rule, the activity organization may give timely notice to the schools involved that the local policy or agreement between them is null and void for the purposes of this rule, insofar as cooperative student participation is concerned with a particular activity. Determinations are appealable to the director of education under the applicable terms of rule 281—36.10(280). For notice to be timely, it must be given at least 45 calendar days prior to the beginning of the activity season. This rule is intended to implement Iowa Code section 280.13. These rules are intended to implement Iowa Code sections 256.46, 280.13, and 282.18.ARC 7163CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to extracurricular athletic activity conference for member schools and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 37, “Extracurricular Athletic Activity Conference for Member Schools,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 280.13.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 280.13.Purpose and Summary After review pursuant to Executive Order 10, the Department of Education proposes to revise Chapter 37 related to activity conference membership by removing unnecessarily restrictive language, as well as consolidating rules for improved organization.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 1:30 to 2 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 9:30 to 10 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 37 and adopt the following new chapter in lieu thereof: CHAPTER 37EXTRACURRICULAR ATHLETIC ACTIVITY CONFERENCE FOR MEMBER SCHOOLS

281—37.1(280) General. It is the policy of the state of Iowa that each school desiring to be a member of a conference providing extracurricular athletic contests and competitions for students is granted this opportunity. For purposes of this chapter, “member school” means a school or school district granted such status by any corporation, association, or organization registered with the state department of education pursuant to Iowa Code section 280.13 and includes associate members. 37.1(1) Criteria. To the maximum extent appropriate, membership shall be with other schools of comparable size and within reasonable geographic proximity. 37.1(2) Initial responsibility. The initial authority and responsibility for conference development, membership, and alignment rests with the board of directors of each public school district and the authorities in charge of each nonpublic school.

281—37.2(280) Complaint to the director, department of education. A member school that believes it has been unfairly excluded or prevented from obtaining membership in an athletic activity conference that would provide the opportunity for participation of its students in athletic events or contests with students from other member schools of comparable size and within reasonable geographic proximity may file a complaint stating this concern with the director of the department of education. The complaint is to set forth in a plain and concise manner the reasons the member school believes the director should intervene in conference alignment decisions and the specific relief requested by the member school. The complaint is to be signed by the president of the board of directors of a public school district or a representative of the officials in charge of an accredited nonpublic school. The director or the director’s designee will, within ten days, acknowledge to the member school receipt of the complaint in writing.

281—37.3(280) Mediation. The director of the department of education will establish a mediation team consisting of the executive director of the Iowa High School Athletic Association (hereinafter association) and the executive secretary of the Iowa Girls’ High School Athletic Union (hereinafter union) organizations recognized in 281—Chapter 36, or their designees, to meet with the complainant and representatives of other affected member schools. If the complaint involves conference alignment for athletic activities represented by only one of the organizations, only that organization will be involved in the mediation. A copy of all materials filed with the director by the complainant member school will be provided to the mediation team.The mediation team will meet with administrators or board members of schools potentially affected by changes in conference alignment related to the complaint. Schools will send representatives who have knowledge of the impact of a conference realignment and full authority to respond on behalf of their member school. Factors to be weighed in reaching resolution include school enrollment figures (current and projected), travel distances, comparability of instructional programs, traditional rivalries, number of existing and proposed schools in the conference, and comparability of athletic programs and other school-sponsored programs.

281—37.4(280) Resolution or recommendation of the mediation team. If mediation results in resolution of the complaint, no further action is necessary on the part of the director and the implementation of the mediation agreement will be left with the boards of directors of school districts and the authorities in charge of nonpublic schools. If no resolution is reached within 50 days of the start of the mediation process, the mediation team will make a recommendation to the director as to the best resolution of the complaint. Copies of this recommendation will be given to all affected member schools. The director will establish a time for a hearing on this recommendation within 45 days of the receipt of the mediation team’s recommendation. The director or director’s designee will conduct the hearing, at which time all affected parties will be given the opportunity to provide oral or written testimony or submit other evidence. The director or director’s designee reserves the right to establish time limits on appearances at the hearing.

281—37.5(280) Decision; effective date. In reaching a decision on the complaint, the director will consider information gathered by the mediation team and its recommendation as well as the written and oral testimony from the hearing. In addition, the director or the director’s designee may consult with other individuals, organizations, or conference representatives able to provide input on a decision. If a designee of the director conducts the hearing and review process, the findings of the designee shall be reviewed by the director. A final decision on the complaint will be made by the director. The decision may affect conference realignment or direct other appropriate relief to remedy the complaint. The director will make a decision within 60 days of the hearing, and copies of the decision will be provided to all affected parties.If the decision results in conference realignment, the date of this change shall be made with deference given to existing contracts and commitments. Alignment changes will be made for four-year periods with automatic review by the director after two years so that further necessary changes take effect at the conclusion of the four-year period, unless agreement exists that implementation of the changes can occur at an earlier date. These rules are intended to implement Iowa Code section 280.13.ARC 7164CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to work-based learning and career education and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 48, “Work-Based Learning,” and Chapter 49, “Individual Career and Academic Plan,” and to adopt a new Chapter 49, “Individualized Career and Academic Plan,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 256.7.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 279.61.Purpose and Summary 2023 Iowa Acts, Senate File 514, resulted in the majority of Chapter 48 being transferred to the Iowa Department of Workforce Development. The remaining rule is proposed to be transferred to Chapter 49, and Chapter 48 is proposed to be rescinded and reserved. The current Chapter 49 contains many instances of overly restrictive language and language that duplicates statutory text verbatim. This proposed rulemaking eliminates that language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2 to 2:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10 to 10:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 281—Chapter 48.

ITEM 2. Rescind 281—Chapter 49 and adopt the following new chapter in lieu thereof: CHAPTER 49INDIVIDUALIZED CAREER AND EDUCATION PLAN

281—49.1(279) Definitions. For purposes of this chapter, the following definitions apply: "Approved system" means a vendor-provided career information and decision-making system that meets the standards of rule 281—49.5(279). "Board" means the board of directors of a public school district. "Career cluster" means a nationally recognized framework for organizing and classifying career and technical education programs. "Department" means the Iowa department of education. "Director" means the director of the Iowa department of education. "District plan" means the career and academic plan developed by each school district that details the delivery of career guidance and development in compliance with this chapter. "Educational program" means the educational program as defined in 281—Chapter 12. "Plan" means the individualized career and academic plan established under this chapter that is created by each student of the school district in eighth grade and which, at a minimum, meets the standards of rule 281—49.2(279). "Postsecondary readiness" means college and career readiness in Iowa as defined by the state board of education. "School counseling program" means the school counseling program established by Iowa Code section 256.11(9A). "Student" means an enrolled student as defined in 281—Chapter 12. "Work-based learning" means planned and supervised connections of classroom, laboratory and industry that prepare students for current and future careers.

281—49.2(279) Individualized career and academic plan. The plan established under this rule is to, at a minimum, comply with the provisions of Iowa Code section 279.61.

281—49.3(279) Essential components. The district is to engage each student in activities that support the following essential components of the individualized career and academic plan: 49.3(1) Self-understanding. Students are to engage in developmentally appropriate inventories and assessments that promote self-understanding and the connection to work and engage in meaningful reflective activities about the results. 49.3(2) Career information. Students are to research careers based on self-understanding results and engage in meaningful reflection about the findings. 49.3(3) Career exploration. Students are to engage in activities that reveal connections among school-based instruction, career clusters, and the world of work and engage in meaningful reflection. 49.3(4) Postsecondary exploration. Students are to engage in activities to explore relevant postsecondary education and training options related to career interests and engage in meaningful reflection on the exploration experience. 49.3(5) Career and postsecondary decision. Students are to complete relevant activities to meet their postsecondary goals consistent with the plan and stated postsecondary intention.

281—49.4(279) District plan. 49.4(1) Components of district plan. The school district shall develop a written career plan. The district plan is to include the following components: a. The district is to, at a minimum, describe the following aspects of the district plan. (1) The activities to be undertaken in each grade level to achieve the provisions of rule 281—49.2(279). (2) Integration of the career plan within connected district initiatives and other facets of the school district’s comprehensive school counseling program. (3) At the district’s discretion, any additional outcomes to be integrated into the career and academic planning system. b. Designation of team. The superintendent of each school district is to designate a team of education practitioners to carry out the duties assigned to the school district under this rule. The district plan is to include a list, by job position, of the designated district team. (1) Team composition. The team will include a school administrator; a school counselor; teachers, including career and technical education teachers; and individuals responsible for coordinating work-based learning activities. (2) Duties. The team is responsible for the following: 1. Implementation of the district plan. 2. Annually reviewing and, as necessary, proposing to the school district revisions to the district plan. 3. Coordination of activities which integrate essential components into classroom instruction and other facets of the school district’s educational program. 4. Regularly consulting with representatives of employers, state and local workforce systems and centers, higher education institutions, and postsecondary training programs. 49.4(2) Maintenance of district plan. The district plan will be regularly reviewed and revised by the team and the board.

281—49.5(279) Career information and decision-making systems. Each district shall use a career information and decision-making system that meets the standards established in subrule 49.5(3). 49.5(1) Review process. The department will establish a process for the review of vendor-provided career information and decision-making systems to determine which career information and decision-making systems meet the minimum specifications established in subrule 49.5(3). 49.5(2) State-designated system. The department will establish a process for the review and approval of a single state-designated career information and decision-making system from among the systems approved through the process established in subrule 49.5(1), which districts may use in compliance with this chapter. 49.5(3) Minimum functions of approved systems. An approved system is to, at a minimum, support implementation of rule 281—49.2(279) and meet the following specifications: a. Allow for the creation of student accounts, which allow a student to store and access the results and information gathered from the inventories, searches, and associated activities outlined in paragraphs 49.5(3)“b” through “d.” b. Include developmentally appropriate inventories and assessments that promote self-understanding and the connection to work. Inventories and assessments are to include an interest inventory; a work values assessment; and an abilities, strengths, or skills assessment. c. Include a search platform for career information. The platform is to allow a student to access and review career information related to the results of the inventories listed in paragraph 49.5(3)“b.” Career information will include current and accurate state and national wage, earning, and employment outlook data for a given occupation; job descriptions, including such information as essential duties and aptitudes; and training and education requirements. The career information search platform is to, at a minimum, allow a student to sort information by wage and earning, career cluster, and training and education requirements. d. Include a search platform for postsecondary information. Postsecondary information is to include, but not be limited to, a current, accurate, and comprehensive database of accredited professional colleges, technical and community colleges, and public and private baccalaureate colleges and universities; and include or provide links to apprenticeship and military opportunities. The postsecondary information search platform will, at a minimum, allow a student to sort information by program and degree type, institution type, location, size of enrollment, and affiliation and appropriate institutional characteristics, such as designation as a historically black college and university or Hispanic-serving institution, and religious affiliation. e. Track basic utilization for the functions outlined in paragraphs 49.5(3)“a” through “d.” Districts are to have the ability to generate and export a report on the utilization statistics. f. Ensure compliance with applicable federal and state civil rights laws. g. Disclose the source and age of, as well as frequency of updates to, all information and data. h. Provide auxiliary services, including: (1) A process for districts to submit comments, feedback, and modification requests to the vendor. (2) Technical assistance during regular school district operating hours. (3) Appropriate training for users. 49.5(4) Supplemental systems. The department will maintain a list of supplemental systems that districts may use to satisfy the components of rule 281—49.2(279). a. The department is to establish a process for the review of supplemental systems. The review will, at a minimum, identify the components of rule 281—49.2(279) and paragraphs 49.5(3)“b” through “d,” which are satisfied through the supplemental system. All supplemental systems are to comply with paragraphs 49.5(3)“f” and “g.” b. A district that chooses to use a supplemental system is to specify which components of rule 281—49.2(279) are satisfied through the use of the supplemental system in the district plan established in rule 281—49.4(279). A district that chooses to utilize a supplemental tool must continue to utilize and make available to students an approved system.

281—49.6(279) Compliance. The director will monitor school districts for compliance with the provisions of this chapter through the accreditation process established for school districts under 281—Chapter 12. 49.6(1) Maintenance of student records. Each school district is to maintain evidence of student completion of the individualized career and academic plan established in rule 281—49.2(279), pursuant to rule 281—12.3(256). 49.6(2) Reporting. The board of directors of each school will complete the reports set forth in Iowa Code section 279.61(5). The board is to report to the department at least annually, and in a manner and frequency established by the department, regarding student participation in work-based learning programs established by the board, including registered apprenticeships, quality pre-apprenticeships, internships, on-the-job training, and projects through the Iowa clearinghouse for work-based learning. 49.6(3) Department responsibilities. Iowa Code section 279.61(6) is incorporated by this reference.

281—49.7(256) Program established. The provisions of this rule implement the future ready Iowa state-recognized work-based learning program as authorized under Iowa Code sections 256.7 and 261.131. 49.7(1) Definitions. As used in this rule: "Apprenticeship program" means an apprenticeship program authorized under federal statute or by the Iowa office of apprenticeship. "Eligible program" means a program eligible under the future ready Iowa skilled workforce last-dollar scholarship program. 49.7(2) Alignment with last-dollar scholarship. The rules governing eligibility for students, programs, and institutions are the same as the eligibility criteria specified in 283—Chapter 15 for the future ready Iowa skilled workforce last-dollar scholarship program. 49.7(3) Eligibility. Pursuant to 283—subparagraph 15.3(1)“j”(2), a student enrolled in an apprenticeship program aligned to an eligible program may be enrolled in an eligible program on a part-time basis. These rules are intended to implement Iowa Code section 279.61.ARC 7165CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to Iowa reading research center and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 61, “Iowa Reading Research Center,” Iowa Administrative Code, and adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 256.7 and 256.9.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 256.7 and 256.9.Purpose and Summary The current Chapter 61 contains many instances of overly restrictive language and language that duplicates statutory text verbatim. This proposed rulemaking eliminates that language. The Department of Education also proposes removing current paragraph 61.6(4)“d,” which currently allows the Iowa Reading Research Center to charge for the actual costs of providing its services. This is inconsistent with the underlying statute, which does not authorize these charges and which requires professional development services to be provided at no cost.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.242.5614 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2 to 2:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10 to 10:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 61 and adopt the following new chapter in lieu thereof: CHAPTER 61IOWA READING RESEARCH CENTER

281—61.1(256) Establishment. There is established an Iowa reading research center (center). The director of the department of education will select a public education entity to serve as the host for the center. The director will give preference to a school district, an area education agency, or the joint area education agencies system. The selection of a host is to be for a specified period of time.

281—61.2(256) Purpose. The center’s purpose is set forth in Iowa Code section 256.9(49)“c”(1).

281—61.3(256) Intensive summer literacy program. The center hereby establishes program criteria and guidelines for voluntary implementation of the program by school districts. 61.3(1) Program criteria: summer reading programs pursuant to Iowa Code section 279.68. Each district that chooses to implement a summer reading program as part of its implementation of Iowa Code section 279.68(2)“a”(6) is to comply with the terms of that section and 281—Chapter 62. A school district will employ appropriately licensed and supervised teachers and paraprofessionals, will monitor student progress, and is encouraged to use an evidence-based curriculum. 61.3(2) Additional voluntary program criteria: intensive summer literacy program. Each district’s voluntary intensive summer literacy program is encouraged to meet, in addition to the terms of subrule 61.3(1), the following program criteria: a. Criterion 1.Each district is encouraged to adopt instructional practices or programs that have some evidence of success and that include explicit and systematic instruction in foundational reading skills based on student need, consistent with Iowa Code section 279.68. b. Criterion 2.Each district is to employ skilled, high-quality instructors. For the purposes of this paragraph, a district may hire or employ personnel directly, through an agreement with one or more other districts, through an agreement with one or more accredited nonpublic schools, through an agreement with one or more state agencies or governmental subdivisions, through an agreement with one or more private not-for-profit community agencies, or some combination thereof. c. Criterion 3.Each district is encouraged to allow sufficient time for meaningful reading instruction and student learning. d. Criterion 4.Each district is encouraged to provide instruction in small classes and small groups. To meet this criterion, a district is encouraged to employ the same instructional grouping formats described in the evidence-based intervention chosen. In the absence of specifications from the intervention chosen, a district is encouraged to ensure that it delivers whole-class instruction in class sizes of 15 or fewer students and that it delivers targeted intervention based on student need in small groups of 5 or fewer students. e. Criterion 5.Each district is encouraged to monitor and promote student attendance. f. Criterion 6.Each district is encouraged to evaluate student outcomes and the quality of program implementation, including implementation of these voluntary criteria. g. Criterion 7.Each program is to be under the leadership and supervision of at least one appropriately licensed teacher and at least one appropriately licensed administrator. The two roles may be filled by the same individual. Nonlicensed personnel are to be supervised by an appropriately licensed teacher. It is encouraged that either the teacher or the administrator holds a reading (K-8) endorsement or a reading specialist endorsement. h. Option to use private providers.A district may enter into an agreement with a private provider that uses evidence-based instructional strategies to provide summer literacy instruction under this chapter and 281—Chapter 62, at the election of a parent and in lieu of programming provided by the district. Any election under this paragraph is at the parent’s sole cost. 61.3(3) Guidelines for implementation by school districts. The center is to: a. Publish guidelines to assist school districts in applying the program criteria contained in subrule 61.3(1) and the voluntary criteria contained in subrule 61.3(2) and in improving the performance of intensive summer literacy programs. b. Make such guidelines available on its website.

281—61.4(256) Nature of the center’s operation. The center’s work is governed by the provisions of Iowa Code section 256.9(49)“c”(2). Annually, the center submits the report specified in Iowa Code section 256.9(49)“c”(3).

281—61.5(256) Nature of the center’s products. 61.5(1) General. The center’s strategies, models, materials, and assessments, including the products referred to in subrule 61.6(3), are judged by and subject to the following requirements. To the extent possible, strategies, models, materials, and assessments, including the products referred to in subrule 61.6(3), shall: a. Be research-based. b. Contain evidence establishing that they are replicable by Iowa school districts, area education agencies, and accredited nonpublic schools. c. Contain evidence establishing that they are capable of sustainable implementation. d. Be widely and liberally distributed and used. 61.5(2) Intellectual property. Regardless of any intellectual property right that may accrue to the center, the department of education and each school district, area education agency, and accredited nonpublic school will have a perpetual, irrevocable, royalty-free, nonexclusive, nontransferable license to use any of the strategies, models, and materials produced by the center. Regardless of any intellectual property right that may accrue to the center, each school district, area education agency, accredited nonpublic school, and practitioner preparation program approved by the department of education has a perpetual, irrevocable, royalty-free, nonexclusive, nontransferable license to use any of the strategies, models, and materials produced by the center to provide training to current and prospective teachers and administrators.

281—61.6(256) Governance and leadership of the center. 61.6(1) Director and other personnel. The center’s director will be employed by the host referred to in rule 281—61.1(256). The director of the department of education or the director’s designee, in consultation with the host and the advisory council, will select, determine the compensation of, and annually evaluate the director of the center. a. Responsibilities of the director of the center will include the following: (1) Enacting the priorities of the reading research center, as defined by the department; (2) Achieving the Iowa reading research center’s mission and purpose; (3) Directing the center’s budget; (4) Managing the center’s staff; (5) Managing and overseeing the request for proposal (RFP) or contracting process or both to enact priorities of the center; (6) Providing oversight and management of all contracts and projects initiated by the center; (7) Establishing models for an intensive summer literacy program replicable in Iowa schools; (8) Disseminating literacy research and its application; and (9) Submitting required reports to the department and the general assembly. b. The center may employ such other personnel as may be necessary to fulfill its responsibilities, upon approval of such positions by the director of the department of education. 61.6(2) Advisory council. When setting priorities for the center, the department of education seeks advice and assistance from an advisory council. The advisory council is to establish its bylaws and govern itself by the following paragraphs: a. The advisory council will consist of representatives of the department, school districts, area education agencies, accredited nonpublic schools, institutions of higher education, organizations representing reading and literacy teachers, community-based nonprofit organizations that are focused on literacy, statewide literacy organizations, and parents. Members who offer other perspectives may be appointed. Members may serve in more than one role. Members are appointed by the director of the department of education or the director’s designee. Actual expenses for members of the advisory council may be assumed by the center. b. The advisory council will recommend and continually review center priorities, which are to be consistent with these rules. The advisory council annually will submit to the department a recommended set of projects and priorities for the reading research center. c. The advisory council will provide input to the director of the department on the desired qualifications for the position of director of the center. d. The advisory council will advise and assist the center in preparing the annual report as set out in rule 281—61.4(256). e. The advisory council will foster collaboration across the Iowa reading research and evaluation community and will serve as a facilitator in identifying additional research needs and ways to apply research to practice in Iowa schools and communities. f. The advisory council will assist the director of the center in reviewing proposals for quality, viability, and statewide impact. g. Meetings of the advisory council are public meetings subject to Iowa Code chapter 21. 61.6(3) Use of advisory council recommendations. The department is to consider the priorities established by its advisory council in determining which projects or activities to direct the center to enact, consistent with these rules and with the center’s funding. 61.6(4) Contracts and awards. In the furtherance of its work, the center may contract with other entities or may make awards by competitive bid. The rules in this chapter are incorporated by reference in any contract or award under this subrule. Any product produced pursuant to a contract or award is subject to these rules, including subrule 61.5(2).

281—61.7(256) Financing of the center. The center will be financed in the following manner: 61.7(1) Host as fiscal agent. The host is the fiscal agent for the center. 61.7(2) Public or private funds. The host and the center may solicit and accept funds from public and private sources for the fulfillment of the mission and purpose of the center. 61.7(3) Oversight by the department. The department has oversight responsibilities for the financial operations of the center. These rules are intended to implement Iowa Code sections 256.7(31)“b” and 256.9(49)“c.”ARC 7166CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to practitioner and administrator preparation programs and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 77, “Standards for Teacher Intern Preparation Programs,” and Chapter 79, “Standards for Practitioner and Administrator Preparation Programs,” Iowa Administrative Code, and to adopt a new Chapter 79 with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 256.16.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 256.16.Purpose and Summary This proposed rulemaking is in response to Executive Order 10. The Department of Education proposes consolidating two chapters (Chapter 77 and Chapter 79) that have common and overlapping provisions. The Department proposes retaining requirements that have the most demonstrable link to student success. The status quo rules contain many instances of overly restrictive language and language that duplicates statutory text verbatim. The proposed rulemaking eliminates that language.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.281.8661 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2 to 2:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10 to 10:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 281—Chapter 77.

ITEM 2. Rescind 281—Chapter 79 and adopt the following new chapter in lieu thereof: CHAPTER 79STANDARDS FOR PRACTITIONER AND ADMINISTRATOR PREPARATION PROGRAMSDIVISION IGENERAL STANDARDS APPLICABLE TO ALL PRACTITIONER PREPARATION PROGRAMS

281—79.1(256) General statement. Programs of practitioner and administrator preparation leading to licensure in Iowa are subject to approval by the state board of education, as provided in Iowa Code chapter 256. All programs having accreditation on August 31, 2001, are presumed accredited unless or until the state board takes formal action to remove accreditation.

281—79.2(256) Definitions. For purposes of clarity, the following definitions are used throughout the chapter: "Administrator candidates" means individuals who are enrolled in practitioner preparation programs leading to administrator licensure. "Administrator preparation programs" means the programs of practitioner preparation leading to licensure of administrators. "Area education agency" "AEA" means a regional service agency that provides school improvement services for students, families, teachers, administrators and the community. "BOEE" means the board of educational examiners, the board responsible for establishing licensure requirements and issuing licenses. "Candidates" means individuals who are preparing to become educational practitioners through a practitioner preparation program. "Clinical experiences" means a candidate’s direct experiences in PK-12 schools. “Clinical experiences” includes field experiences and student teaching or internships. "College/university supervisors" means qualified employees or individuals contracted by the college or university offering educator preparation who provide guidance and supervision to candidates during the candidates’ clinical experiences in the schools. "Cooperating administrators" means school administrators who provide guidance and supervision to administrator candidates during the candidates’ clinical experiences in the schools. "Cooperating teachers" means appropriately licensed classroom teachers of record who provide guidance and supervision to teacher candidates in the cooperating teachers’ classrooms during the candidates’ field experiences in the schools. "Delivery model" means the form in which the educator preparation program is delivered to candidates and may include conventional campus-based, face-to-face models, distance learning models, off-campus models, programs delivered through consortia arrangements, and programs or elements delivered by contracted outside providers. "Department" means the department of education. "Director" means director of the department. "Distance learning" means a formal education process in which the major portion of the instruction occurs when the learner and the instructor are not in the same place at the same time and occurs through virtually any media, including printed or digital materials, a learning management system (LMS) or online communications. "Distance learning program" means a program in which over half of the required courses in the program occur when the learner and the instructor are not in the same place at the same time (more information is contained in the definition of “distance learning”). These programs include those offered by the professional educational unit through a contract with an outside vendor or in a consortium arrangement with other higher education institutions, area education agencies, or other entities. "Diverse groups" means one or more groups of individuals possessing certain traits or characteristics, including age, color, creed, national origin, race, religion, marital status, sex, sexual orientation, gender identity, physical attributes, physical or mental ability or disability, ancestry, political party preference, political belief, socioeconomic status or familial status. "Educator preparation program" means practitioner preparation program. "Facility" means a residential or other setting for a child in which the child receives an appropriate educational program. “Facility” includes a foster care facility as defined in Iowa Code section 237.1, a facility that provides residential treatment pursuant to Iowa Code chapter 125, an approved or licensed shelter care home as defined in Iowa Code section 232.2(34), an approved juvenile detention home as defined in Iowa Code section 232.2(32)and a psychiatric medical institution for children as defined in Iowa Code section 135H.1. "Faculty" means the teaching staff of a university or college responsible for delivering instruction. "Institution" means a college or university in Iowa offering practitioner preparation or an educational organization offering administrator preparation and seeking state board approval of its practitioner preparation program(s). "Institutional accrediting agency" means an institutional accrediting agency recognized by the U.S. Department of Education. Agencies include regional and national accreditors. The department will maintain a web link to a list of currently approved accreditors on the department’s practitioner preparation web page. "InTASC" means Interstate Teacher Assessment and Support Consortium, the source of national standards for teachers. "Intern program" means the program for teacher intern preparation at colleges and universities leading to licensure of teacher interns. "Iowa core" means a legislatively mandated state initiative that provides local school districts and nonpublic schools a guide to delivering instruction to students based on consistent, challenging and meaningful content. "Iowa teaching standards" represents a set of knowledge and skills that reflect evidence of best practices regarding effective teaching as listed in rule 281—83.4(284). The standards serve as the basis for comprehensive evaluations of teachers and professional development plans. "Leadership preparation program" means administrator preparation program. "Mentor" means an experienced educator who provides guidance to a practitioner, administrator candidate or novice educator. For intern programs, “mentor” means an individual employed by a school district or area education agency as a classroom teacher, or a retired teacher, who holds a valid license issued under Iowa Code chapter 272. The individual must have a four-year record of successful teaching practice with at least two of the four years on a nonprobationary basis and demonstrate professional commitment to both the improvement of teaching and learning and the development of beginning teachers or teacher interns. "National professional standards" means standards developed by nationally recognized organizations that establish best practices for education. "NELP standards" means the National Educational Leadership Preparation standards for administrator preparation. "Novice" means an individual in an educational position who has no previous experience in the role of that position or who is newly licensed by the board of educational examiners. "Off-campus program" means a program offered by a unit on sites other than the main campus. Off-campus programs may be offered in the same state, in other states, or in countries other than the United States. "Practitioner" means a teacher, administrator or other school personnel holding a license issued by the BOEE. "Practitioner candidates" means individuals who are enrolled in practitioner preparation programs leading to licensure as teachers, as administrators or as other professional school personnel in professions that require a license issued by the board of educational examiners. "Practitioner preparation programs" means the programs of practitioner preparation leading to licensure of teachers, administrators and other professional school personnel. "Program" means a specific field of specialization leading to a specific endorsement. "School district" means a school corporation as defined in Iowa Code chapter 290. A school district is also referred to as a “local education agency” or “LEA.” "State board" means Iowa state board of education. "Students" means PK-12 pupils. "Teacher candidate" means an individual who is enrolled in a practitioner preparation program leading to teacher licensure. "Teacher intern candidate" means an individual who is enrolled in a teacher intern preparation program leading to teacher intern licensure and who has not yet begun employment as an intern. "Teacher intern preparation program" means the program for teacher intern preparation at colleges and universities leading to licensure of teacher interns. "Unit" means the organizational entity within an institution with the responsibility of administering and delivering all practitioner preparation programs.

281—79.3(256) Institutions affected. In order to attain the authority to recommend candidates for Iowa licensure, colleges and universities offering practitioner preparation programs in Iowa, as well as other Iowa educational organizations engaged in the preparation of school administrators, teacher interns and holders of other school professional licensure, will meet the standards contained in this chapter to gain or maintain state board approval of their programs.

281—79.4(256) Criteria for practitioner preparation programs. Each institution seeking approval of its practitioner preparation programs by the state board, including those programs offered by distance learning delivery models or at off-campus locations, must be accredited by an institutional accrediting agency recognized by the U.S. Department of Education and file evidence of the extent to which each program meets the standards contained in this chapter by means of a written self-evaluation report and an evaluation conducted by the department. The institution will demonstrate such evidence by means of a template developed by the department and through a site visit conducted by the department. After the state board has approved the practitioner preparation programs of an institution, students who complete the programs and are recommended by the authorized official of that institution will be issued the appropriate license and endorsement(s).

281—79.5(256) Approval of programs. 79.5(1) Approval of institutions’ practitioner preparation programs by the state board will be based on the recommendation of the director after study of the factual and evaluative evidence on record about each program in terms of the standards contained in this chapter. 79.5(2) Approval, if granted, is for a term of seven years; however, approval for a lesser term may be granted by the state board if it determines conditions so warrant. 79.5(3) If approval is not granted, the applying institution will be advised concerning the areas in which improvement or changes appear to be essential for approval. In this case, the institution will be given the opportunity to present factual information concerning its programs at a regularly scheduled meeting of the state board, not beyond three months of the board’s initial decision. Following a minimum of six months after the board’s decision to deny approval, the institution may reapply when it is ready to show what actions have been taken to address the areas of suggested improvement. 79.5(4) Programs may be granted conditional approval upon review of appropriate documentation. In such an instance, the program will receive a full review after one year or, in the case of a new program, at the point at which candidates demonstrate mastery of standards for licensure.

281—79.6(256) Visiting teams. Upon application or reapplication for approval, a review team will visit each institution for evaluation of its practitioner preparation program(s). When an institution offers off-campus practitioner preparation programs, the team may elect to include visits to some or all of the sites of the off-campus programs. The membership of the team is selected by the department with the concurrence of the institution being visited. The team may include faculty members of other practitioner preparation institutions; personnel from elementary and secondary schools, to include licensed practitioners; personnel of the state department of education; personnel of the board of educational examiners; and representatives from professional education organizations. Each team member should have appropriate competencies, background and experiences to enable the member to contribute to the evaluation visit. The expenses for the review team will be borne by the institution.

281—79.7(256) Periodic reports. Upon request of the department, approved programs will make periodic reports that provide basic information necessary to keep records of each practitioner preparation program up to date and to carry out research studies relating to practitioner preparation. The department may request that information be disaggregated by attendance center or delivery model or both.

281—79.8(256) Reevaluation of practitioner preparation programs. Every seven years or at any time deemed necessary by the director, an institution will conduct a self-evaluation and file a written institutional report with evidence of its practitioner preparation programs to be followed by a review team visit. Any action for continued approval or rescission of approval will be approved by the state board.

281—79.9(256) Approval of program changes. Upon application by an institution, the director is authorized to approve minor additions to, or changes within, the curricula of an institution’s approved practitioner preparation program. When an institution proposes a revision that exceeds the primary scope of its programs, the revisions become operative only after having been approved by the state board. Approval of any institution’s application for adding the dyslexia specialist endorsement must include approval by the Iowa reading research center.DIVISION IISPECIFIC EDUCATION STANDARDS APPLICABLE TO ALL PRACTITIONER PREPARATION PROGRAMS

281—79.10(256) Governance and resources standard. Governance and resources adequately support the preparation of practitioner candidates to meet professional, state and institutional standards in accordance with the following provisions. 79.10(1) The professional education unit has primary responsibility for all educator preparation programs offered by the institution through any delivery model. 79.10(2) The unit’s conceptual framework and governance structure establishes the shared vision for the unit and provides the foundation for all components of the educator preparation programs. 79.10(3) The unit demonstrates alignment of unit and program standards with current national professional standards for educator preparation; teacher preparation aligns with InTASC standards; and each unit defines unit and program standards and embeds them in courses and field experiences. 79.10(4) The unit provides evidence of ongoing collaboration with appropriate stakeholders. There is an active advisory committee that is involved semiannually in providing input for program evaluation and continuous improvement. 79.10(5) When a unit is a part of a college or university, there is ongoing collaboration with the appropriate departments of the institution, especially regarding content knowledge. 79.10(6) The institution provides resources and support necessary for the delivery of quality preparation program(s). The resources and support include the following: a. Financial resources; facilities; appropriate educational materials, equipment and library services; and commitment to a work climate, policies and faculty/staff assignments that promote/support best practices in teaching, scholarship and service; b. Resources to support professional development opportunities; c. Resources to support technological and instructional needs to enhance candidate learning; d. Resources to support quality clinical experiences for all educator candidates; e. Commitment of sufficient administrative, clerical and technical staff; and f. Equitable resources and access for all program components, regardless of delivery model or location.

281—79.11(256) Diversity standard. The environment and experiences provided for practitioner candidates support candidate growth in knowledge, skills and dispositions to help all students learn in accordance with the following provision: The institution’s and unit’s plans, policies and practices document their efforts in establishing a supportive environment and maintaining a diverse faculty and student body.

281—79.12(256) Faculty standard. Faculty qualifications and performance will facilitate the professional development of practitioner candidates in accordance with the following provisions. 79.12(1) The unit defines and communicates the roles and requirements for faculty members by position. The unit describes how roles and requirements are determined. 79.12(2) The unit documents the alignment of teaching duties for each faculty member with that member’s preparation, knowledge, experiences and skills. 79.12(3) The unit holds faculty members accountable for teaching prowess. This accountability includes evaluation and indicators for continuous improvement. 79.12(4) The unit holds faculty members accountable for professional growth to meet the academic needs of the unit. 79.12(5) Faculty members collaborate with: a. Colleagues in the unit; b. Colleagues across the institution; c. Colleagues in PK-12 schools/agencies/learning settings. Faculty members engage in professional education and maintain ongoing involvement in activities in preschool and elementary, middle or secondary schools. For faculty members engaged in teacher preparation, activities include at least 40 hours of teaching or co-teaching at the appropriate grade level(s) during a period not exceeding five years in duration.

281—79.13(256) Assessment system and unit evaluation standard. The unit’s system of assessment will appropriately monitor individual candidate performance and use that data in concert with other information to evaluate and improve the unit and its programs in accordance with the following provisions. 79.13(1) The unit has a clearly defined, cohesive system of assessment that includes both individual candidate assessment and comprehensive unit assessment. 79.13(2) The assessment system is based on unit standards. 79.13(3) The unit tracks and communicates the following criteria for candidates: a. Entrance into the program. b. Continuation in the program with clearly defined checkpoints/gates. c. Admission to clinical experiences (for teacher education, this includes specific criteria for admission to student teaching). d. Program completion. 79.13(4) Individual candidate assessment includes all of the following: a. Measures used for candidate assessment are fair, reliable and valid. b. Candidates are assessed on their demonstration/attainment of unit standards. c. Multiple measures are used for assessment of the candidate on each unit standard. d. Candidates are assessed on unit standards at different developmental stages. e. Candidates are provided with formative feedback and opportunities to utilize the feedback to reflect upon and guide their development and growth toward attainment of unit standards. 79.13(5) The unit will document regular reviews, evaluation and revision to the system of assessment. a. The collection, aggregation, analysis and evaluation of assessment data described in this subrule will take place on a regular cycle. b. Comprehensive unit assessment includes all of the following: (1) Individual candidate assessment data on unit standards, as described in subrule 79.13(4), are analyzed. (2) The aggregated assessment data are analyzed to evaluate programs. (3) Findings from the evaluation of aggregated assessment data are shared with stakeholders and utilized for program improvement decisions. 79.13(6) The unit shall conduct a survey of graduates and the graduates’ employers to ensure that the graduates are well prepared and use the data for program improvement.DIVISION IIISPECIFIC EDUCATION STANDARDS APPLICABLE ONLY TO INITIAL PRACTITIONER PREPARATION PROGRAMS FOR TEACHER CANDIDATES

281—79.14(256) Teacher preparation clinical practice standard. The unit and its school partners shall provide field experiences and student teaching opportunities that assist candidates in becoming successful teachers in accordance with the following provisions. 79.14(1) The unit ensures that clinical experiences occurring in all locations are well sequenced, supervised by appropriately qualified personnel, monitored by the unit and integrated into the unit standards. These expectations are shared with teacher candidates, college/university supervisors and cooperating teachers. 79.14(2) Cooperating teachers and college/university supervisors share responsibility for evaluating the teacher candidates’ achievement of unit standards. Clinical experiences are structured to have multiple performance‐based assessments at key points within the program. 79.14(3) Teacher candidates experience clinical practices in multiple settings that include diverse groups and diverse learning needs. 79.14(4) Teacher candidates admitted to a teacher preparation program must complete a minimum of 80 hours of pre-student teaching field experiences, with at least 10 hours occurring prior to acceptance into the program. 79.14(5) Pre-student teaching field experiences support learning in context and include all of the following: a. High-quality instructional programs for students in a state-approved school or educational facility. b. Opportunities for teacher candidates to observe and be observed by others and to engage in discussion and reflection on clinical practice, planning, instruction and assessment. 79.14(6) The unit is responsible for ensuring that the student teaching experience for initial licensure: a. Includes a full-time experience for a minimum of 14 weeks in duration during the teacher candidate’s final year of the teacher preparation program. b. Takes place in the classroom of a cooperating teacher who is appropriately licensed in the subject area and grade-level endorsement for which the teacher candidate is being prepared. c. Includes prescribed minimum expectations and responsibilities, including ethical behavior, for the teacher candidate. d. Involves the teacher candidate in communication and interaction with parents or guardians of students in the teacher candidate’s classroom. e. Requires the teacher candidate to become knowledgeable about the Iowa teaching standards and to experience a mock evaluation, which shall not be used as an assessment tool by the unit, performed by the cooperating teacher or a person who holds an Iowa evaluator license. f. Requires collaborative involvement of the teacher candidate, cooperating teacher and college/university supervisor in candidate growth. This collaborative involvement includes biweekly supervisor observations with feedback. g. Requires the teacher candidate to bear primary responsibility for planning, instruction and assessment within the classroom for a minimum of two weeks (ten school days). h. Includes a written evaluation procedure, after which the completed evaluation form is included in the teacher candidate’s permanent record. 79.14(7) The unit annually offers one or more workshops for cooperating teachers to define the objectives of the student teaching experience, review the responsibilities of the cooperating teacher and provide the cooperating teacher other information and assistance the unit deems necessary. The duration of the workshop will be equivalent to one day. 79.14(8) The institution enters into a written contract with the cooperating school or district providing clinical experiences, including field experiences and student teaching.

281—79.15(256) Teacher candidate knowledge, skills and dispositions standard. Teacher candidates are to demonstrate the content, pedagogical and professional knowledge, skills and dispositions necessary to help all students learn in accordance with the following provisions: 79.15(1) Each teacher candidate demonstrates the acquisition of a core of liberal arts knowledge, including English composition, mathematics, natural sciences, social sciences and humanities. 79.15(2) Each teacher candidate receives dedicated coursework and demonstrates competency related to the study of human relations, cultural competency and diverse learners, such that the candidate is prepared to work with students from diverse groups, as defined in rule 281—79.2(256). The unit shall provide evidence that teacher candidates develop the ability to identify and meet the needs of all learners, including: a. Students from diverse ethnic, racial and socioeconomic backgrounds. b. Students with disabilities. This will include preparation in developing and implementing individualized education programs and behavioral intervention plans, preparation for educating individuals in the least restrictive environment and identifying that environment, and strategies that address difficult and violent student behavior and improve academic engagement and achievement. c. Students who are struggling with literacy, including those with dyslexia. d. Students who are gifted and talented. e. English learners. f. Students who may be at risk of not succeeding in school. This preparation will include classroom management addressing high-risk behaviors, including behaviors related to substance use disorder. 79.15(3) Each teacher candidate demonstrates competency in literacy, including reading theory, knowledge, strategies and approaches, and integrating literacy instruction into content areas. The teacher candidate demonstrates competency in making appropriate accommodations for students who struggle with literacy. Demonstrated competency shall address the needs of all students, including students with disabilities; students who are at risk of academic failure; students who have been identified as gifted and talented or English learners; and students with dyslexia, whether or not such students have been identified as children requiring special education under Iowa Code chapter 256B. Literacy instruction shall include evidence-based best practices, determined by research, including those practices identified by the Iowa reading research center. 79.15(4) Each teacher candidate demonstrates competency in all of the following professional core curricula: a. Learner development.The teacher understands how learners grow and develop, recognizing that patterns of learning and development vary individually within and across the cognitive, linguistic, social, emotional and physical areas, and designs and implements developmentally appropriate and challenging learning experiences. b. Learning differences.The teacher uses understanding of individual differences and diverse cultures and communities to ensure inclusive learning environments that enable each learner to meet high standards. c. Learning environments.The teacher works with others to create environments that support individual and collaborative learning, and that encourage positive social interaction, active engagement in learning and self-motivation. d. Content knowledge.The teacher understands the central concepts, tools of inquiry and structures of the discipline(s) being taught and creates learning experiences directly related to the Iowa core that make the discipline accessible and meaningful for learners to ensure mastery of the content. e. Application of content.The teacher understands how to connect concepts and use differing perspectives to engage learners in critical thinking, creativity and collaborative problem solving related to authentic local and global issues. f. Assessment.The teacher understands and uses multiple methods of assessment to engage learners in their own growth, to monitor learner progress and to guide the teacher’s and learners’ decision-making. g. Planning for instruction.The teacher plans instruction that supports every student in meeting rigorous learning goals by drawing upon knowledge of content areas, curriculum, cross-disciplinary skills and pedagogy, as well as knowledge of the learners and the community context. h. Instructional strategies.The teacher understands and uses a variety of instructional strategies to encourage learners to develop deep understanding of content areas and their connections, and to build skills to apply knowledge in meaningful ways. i. Professional learning and ethical practice.The teacher engages in ongoing professional learning and uses evidence to continually evaluate the teacher’s practice, particularly the effects of the teacher’s choices and actions on others (learners, families, other professionals and the community) and adapts practice to meet the needs of each learner. j. Leadership and collaboration.The teacher seeks appropriate leadership roles and opportunities to take responsibility for student learning, to collaborate with learners, families, colleagues, other school professionals and community members to ensure learner growth, and to advance the profession. k. Technology.The teacher candidate effectively integrates technology into instruction to support student learning. l. Methods of teaching.The teacher candidate understands and uses methods of teaching that have an emphasis on the subject and grade-level endorsement desired. 79.15(5) Each teacher candidate must complete a 30-semester-hour teaching major that minimally includes the requirements for at least one of the basic endorsement areas, special education teaching endorsements or secondary level occupational endorsements. Additionally, each elementary teacher candidate must also complete a field of specialization in a single discipline or a formal interdisciplinary program of at least 12 semester hours. Each teacher candidate is to meet all requirements established by the board of educational examiners for any endorsement for which the teacher candidate is recommended.DIVISION IVSPECIFIC EDUCATION STANDARDS APPLICABLE ONLY TO ADMINISTRATOR PREPARATION PROGRAMS

281—79.16(256) Administrator preparation clinical practice standard. The unit and its school partners shall provide clinical experiences that assist candidates in becoming successful school administrators in accordance with the following provisions. 79.16(1) The unit ensures that: a. Principal candidates successfully complete clinical experiences that provide candidates with opportunities to synthesize and apply the knowledge and skills identified in subrule 79.17(2) in ways that approximate the full range of responsibilities of building-level leaders and enable them to promote the current and future success and well-being of each student and adult in their school. b. Superintendent candidates successfully complete clinical experiences that provide candidates opportunities to synthesize and apply the knowledge and skills identified in subrule 79.17(3) in ways that approximate the full range of responsibilities of district-level leaders and enable them to promote the current and future success and well-being of each student and adult in their district. 79.16(2) The unit ensures that clinical experiences occurring in all locations are coherent, authentic, sustained and purposeful opportunities that are monitored by the unit. These expectations are shared with candidates, supervisors and cooperating administrators. 79.16(3) Cooperating administrators and college/university supervisors share responsibility for evaluating the candidate’s achievement of unit standards. Clinical experiences are structured to have multiple performance‐based assessments at key points within the program to demonstrate candidates’ attainment of unit standards. 79.16(4) Clinical experiences include all of the following criteria: a. A minimum of 400 hours during the candidate’s preparation program. b. Take place with appropriately licensed cooperating administrators in state-approved schools or educational facilities. c. Take place in multiple high-quality educational settings that include diverse populations and students of different age groups. d. Include documented expectations and responsibilities for cooperating administrators, school districts, accredited nonpublic schools or AEAs and for higher education supervising faculty members. e. Provide opportunities for candidates to apply and use the knowledge, skills and dispositions identified in subrules 79.17(2) and 79.17(3). 79.16(5) The institution annually delivers one or more professional development opportunities for cooperating administrators to define the objectives of the field experience, review the responsibilities of the cooperating administrator, build skills in coaching and mentoring and provide the cooperating administrator other information and assistance the institution deems necessary. 79.16(6) The institution will enter into a written contract with the cooperating school districts that provide field experiences for administrator candidates.

281—79.17(256) Administrator knowledge, skills and dispositions standard. Administrator candidates will demonstrate the content, pedagogical and professional knowledge, skills and dispositions necessary to help all students learn in accordance with the following provisions: 79.17(1) Each educational administrator program will define program standards (aligned with current NELP standards) and embed them in coursework and clinical experiences at a level appropriate for a novice administrator. 79.17(2) Each principal candidate demonstrates the knowledge, skills and dispositions necessary to: a. Collaboratively lead, design and implement a school mission, vision and process for continuous improvement that reflects a core set of values and priorities that include data use, technology, equity, diversity, digital citizenship and community. (Mission, Vision and Improvement) b. Advocate for ethical decisions and cultivate and enact professional norms. (Ethics and Professional Norms) c. Develop and maintain a supportive, equitable, culturally responsive and inclusive school culture. (Equity, Inclusiveness and Cultural Responsiveness) d. Evaluate, develop and implement coherent systems of curriculum, instruction, data systems, and supports, including Iowa core implementation and assessment. (Learning and Instruction) e. Strengthen student learning, support school improvement and advocate for the needs of the school and community. (Community and External Leadership) f. Improve management, communication, technology, school-level governance and operation systems to develop and improve data-informed and equitable school resource plans and to apply laws, policies and regulations. (Operations and Management) g. Build the school’s professional capacity, engage staff in the development of a collaborative professional culture and improve systems of staff supervision, evaluation, support and professional learning. (Building Professional Capacity) 79.17(3) Each superintendent candidate demonstrates competency in all of the following professional core curricula: a. Collaboratively lead, design and implement a district mission, vision and process for continuous improvement that reflects a core set of values and priorities that include data use, technology, values, equity, diversity, digital citizenship and community. (District Mission, Vision and Improvement) b. Advocate for ethical decisions and cultivate professional norms and culture. (Ethics and Professional Norms) c. Develop and maintain a supportive, equitable, culturally responsive and inclusive district culture. (Equity, Inclusiveness and Cultural Responsiveness) d. Evaluate, design, cultivate and implement coherent systems of curriculum, instruction, data systems, supports, assessment and instructional leadership. (Learning and Instruction) e. Understand and engage families, communities and other constituents in the work of schools and the district and to advocate for district, student and community needs. (Community and External Leadership) f. Develop, monitor, evaluate and manage data-informed and equitable district systems for operations, resources, technology and human capital management. (Operations and Management) g. Cultivate relationships, lead collaborative decision-making and governance and represent and advocate for district needs in broader policy conversations. (Policy, Governance and Advocacy) 79.17(4) Each new administrator candidate successfully completes the appropriate evaluator training provided by a state-approved evaluator trainer. 79.17(5) Each administrator candidate demonstrates, within specific coursework and clinical experiences, the ability to develop and maintain a supportive, equitable, culturally responsive and inclusive district culture with students and staff from diverse groups, as defined in rule 281—79.2(256). The unit shall provide evidence that administrator candidates develop the ability to meet the needs of all learners, as well as ensuring teachers meet the needs of diverse learners, including: a. Students from diverse ethnic, racial and socioeconomic backgrounds. b. Students with disabilities. This will include preparation in developing and implementing individualized education programs and behavioral intervention plans, preparation for educating individuals in the least restrictive environment and identifying that environment, and strategies that address difficult and violent student behavior and improve academic engagement and achievement. c. Students who are struggling with literacy, including those with dyslexia. d. Students who are gifted and talented. e. English learners. f. Students who may be at risk of not succeeding in school. This preparation will include classroom management addressing high-risk behaviors, including behaviors related to substance use disorder.DIVISION VSPECIFIC EDUCATION STANDARDS APPLICABLE ONLY TO PRACTITIONER PREPARATION PROGRAMS OTHER THAN TEACHER OR ADMINISTRATOR PREPARATION PROGRAMS

281—79.18(256) Purpose. This division addresses preparation of an individual seeking a license based on school-centered preparation for employment as one of the following: school guidance counselor, school audiologist, school psychologist, school social worker, speech-language pathologist or supervisor of special education (282—Chapter 27 contains more information regarding licenses for service other than as a teacher).

281—79.19(256) Clinical practice standard. The unit and its school, AEA and facility partners will provide clinical experiences that assist candidates in becoming successful practitioners in accordance with the following provisions. 79.19(1) The unit ensures that clinical experiences occurring in all locations are well sequenced, purposeful, supervised by appropriately qualified personnel, monitored by the unit and integrated into unit standards. These expectations are shared with candidates, supervisors and cooperating professional educators. 79.19(2) Cooperating professional educators and college/university supervisors share responsibility for evaluating the candidate’s achievement of unit standards. Clinical experiences are structured to have multiple performance‐based assessments at key points within the program to demonstrate the candidate’s attainment of unit standards. 79.19(3) Clinical experiences include all of the following criteria: a. Learning that takes place in the context of providing high-quality instructional programs for students in a state-approved school, agency or educational facility; b. Take place in educational settings that include diverse populations and students of different age groups; c. Provide opportunities for candidates to observe and be observed by others and to engage in discussion and reflection on clinical practice; d. Include minimum expectations and responsibilities for cooperating professional educators, school districts, accredited nonpublic schools or AEAs and for higher education supervising faculty members; e. Include prescribed minimum expectations for involvement of candidates in relevant responsibilities directed toward the work for which they are preparing; f. Involve candidates in communication and interaction with parents or guardians, community members, faculty and staff and cooperating professional educators in the school. 79.19(4) The institution annually delivers one or more workshop(s) for cooperating professional educators to define the objectives of the field experience, review the responsibilities of the cooperating professional educators, build skills in coaching and mentoring and provide the cooperating professional educators other information and assistance the institution deems necessary. The workshop(s) incorporate feedback from participants and utilize appropriate delivery strategies. 79.19(5) The institution shall enter into a written contract with the cooperating school districts that provide field experiences for candidates.

281—79.20(256) Candidate knowledge, skills and dispositions standard. Candidates will demonstrate the content knowledge and the pedagogical and professional knowledge, skills and dispositions necessary to help all students learn in accordance with the following provisions: 79.20(1) Each professional educator program will define program standards (aligned with current national standards) and embed them in coursework and clinical experiences at a level appropriate for a novice professional educator. 79.20(2) Each candidate demonstrates, within specific coursework and clinical experiences related to the study of human relations, cultural competency and diverse learners, that the candidate is prepared to work with students from diverse groups, as defined in rule 281—79.2(256). The unit shall provide evidence that candidates develop the ability to meet the needs of all learners, including: a. Students from diverse ethnic, racial and socioeconomic backgrounds. b. Students with disabilities. This will include preparation in developing and implementing individualized education programs and behavioral intervention plans, preparation for educating individuals in the least restrictive environment and identifying that environment, and strategies that address difficult and violent student behavior and improve academic engagement and achievement. c. Students who are struggling with literacy, including those with dyslexia. d. Students who are gifted and talented. e. English learners. f. Students who may be at risk of not succeeding in school. This preparation will include classroom management addressing high-risk behaviors, including behaviors related to substance use disorder.DIVISION VISPECIFIC EDUCATION STANDARDS APPLICABLE ONLY TO TEACHER INTERN PRACTITIONER PREPARATION PROGRAMS

281—79.21(256) General. Institutions interested in offering a teacher intern license will provide evidence of compliance with standards listed in this division, the faculty standards in rule 281—79.12(256) and the assessment standards in rule 281—79.13(256).

281—79.22(256) Intern license governance and resources standard. Governance and resources adequately support the preparation of teacher intern candidates to meet professional, state and institutional standards. As a component of the program, the institution will work collaboratively with the local school district(s) or AEA. 79.22(1) The institution will have a clearly understandable governance structure that serves as a basis to provide guidance and support for the teacher intern preparation program. 79.22(2) The institution’s responsibilities include: a. Establishing a teacher intern leadership team that will provide oversight of the program; and b. Providing appropriate resources to ensure a quality program. 79.22(3) The leadership team’s responsibilities include: a. Establishing the conceptual framework to provide the foundation for all components of the program; b. Screening and selecting teacher intern candidates; c. Establishing an advisory team to provide guidance to the teacher intern preparation program annually for program evaluation and continuous improvement. The advisory team includes institutional personnel, including program faculty, and representatives from LEA 5-12 grade level teachers and administrators; and d. Using program evaluation and continuous improvement to review and monitor the program goals, the program of study, the support system and the assessment system. 79.22(4) The teacher intern preparation program and LEAs will work collaboratively to provide opportunities for teacher intern candidates to observe and be observed by others and to engage in discussion and reflection on clinical practice. 79.22(5) The LEA will provide the following: a. An offer of employment to a teacher intern candidate in the program in one of the endorsements identified on the department’s website at www.educateiowa.gov/pk-12/educator-quality/practitioner-preparation; b. A mentoring and induction program with a district-assigned mentor; and c. An assurance that the LEA will not overload the intern with extracurricular duties. 79.22(6) The institution provides resources and support necessary for the delivery of a quality teacher intern preparation program. The resources and support include the following: a. Financial resources; facilities; and appropriate educational materials, equipment and library services; b. Commitment to a work climate; policies; and faculty/staff assignments that promote/support best practices in teaching, scholarship and service; c. Equitable resources and access for all program components regardless of delivery model or location; d. Technological support for instructional needs to enhance candidate learning with instructional technology integrated into classroom experiences; e. Quality clinical experiences and evaluations for all educator candidates; and f. Sufficient faculty and administrative, clerical and technical staff. 79.22(7) The program has a clearly articulated process regarding candidate and intern performance, aligned with the institutional policy, for decisions impacting progress through the program. Program and school district policies for removal and replacement of interns from their internship assignments are clearly communicated to all candidates, school administrators and faculty. 79.22(8) Candidate assessment for a teacher intern program includes clear criteria for the following: a. Acceptance requirements include: (1) Completion of a baccalaureate degree from a regionally accredited institution that meets program-established required grade point criteria for the baccalaureate degree and content area; (2) Completion of coursework that meets the state minimum requirements for at least one of the BOEE’s secondary endorsement areas, unless the endorsement area requirements are embedded in the teacher intern professional core; and (3) Screening designed to generate information about the prospective candidate’s attributes identified as essential for candidates in the program. b. Continuation in the program with clearly defined checkpoints/gates, including verification of an offer of employment as an intern from a school or district administrator. c. Program completion and subsequent recommendation by the authorized official of the program for an initial teaching license, including recommendation for an intern license for one or more of the endorsements identified on the department’s teacher preparation website at educateiowa.gov/pk-12/educator-quality/practitioner-preparation.

281—79.23(256) Intern license faculty standard. Intern program faculty standards are aligned and may be met through rule 281—79.12(256).

281—79.24(256) Intern license program of study standard. A program’s required coursework will include a minimum of 28 semester hours or equivalent designed to ensure that teacher intern candidates develop the dispositions, knowledge, and performance expectations of the InTASC standards embedded at a level appropriate for a beginning teacher. 79.24(1) Teacher intern candidates will develop the dispositions, knowledge and performance expectations of the Iowa teaching standards (aligned with InTASC standards) and the BOEE’s Code of Professional Conduct and Ethics at a level appropriate for a beginning teacher. 79.24(2) All components of the program of study may only be initiated and completed after the candidate has completed a baccalaureate degree. 79.24(3) Coursework and competencies to be completed prior to the beginning of the candidate’s initial employment as an intern include but are not limited to: a. Understands how learners grow and develop and implements developmentally appropriate and challenging learning experiences. This aligns with InTASC standard 1. b. Demonstrates competence in content knowledge appropriate to the teaching position. This aligns with Iowa teaching standard 2 (281—subrule 83.4(2)) and with InTASC standards 4 and 5. c. Demonstrates competence in classroom management. This aligns with Iowa teaching standard 6 (281—subrule 83.4(6)) and with InTASC standard 3. d. Demonstrates competence in planning and preparing for instruction. This aligns with Iowa teaching standard 3 (281—subrule 83.4(3)) and with InTASC standard 7. e. Uses a variety of methods to monitor student learning. This aligns with Iowa teaching standard 5 (281—subrule 83.4(5)) and InTASC standard 6. 79.24(4) Additional coursework and competencies to be completed prior to the recommendation for an initial teaching license includes: a. Uses strategies to deliver instruction that meets the multiple learning needs of students. This aligns with Iowa teaching standard 4 (281—subrule 83.4(4)) and with InTASC standards 2 and 8. b. Engages in professional growth. This aligns with Iowa teaching standard 7 (281—subrule 83.4(7)) and with InTASC standard 9. c. Contributes to efforts to achieve district and building goals. This aligns with Iowa teaching standard 8 (281—subrule 83.4(8)) and with InTASC standard 10. d. Demonstrates ability to enhance academic performance and support for implementation of the school district student achievement goals. This aligns with Iowa teaching standard 1 (281—subrule 83.4(1)). 79.24(5) Each teacher intern candidate demonstrates knowledge about literacy and receives preparation in literacy. Each candidate also develops and demonstrates the ability to integrate reading strategies into content area coursework. 79.24(6) Each teacher intern candidate effectively demonstrates the ability to integrate technology into instruction to support student learning. 79.24(7) Each teacher intern candidate receives dedicated coursework related to the study of human relations, cultural competency and diverse learners, such that the candidate is prepared to work with students from diverse groups, as defined in rule 281—79.2(256). The unit shall provide evidence that teacher intern candidates develop the ability to meet the needs of all learners, including: a. Students from diverse ethnic, racial and socioeconomic backgrounds; b. Students with disabilities. This will include preparation in developing and implementing individualized education programs and behavioral intervention plans, preparation for educating individuals in the least restrictive environment and identifying that environment, and strategies that address difficult and violent student behavior and improve academic engagement and achievement; c. Students who are gifted and talented; d. English learners; and e. Students who may be at risk of not succeeding in school. This preparation will include classroom management addressing high-risk behaviors, including behaviors related to substance use disorder. 79.24(8) Each teacher intern candidate demonstrates knowledge and application of the Iowa core to the teaching and learning process. 79.24(9) Each teacher intern candidate will be engaged in field experiences that include opportunities for both observation of exemplary instruction and involvement in co-planning and co-teaching. Each teacher intern candidate will complete at least 50 hours of field experience prior to the candidate’s initial employment as an intern. The institution enters into a written contract with the cooperating school or district providing preinternship field experiences. 79.24(10) The teacher intern preparation program will provide a teacher intern seminar during the teacher internship year to support and extend coursework from the teacher intern content and facilitate teacher intern reflection. 79.24(11) In accordance with 281—Chapter 83, all interns will be provided with a district-level mentor in addition to the program supervisor. The purpose of this district-level mentor is to provide coaching feedback dependent on the intern’s classroom experience. This district-level mentor shall not serve in an evaluative role. The district-level mentor shall complete specialized training for serving as a mentor as required in rule 281—83.3(284). The program will coordinate support between the teacher intern candidate’s local district mentor and program supervisor. 79.24(12) The program shall provide an orientation for teacher intern candidates. The orientation will include, but not be limited to: a. Program goals and expectations; b. Licensure and ethics provisions; c. Support provided by the program; and d. Support provided by the LEA or AEA. 79.24(13) Teacher intern faculty will provide teacher intern candidates with academic advising, feedback about their performance throughout the program and consultation opportunities. 79.24(14) Teacher intern faculty will provide regular supervision in teacher intern candidates’ classrooms with additional supervision and assistance provided as needed.

281—79.25(256) Intern license assessment standard. Intern program assessment standards are met through rule 281—79.13(256), except for subrule 79.13(4), which is not applicable. These rules are intended to implement Iowa Code sections 256.7 and 256.16.ARC 7167CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to paraeducator preparation programs and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 80, “Standards for Paraeducator Preparation Programs,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 256.7(22).State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 256.7(32).Purpose and Summary This proposed rulemaking is in response to Executive Order 10. The existing chapter contains many instances of overly restrictive language and language that duplicates statutory text verbatim. The proposed rulemaking eliminates that language. The Department of Education proposes retaining standards that have the highest relationship to improving student success.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.281.8661 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2 to 2:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10 to 10:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 80 and adopt the following new chapter in lieu thereof: CHAPTER 80STANDARDS FOR PARAEDUCATOR PREPARATION PROGRAMS

281—80.1(272) Definitions. The following definitions apply to this chapter: "Authorized official" means an individual with the authority within the institution and the unit to monitor and ensure compliance with this chapter.

If the unit is within a community college, an institution of higher education under the state board of regents, or an accredited private institution of higher education, the official must maintain, oversee, and be responsible for the program within the unit.
If the unit is within an Iowa public school district or area education agency, the official must have one or more of the following credentials issued by the board of educational examiners: a teacher license (with the exception of a substitute teaching license), an administrator license, a professional services license, an elementary professional school counselor endorsement, a secondary professional school counselor endorsement, a school nurse endorsement, a special education support personnel authorization, or a statement of professional recognition. Other authorizations or certificates issued by the board of educational examiners do not satisfy the terms of this paragraph.

"Department" means the department of education. "Director" means the director of the department of education. "Diverse groups" means one or more groups of individuals possessing certain traits or characteristics, including but not limited to age, color, creed, national origin, race, religion, marital status, sex, sexual orientation, gender identity, physical attributes, physical or mental ability or disability, ancestry, political party preference, political belief, socioeconomic status, or familial status. "Institution" means an Iowa public school district, area education agency, community college, institution of higher education under the state board of regents or an accredited private institution as defined in Iowa Code section 261.9(1) offering a paraeducator preparation program(s). "Paraeducator candidate" means an individual who is enrolled in a paraeducator preparation program leading to certification as a generalist, a generalist with area(s) of concentration, or an advanced paraeducator. "Paraeducator preparation program" means the program of paraeducator preparation leading to certification of paraeducators. "State board" means Iowa state board of education. "Unit" means the organizational entity within an institution with the responsibility of administering the paraeducator preparation program(s).

281—80.2(272) Institutions affected. All institutions engaged in preparation of paraeducators and seeking state board approval of the institutions’ paraeducator preparation program(s) shall meet the standards contained in this chapter.

281—80.3(272) Criteria for Iowa paraeducator preparation programs. Each institution seeking approval of its paraeducator preparation program(s) will submit to the state board evidence of the extent to which the program meets the standards contained in this chapter. After the state board has approved an institution’s paraeducator preparation program(s), students who complete the program(s) may be recommended by the authorized official of that institution for issuance of the appropriate certificate.

281—80.4(272) Application; approval of programs. Approval of paraeducator preparation programs by the state board will be based on the recommendation of the director after study of the factual and evaluative evidence of record about each program in terms of the standards contained in this chapter. Approval, if granted, will be for a term of seven years; however, approval for a shorter term may be granted by the state board if it determines conditions so warrant. If approval is not granted, the applicant institution will be advised concerning the areas in which improvement or changes appear to be essential for approval. In this case, the institution will be given the opportunity to present factual information concerning its programs at the next regularly scheduled meeting of the state board. The institution may also reapply at its discretion to provide evidence of the actions taken toward suggested improvement. Any application submitted under this rule is to be submitted by the authorized official.

281—80.5(272) Periodic reports. In addition to reports pursuant to this chapter, the department may ask institutions placed on the approved programs list to make periodic reports necessary to keep records of each paraeducator preparation program up to date, to provide information necessary to carry out research studies relating to paraeducator preparation, and for any other purpose the department deems advisable. Any reports submitted under this rule are to be submitted by the authorized official.

281—80.6(272) Reevaluation of paraeducator preparation programs. Each paraeducator preparation program will be reviewed and reevaluated at least once every seven years, at a shorter interval specified pursuant to rule 281—80.4(272), or at any time deemed necessary by the director. Recommendations as to whether to grant continued approval are governed by rule 281—80.4(272).

281—80.7(272) Approval of program changes. Upon application by an institution, the director is authorized to approve minor additions to, or changes within, the institution’s approved paraeducator preparation program. When an institution proposes revisions that exceed the primary scope of its program, the revisions become operative only after approval by the state board.

281—80.8(272) Organizational and resource standards. Organization and resources adequately support the preparation of paraeducator candidates to enable them to meet state standards in accordance with the provisions of this rule. 80.8(1) The unit provides resources and support necessary for the delivery of a quality certification program, including resources to support a quality hands-on (clinical) experience and resources to support technological and instructional needs to enhance candidate learning. 80.8(2) The unit provides evidence of collaboration with members of the professional community, including the unit’s advisory committee comprised of school administrators, classroom teachers, currently employed paraprofessionals and others, to design, deliver, and evaluate programs to prepare paraeducators. 80.8(3) The unit’s use of staff in teaching roles is purposeful and managed to ensure integrity, quality, and continuity of the program(s). 80.8(4) The unit ensures that resources are equitable for all program components, regardless of delivery or location.

281—80.9(272) Diversity standards. 80.9(1) The unit will ensure that the paraeducator preparation program meets the following diversity standards: a. The unit provides an environment and experiences to paraeducator candidates to support candidate growth in knowledge, skills, and dispositions to help diverse groups of PK-12 students learn. b. The unit’s plans, policies, and practices document its efforts in establishing and maintaining a diverse staff, climate, and paraeducator candidate pool that strives to represent the diverse makeup of the community at large. 80.9(2) In addition to the provisions of rule 281—80.11(272), the unit is to gather data about its implementation of this rule, use those data to make program improvements, and share those data and improvements with the schools and communities the unit serves.

281—80.10(272) Faculty standards. Unit staff qualifications and performance facilitate the unit’s role in the preparation of a professional paraeducator in accordance with the provisions of this rule. 80.10(1) The unit documents the alignment of teaching duties for each faculty member with that member’s preparation, knowledge, experiences, and skills appropriate for training paraeducators to serve in a school setting. 80.10(2) The institution holds unit staff accountable for teaching the critical concepts and principles of the discipline.

281—80.11(272) Program assessment and evaluation standards. The unit’s assessment system will appropriately monitor individual candidate performance and use that data in concert with other program information to improve the unit and its programs in accordance with the provisions of this rule. 80.11(1) Each paraeducator candidate’s knowledge and skills will be measured against state certification standards adopted by the board of educational examiners under Iowa Code section 272.12 and the unit’s learning outcomes for any certificate for which the unit may recommend the candidate. 80.11(2) Programs will submit curriculum exhibits for approval by the department. 80.11(3) The unit will establish a standard of satisfactory performance of paraeducator candidates, which will comply with the following paragraphs: a. The unit uses measures for candidate assessment that are fair, reliable, and valid. b. The unit assesses candidates on their demonstration and attainment of unit standards. c. The unit uses a variety of assessment measures for assessment of candidates on each unit standard. d. The unit provides candidates with formative feedback on their progress toward attainment of unit standards. 80.11(4) The unit will conduct a survey of graduates and their employers to ensure that its graduates are well prepared for their assigned roles. 80.11(5) The unit will have a clearly defined, cohesive assessment system and regularly review, analyze, and revise its assessment practices. 80.11(6) The unit will collect and analyze aggregated candidate and program data, use those data to make program improvements, and share those data and improvements with stakeholders on a regular basis. 80.11(7) An annual report including a composite of evaluative data collected by the unit will be submitted to the department by September 30 of each year. 80.11(8) When it publicly reports data, the unit will comply with all applicable privacy laws, including the Family Educational Rights and Privacy Act (FERPA), 20 U.S.C. §1232g.

281—80.12(272) Clinical practice standards. The unit and its school partners will provide clinical experience opportunities that assist candidates in becoming successful paraeducators in accordance with the provisions of this rule. 80.12(1) Paraeducator clinical experiences support learning in the context in which paraeducators will practice. 80.12(2) Paraeducator clinical experiences include the following: a. A minimum of ten hours of experience in a state-approved school or educational facility under the supervision of a licensed educator. b. Opportunities for paraeducator candidates to observe and be observed by others in the application of skills and knowledge. These rules are intended to implement Iowa Code section 256.7(22).ARC 7168CEducation Department[281]Notice of Intended Action

Proposing rulemaking related to teacher and administrator quality programs and providing an opportunity for public comment

The State Board of Education hereby proposes to rescind Chapter 83, “Teacher and Administrator Quality Programs,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 284.3(3), 284.5(8) and 284.6(6).State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 284.Purpose and Summary This proposed rulemaking is in response to Executive Order 10. The status quo rules contain many instances of overly restrictive language and language that duplicates statutory text verbatim. The proposed rulemaking eliminates that language. The Department of Education proposes retaining standards that have the highest relationship to improving student success.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the State Board for a waiver of the discretionary provisions, if any, pursuant to 281—Chapter 4. Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 4, 2024. Comments should be directed to: Thomas A. Mayes Department of Education Grimes State Office Building, Second Floor 400 East 14th Street Des Moines, Iowa 50319-0146 Phone: 515.281.8661 Email: thomas.mayes@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 2 to 2:30 p.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa January 4, 2024 10 to 10:30 a.m. State Board Room, Second Floor Grimes State Office Building Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs by calling 515.281.5295.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 281—Chapter 83 and adopt the following new chapter in lieu thereof: CHAPTER 83TEACHER AND ADMINISTRATOR QUALITY PROGRAMSDIVISION IGENERAL STANDARDS APPLICABLE TO BOTH ADMINISTRATOR AND TEACHER QUALITY PROGRAMS

281—83.1(284,284A) Definitions. For the purpose of these rules, the following definitions apply: "Administrator" "school leader" means the same as “administrator” as defined in Iowa Code section 284A.2(1). "Beginning administrator" means the same as defined in Iowa Code section 284A.2(2). "Beginning teacher" means the same as defined in Iowa Code section 284.2(1). For purposes of the beginning teacher mentoring and induction program created pursuant to Iowa Code section 284.5 or in an approved career paths, leadership roles, and compensation framework or approved comparable system as provided in Iowa Code section 284.15, “beginning teacher” also includes preschool teachers who are licensed by the board of educational examiners under Iowa Code chapter 272 and are employed by a school district or area education agency. "Comprehensive evaluation" means, with respect to a beginning teacher, the same as defined in Iowa Code section 284.2(2). With respect to a beginning administrator, “comprehensive evaluation” means the same as defined in Iowa Code section 284A.2(3). "Department" means the department of education. "Director" means the director of the department of education. "District facilitator" means an individual in Iowa who serves as a coordinator for a district mentoring and induction program. "Evaluator" means the same as defined in Iowa Code section 284.2(5). "Intensive assistance" means the provision of organizational support and technical assistance to teachers, other than beginning teachers, for the remediation of identified teaching and classroom management concerns for a period not to exceed 12 months. "Leadership standards" means the Iowa standards for school administrators adopted pursuant to Iowa Code section 256.7(27). "Mentor" means, with respect to a beginning teacher, the same as defined in Iowa Code section 284.2(7). With respect to a beginning administrator, “mentor” means the same as defined in Iowa Code section 284A.2(7). "Performance review" means the same as defined in Iowa Code section 284.2(8). "School board" means the same as defined in Iowa Code section 284.2(9). "State board" means the state board of education. "Teacher" means the same as defined in Iowa Code section 284.2(11).DIVISION IISPECIFIC STANDARDS APPLICABLE TO TEACHER QUALITY PROGRAMS

281—83.2(284) Mentoring and induction program for beginning teachers. 83.2(1) Option one: beginning teacher mentoring and induction program. Completion of a beginning teacher mentoring and induction program is one manner in which a beginning teacher may satisfy Iowa Code section 272.28(1). a. General. (1) School districts and area education agencies may provide a beginning teacher mentoring and induction program for all beginning teachers as specified in Iowa Code section 284.5. (2) A school district or area education agency may offer a teacher a third year of participation in the program if, after conducting a comprehensive evaluation, the school district or area education agency determines that the teacher is likely to successfully complete the mentoring and induction program by meeting the Iowa teaching standards by the end of the third year of eligibility. The third year of eligibility is offered at the employing district’s or area education agency’s expense. A teacher granted a third year of eligibility shall, in cooperation with the teacher’s evaluator, develop a plan to meet the Iowa teaching standards and district or area education agency career expectations. This plan will be implemented by the teacher and supported through the district’s or area education agency’s mentoring and induction program. The school district or area education agency will notify the board of educational examiners that the teacher will participate in a third year of the school district’s program. The teacher will undergo a comprehensive evaluation at the end of the third year. For purposes of comprehensive evaluations for beginning teachers, including the comprehensive evaluation necessary for the beginning teacher to progress to career teacher, the Iowa teaching standards and criteria are as described in rule 281—83.3(284). A school district or area education agency will participate in state program evaluations. b. Plan.Each school district or area education agency that offers a beginning teacher mentoring and induction program shall develop a sequential two-year beginning teacher mentoring and induction plan based on the Iowa teaching standards. A school district or area education agency will have the board adopt a beginning teacher mentoring and induction program plan and written procedures for the program. At the board’s discretion, the district or area education agency may choose to use or revise the model plan provided by the area education agency or develop a plan locally. The components of a district’s or area education agency’s beginning teacher mentoring and induction program shall include, but are not limited to, the following: (1) Goals for the program. (2) A process for the selection of mentors. (3) A mentor training process that: 1. Is consistent with effective staff development practices and adult professional needs to include skills needed for teaching, demonstration, and coaching. 2. Addresses mentor needs, indicating a clear understanding of the role of the mentor. 3. Results in the mentor’s understanding of the personal and professional needs of new teachers. 4. Provides the mentor with an understanding of the district expectations for beginning teacher competencies based on the Iowa teaching standards. 5. Facilitates the mentor’s ability to provide guidance and support to new teachers. (4) A supportive organizational structure for beginning teachers which will include: 1. Activities that provide access and opportunities for interaction between mentor and beginning teacher that at a minimum provide:

Released time for mentors and beginning teachers to plan;

The demonstration of classroom practices;

The observation of teaching; and

Feedback.

2. A selection process for who will be in the mentor/beginning teacher partnership. 3. Roles and responsibilities of the mentor. (5) An evaluation process for the program, which includes: 1. An evaluation of the district and area education agency program goals, 2. An evaluation process that provides for the minor and major program revisions, and 3. A process for how information about the program will be provided to interested stakeholders. (6) The process for dissolving mentor and beginning teacher partnerships. (7) A plan that reflects the needs of the beginning teacher employed by the district or area education agency. (8) Activities designed to support beginning teachers by: 1. Developing and enhancing competencies for the Iowa teaching standards, and 2. Providing research-based instructional strategies. (9) Funds, if appropriated by the general assembly, received by a school district or area education agency from the beginning teacher mentoring and induction program will be used for any or all of the following purposes: to pay any applicable costs of the employer’s share of contributions to federal social security and the Iowa public employees’ retirement system for a pension and annuity retirement system established under Iowa Code chapter 294 for such amounts paid by the district or area education agency. These funds are miscellaneous funds or are considered encumbered. A school district or area education agency will maintain a separate listing within its budget for payments received and expenditures made for this program. Funds that remain unencumbered or unobligated at the end of the fiscal year will not revert but will remain available for expenditure for the purposes of the program until the close of the succeeding fiscal year. 83.2(2) Option two: teacher leadership and compensation system. a. General.Two years of successful teaching experience in a school district with an approved career paths, leadership roles, and compensation framework or approved comparable system as provided in Iowa Code section 284.15 (“framework for beginning teachers” for purposes of this rule) is one manner in which a beginning teacher may satisfy Iowa Code section 272.28(1). b. Participation.School districts may provide an approved career paths, leadership roles, and compensation framework or approved comparable system as provided in Iowa Code section 284.15. A beginning teacher, as defined in this chapter, shall be informed by the school district, prior to the beginning teacher’s participation in a framework for beginning teachers, of the Iowa teaching standards and criteria upon which the beginning teacher will be evaluated and of the evaluation process utilized by the school district. The beginning teacher will be supported by the teacher leadership and compensation program as defined in part 4 of the submitted plan. The beginning teacher will be comprehensively evaluated by the end of the beginning teacher’s second year of teaching to determine whether the teacher meets expectations to move to the career level. The school district will recommend for a standard license a beginning teacher who has successfully met the Iowa teaching standards as determined by a comprehensive evaluation. (1) If a beginning teacher who is participating in a framework for beginning teachers leaves the employ of a school district prior to completion of the framework, the school district or area education agency subsequently hiring the beginning teacher will credit the beginning teacher with the time earned in such a framework prior to the subsequent hiring. (2) A school district may offer a teacher a third year of participation in a framework for beginning teachers if, after conducting a comprehensive evaluation, the school district determines that the teacher is likely to successfully meet the Iowa teaching standards by the end of the third year of eligibility. The third year of eligibility is offered at the employing district’s expense. A teacher granted a third year of eligibility shall, in cooperation with the teacher’s evaluator, develop a plan to meet the Iowa teaching standards and district or area education agency career expectations. This plan will be implemented by the teacher and supported through the district’s framework for beginning teachers. The school district shall notify the board of educational examiners that the teacher will participate in a third year of the school district’s framework for beginning teachers. The teacher is to undergo a comprehensive evaluation at the end of the third year. (3) For purposes of comprehensive evaluations for beginning teachers, including the comprehensive evaluation necessary for the beginning teacher to progress to career teacher, the Iowa teaching standards and criteria are as described in rule 281—83.3(284). A school district shall participate in state program evaluations. c. Plan assurances.Each school district that offers a framework under Iowa Code sections 284.15 through 284.17 and uses it for purposes of meeting the school district’s obligations to beginning teachers is to provide assurances to the department that the district’s framework for beginning teachers satisfies those Iowa Code sections and attends to the Iowa teaching standards and criteria described in rule 281—83.3(284). d. Inapplicability to area education agencies.This subrule is not applicable to area education agencies. Only subrule 83.2(1) is applicable to area education agencies; however, a teacher employed by an area education agency may be included in a framework or comparable system established by a school district if the area education agency and the school district enter into a contract for such purpose.

281—83.3(284) Iowa teaching standards and criteria. The Iowa teaching standards and supporting criteria provide Iowa school districts and area education agencies with a consistent representation of the complexity and the possibilities of quality teaching. The standards serve as the basis for comprehensive evaluations of teachers and as a basis for professional development plans. Each standard with supporting criteria is outlined as follows: 83.3(1) Demonstrates ability to enhance academic performance and support for and implementation of the school district’s student achievement goals. a. The teacher: (1) Provides multiple forms of evidence of student learning and growth to students, families, and staff. (2) Implements strategies supporting student, building, and district goals. (3) Uses student performance data as a guide for decision making. (4) Accepts and demonstrates responsibility for creating a classroom culture that supports the learning of every student. (5) Creates an environment of mutual respect, rapport, and fairness. (6) Participates in and contributes to a school culture that focuses on improved student learning. (7) Communicates with students, families, colleagues, and communities effectively and accurately. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Uses knowledge and understanding of the area education agency’s mission, goals, and strategic priorities to provide services that enhance academic performance. (2) Understands and uses knowledge of area education agency and district goals and data to provide services that enhance academic performance. (3) Participates in and contributes to a positive learning culture. (4) Communicates with students, families, colleagues, and communities effectively and accurately. (5) Uses area education agency, district, and student data as a guide for decision making. 83.3(2) Demonstrates competence in content knowledge appropriate to the teaching position. a. The teacher: (1) Understands and uses key concepts, underlying themes, relationships, and different perspectives related to the content area. (2) Uses knowledge of student development to make learning experiences in the content area meaningful and accessible for every student. (3) Relates ideas and information within and across content areas. (4) Understands and uses instructional strategies that are appropriate to the content area. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Understands, communicates, and uses key concepts and best practice in fulfillment of area education agency roles and responsibilities. (2) Uses knowledge of child and adolescent development and of adult learning to make interventions and strategies meaningful, relevant, and accessible. (3) Relates professional knowledge and services within and across multiple content and discipline areas. (4) Understands and supports strategies and interventions that are best practice across content and discipline areas. 83.3(3) Demonstrates competence in planning and preparing for instruction. a. The teacher: (1) Uses student achievement data, local standards, and the district curriculum in planning for instruction. (2) Sets and communicates high expectations for social, behavioral, and academic success of all students. (3) Uses students’ developmental needs, backgrounds, and interests in planning for instruction. (4) Selects strategies to engage all students in learning. (5) Uses available resources, including technology, in the development and sequencing of instruction. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Demonstrates the ability to organize and prioritize time, resources, and responsibilities. (2) Demonstrates the ability to individually and collaboratively plan and prepare professional services that address the range of district, teacher, parent, and student needs. (3) Uses district and student data to develop goals and interventions. (4) Demonstrates the flexibility to plan for professional services based on changing conditions of the work context and environment. (5) Uses available resources, including technology, to plan and develop professional services. 83.3(4) Uses strategies to deliver instruction that meets the multiple learning needs of students. a. The teacher: (1) Aligns classroom instruction with local standards and district curriculum. (2) Uses research-based instructional strategies that address the full range of cognitive levels. (3) Demonstrates flexibility and responsiveness in adjusting instruction to meet student needs. (4) Engages students in varied experiences that meet diverse needs and promote social, emotional, and academic growth. (5) Connects students’ prior knowledge, life experiences, and interests in the instructional process. (6) Uses available resources, including technology, in the delivery of instruction. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Aligns service delivery to district, teacher, parent, and student needs. (2) Provides consultation, instruction, interventions, and strategies that align with learner needs. (3) Demonstrates flexibility and responsiveness in adjusting services to meet diverse learner needs. (4) Uses and supports research-based and evidence-based practices to meet learner needs. (5) Uses available resources, including technology, to provide professional services that meet learner needs. 83.3(5) Uses a variety of methods to monitor student learning. a. The teacher: (1) Aligns classroom assessment with instruction. (2) Communicates assessment criteria and standards to all students and parents. (3) Understands and uses the results of multiple assessments to guide planning and instruction. (4) Guides students in goal setting and assessing their own learning. (5) Provides substantive, timely, and constructive feedback to students and parents. (6) Works with other staff and building and district leadership in analysis of student progress. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Uses appropriate assessment, data collection, and data analysis methods that support alignment of services with learner needs. (2) Works collaboratively within the learning community to establish measurable goals and to identify formative and summative methods to monitor progress and the quality of implementation. (3) Communicates the rationale and criteria of assessment and monitoring methods. (4) Elicits and provides timely and quality feedback on assessment and monitoring. 83.3(6) Demonstrates competence in classroom management. a. The teacher: (1) Creates a learning community that encourages positive social interaction, active engagement, and self-regulation for every student. (2) Establishes, communicates, models, and maintains standards of responsible student behavior. (3) Develops and implements classroom procedures and routines that support high expectations for student learning. (4) Uses instructional time effectively to maximize student achievement. (5) Creates a safe and purposeful learning environment. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Models respectful dialogue and behaviors within and across job responsibilities. (2) Promotes and maintains a positive, safe, and productive environment. (3) Works collaboratively and is flexible. (4) Communicates accurately and effectively. 83.3(7) Engages in professional growth. a. The teacher: (1) Demonstrates habits and skills of continuous inquiry and learning. (2) Works collaboratively to improve professional practice and student learning. (3) Applies research, knowledge, and skills from professional development opportunities to improve practice. (4) Establishes and implements professional development plans based upon the teacher’s needs aligned to the Iowa teaching standards and district/building student achievement goals. (5) Provides an analysis of student learning and growth based on teacher-created tests and authentic measures as well as any standardized and districtwide tests. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Demonstrates habits and skills of continuous inquiry and learning. (2) Works collaboratively to improve professional practices. (3) Applies and shares research, knowledge, and skills from professional development. (4) Establishes and implements professional development plans aligned to area education agency, district, and student learning goals. 83.3(8) Fulfills professional responsibilities established by the school district. a. The teacher: (1) Adheres to board policies, district procedures, and contractual obligations. (2) Demonstrates professional and ethical conduct as defined by state law and district policy. (3) Contributes to efforts to achieve district and building goals. (4) Demonstrates an understanding of and respect for all learners and staff. (5) Collaborates with students, families, colleagues, and communities to enhance student learning. b. Alternative criteria for area education agency staff who meet the definition of “teacher” are described herein. The staff member: (1) Adheres to board policies, area education agency procedures, federal and state rules, and contractual obligations. (2) Demonstrates professional and ethical conduct as defined by state law and area education agency policies. (3) Contributes to efforts to achieve area education agency goals. (4) Demonstrates an understanding of and respect for all learners. (5) Collaborates with all learners. 83.3(9) The school board will provide comprehensive evaluations for beginning teachers using the Iowa teaching standards and criteria listed in this rule. The school board, for the purposes of performance reviews for teachers other than beginning teachers, will provide evaluations that contain, at a minimum, the Iowa teaching standards and criteria listed in this rule.

281—83.4(284) Evaluator approval training. The department will approve eligible providers and their programs to conduct evaluator training. Only individuals certified through programs approved by the department qualify for evaluator certification by the board of educational examiners. A beginning teacher who has evaluator certification from the board of educational examiners shall not evaluate other teachers until the beginning teacher is no longer a probationary employee. Approved evaluator training programs are designed to align with the Iowa teaching standards and criteria, provide evaluators with the skills to conduct comprehensive evaluations and performance reviews pursuant to Iowa Code chapter 284, and provide for the evaluation of the progress made on individual professional development plans. This training for evaluators is to incorporate components of theory, demonstration, practice, and application of evaluation knowledge and skills. 83.4(1) Applications for providers of evaluator approval training. Eligible applications for the provision of evaluator approval training include the following components: a. A curriculum that addresses participant skill development in: (1) The identification of quality instruction and practices based on the Iowa teaching standards and criteria; (2) The use of multiple forms of data collection for identifying and supporting performance and development; (3) The understanding and development of conferencing and feedback skills; and (4) The development of skills in data-based decision making. b. Demonstration that the evaluator approval training process design provides training as specified in this rule. c. A description of the process used to deliver the training to participants. d. A description of the procedures developed to certify the skill attainment of the evaluator being trained. e. A budget. f. Staff qualifications. g. Evidence of the provider’s expertise in evaluation design and training processes. h. Provisions for leadership to support and implement ongoing professional development focused on student learning. i. A process that evaluates the effectiveness of the implementation of the training process and demonstrates that the trainees have attained the knowledge and skills as described in paragraph 83.4(1)“a.” This evaluation will be conducted on an annual basis and submitted to the department. 83.4(2) Process used for the approval of evaluator approval training program applications. a. Eligible providers will apply on forms prescribed by the department. Applications for new providers will be accepted and reviewed by the department by July 1 of each year. A review panel will be convened to review applications for evaluator approval training programs based on subrule 83.4(1). The panel will recommend for approval and the department will approve the evaluator approval training programs that satisfy that subrule. Applicants will be notified of their status within 30 days of the application deadline. An approved list of private providers will be maintained on the department website with an annual notification to school districts and area education agencies of the website address that contains provider information. b. Eligible providers may be public or private entities, including school districts, consortia, and other public or private entities including professional organizations. Applicants are to meet all applicable federal, state, and local health, safety and civil rights laws. Higher education administrative practitioner preparation institutions are to meet the review process through the state board approval and accreditation process for these institutions. 83.4(3) Local teacher evaluation plans. Local districts and area education agencies will develop and implement a teacher evaluation plan that contains the following components: a. The use of the Iowa teaching standards and criteria; b. Provisions for the comprehensive evaluation of beginning teachers that include a review of the teacher’s progress on the Iowa teaching standards as set forth in rule 281—83.3(284) and the use of the comprehensive evaluation instrument developed by the department; c. Provisions for reviews of the performance of teachers other than beginning teachers as follows: (1) Review once every three years by an evaluator to include, at a minimum, classroom observation of the teacher, a review of the teacher’s progress on the Iowa teaching standards as set forth in rule 281—83.3(284) and additional standards and criteria if established under subrule 83.3(9), a review of the implementation of the teacher’s individual professional development plan, and supporting documentation from other evaluators, teachers, parents, and students; and (2) Review annually, other than the third-year review by an evaluator, by a peer group of teachers in accordance with Iowa Code section 284.8(1); d. Provisions for individual professional development plans for teachers other than beginning teachers; e. Provisions for an intensive assistance program as provided in Iowa Code section 284.8 that addresses the remediation defined under subrules 83.3(1) through 83.3(8). (1) If a supervisor or an evaluator determines, at any time, as a result of a teacher’s performance that the teacher is not meeting district expectations under subrules 83.3(1) through 83.3(8), the evaluator will, at the direction of the teacher’s supervisor, recommend to the district that the teacher participate in an intensive assistance program. The intensive assistance program and its implementation are not subject to negotiation or grievance procedures established pursuant to Iowa Code chapter 20. (2) A teacher who is not meeting the applicable standards and criteria based on a determination made pursuant to paragraph 83.4(3)“e” will participate in an intensive assistance program. However, a teacher who has previously participated in an intensive assistance program relating to particular Iowa teaching standards or criteria is not entitled to participate in another intensive assistance program relating to the same standards or criteria and is subject to the provisions of paragraph 83.4(3)“f.” f. Following a teacher’s participation in an intensive assistance program, the teacher will be reevaluated to determine whether the teacher successfully completed the intensive assistance program and is meeting district expectations under the applicable Iowa teaching standards or criteria. If the teacher did not successfully complete the intensive assistance program or continues not to meet the applicable Iowa teaching standards or criteria, the school board may do any of the following: (1) Terminate the teacher’s contract immediately pursuant to Iowa Code section 279.27. (2) Terminate the teacher’s contract at the end of the school year pursuant to Iowa Code section 279.15. (3) Continue the teacher’s contract for a period not to exceed one year. However, the contract will not be renewed and is not subject to Iowa Code section 279.15.

281—83.5(284) Professional development for teachers. 83.5(1) Professional development for school districts, area education agencies, and attendance centers. The following provisions apply to professional development for school districts, area education agencies, and attendance centers: a. Professional learning standards.Professional learning within an area education agency or local district is aligned with the state standards for teaching and learning and aligned to the following standards for professional development. Professional learning increases educator effectiveness and results for all students when it: (1) Occurs within learning communities committed to continuous improvement, collective responsibility, and goal alignment. (2) Requires skillful leaders to develop capacity, advocate, and create support systems for professional learning. (3) Prioritizes, monitors, and coordinates resources for educator learning. (4) Uses a variety of sources and types of student, educator, and system data to plan, assess, and evaluate effectiveness of instruction. (5) Integrates theories, research, and models of human learning to achieve intended outcomes. (6) Applies research on change and sustains support for implementation of professional learning for long-term change. (7) Aligns its outcomes with educator performance and student curriculum standards. b. District or area education agency professional development plan.The district or area education agency professional development plan is to be a long-term plan designed and implemented to increase student achievement and includes all on-site and district or area education agency personnel responsible for instruction. The district or area education agency professional development plan is to contain, but not be limited to, the following: (1) Implementation of a school district’s or area education agency’s plan for professional learning. (2) Documentation that the professional development is based on student data; aligned with district or attendance center student achievement goals; and focused on instruction, curriculum, and assessment. (3) The study and implementation of research-based instructional strategies that improve teaching and learning. (4) Collaborative inquiry into the area of greatest student learning need. (5) Research-based training strategies (e.g., theory, demonstration, observation, practice, coaching, reflection, evaluation) that promote transfer and positive outcomes as needed for learning new practices. (6) Allocation of time to collectively study content, instruction, and impact so necessary adjustments can be made to ensure student success. (7) Accountability and an evaluation that documents improvement of practice and the impact on student learning. c. Attendance center professional development plans.Each attendance center within a school district will develop an attendance center professional development plan as a means of promoting group professional development. An attendance center professional development plan will further the needs of personnel responsible for instruction in the attendance center and enhance the student achievement goals of the attendance center and the goals of the district. d. Individual professional development plans.The school district and area education agency shall support the development and implementation of the individual teacher professional development plan for each teacher as outlined in subrule 83.5(2). Each individual teacher professional development plan will align to the fullest extent possible with the district professional development plan. e. Beginning teacher mentoring and induction.A school district will develop and implement a beginning teacher mentoring and induction plan as outlined in subrule 83.2(1) or a framework for beginning teachers as outlined in subrule 83.2(2). The district’s beginning teacher mentoring and induction plan or framework for beginning teachers will align with the district professional development plan described in paragraph 83.5(1)“b.” An area education agency will develop and implement a beginning teacher mentoring and induction plan as outlined in subrule 83.2(1), which will align with the area education agency’s professional development plan described in paragraph 83.5(1)“b.” f. Organizational support for professional development.The school district will provide resources and support for the district professional development plan, including opportunities for professional development, time for collaborative work of staff, budgetary support, and policies and procedures that reflect the district’s commitment to professional development. 83.5(2) Individual teacher professional development plan. Each school district and area education agency shall support the development and implementation of individual teachers’ professional development plans for teachers other than beginning teachers. The purpose of the individual plan is to promote individual and collective professional development. At a minimum, the goals for an individual teacher professional development plan are based on the needs of the teacher and on the relevant Iowa teaching standards that support the student achievement goals of the teacher’s classroom or classrooms, attendance center and school district or area education agency, as appropriate, as outlined in the comprehensive school improvement plan. The goals will go beyond those under the attendance center professional development plan described in paragraph 83.5(1)“c.” The learning opportunities provided to meet the goals of the individual teacher plan include individual study and collaborative study of district-determined or area education agency-determined content to the extent possible. The individual plan will be developed by the teacher in collaboration with the teacher’s evaluator. An annual meeting will be held between the teacher’s evaluator and the teacher to review the goals and refine the plan. 83.5(3) Professional development provider standards. a. A provider may be a school district; an area education agency; a higher education institution; a public or private entity including a professional organization that provides long-term, ongoing support for the district’s or area education agency’s professional development plan; or a consortium of any of the foregoing. An educational organization or program with specific professional development accreditation or approval from the department is an approved provider. b. Providers that are not currently accredited or approved through state accreditation procedures will follow approval procedures identified in the district’s or area education agency’s professional development plan. The potential provider will submit to the school district or area education agency a written application that provides the following documentation: (1) How the provider will deliver technical assistance that meets the Iowa professional development standards provided in paragraph 83.5(1)“a.” (2) How the provider intends to assist the local district or area education agency in designing, implementing, and evaluating professional development that satisfies paragraph 83.5(1)“b.” (3) A description of the qualifications of the provider. (4) Evidence of the provider’s expertise in professional development. (5) A budget. (6) Procedures for evaluating the effectiveness of the technical assistance delivered by the provider.

281—83.6(284) Teacher quality committees. Each school district and area education agency will create a teacher quality committee pursuant to Iowa Code section 284.4. The committee is subject to Iowa Code chapter 21. To the extent possible, committee membership will have balanced representation with regard to gender. The committee will do all of the following:

Monitor the implementation of statutes and administrative code provisions relating to this chapter, including those that affect any agreement negotiated pursuant to Iowa Code chapter 20.
Monitor the evaluation provisions of this chapter to ensure evaluations are conducted in a fair and consistent manner throughout the school district or agency. The committee will develop model evidence for the Iowa teaching standards and criteria. The model evidence will minimize paperwork and focus on teacher improvement. The model evidence will determine which standards and criteria can be met through observation and which evidence meets multiple standards and criteria.
Determine, following the adoption of the Iowa professional development model by the state board of education, the use and distribution of the professional development funds distributed to the school district or agency as provided in Iowa Code section 284.13(1)“d” based upon school district or agency, attendance center, and individual teacher professional development plans.
Monitor the professional development in each attendance center to ensure that the professional development meets school district or agency, attendance center, and individual teacher professional development plans.
Determine the compensation for teachers on the committee for work responsibilities beyond the normal workday.
Make recommendations to the school board and the certified bargaining representative regarding the expenditures of market factor incentives.

DIVISION IIISPECIFIC STANDARDS APPLICABLE TO ADMINISTRATOR QUALITY PROGRAMS

281—83.7(284A) Administrator quality program. An administrator quality program is established to promote high student achievement and enhanced educator quality and consists of the following four major components:

Adherence to the Iowa school leadership standards and criteria as the minimum basis for evaluations of administrators and as the basis for professional development plans for administrators.
Mentoring and induction programs that provide support for administrators in accordance with Iowa Code section 284A.5.
Professional development designed to directly support best practice for leadership.
Evaluation of administrators against the Iowa standards for school administrators.

281—83.8(284A) Mentoring and induction program for administrators. Each school board will establish a beginning administrator mentoring and induction program as specified in Iowa Code section 284A.5.

281—83.9(284A) Iowa school leadership standards for administrators. The Iowa school leadership standards for administrators provide a framework to guide leadership practice and how leaders are prepared, hired, developed, supervised and evaluated. A local school board may establish additional administrator standards and related criteria but will, at a minimum, utilize the following standards: 83.9(1) Mission, vision, and core values. Educational leaders develop, advocate, and enact a shared mission, vision, and core values of high-quality education and academic success and well-being of each student. 83.9(2) Ethics and professional norms. Educational leaders act ethically and according to professional norms to promote each student’s academic success and well-being. 83.9(3) Equity and cultural responsiveness. Educational leaders strive for equity of educational opportunity and culturally responsive practices to promote each student’s academic success and well-being. 83.9(4) Curriculum, instruction, and assessment. Educational leaders develop and support intellectually rigorous and coherent systems of curriculum, instruction, and assessment to promote each student’s academic success and well-being. 83.9(5) Community of care and support for students. Educational leaders cultivate an inclusive, caring, and supportive school community that promotes the academic success and well-being of each student. 83.9(6) Professional capacity of school personnel. Educational leaders develop the professional capacity and practice of school personnel to promote each student’s academic success and well-being. 83.9(7) Professional community for teachers and staff. Educational leaders foster a professional community of teachers and other professional staff to promote each student’s academic success and well-being. 83.9(8) Meaningful engagement of families and communities. Educational leaders engage families and the community in meaningful, reciprocal, and mutually beneficial ways to promote each student’s academic success and well-being. 83.9(9) Operations and management. Educational leaders manage school operations and resources to promote each student’s academic success and well-being. 83.9(10) School improvement. Educational leaders act as agents of continuous improvement to promote each student’s academic success and well-being.

281—83.10(284A) Evaluation. The board of directors of a school district will conduct an annual evaluation of an administrator who holds a professional administrator license issued under Iowa Code chapter 272, as specified in Iowa Code section 284A.7.

281—83.11(284A) Professional development of administrators. Each school district is responsible for the provision of professional growth programming for individuals employed in a school district administrative position by the school district or area education agency as deemed appropriate by the board of directors of the school district or area education agency as specified in Iowa Code section 284A.6. These rules are intended to implement Iowa Code chapters 284 and 284A.ARC 7187CExecutive Council[361]Notice of Intended Action

Proposing rulemaking related to group insurance for state employees, deferred compensation program, and health maintenance organizations and providing an opportunity for public comment

The Executive Council hereby proposes to adopt new Chapter 1, “Group Insurance for State Employees,” and rescind Chapter 5, “Deferred Compensation Program,” and Chapter 6, “Health Maintenance Organizations,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 509A.8.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 509A.6 and 509A.12.Purpose and Summary This proposed rulemaking authorizes the director of the Department of Administrative Services (DAS) to administer the deferred compensation and health benefits programs for state employees.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Council for a waiver of the discretionary provisions, if any, pursuant to Iowa Code section 17A.9A.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Council no later than 4:30 p.m. on January 5, 2024. Comments should be directed to: Nate Ristow Governor’s Office, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.314.2998 Email: nate.ristow@governor.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 4, 2024 11:30 a.m. to 12 noonRoom G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa January 5, 2024 11:30 a.m. to 12 noon Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Council and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new 361—Chapter 1: CHAPTER 1GROUP INSURANCE FOR STATE EMPLOYEES

361—1.1(509A) Administration. The executive council authorized the director of the department of administrative services or designee to administer the deferred compensation program and the health maintenance organization program for employees of the state of Iowa. The rules for administering the program are as provided for in 11—Chapter 64. This rule is intended to implement Iowa Code sections 509A.6 and 509A.12.

ITEM 2. Rescind and reserve 361—Chapter 5.

ITEM 3. Rescind and reserve 361—Chapter 6.ARC 7188CExecutive Council[361]Notice of Intended Action

Proposing rulemaking related to disaster contingency fund and providing an opportunity for public comment

The Executive Council hereby proposes to adopt new Chapter 2, “Contingent Fund—Disaster Fund,” and rescind Chapter 7, “Disaster Contingency Fund,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 29C.20.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 29C.20.Purpose and Summary The purpose of this proposed rulemaking is to enumerate policies, responsibilities, and procedures adopted by the Executive Council of the State of Iowa in order to provide guidance for administering the state Disaster Contingency Fund.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Council for a waiver of the discretionary provisions, if any, pursuant to Iowa Code section 17A.9A.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Council no later than 4:30 p.m. on January 5, 2024. Comments should be directed to: Nate Ristow Governor’s Office, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.314.2998 Email: nate.ristow@governor.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 4, 2024 11:45 a.m. to 12 noon Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa January 5, 2024 11:45 a.m. to 12 noon Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Council and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new 361—Chapter 2: CHAPTER 2CONTINGENT FUND—DISASTER AID

361—2.1(29C) Purpose. The purpose of these rules is to enumerate policies, responsibilities, and procedures adopted by the executive council of the state of Iowa in order to provide guidance for administering the state disaster contingency fund as described in Iowa Code section 29C.20.

361—2.2(29C) Definitions. The definitions set forth in Iowa Code chapter 29C are incorporated herein by reference.

361—2.3(29C) Policy. It is the policy of the state of Iowa to maintain an organization and procedures for providing supplemental assistance by the state to governmental subdivisions in the achievement of improved disaster readiness and to recover from the effects of a disaster.

361—2.4(29C) Program responsibilities and procedures. 2.4(1) Governor. The governor may proclaim a state of disaster emergency in accordance with Iowa Code section 29C.6. 2.4(2) Governmental subdivisions. Governmental subdivisions will: a. Make every effort to avert and recover from the disaster with their own resources. b. Maintain detailed accounts of disaster expenses. c. Submit to the department a request for a loan. The initial request constitutes a letter on official agency letterhead briefly describing the effect of the disaster or action on the governmental subdivision and the immediate financial inability to meet the continuing obligations of local government. d. Include in the initial letter request Form SDA-1, Form SDA-2, Form SDA-3, and Form SDA-3A as well as the State of Iowa Contingent Fund Loan Contact and Information Sheet. e. Initiate action to implement annual emergency levy as authorized by Iowa Code sections 24.6 and 384.8, in order to expedite repayment of loan. 2.4(3) Director. The director will: a. Prepare and maintain current rules for issuance by the executive council, providing for the administration of the contingent fund—disaster aid. b. Coordinate, as necessary, actions by other departments and agencies necessary to the administration of the contingent fund—disaster aid. c. Report each fiscal year to the governor and the executive council on activities in connection with administration of the contingent fund—disaster aid including, but not limited to, a description of each disaster of a magnitude sufficient to warrant recommendations concerning applications for loans to the executive council. Such description is to include the kind and scope of the disaster, the disposition of government subdivision applications for loans, and the total of loan approvals for the fiscal year. d. The director, upon receipt of an initial request for assistance supported by all appropriate forms and documentation, will advise the secretary of the executive council of such request and will furnish copies of all accompanying documents. e. The director will submit a recommendation to the executive council as to eligibility and entitlement of the requesting governmental subdivision on Form SDA-4 and Form SDA-4A. 2.4(4) Executive council. The executive council will: a. Decide if the contingent fund—disaster aid is justified by the application and showing, and, if so, the amount of the loan(s) to be made. b. Develop and publish the form and procedures for applying for the contingent fund—disaster aid and issue rules describing the administration of the contingent fund—disaster aid. c. Designate and instruct appropriate state departments and agencies to assist the director and the department in the administration of the contingent fund—disaster aid by loan or use of personnel, equipment, and facilities. d. Consider the information furnished by the governmental subdivisions requesting loans, the report and recommendation of the director and decide which of the governmental subdivisions are eligible, and if so, the amount and terms reflecting approved eligibility.The aggregate total of the loans cannot exceed $1 million during a fiscal year. 2.4(5) Department of management. The department of management will execute loans in the amounts, and as scheduled, to government subdivisions as approved by the executive council and maintain appropriate accounts. 2.4(6) State auditor actions. The auditor will audit the accounts of government subdivisions to ensure that loans have been applied in accordance with determined eligibility and will make an audit report to the executive council.

361—2.5(29C) Eligibility for contingent fund—disaster aid loans. 2.5(1) To be eligible for contingent fund—disaster aid loans, a governmental subdivision will demonstrate an immediate financial inability to meet the continuing obligations of local government through a showing of obligations and expenditures necessitated by an actual or potential disaster proclaimed a state of disaster emergency by the governor. 2.5(2) The loan, if made, may only be up to a limit of 75 percent of the showing of obligations and expenditures. The loan, without interest, may be repaid by the maximum annual emergency levy as authorized by Iowa Code sections 24.6 and 384.8. The loan shall be repaid within 20 years.

361—2.6(29C) Forms and documents. 2.6(1) SDA forms. a. Form SDA-1 “Certified True Copy of Resolution of Governing Body.” b. Form SDA-2 “Certificate by Authorized Requesting Official to Accompany Application for State Disaster Aid.” c. Form SDA-3 “Application for Financial State Disaster Aid.” d. Form SDA-3A “Resolution.” e. Form SDA-4 “Report and Recommendation of the Director, Iowa Department of Homeland Security and Emergency Management on Application for State Disaster Aid.” f. Form SDA-4A “Review of Application for State Disaster Aid.” 2.6(2) “Request from Applicant” as described in paragraph 2.4(2)“c.” 2.6(3) “State of Iowa Contingent Fund Loan Contact and Information Sheet.” These rules are intended to implement Iowa Code section 29C.20.

ITEM 2. Rescind and reserve 361—Chapter 7.ARC 7189CExecutive Council[361]Notice of Intended Action

Proposing rulemaking related to inheritance tax payments and providing an opportunity for public comment

The Executive Council hereby proposes to adopt new Chapter 3, “Inheritance Tax Payments,” and rescind Chapter 11, “Inheritance Tax Payments,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 450.6.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 450.6.Purpose and Summary This proposed rulemaking provides the criteria by which the Council will approve an inheritance tax credit for transfer of property to a public entity.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Council for a waiver of the discretionary provisions, if any, pursuant to Iowa Code section 17A.9A.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Council no later than 4:30 p.m. on January 5, 2024. Comments should be directed to: Nate Ristow Governor’s Office, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.314.2998 Email: nate.ristow@governor.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 4, 2024 12 noon to 12:15 p.m. Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa January 5, 2024 12 noon to 12:15 p.m.Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Council and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new 361—Chapter 3: CHAPTER 3INHERITANCE TAX PAYMENTS

361—3.1(450) Prior tax payment. If the inheritance tax has been paid and the payment is not excessive and, therefore, not subject to refund under Iowa Code section 450.94(3), the council will not approve, as a tax credit, any property transfer as a substitute for the prior tax payment.

361—3.2(450) Real property and tangible personal property. The tax credit is applicable for transfers of real property or of tangible personal property located in Iowa. Transfers of intangible property or of property located outside of Iowa will never qualify for the tax credit. 3.2(1) Real property. The executive council will not approve a credit for a transfer of a joint interest in real property or for property that is encumbered by liens. However, the council may approve a credit for an interest in real property that is less than full legal and equitable title if the interest is an easement for public access, a conservation or preservation easement, dedication for preserves or for other public use, or other similar interest, which by virtue of the location and nature of the property is of significant, unique value to the public or to the environment. Property encumbered by liens of creditors will not qualify for the tax credit. Proposals to transfer a partial interest will not qualify for the tax credit. 3.2(2) Tangible personal property. Tangible personal property is tangible property that can be touched or handled. It is corporeal and is contrasted with intangible property. Intangible property includes but is not limited to cash, choses in action, copyrights, patents, stocks, bonds, trademarks, or annuities. Ramco, Inc. v. Director, Department of Revenue, 248 N.W.2d 122 (Iowa 1976).

361—3.3(450) Type, use, and purpose of transfers. The transferred property for which tax credit will be claimed should be useful to the public generally. Thus, for example, transfers of real property to be dedicated and used as a park or wildlife area will generally be approved by the council for the tax credit. In addition, at the time of the transfer, the governmental entity receiving the property should intend to own and use it for a public purpose for an indefinite period of time. The council will not approve a tax credit if the property transferred is to be sold or otherwise transferred again. However, mere retention of authority to dispose of or transfer property does not preclude the council from granting the credit if the donee has rules or policies to ensure that the property may only be transferred to a similar entity or affiliated organization for a similar purpose or sold in a reasonable manner with the proceeds pledged to the same purpose as the original gift. The property transferred should have real significance to the public and should be permanently used for the public’s benefit. Personal property transferred should have significant historical or cultural value or be transferred and used in association with any real property transferred for which the council will approve the tax credit.

361—3.4(450) Political subdivisions. A political subdivision of the state of Iowa is a geographic or territorial portion of the state in which local governmental functions are performed. An agency or instrumentality of a political subdivision is part of the political subdivision. 1976 Op. Att’y Gen. 823.

361—3.5(450) Eligible taxes. The tax credit provisions in Iowa Code section 450.6 are applicable to the Iowa inheritance tax imposed by Iowa Code chapter 450.

361—3.6(450) Partial payment. If the value of the property to be transferred is less than the inheritance tax liability of the beneficiary, heir, surviving joint tenant or other transferee who proposes such transfer and if the council approves the transfer, the remaining portion of the liability shall be paid to the department of revenue before the tax credit will be granted.

361—3.7(450) Timeliness of application. An application for approval of a proposed transfer shall be filed with the council within eight months of the death of the decedent, unless, for good cause, the council extends the period for filing such application. In no case will such extension be granted beyond the due date for the filing of the inheritance tax return and due date for payment of the tax or, if applicable, an extended date obtained pursuant to 701—subrule 900.2(9).

361—3.8(450) Notice of donee agencies. Any state agency that is the transferee of the property in question will receive notice of any pending application on the agenda of the executive council.

361—3.9(450) Scope of rules. These rules do not foreclose any transfers of property of any kind to the state or its political subdivisions. These rules are only concerned with whether such transfers will qualify for the tax credit authorized by Iowa Code section 450.6. The council’s intent is to demonstrate that its discretion to approve the tax credit will not be broadly exercised.

361—3.10(450) Forms. The application to pay inheritance tax by a transfer of property and the certifications necessary under these rules is made on forms available from the department of revenue.

361—3.11(88GA,SF619) Sunset. This chapter shall cease to be operative on January 1, 2026. These rules are intended to implement Iowa Code sections 17A.3 and 450.6.

ITEM 2. Rescind and reserve 361—Chapter 11.ARC 7190CExecutive Council[361]Notice of Intended Action

Proposing rulemaking related to disbursement of money from civil reparations trust fund and providing an opportunity for public comment

The Executive Council hereby proposes to adopt new Chapter 4, “Disbursement of Money From Civil Reparations Trust Fund,” and rescind Chapter 12, “Disbursement of Money From Civil Reparations Trust Fund,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 7D, 17A and 668A.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 668A.Purpose and Summary These proposed rules explain the process for applying for grants from the civil reparations trust fund and the criteria the Council will use to consider disbursement for the purposes of indigent civil litigation programs or insurance assistance programs.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Council for a waiver of the discretionary provisions, if any, pursuant to Iowa Code section 17A.9A.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Council no later than 4:30 p.m. on January 5, 2024. Comments should be directed to: Nate Ristow Governor’s Office, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.314.2998 Email: nate.ristow@governor.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 4, 2024 12:15 to 12:30 p.m. Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa January 5, 2024 12:15 to 12:30 p.m. Room G9, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Council and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new 361—Chapter 4: CHAPTER 4DISBURSEMENT OF MONEY FROM CIVIL REPARATIONS TRUST FUND

361—4.1(68A) Notice of funds. The executive council provides notice of availability of money in the civil reparations trust fund in the following ways: 4.1(1) Iowa Administrative Bulletin. The executive council publishes notice of the balance in the fund in the Iowa Administrative Bulletin semiannually in January and July of each year and within 30 days of the deposit of any amount into the fund exceeding $10,000. If the deposit of an amount exceeding $10,000 would cause notice within 30 days of the deposit to be published in January or July, no additional publication is necessary. 4.1(2) First-class mail. The executive council maintains a mailing list of those persons who wish to receive notice of the balance in the fund. Notice is sent semiannually in January and July of each year and within 30 days of the deposit of any amount into the fund exceeding $10,000 by first-class mail to all persons on the mailing list. If the deposit of an amount exceeding $10,000 would cause notice within 30 days of the deposit to be mailed in January or July, no additional mailing is necessary. Any person may be added to the mailing list on request.In the event that there is no money in the fund in January or July, no notice will be published or mailed.

361—4.2(668A) Applications. 4.2(1) The executive council will accept applications for money from the fund for a period of 30 days after notice has been published in the Iowa Administrative Bulletin or sent by first-class mail. Applications will not be accepted in advance of this time period. 4.2(2) Application forms are available from and filed with the office of the state treasurer. 4.2(3) An application is timely if it is postmarked on the thirtieth day after the date of publication in the Iowa Administrative Bulletin or on the thirtieth day after the date affixed to the notice sent by first-class mail, whichever is later. The executive council may accept applications submitted after this deadline only for good cause upon motion in writing.

361—4.3(668A) Criteria. In determining whether to grant an application for money from the fund, the executive council considers the following factors: 4.3(1) The purpose for which the money will be utilized; 4.3(2) The number of people who will be served by the money; 4.3(3) The availability to the applicant of alternative sources of money; 4.3(4) The degree to which the applicant legally used the money under any prior applications.

361—4.4(668A) Disposition of applications. The executive council determines the disposition of all pending applications and notifies all applicants of the decision by first-class mail. Notice of disposition is sent to all applicants on the same date.

361—4.5(668A) Motion for reconsideration. Any applicant who is aggrieved or adversely affected by the disposition of the applicant’s application may, within 15 days of the date affixed to the notice of disposition, file a motion for reconsideration in the office of the state treasurer. The motion is deemed filed when received and date-stamped by the treasurer.

361—4.6(668A) Grounds. The motion for reconsideration has to delineate the specific grounds for reconsideration. An applicant may request a contested case hearing; however, any request for a contested case hearing specifically delineates the facts in dispute to be contested and determined at the hearing.

361—4.7(668A) Procedure. The executive council rules on any pending motion for reconsideration, including a request for a contested case hearing. In the event that a request for a contested case hearing is granted, the proceeding is conducted as provided in X.5 of the Uniform Rules on Agency Procedure related to contested cases, which are published at www.legis.iowa.gov/DOCS/Rules/Current/UniformRules.pdf on the general assembly’s website. The burden of proof by a preponderance of the evidence rests with the requester to establish grounds for reconsideration. The office of the attorney general will defend the decision of the executive council.

361—4.8(668A) Disbursement of money. No money will be disbursed from the fund after disposition of all applications until the time period for filing a motion for reconsideration has expired. After the time period for filing a motion for reconsideration has expired but while a motion for reconsideration by any applicant is pending, the executive council in its discretion may disburse money from the fund to applicants who have not filed a motion for reconsideration. Money may be disbursed to applicants while a motion for reconsideration is pending only to the extent that resolution of any pending motion could not affect the disbursement of money to other applicants.

361—4.9(668A) Administrative costs. The costs of administering this fund, including any costs associated with the conduct of any contested case proceeding challenging the disbursement of money from the fund and costs for postage and copying, are billed to the fund after approval by the executive council. These rules are intended to implement Iowa Code chapters 17A, 7D, and 668A.

ITEM 2. Rescind and reserve 361—Chapter 12.ARC 7191CExecutive Council[361]Notice of Intended Action

Proposing rulemaking related to agency realignment and providing an opportunity for public comment

The Executive Council hereby proposes to rescind Chapter 8, “Executive Branch Lobbyist Registration,” Chapter 9, “Executive Branch Personal Financial Disclosure Statement,” and Chapter 10, “Executive Branch Ethics Complaint Procedure,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Executive Order 10.State or Federal Law Implemented This rulemaking implements, in whole or in part, Executive Order 10.Purpose and Summary This proposed rulemaking rescinds chapters for which the underlying statutory rulemaking authority no longer exists.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Council for a waiver of the discretionary provisions, if any, pursuant to Iowa Code section 17A.9A.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Council no later than 4:30 p.m. on January 5, 2024. Comments should be directed to: Nate Ristow Governor’s Office, Iowa State Capitol 1007 East Grand Avenue Des Moines, Iowa 50319 Phone: 515.314.2998 Email: nate.ristow@governor.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rulemaking may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 361—Chapter 8.

ITEM 2. Rescind and reserve 361—Chapter 9.

ITEM 3. Rescind and reserve 361—Chapter 10.ARC 7157CInspections and Appeals Department[481]Notice of Intended Action

Proposing rulemaking related to home food processing establishments and providing an opportunity for public comment

The Inspections and Appeals Department hereby proposes to rescind Chapter 34, “Home Food Processing Establishments,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 137D.2(8).State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 137D and 2023 Iowa Acts, House File 661 and Senate File 514.Purpose and Summary This rulemaking proposing promulgation of new Chapter 34, “Home Food Processing Establishments,” implements Iowa Code chapter 137D and 2023 Iowa Acts, House File 661, in accordance with the goals and directives of Executive Order 10 (January 10, 2023). The proposed rulemaking administers Iowa Code section 137D.2 by establishing an application process and standards for payments, refunds, and reporting of gross sales. It also establishes basic standards to protect food from contamination and to protect the health of consumers, including standards related to:

The physical structure of the home food processing establishment, pest control, equipment, water supply, waste disposal and handling of toxic material;

Food handlers, including food safety hazard control, training, hygiene, and communicable disease prevention;

Food received by the establishment, storage of food in the establishment, and distribution of foods from the establishment;

Food protection, including temperature control, pH control, and water activity control;

Food labeling;

Sanitation of food contact surfaces and food processing areas; and

Record requirements intended to trace, identify, and remove from the market foods that pose an immediate public health risk.

The rules also set forth the administrative process for enforcing Iowa Code chapter 137D and Chapter 34, including the process for inspections and the denial, suspension, or revocation of a license. The rules also revise the current definition of “homemade food item” to accommodate the change effected by 2023 Iowa Acts, House File 661.Fiscal Impact This rulemaking does not have a fiscal impact to the State of Iowa in an amount requiring a fiscal impact statement pursuant to Iowa Code section 17A.4(4).Jobs Impact After analysis and review of this rulemaking, the proposed chapter is believed to have either no impact or a positive impact on jobs through increased opportunity for self-employment. This rulemaking, in conjunction with the legislation being implemented (Iowa Code chapter 137D and 2023 Iowa Acts, House File 661), expands opportunities for sales of homemade food items through the home food processing establishment license.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6. Public Comment Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 8, 2024. Comments should be directed to: Ashleigh Hackel Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue, Suite 100 Des Moines, Iowa 50321 Email: ashleigh.hackel@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9:30 to 10 a.m. 6200 Park Avenue, Suite 100 Des Moines, Iowa January 8, 2024 10 to 10:30 a.m. 6200 Park Avenue, Suite 100 Des Moines, Iowa Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 481—Chapter 34 and adopt the following new chapter in lieu thereof: CHAPTER 34HOME FOOD PROCESSING ESTABLISHMENTS

481—34.1(137D) Definitions. As used in this chapter, unless the context otherwise requires: "Acidified foods" means low-acid foods to which an acid or high-acid food is added. Acidified foods have a water activity (aw) greater than 0.85 and have a finished equilibrium pH of 4.60 or below. These foods may be called or may purport to be “pickles” or “pickled.” "Active water" "water activity" or “(aw)” means the measured free moisture in a food. The quotient of the water vapor pressure of the food divided by the vapor pressure of pure water at the same temperature provides the measured free moisture in the food. "Adulterated" means the same as stated 21 U.S.C. Section 342 as amended to January 3, 2022. "Allergen cross contact" means the unintentional incorporation of a food allergen into a food. "Contractor" means a municipal corporation, county, or other political subdivision that contracts with the department to license and inspect under Iowa Code chapter 137D. "Cross contamination" means the inadvertent transfer of bacteria or other contaminants from one surface, substance, etc., to another, especially because of unsanitary handling procedures. "Demonstrate control" means the ability to provide clear and convincing evidence that a home food processing establishment has implemented written standard processes and practices that are intended to control food safety hazards including but not limited to standardized recipes, standard operating procedures, personal hygiene standards, temperature monitoring records, equipment calibration records, production or batch records, sanitation records, predefined corrective actions, training documents, distribution records, and receiving records. "Department" means the same as defined in Iowa Code section 137D.1. "Equilibrium pH" means the ﬁnal pH measured in a food after all the components of the food have achieved the same acidity. "Fermentation" means a metabolic process in which an organism converts a carbohydrate, such as starch or a sugar, into an alcohol or an acid. For example, yeast performs fermentation by converting sugar into alcohol. Bacteria perform fermentation by converting carbohydrates into lactic acid. "Fish" means fresh or saltwater finfish, crustaceans, and other forms of aquatic life (including alligator, frog, aquatic turtle, jellyfish, sea cucumber, and sea urchin and the roe of such animals) other than birds or mammals, and all mollusks, if such animal life is intended for human consumption. "Food" means the same as defined in Iowa Code section 137D.1. "Food contact surface" means a surface of equipment or utensil with which food normally comes into contact; or a surface of equipment or utensil from which food may drip, drain, or splash into a food or onto a surface normally in contact with food. "Game animal" means an animal, the products of which are food, that is not classified as livestock, sheep, swine, goat, horse, mule, or other equine in 9 CFR 301.2 or as poultry or fish.

“Game animal” includes mammals, such as reindeer, elk, deer, antelope, water buffalo, bison, rabbit, squirrel, opossum, raccoon, nutria, or muskrat, and nonaquatic reptiles, such as land snakes.
“Game animal” does not include ratites.

"HACCP plan" means a written document that delineates the formal procedures for following the hazard analysis and critical control point principles developed by the National Advisory Committee on Microbiological Criteria for Foods. "High-acid food" means a food that has an equilibrium pH of 4.60 or lower without the addition of an acid. "Home food processing establishment" "establishment" means the same as “home food processing establishment” as defined in Iowa Code section 137D.1. "Homemade food item" means the same as defined in Iowa Code section 137D.1. Homemade food items do not include the following:

Unpasteurized fruit or vegetable juice;
Raw sprout seeds;
Foods containing game animals;
Fish or shellfish;
Alcoholic beverages;
Bottled water;
Packaged ice;
Consumable hemp products;
Food that will be further processed by a food processing plant or another home food processing establishment;
Time/temperature control for safety food packaged using a reduced oxygen packaging method;
Milk or milk products regulated under Iowa Code chapters 192 and 194;
Meat or meat food products, and poultry or poultry products regulated under Iowa Code chapter 189A, except for any of the following products when sold directly to the end consumer:
Poultry, poultry byproduct, or poultry food product if the producer raised the poultry pursuant to the exemption set forth in 9 CFR 381.10(c)(1) limiting the producer to slaughtering not more than one thousand poultry during the calendar year;
Poultry, poultry byproduct, or poultry food product if the poultry is from an inspected source exempted pursuant to 9 CFR 381.10(d); or
Meat, meat byproduct, or meat food product if the meat is from an inspected source exempted pursuant to 9 CFR 303.1(d); or
A raw agricultural commodity. Other than raw bean or seed sprouts, raw agricultural commodities do not require a license issued by the department to sell and may be sold by home food processing establishments, although they are not homemade food items.

"Low-acid canned food" means a thermally processed low-acid food packaged in a hermetically sealed container. "Low-acid food" means any food, other than alcoholic beverages, with a pH greater than 4.60 and (aw) greater than 0.85. "Major food allergen" means milk, egg, fish, crustacean shellfish (such as crab, lobster, or shrimp), tree nuts (such as almonds, pecans, or walnuts), wheat, peanuts, soybeans, and sesame; or a food ingredient that contains protein derived from these foods. "Packaged" means bottled, canned, cartoned, bagged, or wrapped. “Packaged” does not include wrapped or placed in a carry-out container to protect the food during service or delivery to the consumer, by a food employee, upon consumer request. "pH" means the symbol for the negative logarithm of the hydrogen ion concentration, which is a measure of the degree of acidity or alkalinity of a solution. Values between 0 and 7 indicate acidity, and values between 7 and 14 indicate alkalinity. The value for pure distilled water is 7, which is considered neutral. "Produce" means the same as defined in Iowa Code section 137D.1. "Raw agricultural commodity" means the same as defined in 21 U.S.C. Section 321 as amended to April 1, 2023. "Ready-to-eat food" means any food that is normally eaten in its raw state or any other food, including a processed food, for which it is reasonably foreseeable that the food will be eaten without further processing that would significantly minimize biological hazards. "Recall" means an action taken when a food producer takes a product off the market because there is reason to believe the product may cause consumers to become ill. "Reduced oxygen packaging" means reducing the amount of oxygen in a package by removing oxygen, displacing oxygen and replacing it with another gas or combination of gases, or otherwise controlling the oxygen content to a level below that normally found in the atmosphere (approximately 21 percent at sea level). Reduced oxygen packaging includes vacuum packaging, modified atmosphere packaging, controlled atmosphere packaging, cook chill packaging, and sous vide packaging. "Shellfish"

“Crustacean shellfish” means crab, lobster and shrimp.
“Molluscan shellfish” means any edible species of oysters, clams, mussels, or scallops.

"Special dietary use food" includes a food that contains an artificial sweetener, except when specifically and solely used for achieving a physical characteristic in the food that cannot be achieved with sugar or other nutritive sweetener or a food that is used for the following:

Supplying particular dietary needs that exist by reason of a physical, physiological, pathological, or other condition including but not limited to the conditions of diseases, convalescence, pregnancy, lactation, allergic hypersensitivity to food, underweight, and overweight;
Supplying particular dietary needs that exist by reason of age including but not limited to infancy and childhood; or
Supplementing or fortifying the ordinary or usual diet with any vitamin, mineral, or other dietary property. Any such particular use of a food is a special dietary use, regardless of whether such food also purports to be or is represented for general use.

"Sprouts" means seeds or beans used to grow sprouts that are harvested with their seed or root intact. "Standardized recipe" means a recipe that has been tried, adapted, and retried several times for use by a given food service operation and has been found to produce the same good results and yield every time when the exact procedures are followed with the same type of equipment and same quantity and quality of ingredients. At a minimum, a standardized recipe includes the recipe name, listing of each ingredient, a measurement of each ingredient, equipment and utensils used, preparation instructions, and procedures to ensure the safety of the food. "Time/temperature control for safety" "TCS" means a food that requires time and temperature control for safety to limit pathogenic microorganism growth or toxin formation. TCS food does not include foods that have an equilibrium pH less than 4.60 or (aw) content below 0.85. Examples of TCS foods include:

Animal food that is raw or heat-treated.
Plant food that is heat-treated or consists of raw seed sprouts, cut melons, cut leafy greens, cut tomatoes, or garlic-in-oil mixtures.

"Traceback" means to determine and document the distribution and production chain and the source(s) of a product that has been implicated in a foodborne illness investigation.

481—34.2(137D) Licensing. 34.2(1) Application for license. A person shall not operate a home food processing establishment until a license has been obtained from the department or a contractor. Application for a license shall be made on a form furnished by the department containing the name of the business, name of the owner, physical address of the business, and list of all homemade food items the home food processing establishment intends to prepare. Applications for a license shall be completed using the department’s online application system at least 30 days prior to the anticipated opening of the home food processing establishment. If extenuating circumstances exist that prevent the applicant from completing the online application, paper applications are available from the department or a contractor. 34.2(2) Homemade food item disclosure. Homemade food items not listed on the application shall not be sold or distributed. New homemade food items may be added to an application at any time using the online application system or by submission of a paper form to the department or a contractor. 34.2(3) Transferability. A license is not transferable to a new owner or location. Any change in business ownership or business location requires a new license. 34.2(4) Refunds. License fees are refundable only if the license is surrendered to the department or a contractor prior to the effective date of the license. License fees are not refundable for a new home food processing establishment if a record review has occurred. 34.2(5) Expiration and renewal. A home food processing establishment license, unless sooner suspended or revoked, expires one year after the application for license is approved by the department or a contractor. A renewal should be submitted through the department’s online registration system with the required fee prior to expiration. 34.2(6) Renewal 60 days or more after expiration. A delinquent license will only be renewed if application for renewal is made within 60 days of expiration. If a delinquent license is not renewed within 60 days, an establishment shall apply for a new license and meet all of the requirements for an initial license. An establishment that has not renewed the license within 60 days of expiration will be closed by the department or a contractor. 34.2(7) Documentation of gross sales. The license holder shall maintain documentation of annual gross sales of homemade food items and provide it to the regulatory authority upon request. Documentation of gross sales includes at least one of the following and will be kept confidential: a. A copy of the establishment’s business tax return; b. Four quarters of gross sales of homemade food items; c. A letter from an independent tax preparer; or d. Other records documenting annual gross sales of homemade food items. 34.2(8) Returned payments. The department or a contractor will attempt to redeem a payment submitted for an establishment that is not honored by the bank on which it is drafted and will notify the applicant of the need to provide sufficient payment. An additional fee of $25 will be assessed for each dishonored payment. If the department or a contractor does not receive payment, the establishment will be operating without a valid license.

481—34.3(137D) Physical facilities and equipment. 34.3(1) The floors, walls, ceilings, utensils, equipment, and supplies in the food processing and storage areas, and all vehicles used in the transportation of homemade food items, shall be maintained clean and in good repair. 34.3(2) Outer openings shall be protected by tight-fitting doors, windows, or screens. 34.3(3) Dogs, cats, or other pets and animals shall be excluded from entering food preparation areas when food is being processed or packaged. 34.3(4) Persons unnecessary to the production of homemade food items are not allowed in food processing areas while homemade food items are exposed or being produced. 34.3(5) Adequate lighting and ventilation shall be available in all areas where food is processed or stored. 34.3(6) An establishment shall have an adequate supply of hot and cold potable water under pressure from an approved and safe source. In addition: a. There shall be no direct or indirect connection of safe and unsafe water; b. If the residence is not served by a public water system, the water shall be tested at least annually for nitrates and coliforms; c. In the event a water test shows coliforms are present or nitrates are at an unsafe level, the establishment shall cease operations and notify the regulatory authority. The establishment will not resume operations until approved by the regulatory authority; and d. If the establishment’s water source is under a water advisory indicating the water may be unsafe to consume, it shall not produce homemade food items until the advisory is lifted. 34.3(7) There shall be a conveniently located sink in each food processing area that is maintained clean and accessible for handwashing during production and packaging and supplied with hot and cold running water, hand soap, and sanitary towels. 34.3(8) An establishment shall have adequate equipment, such as a sink or dishwasher, to wash, rinse, and sanitize utensils. 34.3(9) There shall be conveniently located toilet facilities, equipped with a handwashing sink supplied with hot and cold running water, hand soap and sanitary towels or a hand-drying device. 34.3(10) All waste and wastewater produced by the establishment shall be disposed of in a sanitary manner in compliance with applicable laws. If the home food processing establishment has a waste backup, it shall cease operation and notify the regulatory authority. It will not resume preparation of homemade food items until approved by the regulatory authority. 34.3(11) All garbage and refuse shall be kept in containers and removed from the premises regularly to eliminate insects and rodents, offensive odors, or other health hazards. Garbage and refuse containers shall be durable, easy to clean, insect- and rodent-resistant, and of material that neither leaks nor absorbs liquid. 34.3(12) Food processing and storage areas shall be free of pests. Pesticides, if used, shall be approved for use in commercial food establishments, clearly labeled, and used as directed by the manufacturer. 34.3(13) Hazardous chemicals or other toxic materials shall be stored, applied and used as directed by the manufacturer in a manner that protects food, equipment, and food contact surfaces from contamination. 34.3(14) Refrigeration and hot holding equipment design and capacity shall be adequate to maintain safe temperature control, including safe cooling temperatures, to prevent cross contamination and allergen cross contact and protect food from other sources of contamination. Dedicated refrigeration or hot holding equipment may be required if shared equipment is inadequate to maintain food safety. 34.3(15) All refrigeration and hot holding units shall be equipped with an accurate thermometer. 34.3(16) Appropriate thermometers shall be used to accurately measure the internal temperature of food during processing, holding, and storage. 34.3(17) All food contact surfaces shall be intended for use with food, made of safe materials, easy to clean, smooth, durable, nonabsorbent, and noncorrosive.

481—34.4(137D) Management and personnel. 34.4(1) Person in charge. There shall be a person in charge of operations during all hours of food processing who has a thorough understanding of food safety principles and is able to demonstrate control over food safety hazards, including: a. Time/temperature controls for cooking, hot holding, cooling, cold holding, and reheating foods; b. Cross contamination during storage and preparation; c. Major food allergens and allergen cross contact; d. Sanitation of food contact surfaces; e. Food handling, hygienic practices, and communicable diseases; f. Receiving and distribution; and g. If applicable, pH and (aw). 34.4(2) Food safety training. The person in charge shall attend a food safety training course approved by the department and provide proof of attendance prior to the issuance of a home food processing establishment license. 34.4(3) Exclusions from handling food. A food handler shall be excluded from handling food, utensils, or packaging materials if the food handler: a. Is diagnosed with a communicable or contagious disease that can be transmitted through food; b. Has experienced diarrhea or vomiting in the past 24 hours; c. Is jaundiced; d. Has a sore throat with a fever; or e. Has exposed sores or infected wounds on the food handler’s hands or arms. 34.4(4) Hygienic practices. a. A food handler must keep the food handler’s person and clothing clean and hair effectively restrained and wash the food handler’s hands as often as necessary to protect food and food contact surfaces from contamination. b. Ready-to-eat foods must not be handled with bare hands. c. Eating, drinking, and use of tobacco is not permitted in food processing areas while homemade food items are exposed or being produced.

481—34.5(137D) Receiving, storage, and distribution. 34.5(1) Receiving. All foods and ingredients shall be obtained from an approved source and have been produced in compliance with applicable law. Honey from an unlicensed establishment and eggs from the establishment’s own flock may be used in the preparation of homemade food items. All food shall be received in sound condition; at safe temperatures; free from spoilage, filth, or other contamination; unadulterated; and safe for human consumption. 34.5(2) Storage. Food storage areas shall be clean and located in an area that protects the food from contamination at all times. All food products shall be stored off of the floor. If removed from the original container, foods shall be stored in labeled and closed containers that are of a material that will not cause the food to become adulterated. 34.5(3) Distribution. a. Foods containing raw or undercooked foods of animal origin will not be sold or distributed in a ready-to-eat form. b. Foods produced in a home food processing establishment shall not be distributed for further processing by a food processing plant or another home food processing establishment. c. Time/temperature control for safety homemade food items shall be maintained at safe temperatures during shipping and transportation to an end consumer, a mobile food unit, a farmers market food establishment, or a temporary food establishment operated by the same owner as the home food processing establishment. d. Time/temperature control for safety homemade food items sold or distributed to other businesses for resale shall be maintained at or below 41°F during shipping and transportation. e. No one may produce, distribute, offer for sale, or provide adulterated food to the public. Adulterated food shall be disposed of in a reasonable manner approved by the department.

481—34.6(137D) Food preparation and protection. 34.6(1) Food protection. Foods shall be processed, stored, and distributed in a manner that protects food from contamination, including cross contamination from the environment, and allergen cross contact. 34.6(2) Cooking. All animal foods or foods containing animal products, if cooked, shall be cooked to an internal temperature sufficient to destroy organisms that are injurious to health. Homemade food items shall not contain raw or undercooked animal foods except for packaged raw meat or poultry items labeled with safe handling instructions informing the consumer how to safely store, prepare, and handle raw meat and poultry products in the home. 34.6(3) Holding. All time/temperature control for safety foods shall be held at an internal temperature of 41°F or less or 135°F or higher to control bacterial growth or toxin formation. 34.6(4) Cooling. a. Time/temperature control for safety foods that have been heat-treated shall be cooled from 135°F to 70°F within two hours and from 70°F to 41°F within an additional four hours. Total cooling time shall not exceed six hours. b. Time/temperature control for safety foods prepared with ingredients above 41°F shall be cooled to 41°F or below within four hours from the beginning of preparation. 34.6(5) Reheating. a. Homemade food items that are time/temperature control for safety and have been previously heated and cooled shall be reheated to an internal temperature of 165°F within two hours or less. b. Commercially processed time/temperature control for safety foods shall be reheated to 135°F within two hours or less. 34.6(6) Preparation methods. a. High-acid foods that are produced and sold by the establishment and that are controlled by pH, such as barbeque sauce, condiments, and dressings, may be produced as homemade food items if: (1) The product has been produced following a standardized recipe; (2) The product does not contain more than 10 percent low-acid food ingredients by weight; (3) The product recipe, including the name and weight of each ingredient, is submitted and approved by the regulatory authority; (4) The product’s equilibrium pH of each batch is tested with a calibrated pH tester designed for use with food. The pH shall be below 4.60, and the pH value shall be recorded on a production or batch record; and (5) The product is adequately heated to destroy spoilage organisms. b. Dried foods that are produced and sold under the home food processing establishment license that are controlled by (aw), such as dehydrated or freeze-dried food may be produced as a homemade food item if: (1) The products have been produced following a standardized recipe; (2) The homemade food items do not contain raw or undercooked foods of animal origin; and (3) Each batch is tested for (aw) or the standardized written procedure for each homemade food item has been validated to ensure the final product is at or below 0.85 (aw). c. Jams, jellies, preserves, and fruit butters that are produced and sold under the home food processing establishment license shall meet the standard of identity specified in 21 CFR Part 150 as amended to April 1, 2023, and be produced following a standardized recipe. The home food processing establishment shall provide documentation, such as an analysis from an accredited food laboratory, that a product meets the standard of identity when requested by the regulatory authority. d. Nonstandardized fruit jellies shall be produced following a standardized recipe and made with 45 parts of fruit to 55 parts of sugar and concentrated to 65 percent soluble solids. The home food processing establishment shall provide documentation, such as an analysis from an accredited food laboratory, that a product meets this requirement when requested by the regulatory authority. e. Nonstandardized nonfruit jellies shall be produced following a standardized recipe and shall have a soluble solids content of 65 percent. The home food processing establishment shall provide documentation, such as an analysis from an accredited food laboratory, that a product meets this requirement when requested by the regulatory authority. f. Standardized sweeteners and table syrups shall meet the standard of identity specified in 21 CFR Part 168 as amended to April 1, 2023. The home food processing establishment shall provide documentation that a product meets this requirement when requested by the regulatory authority. g. A home food processing establishment that wishes to prepare foods using fermentation shall submit an HACCP plan to the department that has been validated by a recognized process authority, such as those provided on the department’s website. A home food processing establishment shall not ferment food until the department has approved the HACCP plan. h. A home food processing establishment shall not engage in the following processes to produce homemade food items: (1) Low-acid canning (e.g., canned vegetables); (2) Acidification to produce shelf-stable acidified foods (e.g., salsa, pickled vegetables, hot sauce); (3) Curing (e.g., bacon, jerky, meat sticks); or (4) Smoking food for preservation rather than flavor enhancement.

481—34.7(137D) Packaging and labeling requirements. 34.7(1) Legible labels. All required labeling information shall be legible and in a location that is easily identifiable by the consumer. 34.7(2) Labels and packaging on homemade food items, exception. A homemade food item shall be packaged in the home food processing establishment, and all required labeling shall be affixed to the homemade food item before it is delivered to the consumer, with the exception of a homemade food item picked up by the consumer in person at the home food processing establishment. In the case of the exception, the homemade food item shall still be protected from contamination and all required labeling information shall be provided to the consumer. 34.7(3) Raw meat and poultry products. Packaged homemade food items that contain raw meat or poultry shall be labeled with safe handling instructions informing the consumer how to safely store, prepare, and handle raw meat and poultry products in the home. 34.7(4) Expiration date. Refrigerated time/temperature control for safety homemade food items that are ready-to-eat foods shall be labeled with an expiration date not to exceed seven days from the date of preparation, and the date of preparation is counted as day one. Time/temperature control for safety homemade food items may be labeled with an expiration date that exceeds seven days if the expiration date has been determined to be safe by an accredited food science institution and documentation is provided to the regulatory authority upon request. 34.7(5) Contents. a. Homemade food items will be identified as required by Iowa Code section 137D.2(7). b. Labels or other marketing materials associated with homemade food items must be truthful and not misleading. c. Claims on labels or other marketing materials associated with homemade food items that are related to the following must conform to the United States Food and Drug Administration’s (FDA’s) Food Labeling Guide (January 2013). A link to the labeling guide may be found on the department’s website or on the FDA’s website. (1) Health claims; (2) Qualified health claims; (3) Nutrient content claims (e.g., low sodium, high fiber, low fat, sugar free); or (4) Structure/function claims. d. Homemade food items labeled or marketed as a special dietary use food will conform to 21 CFR Part 105 as amended to April 1, 2023. The home food processing establishment shall provide documentation, such as a nutritional analysis by an accredited food laboratory, to the regulatory authority upon request. e. Labels or other marketing materials shall not contain any claims that the homemade food item can be used in the diagnosis, cure, mitigation, treatment, or prevention of disease.

481—34.8(137D) Sanitation. 34.8(1) There shall be sufficient means to clean, rinse, and sanitize all multi-use food contact surfaces. Cleaners and sanitizers used for these purposes shall be intended and approved for use in a commercial food establishment. 34.8(2) All food contact surfaces shall be clean to sight and touch when not in use. 34.8(3) All food contact surfaces shall be cleaned and sanitized: a. Between each use; b. At least every four hours if under continuous use to control microbial growth; c. At a frequency necessary to prevent cross contamination; and d. At a frequency necessary to prevent allergen cross contact. 34.8(4) If chemical sanitizers are used, they shall be used according to the manufacturer directions for use, and a means shall be provided for testing the proper level of chemical concentration, such as test strips designed specifically for the chemical being used. 34.8(5) Food processing, handling, and storage areas shall be neat; clean; and free from excessive accumulation of product, dust, trash, and unnecessary articles.

481—34.9(137D) Maintenance of records by licensee. 34.9(1) An establishment shall maintain standardized recipes for each homemade food item. 34.9(2) An establishment shall maintain production or batch records, including, at a minimum, product name, date of production, and date of packaging, with the exception of made-to-order food. 34.9(3) An establishment shall maintain records of foods received as ingredients, including, at a minimum, the name and address of the supplier, name of the ingredient, and date received. A receipt of purchase is a sufficient record if it contains all of the required information. 34.9(4) An establishment shall maintain distribution records of all homemade food items that are distributed for resale, including the product name, the name and address of the business where the homemade food items were distributed, the date distributed, the quantity distributed, and the date the homemade food item was produced. 34.9(5) An establishment not served by a public water system shall maintain records of annual water tests. 34.9(6) An establishment, if it produces homemade food items that require food safety parameters to be monitored throughout production, such as temperature, pH, or (aw), shall use testing instruments as directed by the manufacturer and calibrated for accuracy according to the manufacturer’s instructions. Monitoring results shall be documented as part of the batch record. 34.9(7) An establishment shall maintain all required records for a minimum of six months. All required records shall be made available for official review or copying upon request by the regulatory authority.

481—34.10(137D) Violations and enforcement. 34.10(1) All violations shall be corrected within a time frame not to exceed 90 days. The license holder shall make a written report to the regulatory authority, stating the action taken to correct the violation, within five days of correction. 34.10(2) An establishment that violates this chapter or Iowa Code chapter 137D is subject to a civil penalty as set forth in Iowa Code chapter 137D. 34.10(3) The department may employ various remedies in response to violations, including but not limited to civil penalty; suspending or revoking the license; injunction; or embargo, stop-sale, or recall orders.

481—34.11(137D) Denial, suspension, or revocation of license. 34.11(1) Denial, suspension, or revocation of a license. Denial, suspension, or revocation of a license is effective 30 days after mailing or personal service of the notice. The department may suspend or revoke a license as set forth in Iowa Code section 137D.8. A certified copy of a final order or judgment of conviction or plea of guilty is conclusive evidence of a conviction.A deferred judgment, until discharged, is a conviction for purposes of this rule. 34.11(2) Immediate suspension of license. To the extent not inconsistent with Iowa Code chapters 17A and 137D and rules adopted pursuant to those chapters, the department or a contractor may immediately suspend a license in cases of an imminent health hazard, as defined by chapter 8 of the 2017 FDA Food Code (the “food code”). The procedures of Iowa Code section 17A.18A and chapter 8 of the food code shall be followed in cases of an imminent health hazard.

481—34.12(137D) Inspection and access to records. 34.12(1) Home food processing establishments will be periodically inspected based on a risk assessment basis, either in person or virtually using video technology. 34.12(2) The regulatory authority may enter a food processing establishment at any reasonable hour to make an inspection. The regulatory authority will inspect only those areas related to preparing or storing food for sale. The manager or person in charge of the establishment shall afford free access to records and every part of the premises where homemade food items and ingredients are stored or prepared and render all aid and assistance necessary to enable the regulatory authority to make a thorough and complete inspection.

481—34.13(137D) Public examination of records. 34.13(1) Public information. Information collected by the department and contractors is public information unless otherwise provided for by law. Records are stored in computer files and are not matched with any other data system. Inspection reports are available for public viewing at iowa.safefoodinspection.com. 34.13(2) Confidential information. a. The following are examples of confidential records: (1) Trade secrets and proprietary information, including items such as formulations, standardized recipes, processes, policies and procedures, and customer lists; (2) Health information related to foodborne illness complaints and outbreaks; (3) The name or any identifying information of a person who files a complaint with the department; and (4) Other state or federal agencies’ records. b. A party claiming that information submitted to the department contains trade secrets or proprietary information should clearly mark those portions of the submission as confidential/trade secret. 34.13(3) Other agencies’ records. Requests for records of other state or federal agencies will be referred to the appropriate agency.

481—34.14(137D) Appeals. An establishment may contest adverse action taken pursuant to this chapter by submitting a request for hearing to the department within 30 days of the mailing or service of the department’s action. Appeals and hearings are governed by 481—Chapter 9. For contractors, license holders shall have the opportunity for a hearing before the local board of health. If the hearing is conducted before the local board of health, the license holder may appeal to the department and shall follow the process for review in rule 481—9.3(10A,17A). These rules are intended to implement Iowa Code chapter 137D.ARC 7142CLabor Services Division[875]Notice of Intended Action

Proposing rulemaking related to child labor and providing an opportunity for public comment

The Labor Commissioner hereby proposes to amend Chapter 32, “Child Labor,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 92.21 as enacted by 2023 Iowa Acts, Senate File 542.State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, Senate File 542.Purpose and Summary This proposed rulemaking amends Chapter 32 to conform with 2023 Iowa Acts, Senate File 542, which was effective July 1, 2023, and codified in Iowa Code chapter 92, and to conform with 2023 Iowa Acts, Senate File 514, which was effective July 1, 2023. The proposed amendments:

Eliminate rules related to work permits.
Change work hours allowed.
Eliminate rules related to hazardous activities such as motor vehicle driver and helper, industrial laundering, loading balers, working in explosives plants, working in freezers, and preparing meats for sale.
Add allowed tasks, including activities for 15-year-olds that previously did not exist (using hazardous chemicals, loading balers, and selling fireworks).
Add a safety provision for new allowed tasks, including conditions for using hazardous chemicals and conditions for doing industrial laundering.
Add definitions and waiver procedures for new allowed work for 15-year-olds.
Amend the rules to forbid activities rather than occupations.
Replace references to the Division of Labor and its Commissioner with references to the Department of Inspections, Appeals, and Licensing and its Director.
Eliminate categories that no longer exist, such as street trades.

Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department of Inspections, Appeals, and Licensing for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.Public Comment Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Mitchell Mahan Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Email: mitchell.mahan@dia.iowa.gov Public Hearing If requested, a public hearing at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 9:30 a.m. Room 126 6200 Park Avenue Des Moines, Iowa Dial: 312.626.6799 Meeting ID number: 813 6327 9319 Passcode: 590253 Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new definition of “Director” in rule 875—32.1(92): "Director" means the director of the department of inspections, appeals, and licensing or the director’s designee.

ITEM 2. Amend rule 875—32.1(92), definitions of “Filing date” and “Occupation or business operated by the child’s parents,” as follows: "Filing date" means the date a document is postmarked by the U.S. Postal Service, if the document is filed by mailing and the U.S. postmark is legible. For a document filed via facsimile transmission, “filing date” means the date the document is transmitted. For any other document, “filing date” means the date the document is received by the labor commissionerdirector. "Occupation or business operatedOperated by the child’s parents," as used in Iowa Code section 92.17(4)92.17(3), means a business operated by the child’s parent where the parentor licensed foster parent who has control of the day-to-day operation of the business and is on the premises during the hours of the child’s employment.

ITEM 3. Rescind the definitions of “Migrant labor permit,” “Other work,” “Part-time,” “Street trade,” “Street trades permit” and “Work permit” in rule 875—32.1(92).

ITEM 4. Amend rule 875—32.1(92), implementation sentence, as follows: This rule is intended to implement Iowa Code chapter 92 as amended by 2019 Iowa Acts, Senate File 337.

ITEM 5. Rescind and reserve rule 875—32.2(92).

ITEM 6. Adopt the following new rule 875—32.5(92):

875—32.5(92) Terms. The terms used in Iowa Code section 92.5 are defined and applied as specified in this rule. 32.5(1) Cleaning products that require personal protective equipment. Prior to allowing a 14- or 15-year-old to use cleaning products that require personal protective equipment, the employer shall submit to the director the following: a. The safety data sheets of all such chemicals the minor will use. b. What personal protective equipment the minor will be using with each chemical that requires it. c. Proof of training the minor on the use of the required personal protective equipment. 32.5(2) Definitions. "Car cleaning, washing, and polishing" as used in Iowa Code section 92.5(9) does not include using chemicals that recommend personal protective equipment. "Laundering" as used in Iowa Code section 92.5(12) as enacted by 2023 Iowa Acts, Senate File 542, section 3, includes laundering with residential-style machines and includes laundromats. It includes industrial laundering on the following conditions:

A parent or guardian gives written permission for the minor to do industrial laundering, to be kept on file by the employer.
The minor is not exposed to any chemicals that recommend personal protective equipment.
The employer shall provide nonslip shoes.
The employer shall provide training on bloodborne pathogens.
The minor shall lift loads of no more than 30 pounds.

"Light tools" as used in Iowa Code section 92.5(11) as enacted by 2023 Iowa Acts, Senate File 542, section 3, includes the listed tools that are up to 30 pounds. This rule is intended to implement Iowa Code section 92.5.

ITEM 7. Adopt the following new rule 875—32.6(92):

875—32.6(92) Terms. The terms used in Iowa Code section 92.6A as enacted by 2023 Iowa Acts, Senate File 542, section 5, are defined and applied as specified in this rule. "Light assembly work" means assembling with nonpower hand tools and does not include welding. "Properly licensed" means a minor who holds a current license from the National Pool and Waterpark Lifeguard Training program in one of the following programs:

National Pool and Waterpark Pool Lifeguard.
National Pool and Waterpark Lifeguard Training.
National Pool and Waterpark Deep Water Lifeguard.

If there is a question whether a specific training course meets the requirements of these rules, information about the course should be submitted to the director for evaluation. 32.6(1) Waiver of weight limitation. An employer may submit an application for waiver to allow a 15-year-old person to load, unload, or lift up to 50 pounds for work allowed under Iowa Code section 92.6A(1) as enacted by 2023 Iowa Acts, Senate File 542, section 5. The application shall include information required by the director in an application form. The application shall be signed by the employer, the minor employee, and a parent or guardian. The application shall include documentation from a physician or physician’s assistant that the minor is physically capable of this work activity. 32.6(2) Waiver to unload lawn machines. An employer may submit an application for waiver to allow a 15-year-old person to unload lawn machines under Iowa Code section 92.6A(3) as enacted by 2023 Iowa Acts, Senate File 542, section 5. The application shall include information required by the director in an application form. The application shall be signed by the employer, the minor, and a parent or guardian. The application shall include documentation from a physician or physician’s assistant that the minor is physically capable of this work activity. This rule is intended to implement Iowa Code section 92.6A as enacted by 2023 Iowa Acts, Senate File 542, section 5.

ITEM 8. Amend subrule 32.8(1) as follows: 32.8(1) “OccupationsWork activities in or about plants or establishments manufacturing or storing explosives or articles containing explosive components” means: a. All occupationsactivities in or about any plant or establishment (other than retail establishments or plants or establishments of the type described in subruleparagraph “b.”) manufacturing or storing explosives or articles containing explosive components except where the occupation isactivities are performed in a “nonexplosive area.” b. The following occupationsactivities in or about any plant or establishment manufacturing or storing small-arms ammunition not exceeding .60 caliber in size, shotgun shells, or blasting caps when manufactured or stored in conjunction with the manufacture of small-arms ammunition: (1) All occupationsactivities involved in the manufacturing, mixing, transporting, or handling of explosive compounds in the manufacture of small-arms ammunition and all other occupationsactivities requiring the performance of any duties in the explosives area in which explosive compounds are manufactured or mixed. (2) All occupationsactivities involved in the manufacturing, transporting, or handling of primers and all other occupationsactivities requiring the performance of any duties in the same building in which primers are manufactured. (3) All occupationsactivities involved in the priming of cartridges and all other occupationsactivities requiring the performance of any duties in the same workroom in which rim-fire cartridges are primed. (4) All occupationsactivities involved in the plate loading of cartridges and in the operation of automatic loading machines. (5) All occupationsactivities involved in the loading, inspecting, packing, shipping and storage of blasting caps. c. Definitions. "Explosives" and “articles containing explosive components” means and includes ammunition, black powder, blasting caps, fireworks, high explosives, primers, smokeless powder, and all goods classified and defined as explosives by the Interstate Commerce Commission in regulations for the transportation of explosives and other dangerous substances by common carriers (49 CFR Parts 71-78, in effect July 1, 1987). "Nonexplosive area" means an area where none of the work performed in the area involves the handling or use of explosives; the area is separated from the explosives area by a distance not less than that prescribed in the American Table of Distances for the protection of inhabited buildings; the area is separated from the explosives area by a fence or is otherwise located so that it constitutes a definite designated area; and satisfactory controls have been established to prevent employees under 18 years of age within the area from entering any area in or about the plant which does not meet the criteria of this definition. "Plant or establishment manufacturing or storing explosives or articles containing explosive components" means the land with all the buildings and other structures thereon used in connection with the manufacturing or processing or storing of explosives or articles containing explosive components. This subrule is intended to implement Iowa Code section 92.8(1).Nothing in this subrule shall be construed to prohibit light assembly work that is away from machines, and nothing in this subrule shall be construed to prohibit selling or assisting in the sale of consumer fireworks in accordance with Iowa Code section 100.19.

ITEM 9. Rescind subrule 32.8(2).

ITEM 10. Renumber subrules 32.8(3) to 32.8(21) as 32.8(2) to 32.8(20).

ITEM 11. Amend renumbered subrule 32.8(2) as follows: 32.8(2) “Occupations involved in logging occupations and occupations inLogging and the operation of any sawmill, lath mill, shingle mill, or cooperage-stock mill” means all occupationsrelated activities with the following exceptions: a. Exceptions applying to logging: (1) Work in offices or in repair or maintenance shops. (2) Work in the construction, operation, repair or maintenance of living and administrative quarters or logging camps. (3) Work in timber cruising, surveying, or logging-engineering parties; work in the repair or maintenance of roads, railroads, or flumes; work in forest protection, such as clearing fire trails or roads, piling and burning slash, maintaining firefighting equipment, constructing and maintaining telephone lines, or acting as fire lookout or fire patrol person away from the actual logging operations. This exception shall not apply to the felling or bucking of timber, the collecting or transporting of logs, the operation of power-driven machinery, the handling or use of explosives, and work on trestles. (4) Peeling of fence posts, pulpwood, chemical wood, excelsior wood, cordwood, or similar products, when not done in conjunction with and at the same time and place as other logging occupationsactivities prohibited by this subrule. (5) Work in the feeding or care of animals. b. Exceptions applying to the operation of any permanent sawmill or the operation of any lath mill, shingle mill, or cooperage-stock mill: (1) Work in offices or in repair or maintenance shops. (2) Straightening, marking, or tallying lumber on the dry chain or the dry drop sorter. (3) Pulling lumber from the dry chain. (4) Cleanup in the lumberyard. (5) Piling, handling, or shipping of cooperage stock in yards or storage sheds, other than operating or assisting in the operation of power-driven equipment. (6) Clerical work in yards or shipping sheds, such as done by order persons, tally persons, and shipping clerks. (7) Cleanup work outside shake and shingle mills, except when the mill is in operation. (8) Splitting shakes manually from precut and split blocks with a froe and mallet, except inside the mill building or cover. (9) Packing shakes into bundles when done in conjunction with splitting shakes manually with a froe and mallet, except inside the mill building or cover. (10) Manual loading of bundles of shingles or shakes into trucks or railroad cars, provided that the employer has on file a statement from a licensed doctor of medicine or osteopathy certifying the minor capable of performing this work without injury. The exceptions in paragraph “b,” subparagraphs (1) to (10), do not apply to a portable sawmill the lumberyard of which is used only for the temporary storage of green lumber and in connection with which no office or repair or maintenance shop is ordinarily maintained and work which entails entering the sawmill building.Definitions. "All occupations in loggingLogging" means all work performed in connection with the felling of timbers; the bucking or converting of timber into logs, poles, piles, ties, bolts, pulpwood, chemical wood, excelsior wood, cordwood, fence posts, or similar products; the collecting, skidding, yarding, loading, transporting and unloading of these products in connection with logging; the constructing, repairing and maintaining of roads, railroads, flumes, or camps used in connection with logging; the moving, installing, rigging, and maintenance of machinery or equipment used in logging; and other work performed in connection with logging. The term shall not apply to work performed in timber culture, timber-stand improvement, or in emergency firefighting. "All occupationsactivities in the operation of any sawmill, lath mill, shingle mill, or cooperage-stock mill" means all work performed in or about any mill in connection with storing of logs and bolts; converting logs or bolts into sawn lumber, laths, shingles, or cooperage stock; storing, drying, and shipping lumber, laths, shingles, cooperage stock, or other products of the mills and other work performed in connection with the operation of any sawmill, lath mill, shingle mill, or cooperage-stock mill. The term shall not include work performed in the planing-mill department or other remanufacturing departments of any sawmill, or in any planing mill or remanufacturing plant not a part of a sawmill. This subrule is intended to implement Iowa Code section 92.8(3)92.8(2).

ITEM 12. Amend renumbered subrule 32.8(3), introductory paragraph, as follows: 32.8(3) “Occupations involved in the operationOperation of power-driven woodworking machines” means operating power-driven woodworking machines including supervision or controlling the operation of the machines, feeding material into the machines, and helping the operator to feed material into the machines, but not including the placing of material on a moving chain or in a hopper or slide for automatic feeding. Also included are occupationsactivities of setting up, adjusting, repairing, oiling or cleaning power-driven woodworking machines and the operations of off-bearing from circular saws and from guillotine-action veneer clippers.

ITEM 13. Amend renumbered subrule 32.8(3), implementation sentence, as follows: This subrule is intended to implement Iowa Code section 92.8(4)92.8(3).

ITEM 14. Amend renumbered subrule 32.8(4), introductory paragraph, as follows: 32.8(4) “OccupationsWork activities involving exposure to radioactive substances and to ionizing radiations” means occupationactivity in any workroom in which radium is stored or used in the manufacture of self-luminous compound; self-luminous compound is made, processed or packaged; self-luminous compound is stored, used or worked upon; incandescent mantles are made from fabric and solutions containing thorium salts, or are processed or packaged; and other radioactive substances are present in the air in average concentrations exceeding 10 percent of the maximum permissible concentrations in the air recommended for occupational exposure by the National Committee on Radiation Protection, as set forth in the 40-hour week column of Table One of the National Bureau of Standards Handbook No. 69 entitled “Maximum Permissible Body Burdens and Maximum Permissible Concentrations of Radionuclides in Air and in Water for Occupational Exposure,” June 5, 1959.

ITEM 15. Amend renumbered subrule 32.8(4), implementation sentence, as follows: This subrule is intended to implement Iowa Code section 92.8(5)92.8(4).

ITEM 16. Amend renumbered subrule 32.8(5) as follows: 32.8(5) “Occupations involved in the operationOperation of elevators and other power-driven hoisting apparatus” means: a. Work of operating an elevator, crane, derrick, hoist, or high-lift truck, except operating an unattended automatic operation passenger elevator or an electric or air-operated hoist not exceeding one-ton capacity. b. Work which involves riding on a manlift or on a freight elevator, except a freight elevator operated by an assigned operator. c. Work of assisting in the operation of a crane, derrick or hoist performed by crane hookers, crane chasers, hookers-on, riggers, rigger helpers, and like occupationsactivities. d. Exception. Iowa Code section 92.8(6)92.8(5) shall not prohibit the operation of an automatic elevator and an automatic signal operation elevator provided that the exposed portion of the car interior (exclusive of vents and other necessary small openings), the car door and the hoistway doors are constructed of solid surfaces without any opening through which a part of the body may extend; all hoistway openings at floor level have doors which are interlocked with the car door so as to prevent the car from starting until all doors are closed and locked; the elevator (other than hydraulic elevators) is equipped with a device which will stop and hold the car in case of overspeed or if the cable slackens or breaks; and the elevator is equipped with upper and lower travel limit devices which will normally bring the car to rest at either terminal and a final limit switch which will prevent the movement in either direction and will open in case of excessive over-travel by the car. e. Definitions. "Automatic elevator" means any passenger elevator, a freight elevator or a combination passenger-freight elevator, the operation of which is controlled by push buttons in a manner that the starting, going to the landing selected, leveling and holding, and the opening and closing of the car and hoistway doors are entirely automatic. "Automatic signal operation elevator" means an elevator which is started in response to the operation of a switch (such as a lever or push button) in the car which when operated by the operator actuates a starting device that automatically closes the car and hoistway doors—from this point on, the movement of the car to the landing selected, leveling and holding when it gets there, and the opening of the car and hoistway doors are entirely automatic. "Crane" means any power-driven machine for lifting and lowering a load and moving it horizontally, in which the hoisting mechanism is an integral part of the machine. The term shall include all types of cranes, such as cantilever gantry, crawler, gantry, hammerhead, ingot pouring, jib, locomotive, motor truck, overhead traveling, pillar jib, pintle, portal, semigantry, semiportal, storage bridge, tower, walking jib, and wall cranes. "Derrick" means any power-driven apparatus consisting of a mast or equivalent members held at the top by guys or braces, with or without a boom, for use with a hoisting mechanism or operating ropes. The term shall include all types of derricks, such as A-frame, breast, Chicago boom, gin-pole, guy and stiff-leg derrick. "Elevator" means any power-driven hoisting or lowering mechanism equipped with a car or platform which moves in guides in a substantially vertical direction. The term shall include both passenger and freight elevators, (including portable elevators or tiering machines), but shall not include dumbwaiters. "High-lift truck" means any power-driven industrial type of truck used for lateral transportation that is equipped with a power-operated lifting device usually in the form of a fork or platform capable of tiering loaded pallets or skids one above the other. Instead of a fork or platform, the lifting device may consist of a ram, scoop, shovel, crane, revolving fork, or other attachments for handling specific loads. The term shall mean and include high-lift trucks known as fork lifts, fork trucks, fork-lift trucks, tiering trucks, or stacking trucks, but shall not mean low-lift trucks or low-lift platform trucks that are designed for the transportation of, but not the tiering of, material. "Hoist" means any power-driven apparatus for raising or lowering a load by the application of a pulling force that does not include a car or platform running in guides. The term includes all types of hoists, such as base-mounted electric, clevis suspension, hook suspension, monorail, overhead electric, simple drum and trolley suspension hoists.“Manlift” means any device intended for the conveyance of persons which consists of platforms or brackets mounted on, or attached to, an endless belt, cable, chain or similar method of suspension; the belt, cable or chain operating in a substantially vertical direction and being supported by and driven through pulleys, sheaves or sprockets at the top and bottom. This subrule is intended to implement Iowa Code section 92.8(6)92.8(5).

ITEM 17. Amend renumbered subrule 32.8(6), introductory paragraph, as follows: 32.8(6) “Occupations involved in the operationOperation of power-driven metal forming, punching and shearing machines” means occupations ofbeing the operator of or helper on the following power-driven metal forming, punching, and shearing machines.

ITEM 18. Amend renumbered subrule 32.8(6), implementation sentence, as follows: This subrule is intended to implement Iowa Code section 92.8(7)92.8(6).

ITEM 19. Amend renumbered subrule 32.8(7) as follows: 32.8(7) “Occupations in connection with miningMining” means all work performed underground in mines and quarries; underground working, open-pit, or surface part of any coal-mining plant that contribute to the extraction, grading, cleaning, or other handling of coal; on the surface at underground mines and underground quarries; in or about open-cut mines, open quarries, clay pits, and sand and gravel operations; at or about placer mining operations; at or about dredging operations for clay, sand or gravel; at or about bore-hole mining operations; in or about all metal mills, washer plants, or grinding mills reducing the bulk of the extracted minerals; and at or about any other crushing, grinding, screening, sizing, washing or cleaning operations performed upon the extracted minerals except where the operations are performed as a part of a manufacturing process.The term “occupations in connection with mining” shall not include: a. Work performed in subsequent manufacturing or processing operations, such as work performed in smelters, electro-metallurgical plants, refineries, reduction plants, cement mills, plants where quarried stone is cut, sanded and further processed, or plants manufacturing clay, glass or ceramic products. b. Work performed in connection with petroleum production, in natural gas production, or in dredging operations which are not a part of mining operations, such as dredging for construction or navigation purposes. c. Work in offices, in the warehouse or supply house, in the change house, in the laboratory, and in repair or maintenance shops not located underground. d. Work in the operation and maintenance of living quarters. e. Work outside the mine in surveying, in the repair and maintenance of roads, and in general cleanup about the mine property such as clearing brush and digging drainage ditches. f. Work of track crews in the building and maintaining of sections of railroad track located in those areas of open-cut metal mines where mining and haulage activities are not being conducted at the time and place that the building and maintenance work is being done. g. Work in or about surface placer mining operations other than placer dredging operations and hydraulic placer mining operations. h. Work in metal mills other than in mercury-recovery mills or mills using the cyanide process involving the operation of jigs, sludge tables, flotation cells, or drier-filters; hand-sorting at picking table or picking belts; or general cleanup.Nothing in this subrule shall be construed to permit any employment of minors in any other occupationactivity otherwise prohibited by Iowa Code chapter 92. This subrule is intended to implement Iowa Code section 92.8(8)92.8(7).

ITEM 20. Amend renumbered subrule 32.8(8) as follows: 32.8(8) “OccupationsWork activities in or about slaughtering and meat packing establishments and rendering plants” means: a. All occupationsactivities on the killing floor, in curing cellars, and in hide cellars, except the work of messengers, runners, hand truckers and similar occupationsactivities which require entering workrooms or workplaces infrequently and for short periods of time. b. All occupationsactivities involved in the recovery of lard and oils, except packaging and shipping of the products and the operation of lard-roll machines. c. All occupationsactivities involved in tankage or rendering of dead animals, animal offal, animal fats, scrap meats, blood, and bones into stock feeds, tallow, inedible greases, fertilizer ingredients, and similar products. d. All occupationsactivities involved in the operation or feeding of the following power-driven meat processing machines, including the occupations of setting-upsetting up, adjusting, repairing, oiling, or cleaning the machines regardless of the product being processed by these machines (including, for example, the slicing in a retail delicatessen of meat, poultry, seafood, bread, vegetables, or cheese, etc.):

Meat patty forming machines, meat and bone cutting saws, knives (except bacon-slicing machines), head splitters, and guillotine cutters;
Snout pullers and jaw pullers;
Skinning machines;
Horizontal rotary washing machines;
Casing-cleaning machines such as crushing, stripping, and finishing machines;
Grinding, mixing, chopping, and hashing machines; and
Presses (except belly-rolling machines).

e. All boning occupationsactivities. f. All occupationsactivities involving the pushing or dropping of any suspended carcass, half carcass, or quarter carcass. g. All occupationsactivities involving hand-lifting or hand-carrying any carcass or half carcass of beef, pork, or horse, or any quarter carcass of beef or horse.Definitions. "Boning occupation" means the removal of bones from meat cuts. It does not include cutting, scraping or trimming meat from cuts containing bones. "Curing cellar" means the workroom or workplace which is primarily devoted to the preservation and flavoring of meat by curing materials. It does not include the workroom or workplace where meats are smoked. "Hide cellar" means the workroom or workplace where hides are graded, trimmed, salted, and otherwise cured. "Killing floor" means the workroom or workplace where cattle, calves, hogs, sheep, lambs, goats, or horses are immobilized, shackled, or killed, and the carcasses are dressed prior to chilling. "Rendering plants" means establishments engaged in the conversion of dead animals, animal offal, animal fats, scrap meats, blood, and bones into stock feeds, tallow, inedible greases, fertilizer ingredients and similar products. "Slaughtering and meat packing establishments" means places in or about which cattle, calves, hogs, sheep, lambs, goats, or horses, poultry, rabbits or small game are killed, processed or butchered and establishments which manufacture or process meat products or sausage casings from these animals. This subrule is intended to implement Iowa Code section 92.8(9)92.8(8).

ITEM 21. Amend renumbered subrule 32.8(9) as follows: 32.8(9) “Occupations involved in the operationOperation of certain power-driven bakery machines” means the occupations of operating, assisting to operate or setting up, adjusting, repairing, oiling, or cleaning any horizontal or vertical dough mixer; batter mixer; bread dividing, rounding, or molding machine; dough brake; dough sheeter; combination bread slicing and wrapping machines; or cake cutting band saw and the occupations of setting up or adjusting a cookie or cracker machine. However, this definition does not apply to the operation of pizza dough rollers that are a type of dough sheeter that have been constructed with safeguards contained in the basic design so as to prevent fingers, hands, or clothing from being caught in the in-running point of the rollers, that have gears that are completely enclosed, and that have microswitches that disengage the machinery if the backs or sides of the rollers are removed, only when all the safeguards detailed in Iowa Code section 92.8(10)92.8(9) are present on the machinery, are operational, and have not been overridden. This subrule is intended to implement Iowa Code section 92.8(10)92.8(9).

ITEM 22. Amend renumbered subrule 32.8(10) as follows: 32.8(10) “Occupations involved in the operationsOperation of paper-products machines” means operating or assisting to operate any of the following power-driven paper-products machines and includes: a. Arm-type wire stitcher or stapler, circular or band saw, corner cutter or mitering machine, corrugating and single- or double-facing machine, envelope die-cutting press, guillotine paper cutter or shear, horizontal bar scorer, laminating or combining machine, sheeting machine, scrap-paper baler, or vertical slotter. b. Platen die-cutting press, platen printing press, or punch press which involves hand feeding of the machine. c. The occupationsactivities of setting up, adjusting, repairing, oiling, or cleaning the machines in paragraphs “a” and “b” of this subrule including those which do not involve hand feeding.d. Loading material into paper/cardboard balers except when the machine is powered off and the key is stored in a separate area from the machine.Definitions. "Operating or assisting to operate" means all work which involves starting or stopping a machine covered by this subrule, placing materials into or removing them from the machine, or any other work directly involved in operating the machineexcept loading material into balers when the machine is powered off and the key is stored in a separate area from the machine. "Paper-products machine" means power-driven machines used in:

The remanufacture or conversion of paper or pulp into a finished product, including the preparation of materials for recycling.
The preparation of materials for disposal. The term applies to the machines whether they are used in establishments that manufacture converted paper or pulp products, or in any other type of manufacturing or nonmanufacturing establishments.

This subrule is intended to implement Iowa Code section 92.8(11)92.8(10).

ITEM 23. Amend renumbered subrule 32.8(11) as follows: 32.8(11) “Occupations involved in the manufacture ofManufacturing brick, tile and related products” means the manufacture of brick, tile and related products and includes the manufacture of clay construction products and of silica refractory products and includes: a. All work in or about establishments in which clay construction products are manufactured, except work in storage and shippings; work in offices, laboratories, and storerooms; and work in the drying departments of plants manufacturing sewer pipe. b. All work in or about establishments in which silica brick or other silica refractories are manufactured, except work in offices. c. Nothing in this subrule shall be construed to permit any employment of minors in any other occupationactivities otherwise prohibited by Iowa Code chapter 92.Definitions. "Clay construction products" means brick, hollow structural tile, sewer pipe and kindred products, refractories, and other clay products such as architectural terra cotta, glazed structural tile, roofing tile, stove lining, chimney pipes and tops, wall coping, and drain tile. It does not include nonstructural-bearing clay products such as ceramic floor and wall tile, mosaic tile, glazed and enameled tile, faience, and similar tile, nor nonclay construction products such as sand-lime brick, glass brick, or nonclay refractories. "Silica brick or other silica refractories" means refractory products produced from raw materials containing free silica as its main constituent. This subrule is intended to implement Iowa Code section 92.8(12)92.8(11).

ITEM 24. Amend renumbered subrule 32.8(12) as follows: 32.8(12) “Occupations involved in the operationOperation of circular saws, band saws, and guillotine shears” means: a. Occupations of operatorOperator of or helper on power-driven fixed or portable circular saws, band saws, and guillotine shears except machines equipped with full automatic feed and ejection. b. The occupations of setting-upSetting up, adjusting, repairing, oiling, or cleaning circular saws, band saws, or guillotine shears.Definitions. "Band saw" means a machine equipped with an endless steel band having a continuous series of notches or teeth, running over wheels or pulleys, and used for sawing materials. "Circular saw" means a machine equipped with an endless steel disc and having a continuous series of notches or teeth on the periphery, mounted on shafting, and used for sawing materials. "Guillotine shear" means a machine equipped with a movable blade operated vertically and used to shear materials. The term shall not include other types of shearing machines, using a different form of shearing action, such as alligator shears or circular shears. "Helper" means a person who assists in the operation of a machine covered by this subrule by helping place materials into or remove them from the machine. "Machines equipped with full automatic feed and ejection" means machines covered by this subrule which are equipped with devices for full automatic feeding and ejection and with a fixed barrier guard to prevent completely the operator or helper from placing any body part in the point-of-operation area. "Operator" means a person who operates a machine covered by this subrule by performing functions such as starting or stopping the machine, placing materials into or removing them from the machine, or any other function directly involved in the operation of the machine. This subrule is intended to implement Iowa Code section 92.8(13)92.8(12).

ITEM 25. Amend renumbered subrule 32.8(13) as follows: 32.8(13) “Wrecking, demolition and shipbreaking operations” means all work, including cleanup and salvage work, performed at the site of the total or partial razing, demolishing, or dismantling of a building, bridge, steeple, tower, chimney, other structure, ship or other vessel. This subrule is intended to implement Iowa Code section 92.8(14)92.8(13).

ITEM 26. Amend renumbered subrule 32.8(14), implementation sentence, as follows: This subrule is intended to implement Iowa Code section 92.8(15)92.8(14).

ITEM 27. Amend renumbered subrule 32.8(15) as follows: 32.8(15) “Excavation occupations” means all occupationsactivities involved with: a. Excavating, working in, or backfilling (refilling) trenches, except manually excavated or manually backfilling trenches that do not exceed four feet in depth at any point or working in trenches that do not exceed four feet in depth at any point. b. Excavating for buildings or other structures or working in the excavations, except manually excavating to a depth not exceeding four feet below any ground surface adjoining the excavation, working in an excavation not exceeding four feet in depth, or working in an excavation where the side walls are shored or sloped to the angle or repose. c. Working within tunnels prior to the completion of all driving and shoring operations. d. Working within shafts prior to the completion of all sinking and shoring operations. This subrule is intended to implement Iowa Code section 92.8(16)92.8(15).

ITEM 28. Amend renumbered subrule 32.8(20) as follows: 32.8(20) Hazardous occupationsWork activities prohibited by the labor commissionerdirector include the following: a. OccupationsActivities involved in the operation of power cutters on corn detasseling machines. b. OccupationsActivities involved in the driving of power-driven detasseling machines unless the driver has a valid driver’s license or a certificate issued by the Federal Extension Service showing that the driver has completed a 4-H farm and machinery program. This subrule is intended to implement Iowa Code section 92.8(21)92.8(20).

ITEM 29. Adopt the following new rule 875—32.9(92):

875—32.9(92) Terms. The terms used in Iowa Code section 92.8A are defined and applied as specified in this rule. "Incidental" means not a primary activity of the minor. "Intermittent and for short periods of time" may vary depending on the degree and type of hazard. The frequency and duration of an activity shall make it clear the employee is a learner rather than a production worker. The burden is on the employer to justify more than one hour per day or 20 percent of a shift. "Written permission" shall include a description of the activity that would otherwise be unlawful under Iowa Code section 92.8, including the expected frequency and duration of that activity. This rule is intended to implement Iowa Code section 92.8A as enacted by 2023 Iowa Acts, Senate File 542, section 9.

ITEM 30. Amend rule 875—32.11(92), introductory paragraph, as follows:

875—32.11(92) Civil penalty calculation. An employer who violates this chapter or Iowa Code chapter 92 is subject to a civil penalty of not more than $10,000 per violation as set forth in this rule. The labor commissioner may refer a violation to the appropriate authority for criminal prosecution in addition to assessing a civil penalty.

ITEM 31. Amend subrules 32.11(1) and 32.11(2) as follows: 32 32.11 11(1) Counting the number of violations. a. Violations shall be counted as follows:each day that a child works too many hours, works at a prohibited time, or works in a prohibited occupation shall be a separate violation. a. Each item of inaccurate information on each Iowa Child Labor Application/Work Permit shall be a separate violation. b. Each day that a child works without a permit, works too many hours, works at a prohibited time, or works in a prohibited occupation shall be a separate violation. c. If an employer completes the Iowa Child Labor Application/Work Permit but fails to file it by the deadline, each day that the minor works after the deadline shall be a separate violation. b. The director may waive or reduce the penalty if this method of counting the violations would result in a penalty that is disproportionate to the harm done to the minor(s), the size of the employer, or both. 32 32.11 11(2) Determining whether a violation is a repeat violation. The higher penalty amounts outlined in subrules 32.11(3) through32.11(4) and 32.11(5) for repeat instances may be assessed by the labor commissionerdirector if citations regarding the earlier instance or instances are final action and occurred less than five years before.

ITEM 32. Rescind and reserve subrule 32.11(3).

ITEM 33. Amend subrule 32.11(6) as follows: 32.11(6) Penalty reduction factors. Except for violations related to the death of a child while working, the labor commissionerdirector shall reduce the penalty calculated pursuant to subrules 32.11(1) through, 32.11(2), 32.11(4) and 32.11(5) by the appropriate penalty reduction percentages set forth in this subrule. However, if the labor commissionerdirector requests information relevant to the penalty assessment and the employer does not provide responsive information, the labor commissionerdirector shall not reduce the penalty. a. Penalty reduction for size of business.The labor commissionerdirector shall reduce a penalty by 25 percent if the employer has 25 or fewer employees. The labor commissionerdirector shall reduce the penalty amount by 15 percent if the employer has 26 to 100 employees. The labor commissionerdirector shall reduce the penalty amount by 5 percent if the employer has 101 to 250 employees. b. Penalty reduction for good faith.The labor commissionerdirector may reduce a penalty by 15 percent based upon evidence that the employer made a good faith attempt to comply with the requirements. If at any time the labor commissionerdirector warned an employer in writing about a prohibited practice and a civil penalty is being assessed against the same employer for repeating the practice, the labor commissionerdirector shall not reduce the penalty based on good faith. c. Penalty reduction for history.The labor commissionerdirector shall reduce a penalty by 10 percent if the labor commissionerdirector has not assessed a civil penalty under this chapter within the past five years. If the labor commissionerdirector has assessed a civil penalty under this chapter in the past five years but the civil penalty has not reached judicial or administrative finality, the civil penalty shall be reduced by 10 percent.

ITEM 34. Amend rule 875—32.12(92) as follows:

875—32.12(92) Civil penalty procedures. 32.12(1) Notice of civil penalty. The commissionerdirector shall serve a notice of proposed civil penalty by certified mail or in a manner consistent with service of original notice under the Iowa Rules of Civil Procedure. There shall be a 15-day grace period before issuing the notice. The notice shall include the following: a. A statement that the notice proposes a civil penalty assessment for violation of child labor laws. b. Descriptions of the alleged violations including the provisions allegedly violated, the number of violations, and the proposed penalties. c. A statement that the employer has the right to request a hearing by filing a notice of contest with the labor commissionerdirector within 15 working days from the receipt of the notice of proposed civil penalty and that if a notice of contest is not timely filed, the proposed civil penalty will become final agency action. d. A reference to the applicable procedural provisions. 32.12(2) Notice of contest. The civil penalty proposed by the labor commissionerdirector shall become final agency action if the employer does not timely file a notice of contest. The filing date for a timely notice of contest shall be within 15 working days of the date the notice of proposed civil penalty was received by the employer. The notice of contest shall include the name, address, and telephone number of the employer’s representative. If a notice of contest is filed by fax, the original shall be mailed to the labor commissionerdirector. 32.12(3) Contested case procedures. Contested case procedures are set forth in 875—Chapter 1 and Iowa Code chapter 17A. This rule is intended to implement Iowa Code section 92.22.ARC 7143CLabor Services Division[875]Notice of Intended Action

Proposing rulemaking related to requests for extended inspection interval and providing an opportunity for public comment

The Labor Commissioner hereby proposes to amend Chapter 90, “Administration of the Boiler and Pressure Vessel Program,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 89.14(11) as enacted by 2023 Iowa Acts, House File 461.State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, House File 461.Purpose and Summary This proposed rulemaking implements House File 461 regarding extensions of internal boiler and pressure vessel internal inspections. The proposed subrule clarifies what qualifies for an extension and how to get approval for the extension. The subrule facilitates granting the extension along with safety assurances.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department of Inspections, Appeals, and Licensing for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.Public Comment Any interested person may submit written comments concerning this proposed rulemaking. Written comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Mitchell Mahan Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Email: mitchell.mahan@dia.iowa.gov Public Hearing No public hearing is scheduled at this time. As provided in Iowa Code section 17A.4(1)“b,” an oral presentation regarding this rulemaking may be demanded by 25 interested persons, a governmental subdivision, the Administrative Rules Review Committee, an agency, or an association having 25 or more members. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new subrule 90.6(10): 90.6(10) Request for extended inspection interval. a. Owners of objects covered under Iowa Code section 89.3(4)“a” may apply for an extended internal inspection interval of up to seven years. b. The application for an extended internal inspection interval shall include the following information submitted to the director: (1) The name and contact information of the requestor. (2) The state identification number of the object. (3) The interval requested with supporting reasons. (4) An affidavit affirming the following: 1. Compliance with the process safety management standard contained in 29 CFR §1910.119. 2. The object is included as process safety management process equipment in the owner’s process safety management program. 3. The object meets the requirements contained in the National Board Inspection Code. 4. The object is fit for service based on the year of fabrication and the estimated service life of the object as determined by Part 2 of the National Board Inspection Code. 5. Practices have been implemented for managing consumable items and ancillary equipment of the object. (5) The following supporting records: 1. Inspection records of the boiler and ancillary equipment for the prior five years. 2. The most recent Report of Fitness for Service Assessment. 3. Every Form R-1 Report of Repair and Form R-2 Report of Alterations for the prior five years. (6) A request for an informal conference, if desired. c. The director will consider, among other things, whether the object meets the requirements contained in the National Board Inspection Code, whether the object is fit for service based on the year of fabrication, the estimated service life of the object as determined by Part 2 of the National Board Inspection Code, and whether the owner has implemented practices for managing consumable items and ancillary equipment of the object. d. The director may grant an extended inspection interval. (1) An extended inspection interval lasts until the next inspection, at which time the owner of the object may again apply for an extension. (2) The owner shall promptly report to the department’s boiler and pressure vessel unit any unscheduled shutdowns, significant incidents, near misses, and any other occurrences that might reasonably require reinspection before the extended date. Should the occurrence reasonably require it, or if any such event is not reported within ten days of occurrence, the director may revoke the extended inspection interval. e. If the director does not intend to grant the extension, the director will give the applicant a Notice of Intent to Deny Extended Inspection Interval, granting ten days for the applicant to provide additional reasons and evidence why the interval should be extended.ARC 7170CMedicine Board[653]Notice of Intended Action

Proposing rulemaking related to standards of practice for physicians who perform or induce abortions and providing an opportunity for public comment

The Board of Medicine hereby proposes to amend Chapter 13, “Standards of Practice and Principles of Medical Ethics,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in 2023 Iowa Acts, House File 732.State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, House File 732.Purpose and Summary The proposed rule is directed by 2023 Iowa Acts, House File 732, to outline the standards of practice for physicians who perform or induce abortions, including the detection of a fetal heartbeat, exceptions, and discipline.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board under 653—Chapter 3 for a waiver of the discretionary provisions, if any.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Chrissy Greco Iowa Board of Medicine 6200 Park Avenue, Suite 100 Des Moines, Iowa 50321 Phone: 515.242.6039 Fax: 515.242.5908 Email: chrissy.greco@iowa.gov Public Hearing A public hearing at which persons may present their views orally or in writing will be held as follows: January 4, 2024 10 a.m. to 12 noon 6200 Park Avenue Des Moines, Iowa Persons who wish to make oral comments at the public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend the public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Adopt the following new rule 653—13.17(135L,146A,146E,147,148,272C):

653—13.17(135L,146A,146E,147,148,272C) Standards of practice for physicians who perform or induce abortions—definitions—detection of fetal heartbeat—fetal heartbeat exceptions—discipline. 13.17(1) Standards of practice. This rule sets forth the standards of practice for physicians who perform or induce abortions. More information is contained in Iowa Code section 146E.2(5) as enacted by 2023 Iowa Acts, House File 732. 13.17(2) Definitions. As used in this rule: "Private health agency" means any establishment, facility, organization, or other entity that is not owned by a federal, state, or local government that either is a health care provider or employs or provides the services of a health care provider. Establishments, facilities, organizations, or other entities that are health care providers include the following:

A hospital as defined in Iowa Code section 135B.1;
A health care facility as defined in Iowa Code section 135C.1;
A health facility as defined in Iowa Code section 135P.1; or
A similar entity that either is a health care provider or employs or provides the services of a health care provider.

"Public health agency" means any establishment; facility; organization; administrative division; or entity that is owned by a federal, state, or local government that either is a health care provider or employs or provides the services of a health care provider. Establishments, facilities, organizations, administrative divisions, or other entities that are health care providers include the following:

A hospital as defined in Iowa Code section 135B.1;
A health care facility as defined in Iowa Code section 135C.1;
A health facility as defined in Iowa Code section 135P.1; or
A similar entity that either is a health care provider or employs or provides the services of a health care provider.

"Standard medical practice" means the degree of skill, care, and diligence that a physician of the same medical specialty would employ in like circumstances. As applied to the method used to determine the presence of a fetal heartbeat for purposes of Iowa Code chapter 146E as enacted by 2023 Iowa Acts, House File 732, and this rule, “standard medical practice” includes employing the appropriate means of detection depending on the estimated gestational age of the unborn child and the condition of the woman and her pregnancy. "The pregnancy is the result of a rape" means a circumstance in which the pregnancy is the result of conduct perpetrated against a female that would be a prosecutable offense under Iowa Code section 709.2, 709.3, 709.4, or 709.4A. "The pregnancy is the result of incest" means a circumstance in which a sex act occurs between closely related persons that involves a vaginal penetration that causes a pregnancy. The closely related persons must be related, either legitimately or illegitimately, as an ancestor, descendant, brother or sister of the whole or half blood, aunt, uncle, niece, or nephew. For purposes of this rule, a closely related person includes a stepparent, stepchild, or stepsibling, including siblings through adoption. 13.17(3) Detection of fetal heartbeat. A physician who intends to perform or induce an abortion must determine via abdominal ultrasound whether the woman is carrying an unborn child with a detectable fetal heartbeat. a. Obligation.The obligation under this rule requires a bona fide effort to detect a fetal heartbeat in the unborn child. This effort must be made in good faith and according to standard medical practice and reasonable medical judgment. b. Method.Consistent with standard medical practice and reasonable medical judgment, the physician shall perform an exterior abdominal ultrasound on the woman to determine whether the unborn child has a detectable fetal heartbeat. This exterior abdominal ultrasound shall be performed with real-time ultrasound equipment with a transducer of appropriate frequency. The equipment must be properly maintained and in proper functioning order. At minimum, the exterior abdominal ultrasound shall examine the full region of the woman’s body between the chest and pelvis, including the side flanks between the rib cage and hips. 13.17(4) Fetal heartbeat exceptions. The following applies to a physician who intends to perform or induce an abortion under a fetal heartbeat exception as defined in Iowa Code chapter 146E as enacted by 2023 Iowa Acts, House File 732, and this rule: a. Incest or rape.If a pregnancy is the result of incest or a rape, the woman seeking an abortion may report the incest or the rape within the appropriate time frame to a licensed physician whose services are retained for an abortion procedure. (1) To determine whether the pregnancy is the result of incest, a physician who intends to perform or induce an abortion must gather the following information from the woman seeking an abortion: 1. Did a sex act occur between the woman and a closely related person, meaning, related, either legitimately or illegitimately, as an ancestor, descendant, brother or sister of the whole or half blood, aunt, uncle, niece, nephew, stepparent, stepchild, stepsibling, or an adopted sibling? 2. On what date did the sex act that caused the pregnancy occur? 3. If initial reporting was to someone other than the physician who intends to perform or induce an abortion, on what date was the act reported to a law enforcement agency, public health agency, private health agency, or family physician?The physician who intends to perform or induce an abortion shall use this information to determine whether the fetal heartbeat exception for incest applies. This information shall be documented in the woman’s medical records.The physician who intends to perform or induce an abortion may rely on the information provided by the woman seeking an abortion upon a good-faith assessment that the woman is being truthful. The physician who intends to perform or induce an abortion may require the woman to sign a certification form attesting that the information she gave was true and accurate to the best of the woman’s understanding. (2) To determine whether the pregnancy is the result of a rape, a physician who intends to perform or induce an abortion must gather the following information from the woman seeking an abortion: 1. On what date did the sex act that caused the pregnancy occur? 2. What was the age of the woman seeking an abortion at the time of that sex act? 3. Did the sex act constitute a rape? 4. Was the rape perpetrated against the woman seeking an abortion? 5. If initial reporting was to someone other than the physician who intends to perform or induce an abortion, on what date was the rape reported to a law enforcement agency, public health agency, private health agency, or family physician?The physician who intends to perform or induce an abortion shall use this information to determine whether the fetal heartbeat exception for rape applies. This information shall be documented in the woman’s medical records.The physician who intends to perform or induce an abortion may rely on the information as provided by the woman seeking an abortion upon a good-faith assessment that the woman is being truthful. The physician who intends to perform or induce an abortion may require the woman to sign a certification form attesting that the information she gave was true and accurate to the best of the woman’s understanding. b. Fetal abnormality.A certification from an attending physician that a fetus has a fetal abnormality that in the attending physician’s reasonable medical judgment is incompatible with life must contain the following information: (1) The diagnosis of the abnormality; (2) The basis for the diagnosis, including the tests and procedures performed, the results of those tests and procedures, and why those results support the diagnosis; and (3) A description of why the abnormality is incompatible with life.The diagnosis and the attending physician’s conclusion must be reached in good faith following a bona fide effort, consistent with standard medical practice and reasonable medical judgment, to determine the health of the fetus. The certification must be signed by the attending physician. A physician who intends to perform or induce an abortion may rely in good faith on a certification from an attending physician if the physician who intends to perform or induce an abortion has a copy of the certification. The certification must be included in the woman’s medical records by the physician who intends to perform or induce an abortion. 13.17(5) Discipline. Failure to comply with this rule or the requirements of Iowa Code chapter 146E as enacted by 2023 Iowa Acts, House File 732, may constitute grounds for discipline. This rule is intended to implement Iowa Code chapter 146E as enacted by 2023 Iowa Acts, House File 732.ARC 7175CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to licensure of podiatrists and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 220, “Licensure of Podiatrists,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 149 and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 149 and 272C.Purpose and Summary This proposed rulemaking sets minimum standards for entry into the podiatry profession. Iowa residents, licensees, and employers benefit from the rulemaking because it articulates the processes by which individuals apply for licensure as a podiatrist in the state of Iowa, as directed in statute. This includes the process for initial licensure, renewal, and reinstatement. These requirements ensure public safety by ensuring that any individual entering the profession has minimum competency. Requirements include the application process, minimum educational qualifications, and examination requirements.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 220 and adopt the following new chapter in lieu thereof: CHAPTER 220PODIATRISTSchapter 220licensure of podiatristschapter 221licensure of orthotists, prosthetists, and pedorthistschapter 222continuing education for podiatristschapter 223practice of podiatrychapter 224discipline for podiatrists, orthotists, pedorthists, and prosthetistschapter 225continuing education for orthotists, prosthetists, and pedorthistsLICENSURE OF PODIATRISTS

645—220.1(149) Definitions. "Active license" means a license that is current and has not expired. "Board" means the board of podiatry. "Grace period" means the 30-day period following expiration of a license when the license is still considered to be active. "Inactive license" means a license that has expired because it was not renewed by the end of the grace period. "Licensee" means any person licensed to practice as a podiatrist in the state of Iowa. "License expiration date" means June 30 of even-numbered years. "Licensure by endorsement" means the issuance of an Iowa license to practice podiatry to an applicant who is or has been licensed in another state. "NBPME" means National Board of Podiatric Medical Examiners. "Reactivate" "reactivation" means the process as outlined in rule 645—220.15(17A,147,272C) by which an inactive license is restored to active status. "Reciprocal license" means the issuance of an Iowa license to practice podiatry to an applicant who is currently licensed in another state that has a mutual agreement with the Iowa board of podiatry to license persons who have the same or similar qualifications to those required in Iowa. "Reinstatement" means the process as outlined in rule 645—11.31(272C) by which a licensee who has had a license suspended or revoked or who has voluntarily surrendered a license may apply to have the license reinstated, with or without conditions. Once the license is reinstated, the licensee may apply for active status.

645—220.2(149) Requirements for licensure. 220.2(1) The applicant will submit a completed online application for licensure and pay the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149). 220.2(2) No application will be considered complete until official copies of academic transcripts are received, verifying graduation from a college of podiatric medicine approved by the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association. Transcripts must be sent directly from the college to the board. 220.2(3) Licensees who were issued their licenses within six months prior to the renewal date do not need to renew their licenses until the renewal date two years later. 220.2(4) Incomplete applications that have been on file in the board office for more than two years will be: a. Considered invalid and destroyed; or b. Retained upon written request of the applicant. The applicant is responsible for requesting that the file be retained. 220.2(5) An applicant who graduated from a podiatric college in 1961 or earlier, is currently licensed in another state and has practiced for the 24 months immediately prior to application may be exempted from passing Part I and Part II of the NBPME examination based on the applicant’s credentials and the discretion of the board. 220.2(6) An applicant who graduated from a podiatric college on or after January 1, 1995, but before January 1, 2013, shall present documentation of successful completion of a residency approved by the CPME of the American Podiatric Medical Association. 220.2(7) An applicant who graduated from a podiatric college on or after January 1, 2013, shall present documentation of successful completion of two years of a residency approved by the CPME of the American Podiatric Medical Association. 220.2(8) Passing score reports for Part I, Part II, and Part III of the NBPME examination shall be sent directly from the examination service to the board.

645—220.3(149) Written examinations. 220.3(1) The examinations required by the board shall be Part I, Part II, and Part III of the NBPME. 220.3(2) The applicant has responsibility for: a. Making arrangements to take the examinations; and b. Arranging to have the examination score reports sent directly to the board from the NBPME. 220.3(3) A passing score as recommended by the administrators of the NBPME examinations shall be required.

645—220.4(149) Educational qualifications. 220.4(1) A new applicant for permanent or temporary licensure to practice as a podiatrist shall present official copies of academic transcripts, verifying graduation from a college of podiatric medicine approved by the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association. Transcripts must be sent directly from the college to the board of podiatry. 220.4(2) Foreign-trained podiatrists shall: a. Provide an equivalency evaluation of their educational credentials by one of the following: International Education Research Foundation, Inc., Credentials Evaluation Service, P.O. Box 3665, Culver City, CA 90231-3665, telephone 310.258.9451, website www.ierf.org, or email at info@ierf.org; or International Credentialing Associates, Inc., 7245 Bryan Dairy Road, Bryan Dairy Business Park II, Largo, FL 33777, telephone 727.549.8555. The professional curriculum must be equivalent to that stated in these rules. The candidate shall bear the expense of the curriculum evaluation. b. Provide a notarized copy of the certificate or diploma awarded to the applicant from a podiatry program in the country in which the applicant was educated. c. Receive a final determination from the board regarding the application for licensure.

645—220.5(149) Title designations. A podiatrist may use the prefix “Doctor” but shall add after the person’s name the word “Podiatrist” or “DPM.”

645—220.6(147,149) Temporary license. 220.6(1) A temporary license may be issued for up to one year and may be annually renewed at the discretion of the board. Temporary licenses will expire on June 30. 220.6(2) Each applicant shall: a. Submit a completed online application for licensure and pay the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149); b. Have official copies of academic transcripts sent directly to the board of podiatry from a college of podiatric medicine approved by the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association; c. Request that passing score reports of the NBPME examination Part I and Part II be sent directly to the board of podiatry from the National Board of Podiatric Medical Examiners; d. Furnish an affidavit by the institution director or dean of an approved podiatric college attesting that the applicant has been accepted into a residency program in this state that is approved by the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association; e. Request verification of license(s) from every jurisdiction in which the applicant has been licensed, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification direct from the jurisdiction’s board office if the verification provides: (1) Licensee’s name; (2) Date of initial licensure; (3) Current licensure status; and (4) Any disciplinary action taken against the license. 220.6(3) An applicant who graduated from a podiatric college in 1961 or earlier, is currently licensed in another state, and has practiced for the 24 months immediately prior to application may be exempted from passing Part I and Part II of the NBPME examination based on the applicant’s credentials and the discretion of the board. 220.6(4) The ultimate decision to issue a temporary license resides with the board, and a temporary license shall be surrendered if the reason for issuance ceases to exist.

645—220.7(149) Licensure by endorsement. An applicant who has been a licensed podiatrist under the laws of another jurisdiction may file an application for licensure by endorsement with the board office. 220.7(1) The board may receive by endorsement any applicant from the District of Columbia, another state, territory, province or foreign country who: a. Submits a completed online application for licensure and pays the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149); b. Shows evidence of licensure requirements that are similar to those required in Iowa; c. Provides the board with official copies of academic transcripts, verifying graduation from a college of podiatric medicine approved by the Council on Podiatric Medical Education (CPME) of the American Podiatric Medical Association. Transcripts must be sent directly from the school to the board of podiatry; and d. Provides verification of license(s) from every jurisdiction in which the applicant has been licensed, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification direct from the jurisdiction’s board office if the verification provides: (1) Licensee’s name; (2) Date of initial licensure; (3) Current licensure status; and (4) Any disciplinary action taken against the license. 220.7(2) An applicant shall submit the passing score reports for Part I and Part II of the NBPME examination. An applicant who graduated from a podiatric college in 1961 or earlier, is currently licensed in another state, and has practiced for the 24 months immediately prior to application may be exempted from passing Part I and Part II of the NBPME examination based on the applicant’s credentials and the discretion of the board. 220.7(3) An applicant shall submit passing score reports for Part III of the NBPME examination. An applicant who passed the Part III NBPME examination more than three years prior to the date of application in Iowa must submit proof of podiatry practice for one of the last three years. 220.7(4) An applicant who graduated from a podiatric college on or after January 1, 1995, must present documentation of successful completion of a residency approved by the CPME of the American Podiatric Medical Association. 220.7(5) A person who is licensed in another jurisdiction but who is unable to satisfy the requirements for licensure by endorsement may apply for licensure by verification, if eligible, in accordance with rule 645—19.1(272C).

645—220.8(149) License renewal. 220.8(1) The biennial license renewal period for a license to practice podiatry begins on July 1 of an even-numbered year and ends on June 30 of the next even-numbered year. The licensee is responsible for renewing the license prior to its expiration. 220.8(2) An individual who was issued a license within six months of the license renewal date does not need to renew the individual’s license until the subsequent renewal two years later. 220.8(3) An applicant who graduated from a podiatric college on or after January 1, 2013, and who is seeking renewal for the first time shall present documentation of successful completion of a residency program approved by the CPME of the American Podiatric Medical Association. 220.8(4) A licensee seeking renewal shall: a. Meet the continuing education requirements of rule 645—222.2(149,272C) and the mandatory reporting requirements of subrule 220.9(4). A licensee whose license was reactivated during the current renewal compliance period may use continuing education credit earned during the compliance period for the first renewal following reactivation; and b. Submit the completed renewal application and renewal fee before the license expiration date. 220.8(5) Mandatory reporter training requirements. a. A licensee who, in the scope of professional practice or in the licensee’s employment responsibilities, examines, attends, counsels or treats children and dependent adults in Iowa shall indicate on the renewal application completion of two hours of training in child abuse identification and reporting in the previous five years or condition(s) for waiver of this requirement as identified in paragraph 220.8(5)“e.” b. A licensee who, in the course of employment, examines, attends, counsels or treats adults in Iowa shall complete the applicable department of health and human services training related to the identification and reporting of child and dependent adult abuse as required by Iowa Code section 232.69(3)“b.” The requirement for mandatory training for identifying and reporting child and dependent adult abuse shall be suspended if the board determines that suspension is in the public interest or that a person at the time of license renewal: (1) Is engaged in active duty in the military service of this state or the United States. (2) Holds a current waiver by the board based on evidence of significant hardship in complying with training requirements, including an exemption of continuing education requirements or extension of time in which to fulfill requirements due to a physical or mental disability or illness as identified in 645—Chapter 4. c. The board may select licensees for audit of compliance with the requirements in paragraphs 220.8(5)“a” and “b.” 220.8(6) Upon receiving the information required by this rule and the required fee, board staff will administratively issue a two-year license. In the event the board receives adverse information on the renewal application, the board will issue the renewal license but may refer the adverse information for further consideration or disciplinary investigation. 220.8(7) The license certificate and proof of active licensure will be displayed in a conspicuous public place at the primary site of practice. 220.8(8) Late renewal. A license not renewed by the expiration date will be assessed a late fee as specified in 645—subrule 5.15(3). Completion of renewal requirements and submission of the late fee within the grace period are needed to renew the license. 220.8(9) Inactive license. A license not renewed by the end of the grace period is inactive. A licensee whose license is inactive continues to hold the privilege of licensure in Iowa, but may not practice as a podiatrist in Iowa until the license is reactivated. A licensee who practices as a podiatrist in the state of Iowa with an inactive license may be subject to disciplinary action by the board, injunctive action pursuant to Iowa Code section 147.83, criminal sanctions pursuant to Iowa Code section 147.86, and other available legal remedies.

645—220.9(17A,147,272C) License reactivation. To apply for reactivation of an inactive license, an applicant will: 220.9(1) Submit a completed online application for licensure and pay the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149). 220.9(2) Provide verification of current competence to practice as a podiatrist by satisfying one of the following criteria: a. If the license has been on inactive status for five years or less, provide the following: (1) Verification of the license(s) from every jurisdiction in which the applicant is or has been licensed and is or has been practicing during the time period the Iowa license was inactive, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification from a jurisdiction’s board office if the verification includes: 1. Licensee’s name; 2. Date of initial licensure; 3. Current licensure status; and 4. Any disciplinary action taken against the license; and (2) Verification of completion of 40 hours of continuing education within two years of application for reactivation. b. If the license has been on inactive status for more than five years, provide the following: (1) Verification of the license(s) from every jurisdiction in which the applicant is or has been licensed and is or has been practicing during the time period the Iowa license was inactive, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification from a jurisdiction’s board office if the verification includes: 1. Licensee’s name; 2. Date of initial licensure; 3. Current licensure status; and 4. Any disciplinary action taken against the license; and (2) Verification of completion of 80 hours of continuing education within two years of application for reactivation.

645—220.10(17A,147,272C) License reinstatement. A licensee whose license has been revoked, suspended, or voluntarily surrendered must apply for and receive reinstatement of the license in accordance with rule 645—11.31(272C) and must apply for and be granted reactivation of the license in accordance with rule 645—220.15(17A,147,272C) prior to practicing as a podiatrist in this state. These rules are intended to implement Iowa Code chapters 17A, 147, 149, and 272C.ARC 7176CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to licensure of orthotists, prosthetists, and pedorthists and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 221, “Licensure of Orthotists, Prosthetists, and Pedorthists,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 148F and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 148F and 272C.Purpose and Summary This proposed rulemaking sets minimum standards for entry into the professions of orthotists, prosthetists, and pedorthists. Iowa residents, licensees, and employers benefit from the rulemaking because it articulates the processes by which individuals apply for licensure in the state of Iowa, as directed in statute. This includes the process for initial licensure, renewal, and reinstatement. These requirements ensure public safety by ensuring that any individual entering the profession has minimum competency. Requirements include the application process, minimum educational qualifications, and examination requirements.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 221 and adopt the following new chapter in lieu thereof: CHAPTER 221LICENSURE OF ORTHOTISTS, PROSTHETISTS, AND PEDORTHISTS

645—221.1(148F) Definitions. "Active license" means a license that is current and has not expired. "Board" means the board of podiatry. "Grace period" means the 30-day period following expiration of a license when the license is still considered to be active. "Inactive license" means a license that has expired because it was not renewed by the end of the grace period. "Licensee" means any person licensed to practice as an orthotist, prosthetist, or pedorthist in the state of Iowa. "License expiration date" means June 30 of even-numbered years. "Licensure by endorsement" means the issuance of an Iowa license to practice orthotics, prosthetics, or pedorthics to an applicant who is or has been licensed in another state. "Reactivate" "reactivation" means the process as outlined in rule 645—221.8(17A,147,272C) by which an inactive license is restored to active status. "Reciprocal license" means the issuance of an Iowa license to practice orthotics, prosthetics, or pedorthics to an applicant who is currently licensed in another state that has a mutual agreement with the Iowa board of podiatry to license persons who have the same or similar qualifications to those required in Iowa. "Reinstatement" means the process as outlined in rule 645—11.31(272C) by which a licensee who has had a license suspended or revoked or who has voluntarily surrendered a license may apply to have the license reinstated, with or without conditions. Once the license is reinstated, the licensee may apply for active status.

645—221.2(148F) Requirements for licensure. 221.2(1) The applicant will submit a completed online application for licensure and pay the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149). 221.2(2) No application will be considered complete until official copies of academic transcripts are received. a. Applicants for licensure in orthotics or prosthetics must submit proof of graduation from an educational program approved by the Commission on Accreditation of Allied Health Education Programs. b. Applicants for licensure in pedorthics must submit proof of graduation from an educational program approved by the National Commission on Orthotic and Prosthetic Education. 221.2(3) Transcripts must be sent directly from the program to the board. 221.2(4) Licensees who were issued their licenses within six months prior to the renewal date do not need to renew their licenses until the renewal date two years later. 221.2(5) Incomplete applications that have been on file in the board office for more than two years will be: a. Considered invalid and destroyed; or b. Retained upon written request of the applicant. The applicant is responsible for requesting that the file be retained. 221.2(6) The applicant shall ensure that the passing score from the appropriate professional examination is sent directly to the board from the examination service. 221.2(7) Applicants for licensure in orthotics or prosthetics must provide documentation of successful completion of a residency program accredited by the National Commission on Orthotic and Prosthetic Education. 221.2(8) Applicants for licensure in pedorthics must provide documentation of successful completion of a qualified clinical experience program.

645—221.3(148F) Written examinations. 221.3(1) Prosthetists must have completed and passed the Board of Certification/Accreditation, International (BOC), or American Board for Certification in Orthotics, Prosthetics and Pedorthics, Incorporated (ABC), examination for prosthetists. 221.3(2) Orthotists must have completed and passed the BOC or ABC examination for orthotists. 221.3(3) Pedorthists must have completed and passed the BOC or ABC examination for pedorthists. 221.3(4) The applicant has responsibility for: a. Making arrangements to take the examination; and b. Arranging to have the examination score reports sent directly to the board from the ABC or BOC. 221.3(5) A passing score as recommended by the administrators of the ABC or BOC examination shall be required.

645—221.4(148F) Educational qualifications. 221.4(1) An applicant for licensure to practice as an orthotist or prosthetist shall present official copies of academic transcripts, verifying completion of the following requirements: a. A baccalaureate or higher degree from a regionally accredited college or university. Transcripts must be sent directly from the college or university to the board of podiatry; and b. Verification of completion of an academic program in orthotics or prosthetics accredited by the Commission on Accreditation of Allied Health Education Programs (CAAHEP). Transcripts must be sent directly from the program to the board of podiatry. 221.4(2) An applicant for licensure to practice as a pedorthist shall present official copies of academic transcripts, verifying completion of the following requirements: a. A high school diploma or its equivalent; and b. Verification of completion of an academic program in pedorthics accredited by the National Commission on Orthotic and Prosthetic Education. Verification must be sent directly from the program to the board of podiatry. 221.4(3) An applicant who has relocated to Iowa from a state that did not require licensure to practice the profession may submit proof of work experience in lieu of educational and training requirements, if eligible, in accordance with rule 645—19.2(272C).

645—221.5(148F) Licensure by endorsement. 221.5(1) An applicant who has been a licensed orthotist, prosthetist, or pedorthist under the laws of another jurisdiction may file an application for licensure by endorsement with the board office. The board may receive by endorsement any applicant from the District of Columbia, or another state, territory, province or foreign country who: a. Submits a completed online application for licensure and pays the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149); b. Shows evidence of licensure requirements that are similar to those required in Iowa; c. For prosthetic or orthotic licensure, provides: (1) A baccalaureate or higher degree from a regionally accredited college or university. Transcripts must be sent directly from the college or university to the board of podiatry; and (2) Verification of completion of an academic program in orthotics or prosthetics accredited by CAAHEP. Transcripts must be sent directly from the program to the board of podiatry; d. For pedorthic licensure, provides: (1) A high school diploma or its equivalent; and (2) Verification of completion of an academic program in pedorthics accredited by the National Commission on Orthotic and Prosthetic Education. Verification must be sent directly from the program to the board of podiatry; e. Provides verification of license(s) from every jurisdiction in which the applicant has been licensed, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification direct from the jurisdiction’s board office if the verification provides: (1) Licensee’s name; (2) Date of initial licensure; (3) Current licensure status; and (4) Any disciplinary action taken against the license; f. Submits a copy of the scores from the appropriate professional examination to be sent directly from the examination service to the board. 221.5(2) Individuals who were issued their licenses by endorsement within six months of the license renewal date do not need to renew their licenses until the next renewal date two years later. 221.5(3) Licensure by verification. A person who is licensed in another jurisdiction but who is unable to satisfy the requirements for licensure by endorsement may apply for licensure by verification, if eligible, in accordance with rule 645—19.1(272C).

645—221.6(148F) License renewal. 221.6(1) The biennial license renewal period for a license to practice orthotics, prosthetics, or pedorthics begins on July 1 of an even-numbered year and ends on June 30 of the next even-numbered year. The licensee is responsible for renewing the license prior to its expiration. 221.6(2) An individual who was issued a license within six months of the license renewal date will not be required to renew the license until the subsequent renewal date two years later. 221.6(3) A licensee seeking renewal shall: a. Meet the continuing education requirements of rule 645—225.2(148F,272C). A licensee whose license was reactivated during the current renewal compliance period may use continuing education credit earned during the compliance period for the first renewal following reactivation; and b. Submit the completed renewal application and renewal fee before the license expiration date. 221.6(4) Upon receipt of the information required by this rule and the required fee, board staff shall administratively issue a two-year license. In the event the board receives adverse information on the renewal application, the board will issue the renewal license but may refer the adverse information for further consideration or disciplinary investigation. 221.6(5) The license certificate and proof of active licensure will be displayed in a conspicuous public place at the primary site of practice. 221.6(6) Late renewal. The license shall become late when the license has not been renewed by the expiration date on the renewal. The licensee shall be assessed a late fee as specified in 645—subrule 5.15(7). To renew a late license, the licensee shall complete the renewal requirements and submit the late fee within the grace period. 221.6(7) Inactive license. A licensee who fails to renew the license by the end of the grace period has an inactive license. A licensee whose license is inactive continues to hold the privilege of licensure in Iowa but may not practice as an orthotist, prosthetist, or pedorthist in Iowa until the license is reactivated. A licensee who practices as an orthotist, prosthetist, or pedorthist in the state of Iowa with an inactive license may be subject to disciplinary action by the board, injunctive action pursuant to Iowa Code section 147.83, criminal sanctions pursuant to Iowa Code section 147.86, and other available legal remedies.

645—221.7(17A,147,272C) License reactivation. To apply for reactivation of an inactive license, a licensee shall: 221.7(1) Submit a completed online application for licensure and pay the nonrefundable licensure fee specified in rule 645—5.15(147,148F,149). 221.7(2) Provide verification of current competence to practice by satisfying one of the following criteria: a. If the license has been on inactive status for five years or less, an applicant must provide the following: (1) Verification of the license(s) from every jurisdiction in which the applicant is or has been licensed and is or has been practicing during the time period the Iowa license was inactive, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification from a jurisdiction’s board office if the verification includes: 1. Licensee’s name; 2. Date of initial licensure; 3. Current licensure status; and 4. Any disciplinary action taken against the license; and (2) Verification of completion of: 1. For orthotists or prosthetists, 30 hours of continuing education within two years of application for reactivation. 2. For pedorthists, 20 hours of continuing education within two years of application for reactivation. b. If the license has been on inactive status for more than five years, an applicant must provide the following: (1) Verification of the license(s) from every jurisdiction in which the applicant is or has been licensed and is or has been practicing during the time period the Iowa license was inactive, sent directly from the jurisdiction(s) to the board office. Web-based verification may be substituted for verification from a jurisdiction’s board office if the verification includes: 1. Licensee’s name; 2. Date of initial licensure; 3. Current licensure status; and 4. Any disciplinary action taken against the license; and (2) Verification of completion of: 1. For orthotists or prosthetists, 60 hours of continuing education within two years of application for reactivation. 2. For pedorthists, 40 hours of continuing education within two years of application for reactivation.

645—221.8(17A,147,272C) License reinstatement. A licensee whose license has been revoked, suspended, or voluntarily surrendered must apply for and receive reinstatement of the license in accordance with rule 645—11.31(272C) and must apply for and be granted reactivation of the license in accordance with rule 645—221.8(17A,147,272C) prior to practicing as an orthotist, a prosthetist, or a pedorthist in this state. These rules are intended to implement Iowa Code chapters 17A, 147, 148F, and 272C.ARC 7177CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to continuing education for podiatrists and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 222, “Continuing Education for Podiatrists,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 149 and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 149 and 272C.Purpose and Summary This proposed rulemaking sets forth continuing education requirements for podiatrists. The rulemaking includes definitions related to continuing education, the required number of hours of continuing education that licensees are required to obtain, the standards that licensees need to meet in order to comply with the rulemaking, and the types of continuing education courses that are permissible. The intended benefit of continuing education is to ensure that podiatrists maintain up-to-date practice standards and, as a result, provide high-quality services to Iowans.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 222 and adopt the following new chapter in lieu thereof: CHAPTER 222CONTINUING EDUCATION FOR PODIATRISTS

645—222.1(149,272C) Definitions. "Active license" means a license that is current and has not expired. "Approved program/activity" means a continuing education program/activity meeting the standards set forth in these rules. "Audit" means the selection of licensees for verification of satisfactory completion of continuing education requirements during a specified time period. "Board" means the board of podiatry. "Continuing education" means planned, organized learning acts acquired during licensure designed to maintain, improve, or expand a licensee’s knowledge and skills in order for the licensee to develop new knowledge and skills relevant to the enhancement of practice, education, or theory development to improve the safety and welfare of the public. "Hour of continuing education" means at least 50 minutes spent by a licensee in actual attendance at and completion of an approved continuing education activity. "Inactive license" means a license that has expired because it was not renewed by the end of the grace period. "Independent study" means a subject/program/activity that a person pursues autonomously that meets standards for approval criteria in the rules and includes a posttest. "License" means license to practice. "Licensee" means any person licensed to practice as a podiatrist in the state of Iowa.

645—222.2(149,272C) Continuing education requirements. 222.2(1) The biennial continuing education compliance period extends for a two-year period beginning on July 1 of each even-numbered year and ending on June 30 of the next even-numbered year. Each biennium, each person who is licensed to practice as a podiatrist in this state shall be required to complete a minimum of 40 hours of continuing education. 222.2(2) Requirements for new licensees. Those persons licensed for the first time shall not be required to complete continuing education as a prerequisite for the first renewal of their licenses. Continuing education hours acquired anytime from the initial licensing until the second license renewal may be used. The new licensee will be required to complete a minimum of 40 hours of continuing education per biennium for each subsequent license renewal. 222.2(3) Hours of continuing education credit may be obtained by attending and participating in a continuing education activity. These hours must be in accordance with these rules. 222.2(4) No hours of continuing education will be carried over into the next biennium. 222.2(5) It is the responsibility of each licensee to finance the cost of continuing education.

645—222.3(149,272C) Standards. 222.3(1) General criteria. A continuing education activity that meets all of the following criteria is appropriate for continuing education credit if the continuing education activity: a. Constitutes an organized program of learning that contributes directly to the professional competency of the licensee; b. Pertains to subject matters that integrally relate to the practice of the profession; c. Is conducted by individuals who have specialized education, training and experience by reason of which said individuals should be considered qualified concerning the subject matter of the program. At the time of audit, the board may request the qualifications of presenters; d. Fulfills stated program goals, objectives, or both; and e. Provides proof of attendance to licensees in attendance including: (1) Date, location, course title, presenter(s); (2) Number of program contact hours; and (3) Certificate of completion or evidence of successful completion of the course provided by the course sponsor. 222.3(2) Specific criteria. a. Licensees may obtain continuing education hours of credit by teaching in a college, university, or graduate school that is recognized by the U.S. Department of Education. The licensee may receive credit on a one-time basis for the first offering of a course. b. Continuing education hours of credit may be obtained by completing the following programs/activities of a podiatric scientific nature and sponsored by an accredited college of podiatric medicine or the American Podiatric Medical Association or a regional or state affiliate or nonprofit hospital that are: (1) Educational activities in which participants and faculty are present at the same time and attendance can be verified. Such activities include lectures, conferences, focused seminars, clinical and practical workshops, simultaneous live satellite broadcasts and teleconferences; and (2) Scientifically oriented material or risk management activities. c. If the podiatrist utilizes conscious sedation, the podiatrist shall obtain a minimum of one hour of continuing education in the area of conscious sedation or other related topics. d. A licensee who has prescribed opioids to a patient during a renewal cycle shall have obtained a minimum of one hour of continuing education regarding the United States Centers for Disease Control and Prevention guideline for prescribing opioids for chronic pain, including recommendations on limitations on dosages and the length of prescriptions, risk factors for abuse, and nonopioid and nonpharmacologic therapy options. e. Combined maximum per biennium of 20 hours for the following continuing education source areas will not exceed: (1) Presenting professional programs that meet the criteria listed in this subrule. Two hours of credit will be awarded for each hour of presentation. A course schedule or brochure must be maintained for audit. (2) Ten hours of credit for viewing videotaped presentations if the following criteria are met: 1. There is an approved sponsoring group or agency; 2. There is a facilitator or program official present; 3. The program official is not the only attendee; and 4. The program meets all the criteria in rule 645—222.3(149,272C). (3) Ten hours of credit for computer-assisted instructional courses or programs pertaining to patient care and the practice of podiatric medicine and surgery. These courses and programs must be approved by the American Podiatric Medical Association or its affiliates and have a certificate of completion that includes the following information: 1. Date course/program was completed; 2. Title of course/program; 3. Number of course/program contact hours; and 4. Official signature or verification of course/program sponsor. (4) Five hours of credit for reading journal articles pertaining to patient care and the practice of podiatric medicine and surgery. The licensee must pass a required posttest and be provided with a certificate of completion. f. No office management courses will be accepted by the board. g. Continuing education hours of credit equivalents for academic coursework per biennium are as follows:1 academic semester hour = 15 continuing education hours1 academic quarter hour = 10 continuing education hours h. Credit is given only for actual hours attended. These rules are intended to implement Iowa Code section 272C.2 and chapter 149.ARC 7178CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to practice of podiatry and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 223, “Practice of Podiatry,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 149 and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 149 and 272C.Purpose and Summary This proposed rulemaking provides Iowans, licensees, and their employers with definitions relevant to the practice of podiatrists and requirements for administering conscious sedation, for preventing human immunodeficiency virus and hepatitis B virus transmission, for unlicensed graduates of a podiatric college working as assistants, and for prescribing opioids. This rulemaking articulates practice standards and provides a scope of practice for the profession.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 223 and adopt the following new chapter in lieu thereof: CHAPTER 223PRACTICE OF PODIATRY

645—223.1(149) Definitions. "Ambulatory surgical center" "ASC" means an ambulatory surgical center that has in effect an agreement with the Centers for Medicare and Medicaid Services (CMS) of the U.S. Department of Health and Human Services, in accordance with 42 CFR Part 416 as amended to November 22, 2023. "Conscious sedation" means a depressed level of consciousness produced by the administration of pharmacological substances that retains the patient’s ability to independently and continuously maintain an airway and respond appropriately to physical stimulation or verbal command.

645—223.2(149) Requirements for administering conscious sedation. A licensed podiatrist who holds a permanent license in good standing may use conscious sedation for podiatric patients on an outpatient basis in a hospital or ASC after the podiatrist has submitted to the board office an attestation on a form approved by the board. 223.2(1) The attestation shall include: a. Evidence of successful completion within the past five years of a formal anesthesiology rotation in a residency program approved by the Council on Podiatric Medical Education (CPME); or b. For a podiatrist who does not meet the requirements of paragraph 223.2(1)“a,” an attestation with evidence that the podiatrist is authorized by the governing body of a hospital or ASC to use conscious sedation. This attestation must be received by the board prior to January 1, 2005. 223.2(2) The podiatrist will provide verification of current certification in Basic Cardiac Life Support (BCLS) or Advanced Cardiac Life Support (ACLS). 223.2(3) A podiatrist who has an attestation on file and continues to use conscious sedation will meet the requirements of 645—Chapter 222 at the time of license renewal. A minimum of one hour of continuing education in the area of conscious sedation or related topics is required beginning with the renewal cycle of July 1, 2004, to June 30, 2006. Continuing education credit in the area of conscious sedation may be applied toward the 40 hours of continuing education required for renewal of the license. In addition, the podiatrist will maintain current certification in BCLS or ACLS. 223.2(4) A podiatrist will only utilize conscious sedation in a hospital or ASC when the podiatrist has been granted clinical privileges by the governing body of the hospital or ASC in accordance with approved policies and procedures of the hospital or ASC. 223.2(5) It is a violation of the standard of care for a podiatrist to use conscious sedation agents that result in a deep sedation or general anesthetic state. 223.2(6) Reporting of adverse occurrences related to conscious sedation. A licensed podiatrist who has an attestation on file with the board must submit a report to the board within 30 days of any mortality or other incident which results in temporary or permanent physical or mental injury requiring hospitalization of the patient during or as a result of conscious sedation. Included in the report will be the following: a. Description of podiatric procedures; b. Description of preoperative physical condition of patient; c. List of drugs and dosage administered; d. Description, in detail, of techniques utilized in administering the drugs; e. Description of adverse occurrence, including: (1) Symptoms of any complications including, but not limited to, onset and type of symptoms; (2) Treatment instituted; (3) Response of the patient to treatment; f. Description of the patient’s condition on termination of any procedures undertaken; g. If a patient is transferred, a statement providing where and to whom; and h. Name of the registered nurse who is trained to administer conscious sedation and who assisted in the procedure. 223.2(7) Failure to report. Failure to comply with subrule 223.2(6) when the adverse occurrence is related to the use of conscious sedation may result in the podiatrist’s loss of authorization to administer conscious sedation or in other sanctions provided by law. 223.2(8) Record keeping. The patient’s chart must include: a. Preoperative and postoperative vital signs; b. Drugs administered; c. Dosage administered; d. Anesthesia time in minutes; e. Monitors used; f. Intermittent vital signs recorded during procedures and until the patient is fully alert and oriented with stable vital signs; g. Name of the person to whom the patient was discharged; and h. Name of the registered nurse who is trained to administer conscious sedation and who assisted in the procedure. 223.2(9) Failure to comply with these rules is grounds for discipline.

645—223.3(139A) Preventing HIV and HBV transmission. Podiatrists will comply with the recommendations for preventing transmission of human immunodeficiency virus and hepatitis B virus to patients during exposure-prone invasive procedures, issued by the Centers for Disease Control and Prevention of the United States Department of Health and Human Services, or with the recommendations of the expert review panel established pursuant to Iowa Code section 139A.22(3) and applicable hospital protocols established pursuant to Iowa Code section 139A.22(1). Failure to comply will be grounds for disciplinary action.

645—223.4(149) Unlicensed graduate of a podiatric college. An unlicensed graduate of a podiatric college may function in the licensed podiatrist’s office only as a podiatric assistant. The licensed podiatrist has full responsibility and liability for the unlicensed person. 223.4(1) Treatments, charting, and notations completed by the unlicensed graduate must be initialed by that person and countersigned by the licensed podiatrist. 223.4(2) An unlicensed graduate will not: a. Be referred to as “doctor” during professional contact with patients. b. Treat patients in the office without a licensed podiatrist present. c. Perform surgical work without direct supervision of a licensed podiatrist. d. Diagnose or prescribe medicine. e. Take independent actions regarding diagnosis, treatment or prescriptions. f. Visit nursing homes or make house calls without the presence of the licensed podiatrist. g. Bill for any services.

645—223.5(149) Prescribing opioids. Podiatrists will review a patient’s information contained in the prescription monitoring program database for each opioid prescription prior to prescribing, unless the patient is receiving inpatient hospice care or long-term residential facility care. These rules are intended to implement Iowa Code chapters 139A, 149 and 514F.ARC 7179CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to discipline for podiatrists, orthotists, prosthetists, and pedorthists and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 224, “Discipline for Podiatrists, Orthotists, Prosthetists, and Pedorthists,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 148F, 149 and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 148F, 149 and 272C.Purpose and Summary This proposed rulemaking provides protection to Iowans because it publicly defines disciplinary options when a podiatrist, orthotist, pedorthist, or prosthetist fails to provide the standard of care. This is important to both the public and to the licensee because it creates a shared understanding of what is and is not appropriate for certain types of licensed individuals in the state of Iowa. When professional standards are not met, it can subject a licensee to discipline against the licensee’s license. Iowans have the ability to submit a complaint to the licensing board, which can then investigate the allegation. The Board has the ability to seek discipline against the licensee for those items outlined, ensuring that the public is protected. The 19 boards in the legacy Department of Health and Human Services (HHS) Bureau of Professional Licensure have similar disciplinary standards for all professions. For this reason, one shared disciplinary chapter has been created that applies to all professions. This chapter contains only those disciplinary grounds that are unique to the Board and are therefore excluded from the general disciplinary chapter.Fiscal Impact This rulemaking has no ﬁscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 224 and adopt the following new chapter in lieu thereof: CHAPTER 224DISCIPLINE FOR PODIATRISTS, ORTHOTISTS, PROSTHETISTS, AND PEDORTHISTS[Prior to 2/6/02, see 645—Chapter 220]

645—224.1(148F,149,272C) Grounds for discipline. The board may impose any of the disciplinary sanctions provided in Iowa Code section 272C.3 when the board determines that the licensee is guilty of any of the following acts or offenses or those listed in 645—Chapter 13: 224.1(1) Prescribing opioids in dosage amounts exceeding what would be prescribed by a reasonably prudent prescribing practitioner engaged in the same practice. 224.1(2) Reserved.

645—224.2(148F,149,272C) Indiscriminately prescribing, administering or dispensing any drug for other than a lawful purpose. The board may impose any of the disciplinary sanctions provided in 645—Chapter 13 when the board determines that the licensee is guilty of any of the following acts or offenses: 224.2(1) Self-prescribing or self-dispensing controlled substances. 224.2(2) Prescribing or dispensing controlled substances to members of the licensee’s immediate family for an extended period of time. a. Prescribing or dispensing controlled substances to members of the licensee’s immediate family is allowable for an acute condition or on an emergency basis when the physician conducts an examination, establishes a medical record, and maintains proper documentation. b. Immediate family includes spouse or life partner, natural or adopted children, grandparent, parent, sibling, or grandchild of the physician; and natural or adopted children, grandparent, parent, sibling, or grandchild of the physician’s spouse or life partner. 224.2(3) Prescribing or dispensing controlled substances outside the scope of the practice of podiatry. These rules are intended to implement Iowa Code chapters 147, 148F, 149, and 272C.ARC 7180CProfessional Licensure Division[645]Notice of Intended Action

Proposing rulemaking related to continuing education for orthotists, prosthetists, and pedorthists and providing an opportunity for public comment

The Board of Podiatry hereby proposes to rescind Chapter 225, “Continuing Education for Orthotists, Prosthetists, and Pedorthists,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 17A, 147, 148F and 272C.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 17A, 147, 148F and 272C.Purpose and Summary These proposed rules set forth continuing education requirements for orthotists, prosthetists, and pedorthists. The rules include definitions related to continuing education, the required number of hours of continuing education that licensees are required to obtain, the standards that licensees need to meet in order to comply with the rules, and the types of continuing education courses that are permissible. The intended benefit of continuing education is to ensure that orthotists, prosthetists, and pedorthists maintain up-to-date practice standards and, as a result, provide high-quality services to Iowans.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers A waiver provision is not included in this rulemaking because all administrative rules of the professional licensure boards in the Professional Licensure Division are subject to the waiver provisions accorded under 645—Chapter 18.Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Board no later than 4:30 p.m. on January 31, 2024. Comments should be directed to: Tony Alden Iowa Department of Inspections, Appeals, and Licensing 6200 Park Avenue Des Moines, Iowa 50321 Phone: 515.281.4401 Email: tony.alden@dia.iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 30, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# January 31, 2024 10 to 10:20 a.m. 6200 Park Avenue Des Moines, Iowa Via video/conference call: meet.google.com/jji-jaoj-uqy Or dial: 1.402.921.2210 PIN: 744 558 427# Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. In an effort to ensure accuracy in memorializing a person’s comments, a person may provide written comments in addition to or in lieu of oral comments at the hearing. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Board and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 645—Chapter 225 and adopt the following new chapter in lieu thereof: CHAPTER 225CONTINUING EDUCATION FOR ORTHOTISTS, PROSTHETISTS, AND PEDORTHISTS

645—225.1(148F) Definitions. "ABC" means the American Board for Certification in Orthotics, Prosthetics and Pedorthics, Incorporated. "Active license" means a license that is current and has not expired. "Approved program/activity" means a continuing education program/activity meeting the standards set forth in these rules. "Audit" means the selection of licensees for verification of satisfactory completion of continuing education requirements during a specified time period. "Board" means the board of podiatry. "BOC" means the Board of Certification/Accreditation, International. "Continuing education" means planned, organized learning acts acquired during licensure designed to maintain, improve, or expand a licensee’s knowledge and skills in order for the licensee to develop new knowledge and skills relevant to the enhancement of practice, education, or theory development to improve the safety and welfare of the public. "Hour of continuing education" means at least 50 minutes spent by a licensee in actual attendance at and completion of an approved continuing education activity. "Inactive license" means a license that has expired because it was not renewed by the end of the grace period. "Independent study" means a subject/program/activity that a person pursues autonomously that meets standards for approval criteria in the rules and includes a posttest. "License" means license to practice. "Licensee" means any person licensed to practice as an orthotist, prosthetist, or pedorthist in the state of Iowa.

645—225.2(148F,272C) Continuing education requirements. 225.2(1) The biennial continuing education compliance period extends for a two-year period beginning on July 1 of each even-numbered year and ending on June 30 of the next even-numbered year. a. Each biennium, each person who is licensed to practice as an orthotist in this state shall be required to complete a minimum of 30 hours of continuing education. b. Each biennium, each person who is licensed to practice as a prosthetist in this state shall be required to complete a minimum of 30 hours of continuing education. c. Each biennium, each person who is licensed to practice as a pedorthist in this state shall be required to complete a minimum of 20 hours of continuing education. 225.2(2) Requirements for new licensees. Those persons licensed for the first time shall not be required to complete continuing education as a prerequisite for the first renewal of their licenses. Continuing education hours acquired anytime from the initial licensing until the second license renewal may be used. a. The new orthotic licensee will be required to complete a minimum of 30 hours of continuing education per biennium for each subsequent license renewal. b. The new prosthetic licensee will be required to complete a minimum of 30 hours of continuing education per biennium for each subsequent license renewal. c. The new pedorthic licensee will be required to complete a minimum of 20 hours of continuing education per biennium for each subsequent license renewal. 225.2(3) Hours of continuing education credit may be obtained by attending and participating in a continuing education activity. These hours must be in accordance with these rules. 225.2(4) No hours of continuing education will be carried over into the next biennium. 225.2(5) It is the responsibility of each licensee to finance the cost of continuing education.

645—225.3(148F,272C) Standards. 225.3(1) General criteria. A continuing education activity that meets all of the following criteria is appropriate for continuing education credit if the continuing education activity: a. Constitutes an organized program of learning that contributes directly to the professional competency of the licensee; b. Pertains to subject matters that integrally relate to the practice of the profession; c. Is conducted by individuals who have specialized education, training and experience by reason of that said individuals should be considered qualified concerning the subject matter of the program. At the time of audit, the board may request the qualifications of presenters; d. Fulfills stated program goals, objectives, or both; and e. Provides proof of attendance to licensees in attendance including: (1) Date, location, course title, and presenter(s); (2) Number of program contact hours; and (3) Certificate of completion or evidence of successful completion of the course provided by the course sponsor. 225.3(2) Specific criteria for licensees. a. Licensees may obtain continuing education hours of credit by attending workshops, conferences, symposiums, electronically transmitted courses, live interactive conferences, and academic courses that relate directly to the professional competency of the licensee. Official transcripts indicating successful completion of academic courses that apply to the field of orthotics, prosthetics, or pedorthics will be necessary in order to receive the following continuing education credits:1 academic semester hour = 15 continuing education hours of credit1 academic trimester hour = 12 continuing education hours of credit1 academic quarter hour = 10 continuing education hours of credit b. Licensees may obtain continuing education hours of credit by teaching in an approved college, university, or graduate school. The licensee may receive credit on a one-time basis for the first offering of a course. c. Continuing education hours of credit may be granted for any of the following activities not to exceed a maximum combined total of 15 hours for orthotists and prosthetists and 10 hours for pedorthists: (1) Presenting professional programs that meet the criteria listed in this rule. Two hours of credit will be awarded for each hour of presentation. A course schedule or brochure must be maintained for audit. (2) Authoring research or other activities, the results of which are published in a recognized professional publication. The licensee will receive five hours of credit per page. (3) Viewing videotaped presentations and electronically transmitted material that have a postcourse test if the following criteria are met: 1. There is a sponsoring group or agency; 2. There is a facilitator or program official present; 3. The program official is not the only attendee; and 4. The program meets all the criteria specified in this rule. (4) Participating in home study courses that have a certificate of completion and a postcourse test. (5) Participating in courses that have business-related topics: marketing, time management, government regulations, and other like topics. (6) Participating in courses that have personal skills topics: career burnout, communication skills, human relations, and other like topics. (7) Participating in courses that have general health topics: clinical research, CPR, child abuse reporting, and other like topics.

645—225.4(148F,272C) Audit of continuing education report. In addition to the requirements of 645—4.11(272C), proof of current BOC or ABC certification as an orthotist, prosthetist, or pedorthist will be accepted in lieu of individual certificates of completion for an audit. These rules are intended to implement Iowa Code section 272C.2 and chapter 148F.ARC 7181CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to collection of tax debt and debt owed to other state agencies and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 20, “Filing and Extension of Tax Liens and Charging Off Uncollectible Tax Accounts,” and adopt a new Chapter 20 with the same title; rescind Chapter 21, “Federal Offset for Iowa Income Tax Obligations,” and adopt a new Chapter 21 with the same title; rescind Chapter 22, “Collection of Debts Owed the State of Iowa or a State Agency,” and adopt a new Chapter 22 with the same title; rescind Chapter 23, “Debt Collection and Selling of Property to Collect Delinquent Debts,” and adopt a new Chapter 23 with the same title; rescind Chapter 24, “License Sanctions for Collection of Debts Owed the State of Iowa or a State Agency,” and adopt a new Chapter 24 with the same title; rescind Chapter 25, “Challenges to Administrative Levies and Publication of Names of Debtors,” and adopt a new Chapter 25, “Challenges to Administrative Levies”; and adopt Chapter 27, “Subpoena of Records from Utility Companies and Publication of Names of Debtors,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code chapters 272D and 453B and section 421.17.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 626 and 642 and sections 272D.2, 272D.5 to 272D.7, 272D.9, 421.17, 421.17A, 422.20, 422.26 and 422.72.Purpose and Summary The purpose of this proposed rulemaking is to readopt several chapters related to the collection of tax debt and debt owed to other state agencies and to adopt one new chapter on related topics. The proposed chapters were revised to remove unnecessary or obsolete language and language that is duplicative of statute and to clarify readopted rules. Chapter 20 provides practices and procedures the Department will follow in filing liens on property to establish a priority interest in assets of the taxpayer for unpaid debt. Chapter 21 provides when and how the Department may offset a taxpayer’s federal refund via the Treasury Offset Program to satisfy state income tax obligations. Chapter 22 contains requirements for other state agencies and local government entities to place their debt with the Department for collection. Chapter 23 contains a rule implementing the Department’s authority to seize and sell property to collect tax debt and other delinquent liabilities collected by or owed to the State of Iowa. Chapter 24 provides requirements of the Department for sanctioning a professional or other license and the procedure for challenging. Chapter 25 contains the procedure for a debtor to challenge a wage or bank levy issued by the Department. Chapter 27 is a newly created chapter that contains rules on the subpoena of utility companies and the Director’s power to release the names of debtors. The rules in this newly created chapter were previously located in other chapters, but were moved to Chapter 27 for more intuitive organization. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023. Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 20 and adopt the following new chapter in lieu thereof: CHAPTER 20FILING AND EXTENSION OF TAX LIENS AND CHARGING OFF UNCOLLECTIBLE TAX ACCOUNTS[Prior to 12/17/86, Revenue Department[730]][Prior to 11/2/22, see Revenue Department[701] Ch 9]

701—20.1(422,423) Definitions. As used in the rules contained herein, the following definitions apply unless the context otherwise requires: "Assessment issued" means the same as defined in Iowa Code section 422.26(10). "Charge off" means moving an unpaid account to inactive status. “Charge off” does not mean the account is deleted from the department’s records or that the account is not due and owed. Charge off does not prevent the department from recovering all or part of the account through actions including but not limited to bankruptcy, probate, or setoff or through voluntary payment. "Department" means the Iowa department of revenue. "Director" means the director of the department or the director’s authorized representative. "Lien" means the legal right or interest against personal or real property provided by Iowa Code section 422.26 or other Iowa Code sections making reference to Iowa Code section 422.26. "Recorder" means the county recorder of any county in the state of Iowa. "Taxes" means all taxes or charges administered by the department and any tax or charge to which Iowa Code section 422.26 applies.

701—20.2(422,423) Place of filing. 20.2(1) A notice of lien may be filed in the office of the recorder in any county. 20.2(2) The director may charge off any account before the lien has lapsed if the taxpayer meets one or more of the following criteria: a. The taxpayer is deceased, and there are no assets in the estate or there are no assets available for the payment of taxes under Iowa Code section 633.425. b. The taxpayer is a corporation that has dissolved or ceased to exist with no assets remaining. c. The taxpayer is retired because of age or total disability (as described in rule 701—104.12(425)) with income and assets such that it would cause the taxpayer undue financial hardship if the department enforced collection of past due taxes. The director may require other evidence to determine when collection of tax would be a hardship on a taxpayer. d. The taxpayer has unpaid tax amounting to less than $50. e. The taxpayer cannot be found, after diligent inquiry, and has no property upon which the lien can attach. f. The taxpayer is insolvent with no property, real or personal, upon which the lien can attach. These rules are intended to implement Iowa Code section 422.26.

ITEM 2. Rescind 701—Chapter 21 and adopt the following new chapter in lieu thereof: CHAPTER 21FEDERAL OFFSET FOR IOWA INCOME TAX OBLIGATIONS[Prior to 11/2/22, see Revenue Department[701] Ch 150]

701—21.1(421,26USC6402) Definitions. The following definitions are applicable to the federal offset program: "Assessment" means the determination of a past due tax obligation and includes self-assessments. An assessment includes the Iowa income tax, interest, penalties, fees or other charges associated with the past due legally enforceable Iowa income tax obligation. "Department,” “state of Iowa,” “Iowa" "the state" means the Iowa department of revenue. "Director" means the director of the Iowa department of revenue or the director’s authorized representative. "Overpayment" means a federal tax refund due and owing to a person or persons. "Past due legally enforceable Iowa income tax obligation" means a debt defined in 26 U.S.C. 6402(e)(5). "Resident of Iowa" means any person with a federal overpayment for the year in which Iowa seeks offset and such person has an Iowa address listed on that person’s federal return for the tax period of overpayment. "Secretary" means the Secretary of the Treasury for the federal government. "State income tax obligation" "Iowa income tax obligation" is intended to cover all Iowa income taxes. This term includes all local income taxes administered by the Iowa department of revenue or determined to be a “state income tax” under Iowa law. Such taxes may include but are not limited to individual income tax, income surtax, fiduciary income tax, withholding tax, or corporate income tax, and penalties, interest, fines, judgments, or court costs relating to such tax obligations. "Tax refund offset" means withholding or reducing, in whole or in part, a federal tax refund payment by an amount necessary to satisfy a past due legally enforceable state income tax obligation owed by the payee (taxpayer) of the tax refund payment. This chapter only involves the offset of tax refund payments under 26 U.S.C. 6402(e); it does not cover the offset of federal payments other than tax refund payments for the collection of past due legally enforceable state income tax obligations. "Tax refund payment" means the amount to be refunded to a taxpayer by the federal government after the Internal Revenue Service (IRS) has applied the taxpayer’s overpayment to the taxpayer’s past due tax liabilities in accordance with 26 U.S.C. 6402(a) and 26 CFR 301.6402-3(a)(6).

701—21.2(421,26USC6402) Prerequisites for requesting a federal offset. The following requirements must be met before the state can request an offset of a federal overpayment against an Iowa income tax obligation: 21.2(1) The state must have made written demand on the taxpayer to obtain payment of the state income tax obligation for which the request for offset is being submitted. 21.2(2) Pre-offset notice. At least 60 days prior to requesting the offset of a taxpayer’s federal overpayment for an Iowa income tax obligation, the state of Iowa must provide notice by certified mail, return receipt requested, to the person owing the Iowa income tax liability. This notice must include information as required by 26 U.S.C. 6402 and 31 CFR 285.8. 21.2(3) The state must consider any evidence presented by the person owing the obligation and determine whether the amount or amounts are past due and legally enforceable. 21.2(4) Additional pre-offset notices. The department must provide a taxpayer with an additional pre-offset notice if the amount of the obligation to be subject to offset is increased due to a new assessment. However, a new pre-offset notice is not required if there is an increase in the amount to be offset due to accrued interest, penalties or other charges associated with an Iowa income tax obligation in which notice has previously been given. 21.2(5) Before offset of the federal refund can be requested by the state of Iowa, the person’s Iowa income tax liability must be at least $25, unless otherwise provided based on the discretion of the department and the Secretary. If an individual owes more than one Iowa income tax obligation, the minimum amount will be applied to the aggregate amounts of such obligations owed to Iowa. 21.2(6) Only residents of Iowa are subject to offsets under these rules.

701—21.3(421,26USC6402) Submission of evidence. A taxpayer may challenge the offset by submitting evidence that all or part of the debt is not past due or not legally enforceable. The challenge must be postmarked or received within 60 days of the date of the pre-offset notice in the manner described in the pre-offset notice.

701—21.4(421,26USC6402) Procedure after submission of evidence. Following timely receipt of evidence by the department from the taxpayer, the department will notify the taxpayer whether the evidence submitted is sufficient to terminate the intended offset. If the department determines that the evidence is sufficient, the procedure to initiate the federal offset shall be terminated for that obligation and the taxpayer’s record of Iowa income tax obligation for that particular obligation shall be adjusted accordingly. However, if the department determines that the evidence is insufficient to show that the amount or amounts at issue are not, in whole or in part, a past due and legally enforceable income tax obligation, the department must notify the taxpayer of the decision. The challenge of an offset under these rules is subject to judicial review under Iowa Code section 17A.19 as other agency action.In cases in which a taxpayer claims immunity from state taxation due to being an enrolled member of an Indian tribe who lives on that member’s reservation and derives all of that member’s income from that reservation, the taxpayer may refer to 31 CFR 285.8(c)(3)(ii) for additional information. These rules are intended to implement Iowa Code chapter 421 and 26 U.S.C. 6402(e) et seq.

ITEM 3. Rescind 701—Chapter 22 and adopt the following new chapter in lieu thereof: CHAPTER 22COLLECTION OF DEBTS OWED THE STATE OF IOWA OR A STATE AGENCY[Prior to 11/2/22, see Revenue Department[701] Ch 151]

701—22.1(421) Definitions. For purposes of this chapter, the following definitions shall govern: "Centralized collections unit" means the unit within the department charged with collecting debt for the department and other entities pursuant to Iowa Code section 421.17(27) or any other Iowa statute. "Debtor" means any person having a delinquent account, charge, fee, loan, or other indebtedness due the state of Iowa or any state agency. "Department" means the Iowa department of revenue. "Director" means the director of revenue or the director’s authorized representative. "Liability" "debt" means any liquidated sum due and owing to the state of Iowa or any state agency that has accrued through contract, subrogation, tort, operation of law, or any legal theory regardless of whether there is an outstanding judgment for that sum. "Person" "entity" means individual, corporation, business trust, estate, trust, partnership or association, limited liability company, or any other legal entity, but does not include a state agency. "State agency" "agency" includes but is not limited to entities listed in Iowa Code section 421.17(27)“a.”

701—22.2(421) Participation guidelines. The department may collect on behalf of a public agency at the department’s sole discretion. The department may require that a public agency enter into an agreement for collection with the department prior to collecting for the public agency. Agreements will be signed by the director or another staff member of the department designated by the director.

701—22.3(421) Duties of the agency. A public agency seeking the use of the centralized collections unit shall have the following duties regarding the department and debtors. 22.3(1) Notification to the department. The public agency must provide a list of debtors to the department of revenue. This list must be in a format and type prescribed by the department and include information relevant to the identification of the debtor and the source and amount of the debt. The public agency shall terminate all collection activities once notification is given to the department. 22.3(2) Change in status of debt. A public agency that has provided liability information to the department of revenue must notify the department immediately of any change in the status of a debt. This notification shall be made no later than ten calendar days from the occurrence of the change. Change in status may come from payment of the debt or liability, invalidation of the liability, alternate payment arrangements with the debtor, bankruptcy, or other factors. These rules are intended to implement Iowa Code sections 421.17, 422.20, and 422.72.

ITEM 4. Rescind 701—Chapter 23 and adopt the following new chapter in lieu thereof: CHAPTER 23DEBT COLLECTION AND SELLING OF PROPERTY TO COLLECT DELINQUENT DEBTS[Prior to 11/2/22, see Revenue Department[701] Ch 152]

701—23.1(421,422,626,642) Definitions. "Delinquent debtor" means an individual, corporation, limited liability company, business trust, estate, trust, partnership, or any other legal entity that owes a delinquent liability, or unpaid taxes to the state or a liability that is collectible by the state. "Department" means the Iowa department of revenue. "Director" means the director of revenue or the director’s authorized representative. "Property" means any property, including but not limited to real property, tangible property, and intangible property. “Property” includes but is not limited to a homestead. "State" means the state of Iowa. This rule is intended to implement Iowa Code sections 421.17 and 422.26 and chapters 626 and 642.

701—23.2(421,422,626,642) Sale of property. Property may be seized and sold to satisfy unpaid taxes, delinquent liabilities owed to the state, and liabilities collected by the state. A homestead may be sold to satisfy delinquent taxes collected under Iowa Code section 422.26 and any other similar section. However, a homestead may not be sold for collection of any other liability owed to or collected by the state other than taxes unless specifically authorized by statute. This rule is intended to implement Iowa Code sections 421.17 and 422.26 and chapters 626 and 642.

ITEM 5. Rescind 701—Chapter 24 and adopt the following new chapter in lieu thereof: CHAPTER 24LICENSE SANCTIONS FOR COLLECTION OF DEBTS OWED THE STATE OF IOWA OR A STATE AGENCY[Prior to 11/2/22, see Revenue Department[701] Ch 153]

701—24.1(272D) Definitions. For purposes of this chapter, the following terms shall have the same definitions as Iowa Code section 272D.1:

Certificate of noncompliance.
Liability.
License.
Licensee.
Licensing authority.
Obligor.
Person.
Unit.
Withdrawal of a certificate of noncompliance.

701—24.2(272D) Notice to person of potential sanction of license. Before issuing a certificate of noncompliance, the unit must send a notice to a person in accordance with Iowa Code section 272D.3.

701—24.3(272D) Challenges. A person may challenge the unit’s issuance of a certificate of noncompliance by requesting a conference. Upon receiving a timely written request for a conference, the unit shall grant the person a stay of the issuance of a certificate of noncompliance. The stay shall remain in effect pending the decision of the unit under Iowa Code section 272D.6(1). 24.3(1) Conference. The person may request a conference with the unit to challenge the unit’s issuance of a certificate of noncompliance following the mailing of the notice of potential license sanction or at any time after a licensing authority serves notice of suspension, revocation, denial of issuance, or nonrenewal of a license. The request for a conference shall be made in writing to the unit. If the conference is requested pursuant to and after the unit’s mailing of a notice of potential license sanction under rule 701—24.2(272D), the request must be received by the unit within 20 days following the mailing or service of that notice. 24.3(2) Notification. The unit shall notify the person of the date, time, and location of the conference by regular mail, with the date of the conference to be no earlier than ten days following the unit’s issuance of the notice of the conference. If the person fails to appear at the conference, the unit shall issue a certificate of noncompliance. 24.3(3) Location. The conference will be conducted by telephone unless otherwise indicated in the written notification by the department.

701—24.4(272D) Issuance of certificate of noncompliance. 24.4(1) If the person fails to appear at the conference, the unit shall issue a certificate of noncompliance. If the person does not timely request a conference or pay the amount of liability owed within 20 days of the date the notice was postmarked, the unit shall issue a certificate of noncompliance. 24.4(2) However, the unit will not issue a certificate of noncompliance if: a. The unit finds a mistake in the identity of the person; b. The unit finds a mistake in determining the amount of the liability; c. The unit determines the amount of the liability is less than $1,000; d. The obligor pays the amount due or enters into an acceptable payment plan; e. The obligor is in bankruptcy; or f. The unit finds additional time is required for the person to comply.

701—24.5(272D) Written agreements. The obligor and the unit may enter into a written agreement for payment of the liability owed pursuant to Iowa Code section 272D.5.

701—24.6(272D) Decision of the unit. 24.6(1) If the unit mails a notice to a person and the person requests a conference, the unit shall issue a written decision if any of the conditions in Iowa Code section 272D.6(1) exist. 24.6(2) Mailing of decision. The unit shall send a copy of the written decision as described in Iowa Code section 272D.6(2).

701—24.7(272D) Certificate of noncompliance to licensing authority. 24.7(1) The unit shall issue a certificate of noncompliance to any appropriate licensing authority as required by Iowa Code section 272D.7. 24.7(2) The suspension, revocation, or denial shall be effective no sooner than 30 days following the date of notice to the person.

701—24.8(272D) Requirements of the licensing authority. Licensing authorities shall observe the requirements and procedures of Iowa Code section 272D.8.

701—24.9(272D) District court hearing. A person may file an application for review of the decision by the unit or following issuance of notice by the licensing authority with the district court as described in Iowa Code section 272D.9. Actions initiated by the unit under this chapter shall not be subject to contested case proceedings or further review pursuant to Iowa Code chapter 17A, and any resulting court hearing shall be an original hearing before the district court. These rules are intended to implement Iowa Code sections 272D.2, 272D.5, and 272D.9.

ITEM 6. Rescind 701—Chapter 25 and adopt the following new chapter in lieu thereof: CHAPTER 25CHALLENGES TO ADMINISTRATIVE LEVIES[Prior to 11/2/22, see Revenue Department[701] Ch 154]

701—25.1(421) Challenges to administrative levies. A challenge to an administrative levy can only be made by an obligor or an account holder of interest. A challenge to an administrative levy will be reviewed by the centralized collections unit of the department. This review is not subject to the provisions of Iowa Code chapter 17A. An account holder of interest means a person named on the account.

701—25.2(421) Form and time of challenge. The obligor or an account holder of interest must submit a written challenge to an administrative levy within ten days of the date of the notice. Challenges must be submitted to the department in the manner described on the notice furnished by the department to the obligor or account holder of interest.

701—25.3(421) Issues that may be raised. The issues raised by the challenging party, which are limited to a mistake of fact, may include but are not limited to:

The challenging party has the same name as the obligor but is not the obligor.
The challenging party does not have an interest in the account that is being seized.
The amount listed in the notice to the obligor is greater than the amount actually owed.

These rules are intended to implement Iowa Code sections 421.17 and 421.17A.

ITEM 7. Adopt the following new 701—Chapter 27: CHAPTER 27SUBPOENA OF RECORDS FROM UTILITY COMPANIES AND PUBLICATION OF NAMES OF DEBTORS

701—27.1(421) Subpoena of records from public or private utility company. The director may subpoena records of a public or private utility company to the extent permitted by Iowa Code section 421.17(32). 27.1(1) Definitions. "Reasonable efforts," for purposes of Iowa Code section 421.17(32), will be considered complete when the department has attempted to reach the individual using the individual’s last-known address as determined pursuant to subrule 7.33(2). "Utility" means the same as “public or private utility company” as defined in Iowa Code section 421.17(32)“f.” 27.1(2) Procedure for issuing a subpoena; data transfer. a. The department shall submit the subpoena to the utility’s designated recipient on or before the date a secure data file is submitted for processing. The subpoena will include the director’s authority to make the request, the name of the file submitted for processing, the information to be provided for each individual, the expected response date, and the department’s contact information. The subpoena must be signed by the director. The data file provided to the utility by the department will include social security numbers, names, and last-known addresses in the mutually agreed-upon format. b. Within 30 days of receiving the department’s data file, the utility will process and return the data file to the department. 27.1(3) Confidentiality. The utility must keep confidential all records received from the department. After the department has received the requested information from the utility, the utility must delete the data files the utility received in a secure manner. The department must keep confidential all records received from the utility in compliance with all applicable state and federal laws regarding individual privacy and the privacy rights of public and private utility companies. This rule is intended to implement Iowa Code sections 421.17(32), 422.20, and 422.72.

701—27.2(421) List for publication. 27.2(1) The director may compile and make available for publication a list of names, with last-known addresses and amounts of indebtedness owed to or being collected by the state if the indebtedness is subject to the centralized debt collection procedure established in Iowa Code section 421.17(27) and 421.17(34). The director may determine when to compile the list. 27.2(2) Names selected for release for publication shall be based on the records of the centralized collections unit. The director will not include the names of persons who owe less than $100 or the threshold amounts determined by the director. The threshold amounts may vary by the debt types being collected by the centralized collections unit. The director may withhold names from publication if, in the director’s opinion, publication would not assist in the collection of the debt. 27.2(3) The director will not release for publication names of persons who have entered into a payment agreement with the centralized collections unit to pay the outstanding debt and are current in liquidating the debt based on the payment agreement. Upon entering a payment agreement with the centralized collections unit, the name of the party will be removed from publication within 60 days if the person is current in paying on the payment plan. This rule does not prevent the department from disclosing information under a provision of law other than Iowa Code section 421.17(27)“i.”

701—27.3(421) Release of information. The director may release the information, as the director deems necessary, as follows:

The director may issue an announcement describing the manner in which a copy of the list of names for publication may be obtained. The director will make the list available in an electronic medium of the director’s choice.
The director may release to credit reporting agencies the names selected for release for publication upon request. The names are to be released in the same electronic medium as the names are released for publication.

These rules are intended to implement Iowa Code section 421.17.ARC 7144CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to definitions and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 200, “Definitions,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.1, 423.2, 423.3, 423.6 and 423.45.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 200, which consists solely of rule 701—200.1(423) and provides definitions that apply across other sales tax rules chapters. These terms are used throughout other Iowa Administrative Code chapters, but are not defined in statute. The Department proposes revisions to the rule to remove portions of the rule that the Department determined are unnecessary and duplicative of statutory language. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 200 and adopt the following new chapter in lieu thereof: CHAPTER 200TITLE IIISALES, USE, AND EXCISE TAXDEFINITIONS[Prior to 9/7/22, see Revenue Department[701] Ch 211]

701—200.1(423) Definitions. The definitions set out in this chapter are applicable wherever the terms they define appear in this title unless the context indicates otherwise. "Agricultural production" is limited to what would ordinarily be considered a farming operation undertaken for profit. The term “agricultural production” refers to the raising of crops or livestock for market on an acreage. Included within the meaning of the phrase “agricultural production” is any feedlot operation whether or not the land upon which a feedlot operation is located is used to grow crops to feed the livestock in the feedlot and regardless of whether or not the livestock fed are owned by persons conducting the feedlot operation, and operations growing and raising hybrid seed corn or other seed for sale to nurseries, ranches, orchards, and dairies. “Agricultural production” includes the raising of flowering, ornamental, or vegetable plants in commercial greenhouses or elsewhere for sale in the ordinary course of business. “Agricultural production” also includes any kind of aquaculture, silviculture, commercial greenhouses, and raising catfish. Beekeeping and the raising of mink, other nondomesticated furbearing animals, and nondomesticated fowl (other than ostriches, rheas, and emus) continue to be excluded from the term “agricultural production.” The above list of exclusions and inclusions within the term “agricultural production” is not exhaustive. “Agricultural products” includes flowering, ornamental, or vegetable plants and those products of aquaculture and silviculture. "Aquaculture" means the cultivation of aquatic animals and plants, including fish, shellfish, and seaweed, in natural or controlled marine or freshwater environments. "Chemical" means a substance that is primarily used for producing a chemical effect. A chemical effect results from a chemical process wherein the number and kind of atoms in a molecule are changed in form (e.g., where oxygen and hydrogen are combined to make water). A chemical process is distinct from a physical process wherein only the state of matter changes (e.g., where water is frozen into ice or heated into steam). "Domesticated fowl" means any domesticated bird raised as a source of food, either eggs or meat. “Domesticated fowl” includes, but is not limited to, chickens, ducks, turkeys, pigeons, ostriches, rheas, and emus that are raised for meat rather than for racing or as pets. Excluded from the meaning of “domesticated fowl” are nondomesticated birds, such as pheasants, raised for meat or any other purpose. "Livestock" means domestic animals that are raised on a farm as a source of food or clothing. “Livestock” includes cattle, sheep, hogs, goats, chickens, ducks, turkeys, ostriches, rheas, emus, bison, and farm deer. “Farm deer” means the same as defined in Iowa Code section 170.1 and commonly includes animals belonging to the Cervidae family, such as fallow deer, red deer or elk and sika. However, “farm deer” does not include unmarked free-ranging elk. Fish and any other animals that are products of aquaculture are considered to be “livestock” as well.Excluded from the term “livestock” are horses, mules, other draft animals, dogs, cats, and other pets. Also excluded from the term “livestock” are mink, bees, or other nondomesticated animals even if raised in captivity and even if raised as a source of food or clothing. Also excluded from “livestock” is any animal raised for racing. "Plants" means fungi such as mushrooms and crops commonly grown in this state such as corn, soybeans, oats, hay, alfalfa hay, wheat, sorghum, and rye. Also included within the meaning of the term “plants” are flowers, shrubs, and fruit trees. Excluded from the meaning of the term “plants” are products of silviculture, such as trees raised for Christmas trees and any trees raised to be harvested for wood. "Reagent" means a substance used for various purposes (i.e., in detecting, examining, or measuring other substances; in preparing materials; in developing photographs) because it takes part in one or more chemical reactions or biological processes. A reagent is also a substance used to convert one substance into another by means of the reaction that it causes. To be a reagent for purposes of the exemption, a substance must be primarily used as a reagent. "Silviculture" means the establishment, growth, care, and cultivation of trees. “Silvicultural activities” includes logging. “Silvicultural products” includes trees raised and offered for sale for Christmas trees and any trees raised to be harvested for wood. "Solvent" means a substance in which another substance can be dissolved and that is primarily used for that purpose. "Sorbent" means a solid material, often in a powder or granular form, that acts to retain another substance, usually on the sorbent’s surface, thereby removing the other substance from the gas or liquid phase. The sorbent and the second material bond together at the molecular or atomic scale via physiochemical interactions. A substance is not a sorbent based on an ability to absorb heat or thermal energy. "Tax" means the tax imposed upon retail sales or use of tangible personal property, specified digital products, or taxable services. This rule is intended to implement Iowa Code chapter 423.ARC 7171CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to sales and use tax permits and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 201, “Sales and Use Tax Permits,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 423.25, 423.36 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 252J.7, 421.17, 423.2, 423.36 and 423.40.Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 201 and adopt a new Chapter 201 related to sales and use tax permits. Chapter 201 describes the requirements surrounding sales and use tax permits. The rules in this chapter are intended to help the public understand how to obtain a permit and what is required to obtain one. The citation in subrule 201.2(3) to 701—Chapter 19 refers to a chapter that was recently adopted in a separate rulemaking, ARC 7101C. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 201 and adopt the following new chapter in lieu thereof: CHAPTER 201SALES AND USE TAX PERMITS[Prior to 7/13/22, see 701—Chapter 13]

701—201.1(423) Permit required. 201.1(1) Permit requirement. A person shall not make taxable sales of tangible property, specified digital products, or services until the person has received a permit from the department. 201.1(2) Purchases subject to use tax. A person liable for use tax under Iowa Code section 423.34 is required to file a sales and use tax return with the department, reporting and remitting use tax on all property or taxable service purchased for use in Iowa during the tax period covered by the return, unless the seller from whom the purchase is made is registered with the department and has collected sales or use tax on the purchase. 201.1(3) Sales subject to use tax. A remote seller as defined in rule 701—207.1(423) making sales into Iowa or sales of tangible personal property, specified digital products, or taxable services without meeting or exceeding the sales threshold as defined in rule 701—207.1(423) may register for a sales and use tax permit to collect use tax on such sales. The person collecting use tax on these sales shall report these sales as sales subject to use tax on the sales and use tax return. Rule 701—207.6(423) contains additional information about sales tax collection obligations for out-of-state persons. 201.1(4) Infrequent purchases. A person who does not regularly make purchases subject to use tax but needs to remit tax may use the Iowa non-permit use tax return available via GovConnectIowa or by other means as prescribed by the department. If a person owes less than $1,200 per year in use tax, the person does not need to obtain a permit and may file the Iowa non-permit use tax return. This rule is intended to implement Iowa Code section 423.36.

701—201.2(423) Application for permit. 201.2(1) Permit application. a. An application for a sales and use tax permit shall be made via GovConnectIowa or by other means prescribed by the department, and the applicant shall furnish all information requested on such form. An application for a permit for a business operating under a trade name shall state the trade name, as well as the individual owner’s name, in the case of a sole proprietorship by an individual, or the trade name and the name of all partners in the case of a partnership. The application shall state the date when the applicant will begin making taxable sales from the location for which the application is made. b. There is no charge for a sales and use tax permit. If a person makes retail sales from more than one location, each location from which taxable sales of tangible personal property, specified digital products, or services will occur shall be required to hold a permit. 201.2(2) Signatures required. a. Applications.The application shall be signed by the owner in the case of a sole proprietorship or a single-member LLC, or otherwise by an individual authorized to act on behalf of the business under rule 701—7.6(17A,22,421,422). b. Electronic applications.For electronically transmitted applications, the signature must comply with rule 701—8.2(17A,421) unless more specified requirements are described on the form. 201.2(3) Retroactive permits and returns for prior periods. A person may indicate on a permit application that the effective date of the permit is in a prior tax period. Returns must be filed for all prior tax periods dating back to the effective date of the permit. Penalty and interest applies pursuant to Iowa Code sections 421.27 and 423.40. Submission of a retroactive permit application makes a person ineligible for a voluntary disclosure agreement for those prior tax periods and does not prohibit the department from enforcing provisions of Iowa Code section 423.40 if applicable. 701—Chapter 19 contains more information about the voluntary disclosure program. 201.2(4) Address only required for retail sales locations. If a person is subject to sales tax and has physical presence or economic presence and is not making sales exclusively through a marketplace facilitator, the person shall provide a location for its sales and use tax permit. 201.2(5) Seasonal filers. A seasonal business retailer with sales in up to four months during the calendar year may register to file a return and remit tax as a seasonal filer. The retailer will be expected to only file returns for the specific months in which the retailer conducts business as indicated by the retailer upon registration. The retailer will not be expected to file a return or remit tax for the other months of the year. Like any other retailer, the seasonal retailer must still notify the department when it ceases operation permanently; if it does not, it will receive a nonfiler notice from the department. This rule is intended to implement Iowa Code section 423.36.

701—201.3(423) Retailers selling nontaxable goods and services. Persons regularly engaged in selling tangible personal property or a specified digital product that is exempt from tax, making nontaxable transactions, or performing a service that is not enumerated in Iowa Code section 423.2 shall not be required to obtain a sales tax permit. However, if the retailer makes taxable sales or provides taxable services, the retailer will be required to hold a permit under the provisions of this chapter and Iowa Code section 423.36. This rule is intended to implement Iowa Code section 423.36.

701—201.4(423) Obtaining a new permit after voluntarily canceling a prior permit. A person who previously held and canceled a permit who wishes to re-engage in business shall apply to the department for a new permit and file any previously unfiled tax returns. Upon receipt of the proper clearance for previous tax returns, a new permit may be issued if the relevant persons described in Iowa Code section 423.36 are not substantially delinquent in paying any tax due that is administered by the department. This rule is intended to implement Iowa Code section 423.36.

701—201.5(423) Permit not transferable—sale of business. If a permit is held by a single-member LLC or a sole proprietor, the permit is not transferable. An entity that is not a single-member LLC or a sole proprietorship may, upon the sale of the business, transfer its permit to a new owner that is not a single-member LLC or a sole proprietorship. This rule is intended to implement Iowa Code section 423.36.

701—201.6(423) Change of location. A business changing its location shall cancel its original permit and apply for a new permit. If a business does not have a stationary location, the business shall report its mailing address as its location. This rule is intended to implement Iowa Code section 423.36.

701—201.7(423) Change of ownership or business organization. 201.7(1) Change of business entity. A retailer changing its business entity shall apply for a new permit under the name of the new entity. This includes but is not limited to such entity changes as proprietorship to partnership, partnership to corporation, or any combination thereof. 201.7(2) Change of ownership. A business that changes ownership shall cancel its permit and reapply with the new federal employer identification number (FEIN). This rule is intended to implement Iowa Code section 423.36.

701—201.8(423) Change of legal or operating name of a business. 201.8(1) Change to legal name. A retailer changing its legal name but maintaining its ownership may continue to use its existing sales and use tax permit. The retailer shall notify the department of the change in legal name and shall provide any form of documentation requested by the department proving the change in name before the department will change the legal name for the permit. 201.8(2) Change to operating name. A retailer changing its operating, or “doing business as,” name may continue using its existing sales and use tax permit. The retailer shall notify the department of the change in operating name. The department may require any documentation to update the operating name associated with the permit. This rule is intended to implement Iowa Code section 423.36.

701—201.9(423) Trustees, receivers, executors and administrators. By virtue of their appointment, trustees, receivers, executors and administrators who continue to operate, manage or control a business involving the sale of tangible personal property, specified digital products, or taxable services or engage in liquidating the assets of a business by means of sales made in the usual course of trade shall collect and remit tax on inventory and non-inventory items. A permit of a ward, decedent, cestui que trust, bankrupt, assignor or debtor for whom a receiver has been appointed, which is valid at the time a fiduciary relation is created, shall continue to be a valid permit for the fiduciary to continue the business for a reasonable time or to close out the business for the purpose of settling an estate or terminating or liquidating a trust or receivership. This rule is intended to implement Iowa Code section 423.36.

701—201.10(423) Substantially delinquent tax—denial of permit. 201.10(1) Substantial delinquency factors. For purposes of Iowa Code section 423.36, the department will consider the following nonexclusive factors when considering whether an applicant is substantially delinquent in paying a tax such that a permit application will be denied:

The amount of tax delinquent.
The number of filing periods for which a tax remains due and unpaid.
The length of time a tax has been unpaid.
The amount of tax, interest, or penalty owed in relation to the applicant’s total financial resources.
Additional factors, which may be considered based on the specific facts and circumstances of each application.

201.10(2) Child support noncompliance. The department will deny a permit to any applicant or permittee who is an individual if the department has received a certificate of noncompliance from the child support recovery unit in regard to the individual, until the unit furnishes the department with a withdrawal of the certificate of noncompliance. The department will not deny a permit to any applicant that is an entity if the department has received a certificate of noncompliance from the child support recovery unit in regard to an individual who is an owner or officer of the entity. This rule is intended to implement Iowa Code section 252J.7 and 423.36.

701—201.11(423) Substantially delinquent tax—revocation of permit. 201.11(1) Substantial delinquency of tax. The department may revoke a permit if the permit holder has become substantially delinquent in paying any tax that is administered by the department or the interest or penalty on the tax. The department will consider the nonexclusive factors set forth in subrule 201.10(1) to determine whether there is a substantial delinquency. 201.11(2) Child support noncompliance. The holder of a revoked permit will not be permitted to obtain a new permit if the department has received a certificate of noncompliance from the child support recovery unit in regard to the permit holder who is an individual requesting reinstatement, until the unit furnishes the department with a withdrawal of the certificate of noncompliance. The department will not revoke a permit from an entity if the department has received a certificate of noncompliance from the child support recovery unit in regard to an individual who is an owner or officer of the entity. This rule is intended to implement Iowa Code section 423.36.

701—201.12(423) Obtaining a new permit after revocation. 201.12(1) If a taxpayer’s permit is revoked, the taxpayer may apply for a new permit. The new permit application will be granted or denied based on terms and conditions set forth by the department. Terms and conditions include payment of any tax liability that may be due to the department. 201.12(2) Upon revocation of a sales and use tax permit, the taxpayer will be required to pay all delinquent tax liabilities, to file returns, and to refrain from taxable occurrences under Iowa Code section 423.2 prior to the issuance of a new sales tax permit, and the director may require the taxpayer to post a bond. 201.12(3) The director may impose a waiting period during which the person must refrain from taxable occurrences pursuant to the penalties of Iowa Code section 423.40, not to exceed 90 days, to issue a new permit after a revocation. The department may require a sworn affidavit, under penalty of perjury, stating that the person has fulfilled all requirements of said order of revocation and stating the dates on which the person refrained from taxable occurrences. 201.12(4) Each of the following situations will be considered one offense, for the purpose of determining the waiting period to reinstate a revoked permit or issue a new permit after a revocation, unless otherwise noted: a. Failure to post a bond as required. b. Failure to file a return timely. c. Failure to pay tax timely (including dishonored checks, failure to pay, and late payments). d. Failure to file a return and pay tax shown on the return timely (counts as two offenses). 201.12(5) The administrative law judge or director of revenue may order a waiting period after the revocation not to exceed: a. Five days for one through five offenses. b. Seven days for six through seven offenses. c. Ten days for eight through nine offenses. d. Thirty days for ten offenses or more. 201.12(6) The administrative law judge or director of revenue may order a waiting period not to exceed: a. Forty-five days if the second revocation occurs within 24 months of the first revocation. b. Sixty days if the second revocation occurs within 18 months of the first revocation. c. Ninety days if the second revocation occurs within 12 months of the first revocation. d. Ninety days if the third revocation occurs within 36 months of the second revocation. 201.12(7) A new permit will not be issued following revocation if the department has received a certificate of noncompliance from the child support recovery unit in regard to the permit holder until the unit furnishes the department with a withdrawal of the certificate of noncompliance. The department will not deny a permit to any applicant that is an entity if the department has received a certificate of noncompliance from the child support recovery unit in regard to an individual who is an owner or officer of the entity. This rule is intended to implement Iowa Code sections 423.2, 423.36, and 423.40.

701—201.13(423) Administrative cancellation of permit. The department may cancel a permit upon verification by the department that the permit is no longer in use. This rule is intended to implement Iowa Code section 421.17(37).ARC 7145CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to elements included in and excluded from a taxable sale and sales price and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 203, “Elements Included in and Excluded From a Taxable Sale and Sales Price,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.1, 423.2, 423.3 and 423.24.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 203. The Department proposes revisions to the chapter to remove portions of the rules that the Department determined are obsolete, unnecessary, or duplicative of statutory language. The chapter describes the Department’s interpretation of the underlying statutes to help the public understand elements included in and excluded from a taxable sale. These rules reduce uncertainty about what constitutes sales price. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 203 and adopt the following new chapter in lieu thereof: CHAPTER 203ELEMENTS INCLUDED IN AND EXCLUDED FROM A TAXABLE SALE AND SALES PRICE[Prior to 9/7/22, see Revenue Department[701] Ch 212]

701—203.1(423) Tax not to be included in price. When a retailer prices an article for retail sale and displays or advertises the same to the public with that price marked, the price so marked or advertised shall include only the sales price of such article unless it is stated on the price tag that the price includes tax.This rule does not prohibit advertising or displaying the sale price plus tax or the price including tax, as shown in the following examples:“This dress—$10 plus tax” or “This dress—$10.70 including tax.”When a retailer conspicuously advertises in such manner and position so that it may be readily seen and read by the public that the price “includes tax,” the retailer will be allowed to determine sales price by dividing the total of such retailer’s price which includes tax by the applicable percentage. For example, a retailer in a jurisdiction that has the state sales tax rate of 6 percent plus a 1 percent local option tax would use a factor of 107 percent.However, where an invoice is given to the purchaser as a part of the sale, either the invoice must show the tax separately from the retailer’s price or it must be stated on each invoice that tax is included in the retailer’s price. If the invoice states “tax included,” the seller may determine sales price by the applicable percent method described above. It shall be the responsibility of the retailer that uses or has used the applicable percent method for reporting to provide proof that the retailer has complied with the method of advertising or displaying the retailer’s price, as described above. This rule is intended to implement Iowa Code sections 423.14 and 423.24.

701—203.2(423) Finance charge. Interest or other types of additional charges that result from selling on credit or under installment contracts are not subject to sales tax when such charges are separately stated and when such charges are in addition to an established cash sales price. However, if finance charges are not separately stated and a sale is made for a lump sum amount, the tax is due on the total retailer’s price.When interest and other types of additional charges are added as a condition of a sale in order to obtain title rather than as a charge to obtain credit where title to goods has previously passed, such charges will be subject to tax even though they may be separately stated. More information is contained in rule 701—213.3(423), relating to conditional sales contracts. This rule is intended to implement Iowa Code section 423.1(51).

701—203.3(423) Retailers’ discounts, trade discounts, rebates and coupons. 203.3(1) Retailers’ discounts. A retailer’s discount reduces the retailer’s price of a property or service with the remainder being the actual sales price of the goods charged in the account. The purchaser entitled to the discount will never owe the retailer’s price as a debt, the debt being the sales price after the agreed discount has been deducted. The word “discount” means “to buy at a reduction.” Any discount a retailer allows that reduces a retailer’s price to a sales price is a proper deduction when collecting and reporting tax. This is not the case when the retailer offers a discount to a purchaser but bills and collects tax on the retailer’s price rather than on the sales price. The customer must receive the benefit of the discount, for sales tax purposes, in order for the retailer to exclude the discount from the sales price when collecting and reporting tax.Certain retailers bill their customers on a gross and net basis, with the difference considered to be a discount for payment purposes. When a customer does not resolve the bill within the net payment period, tax shall apply on the gross charge shown on the billing, the gross charge having become the taxable sales price by virtue of the customer’s failure to take the action, which allows the discount to be taken. 203.3(2) Rebates. A “rebate” is a return of part of an amount paid for a product. Manufacturers’ rebates are not discounts and cannot be used to reduce the sales price received from a sale or to reduce the purchase price of a product. This subrule applies even though the rebate is used by the retailer to reduce the retailer’s price to a sales price or is used by the purchaser as a down payment. The rebate is considered a transaction between the manufacturer and the purchaser. 203.3(3) Coupons. Coupons issued by the producer of a product are not discounts and cannot be used as an abatement from the retailer’s price of the product. Coupons issued by the retailer that actually reduce the price of the product to the purchaser are treated as a discount as provided in subrule 203.3(1). 203.3(4) Trade discounts. A “trade discount” is a discount from a seller’s list price that is offered to a class or category of customer, e.g., retailers or wholesalers. Trade discounts given or allowed by manufacturers, distributors, or wholesalers to retailers or by manufacturers or distributors to wholesalers and payments made by manufacturers, distributors, or wholesalers directly to retailers or by manufacturers or distributors to wholesalers to reduce the sales price of a manufacturer’s, distributor’s, or wholesaler’s product (e.g., cigarettes) or to promote the sale or recognition of the manufacturer’s, distributor’s, or wholesaler’s product are not to be included in any taxable sales price. This subrule does not apply to coupons issued by manufacturers, distributors, or wholesalers to consumers; more information is contained in subrule 203.3(3). This rule is intended to implement Iowa Code section 423.1(51).

701—203.4(423) Excise tax included in and excluded from sales price. 203.4(1) An excise tax that is not an Iowa sales or use tax may be excluded from the sales price or purchase price of the sale or use of property or taxable services only if all of the following conditions exist: a. The excise tax is imposed upon the identical sales price on which the Iowa sales tax is imposed or upon the purchase price that measures the amount of taxable use or upon a use identical to the Iowa taxable use and not upon some event or activity that precedes or occurs after the sale or use. b. The legal incidence of the excise tax falls upon the purchaser who is also responsible for payment of the Iowa sales tax. The purchaser must be obligated to pay the excise tax either directly to the government in question or to another person (e.g., the retailer) who acts as a collector of the tax. Gurley v. Rhoden, 421 U.S. 200, 95 S. Ct. 1605, 44 L.Ed.2d 110 (1975) contains a description of the circumstances under which the legal, as opposed to the economic, burden of an excise tax falls upon the purchaser. c. The name of the excise tax is specifically stated, and the amount of the excise tax is separately set out on the invoice, bill of sale, or another document that embodies a record of the sale. 203.4(2) The following federal excise taxes are to be included in the sales price upon which Iowa sales tax is to be paid for purposes of collecting Iowa sales tax: a. The federal gallonage taxes imposed by 26 U.S.C. Sections 5001, 5041, and 5051 on distilled spirits, wines, and beer. b. The tax imposed by 26 U.S.C. Section 5701 with regard to cigars, cigarettes, cigarette papers and tubes, smokeless tobacco, and pipe tobacco. c. The federal tax imposed under 26 U.S.C. Section 4081 on gasoline. 203.4(3) The following excise taxes are excluded from the amount of the sales price: a. The federal tax imposed by 26 U.S.C. Section 4251(a) on the communication services of local telephone service, toll telephone service, and teletypewriter exchange service. b. The federal tax imposed by 26 U.S.C. Section 4051 upon the first retail sale of automobile and truck chassis and bodies, truck trailer and semitrailer chassis and bodies and tractors of the kind chiefly used for highway transportation in combination with trailers or semitrailers. This rule is intended to implement Iowa Code section 423.1(51).

701—203.5(423) Trade-ins. 203.5(1) Trade-ins. a. When tangible personal property is traded toward the purchase price of other tangible personal property, the sales price shall be only that portion of the purchase price that is payable in money to the retailer if the conditions in paragraph 203.5(1)“b” are met. b. The tangible personal property is traded to a retailer, the property traded is the type normally sold in the regular course of the retailer’s business and either subparagraph 203.5(1)“b”(1) or 203.5(1)“b”(2) is true. (1) The tangible personal property traded to a retailer is intended by the retailer to be ultimately sold at retail; or (2) The tangible personal property traded to a retailer is intended to be used by the retailer or another in the remanufacturing of a like item.Several months later, Hometown Appliance sells the used refrigerator it received from Customer A to the local school district, which is exempt from sales tax on its purchase. The trade-in provision on the original transaction is still applicable because both conditions in paragraph 203.5(1)“b” and subparagraph 203.5(1)“b”(1) were met. The sale is “at retail,” even if the sales price is exempt from tax. 203.5(2) All the provisions of subrule 203.5(1) apply to the trade-in of vehicles subject to registration when the trade involves retailers of vehicles.When vehicles subject to registration are traded among persons who are not retailers of vehicles subject to registration, the conditions set forth in subrule 203.5(1) need not be met. The purchase price is only that portion of the purchase price represented by the difference between the total purchase price of the vehicle subject to registration acquired and the value of the vehicle subject to registration traded.This rule applies only when a vehicle is traded for tangible personal property, regardless of whether the transaction is between a retailer and a nonretailer or between two nonretailers. The vehicle traded in must be owned by the person(s) trading in the vehicle. It is presumed that the name or names indicated on the title of the vehicle dictate ownership of the vehicle as set forth in Iowa Code chapter 321. 203.5(3) Trade for services or specified digital products. The trade-in provisions referenced in Iowa Code section 423.1(51) and found in Iowa Code section 423.3(59) do not apply to taxable enumerated services or specified digital products. When taxable enumerated services or specified digital products are traded, the sales price would be determined based on the value of the service or specified digital products or other consideration. 203.5(4) Three-way trade-in transactions. In a three-way trade-in transaction, the agreement provides that a lessee sells to a third-party dealer a vehicle (or other tangible personal property) that the lessee owns. The lessor then purchases another vehicle from the third-party dealer at a reduced price and leases the vehicle to the lessee. The difference between the reduced sale price and retail price of the vehicle is not allowed as a trade-in on the vehicle for use tax purposes. This rule is intended to implement Iowa Code sections 423.1(51) and 423.3(59).

701—203.6(423) Installation charges when tangible personal property is sold at retail. When the sale of tangible personal property includes a charge for installation of the personal property sold, the current rate of tax shall be measured on the entire sales price from the sale. The installation charges would not be taxable if the installation service is not an enumerated service, and where a sales agreement exists, the installation charges are separately contracted. If the written contract contains no provisions separately itemizing such charges, tax is due on the full contract price with no deduction for installation charges, whether or not such installation charges are itemized separately on the invoice.If the installation services are enumerated services, the installation charges would not be taxable if (1) the services are exempt from tax (e.g., the services are performed on or connected with new construction, reconstruction, alteration, expansion or remodeling of a building or structure) or the services are rendered in connection with the installation of new industrial machinery or equipment, and (2) where a sales agreement exists, the installation charges are separately contracted. If the written contract contains no provisions separately itemizing such charges, tax is due on the full contract price with no deduction for installation charges, whether or not such installation charges are itemized separately on the invoice. If no written contract exists, the installation charges must be separately itemized on the invoice to be exempt from tax. More information is contained in rule 701—219.13(423). This rule is intended to implement Iowa Code section 423.1(51).

701—203.7(423) Service charge and gratuity. When the purchase of any food, beverage or meal automatically and invariably results in the inclusion of a mandatory service charge to the total price for such food, beverage or meal, the amounts so included shall be subject to tax. The term “service charge” means either a fixed percentage of the total price of or a charge for food, a beverage or a meal.The mandatory service charge shall be considered: (1) a required part of a transaction arising from a taxable sale and a contractual obligation of a purchaser to pay to a vendor a charge arising directly from and as a condition of the making of the sale and (2) a fixed labor cost included in the price for food, a beverage or a meal even though such charge is separately stated from the charge for the food, beverage or meal.When a gratuity is voluntarily given for food, a beverage or a meal, it shall be considered a tip and not subject to tax. This rule is intended to implement Iowa Code sections 423.1(51) and 423.2(1).

701—203.8(423) Payment from a third party. The sales price from the sales of tangible personal property, services, or enumerated services includes consideration received by the seller from third parties. The following conditions shall apply: 203.8(1) The seller actually receives consideration from a party other than the purchaser, and the consideration is directly related to a price reduction or discount on the sale; 203.8(2) The seller has an obligation to pass the price reduction or discount through to the purchaser; 203.8(3) The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and 203.8(4) One of the following criteria is met: a. The purchaser presents a coupon, certificate or other documentation to the seller to claim a price reduction or discount where the coupon, certificate or documentation is authorized, distributed or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate or documentation is presented; b. The purchaser self-identifies to the seller as a member of a group or organization entitled to a price reduction or discount (a “preferred customer” card that is available to any patron does not constitute membership in such a group); or c. The price reduction or discount is identified as a third-party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate or other documentation presented by the purchaser. This rule is intended to implement Iowa Code chapter 423.ARC 7146CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to rules necessary to implement the streamlined sales and use tax agreement and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 204, “Rules Necessary to Implement the Streamlined Sales and Use Tax Agreement,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 423, subchapter IV.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 204. The Department proposes revisions to the chapter to remove portions of the rules that the Department determined are obsolete or unnecessary or that duplicate statutory language. Iowa has been a member of the Streamlined Sales Tax Governing Board and a party to the Streamlined Sales and Use Tax Agreement (SSUTA) since October 1, 2005. The goal of the SSUTA is to maintain uniformity of definitions of certain sales and use tax-related terms, state and local tax bases, sourcing rules, and administration, among other features. In order to maintain compliance with the SSUTA, Iowa statutes, rules, and policies must comply with each provision of the SSUTA. Iowa Code chapter 423, subchapter VI, is the Uniform Sales and Use Tax Act Administration, which outlines Iowa’s intent to enter into the SSUTA to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for sellers. Chapter 204 contains rules interpreting the Uniform Sales and Use Tax Act Administration and additional rules necessary to maintain compliance with the SSUTA and help the public understand tax policies that Iowa has adopted as part of implementing the SSUTA. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 204 and adopt the following new chapter in lieu thereof: CHAPTER 204RULES NECESSARY TO IMPLEMENT THE STREAMLINED SALES AND USE TAX AGREEMENT[Prior to 9/7/22, see Revenue Department[701] Ch 240]

701—204.1(423) Allowing use of the lowest tax rate within a database area and use of the tax rate for a five-digit area when a nine-digit zip code cannot be used. Any database maintained by the department that displays tax rates and tax jurisdictional boundaries based on either a five-digit or nine-digit zip code system shall, if an area encompassing one zip code has two or more rates of tax, provide to retailers a means of identifying and applying the lowest rate within the area for use in computing tax due. If a nine-digit zip code designation is not available for a street address or if a seller is unable to determine the nine-digit zip code designation of a purchaser after exercising due diligence to determine the designation, the seller may apply the lowest rate for the five-digit zip code area. This rule is intended to implement Iowa Code section 423.55.

701—204.2(423) Permissible categories of exemptions. 204.2(1) Definitions. "Entity-based exemption" means an exemption based on who purchases the product or who sells the product. "Product-based exemption" means an exemption based on the description of the product and not based on who purchases the product or how the purchaser intends to use the product. "Use-based exemption" means an exemption based on the purchaser’s use of the product. 204.2(2) Product-based exemptions. Iowa will enact a product-based exemption without restriction only if the agreement does not have a definition for the product or for a term that includes the product. If the agreement has a definition for the product or for a term that includes the product, Iowa will exempt all items included within the definition but will not exempt only part of the items included within the definition unless the agreement sets out the exemption for part of the items as an acceptable variation. 204.2(3) Entity-based and use-based exemptions. Iowa will enact an entity-based or a use-based exemption without restriction only if the agreement has no definition for the product whose use or purchase by a specific entity is exempt or for a term that includes the product. If the agreement has a definition for the product whose use or specific purchase is exempt, Iowa will enact an entity-based or a use-based exemption that applies to that product only if the exemption utilizes the agreement’s definition of the product. If the agreement does not have a definition for the product whose use or specific purchase is exempt but has a definition for a term that includes the product, Iowa has the power to enact an entity-based or a use-based exemption for the product without restriction. This rule is intended to implement Iowa Code chapter 423, subchapter IV.

701—204.3(423) Requirement of uniformity in the filing of returns and remittance of funds. Any model 1, 2, or 3 seller may submit its sales or use tax returns in a simplified format that does not include more data fields than permitted by the governing board. The department will require only one remittance for each return except as otherwise allowed by the agreement. If any additional remittance is required, it will only be required from sellers that have collected more than $30,000 in sales and use taxes in Iowa during the preceding calendar year. The amount of the additional remittance shall be determined through a calculation method rather than actual collections and shall not require the filing of an additional return. This rule is intended to implement Iowa Code chapter 423, subchapter IV.

701—204.4(423) Allocation of bad debts. If a seller is entitled under Iowa Code section 423.21 to deduct bad debts owed to the seller and those bad debts consist of any sales price or purchase price upon which tax has been paid to the state of Iowa as well as a state or states other than Iowa, then allocation of the bad debt is allowed. The seller must support an allocation of the bad debts between Iowa and the other state or states through the proper accounting of its books and records. This rule is intended to implement Iowa Code chapter 423, subchapter IV.

701—204.5(423) Purchaser refund procedures. Iowa law allows a purchaser to seek a return of overcollected sales or use taxes from the seller who collected them. More information is contained in Iowa Code section 423.45(2). In connection with any purchaser’s request of a seller that the seller return sales or use tax alleged to have been overcollected, the seller to whom the request is directed shall be rebuttably presumed to have a reasonable business practice if, in the collection of such sales or use tax, the seller uses either a provider or a system, including a proprietary system, which is certified by this state and has remitted all taxes collected by the use of that provider system to the department, less any deductions, credits, or collection allowances. This rule is intended to implement Iowa Code chapter 423, subchapter IV.

701—204.6(423) Relief from liability for reliance on taxability matrix. Iowa provides and maintains a taxability matrix in a database that is in a downloadable format approved by the governing board. All sellers and certified service providers are relieved from liability to Iowa and any jurisdiction imposing a local option tax under Iowa Code chapter 423B or 423E for having charged and collected the incorrect amount of sales or use tax resulting from the seller’s or certified service provider’s reliance on erroneous data provided by that taxability matrix. This rule is intended to implement Iowa Code chapter 423, subchapter IV.

701—204.7(423) Effective dates of taxation rate increases or decreases when certain services are furnished. Certain taxable services are usually furnished over an extended period of time (e.g., utilities, janitorial, and ministorage services), and the user of such a service is billed at regular intervals (e.g., monthly or quarterly). The beginning date when a rate change is imposed on the sales price of this type of service differs, depending upon whether a rate increase or rate decrease is involved. If the rate of taxation has been increased, the beginning date of the rate change shall be the first day of the first billing period occurring on or after the effective date of the rate increase. If the rate of taxation has been decreased, the new rate shall apply to bills rendered on or after the effective date of the rate decrease. This rule is intended to implement Iowa Code chapter 423, subchapter IV.ARC 7147CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to sourcing of taxable services, tangible personal property, and specified digital products and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 205, “Sourcing of Taxable Services, Tangible Personal Property, and Specified Digital Products,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.2, 423.15 and 423B.5.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 205. The Department proposes revisions to the chapter to remove portions of the rules that the Department determined are obsolete, are unnecessary, or are duplicative of statutory language. The chapter describes the Department’s interpretation of the underlying statute to help the public understand the sourcing of taxable services, tangible personal property, and specified digital products. These rules provide clarification about where a sale takes place in order to determine when and where Iowa sales or use tax applies. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 205 and adopt the following new chapter in lieu thereof: CHAPTER 205SOURCING OF TAXABLE SERVICES, TANGIBLE PERSONAL PROPERTY, AND SPECIFIED DIGITAL PRODUCTS[Prior to 9/7/22, see Revenue Department[701] Ch 223]

701—205.1(423) Definitions. For purposes of this chapter, the following terms shall have the same definition as in Iowa Code section 423.1: "Agreement" means the same as defined in Iowa Code section 423.1. "Department" means the same as defined in Iowa Code section 423.1. "First use of a service" means the same as defined in Iowa Code section 423.1. "First use of a service performed on tangible personal property" means receiving, with the ability to use, whether or not actually used, the tangible personal property on which the taxable service was performed. "Governing board" means the same as defined in Iowa Code section 423.1. "Receive" "receipt," with regard to sales of services, means making “first use of services” pursuant to this chapter. For purposes of receipt of services performed on tangible personal property under rule 701—205.3(423), the location (or locations) where the purchaser (or the purchaser’s donee) regains possession or can potentially make first use of the tangible personal property on which the seller performed the service is the location (or locations) of the receipt of the service. The location where the seller performs the service is not determinative of the location where the purchaser receives the service. The terms “receive” and “receipt” do not include possession by a shipping company on behalf of the purchaser; this is treated as though the retailer delivered to the purchaser the tangible personal property on which the service was performed. When a shipping company delivers tangible personal property on which the service was performed, the service is deemed “received” where the shipping company delivers the tangible personal property to the purchaser. For the purposes of sales of personal care services, the location (or locations) where the service is performed on the purchaser (or the purchaser’s donee) is the location where the purchaser receives the service. "Retailer" means the same as defined in Iowa Code section 423.1. "Seller" means the same as defined in Iowa Code section 423.1.

701—205.2(423) General sourcing rules for taxable services. Except as otherwise provided in the agreement, retailers providing taxable services in Iowa shall source the sales of those services using the destination sourcing requirements described in Iowa Code section 423.15. In determining whether to apply the provisions of Iowa Code section 423.15 to the sale of a taxable service, it is necessary to determine the location where the result of the service is received, is first used, or could potentially be first used by the purchaser or the purchaser’s donee. The provisions of these rules do not affect the obligation of a purchaser or lessee to remit additional tax, if any, to another taxing jurisdiction based on the use of the service at another location. 205.2(1) Determining the result of a service. Determining the location where the result of a service is received by a purchaser requires a fact-based inquiry on a case-by-case basis.The photoshoot is the result of Company Z’s service, which occurs in Okoboji, Iowa—the location where the performance of the photoshoot begins. Company Z must therefore charge Iowa sales tax and any applicable local option tax on the $2,000 charge for the photoshoot. The $1,000 charge for the photographs is a sale of tangible personal property and is sourced to Illinois—the location where the photographs are delivered. Company Z therefore does not need to charge Iowa sales tax on the $1,000 but may be responsible for collecting and remitting Illinois tax. 205.2(2) Subsequent use in Iowa. If an Iowa purchaser is determined to owe sales tax in another state based on first use, Iowa use tax may still apply. If, subsequent to the first use in another state, the product or result of a service is used in Iowa, Iowa use tax applies. (More information can be found in Iowa Code section 423.5.) 205.2(3) Measurement of use tax due. If tax has been imposed on the sales price of services performed on tangible personal property in another state at a rate that is less than the Iowa use tax rate, the purchaser will have to pay Iowa use tax at a rate measured by the difference between the Iowa use tax rate and the tax rate imposed in the state where the service was first used. (More information can be found in Iowa Code section 423.22.) There is no local option use tax.

701—205.3(423) First use of services performed on tangible personal property. 205.3(1) First use of services performed on tangible personal property defined. A service performed on tangible personal property is a service that changes some aspect of the property, such as its appearance or function. Services with respect to tangible personal property, but not necessarily performed on tangible personal property, such as inspection and appraisal, are not addressed in this rule. Except as otherwise provided in the agreement or the rules adopted by the governing board, a service performed on tangible personal property is first used at, and sourced to, the location where the customer receives, regains possession of, or can potentially make first use of, whether or not actually used, the tangible personal property on which the seller performed the service. In general, this is the location where the tangible personal property is returned to the purchaser or the purchaser’s donee. 205.3(2) Sourcing of taxable services performed on tangible personal property as applied to local option sales and services tax. A local option sales and services tax shall be imposed on the same basis as the state sales and services tax. With respect to sourcing of taxable services performed on tangible personal property, the local option sales and services tax sourcing rules shall be the same as the destination sourcing requirements described in Iowa Code section 423.15 and as set forth in rules 701—205.1(423) and 701—205.2(423) and subrule 205.3(1). However, the location of the taxable service performed on tangible personal property shall be sourced to the taxing jurisdiction, rather than to the state, where the customer regains possession or can potentially make first use of the tangible personal property on which the seller performed the service. Iowa does not impose a local option use tax. 205.3(3) Specific examples of taxable enumerated services. Specific examples of services performed on tangible personal property taxable in Iowa under Iowa Code section 423.2 include, but are not limited to: a. Alteration and garment repair; b. Vehicle repair and vehicle wash and wax; c. Boat repair; d. Carpentry; e. Roof, shingle, and glass repair; f. Dry cleaning, pressing, dyeing, and laundering; g. Electrical and electronic repair and installation; h. Farm implement repair of all kinds; i. Furniture, rug, carpet, and upholstery repair and cleaning; j. Gun and camera repair; k. Household appliance, television, and radio repair; l. Jewelry and watch repair; m. Machine repair of all kinds, including office and business machine repair; n. Motor repair; o. Motorcycle, scooter, and bicycle repair; p. Pet grooming; q. Wood preparation; r. Sewing and stitching; s. Shoe repair and shoeshine; and t. Taxidermy services. 205.3(4) Examples of sourcing rules for motor and machine repair. The following examples are intended to clarify when motor and machine repair services are deemed “received.” 205.3(5) Examples of sourcing rules for the painting of tangible personal property. The following examples are intended to clarify when the service of painting of tangible personal property is deemed “received.” 205.3(6) Example of sourcing rules for dry cleaning services. The following example is intended to clarify when dry cleaning services are deemed “received.” 205.3(7) Example of sourcing rules for vehicle wash and wax services. The following example is intended to clarify when vehicle wash and wax services are deemed “received.” 205.3(8) Examples of sourcing rules for animal grooming services. The following examples are intended to clarify when animal grooming services are deemed “received.” 205.3(9) Example of local option sales and service tax sourcing rules for camera repair services. The following example is intended to clarify when camera repair services are deemed “received.” 205.3(10) Examples of local option sales and service tax sourcing rules for bicycle repair services. The following examples are intended to clarify when bicycle repair services are deemed “received.”

701—205.4(423) Sourcing rules for personal care services. 205.4(1) Definition. “Personal care services” means services that are performed on the physical human body. Examples of personal care services governed by this rule include, but are not limited to: a. Barber and beauty services; b. Massage, excluding services provided by massage therapists licensed under Iowa Code chapter 152C; c. Reflexology; d. Reducing salons; and e. Tanning beds and salons. 205.4(2) Sourcing of personal care services. Except as otherwise provided in the agreement or the rules adopted by the governing board, a purchaser receives a personal care service within the meaning of subrule 205.4(1) at the location where the services are performed, which is the same location where the services are received by the purchaser (or the purchaser’s donee). The services will be received by the purchaser (or the purchaser’s donee) either at the seller’s location, pursuant to Iowa Code section 423.15(1)“a,” or at the purchaser’s (or the purchaser’s donee) location, pursuant to Iowa Code section 423.15(1)“b.” 205.4(3) Examples of sourcing of personal care services. The following examples are intended to clarify sourcing rules for personal care services.

701—205.5(423) Sourcing of tickets or admissions to places of amusement, fairs, and athletic events. Sales of tickets or admissions to places of amusement, fairs, and athletic events are sourced in the same manner as services, using the destination sourcing requirements described in Iowa Code section 423.15 and as set forth in rule 701—205.2(423). Generally, the sale of a service is sourced to the location where the purchaser makes first use of the service. In the case of an event that the purchaser attends at a physical location, first use would occur at the location of the event. 205.5(1) Sales of admissions to virtual events. First use of a ticket of admission to a virtual event occurs at the location where the attendee first participates in or accesses the event, if known to the seller. If this location is unknown, the sale is sourced pursuant to Iowa Code section 423.15(1). 205.5(2) Sales of admissions that can be used at multiple locations. Admissions that may be used at multiple locations should be sourced to the location where the admission is purchased if the purchaser picks it up in person and it can be used at that location. If the service cannot be used at that location or the sale is made online, the sale should be sourced using the provisions of Iowa Code section 423.15 and these rules that apply when the location of first use is unknown.

701—205.6(423) Sourcing rules for tangible personal property and specified digital products. All sales of tangible personal property and specified digital products by sellers obligated to collect sales and use tax, except those enumerated in Iowa Code section 423.16, shall be sourced using the destination sourcing requirements described in Iowa Code section 423.15. Products received by a purchaser at a seller’s business location shall be sourced to that business location. When the retailer has the address to which the retailer or a shipping company will deliver a product to the purchaser, Iowa Code section 423.15(1)“b” applies and the sale is sourced to the delivery address. The sale of a product delivered to a shipping company is not sourced to the location of the shipping company. The terms of a sale as F.O.B. (origin) are irrelevant for purposes of sourcing a sale. More information can be found in Iowa Code section 423.1(43)“b.” 205.6(1) General examples of sourcing of tangible personal property. The following examples illustrate the sourcing principles of Iowa Code section 423.15(1) as applied to sales, but not leases or rentals, of tangible personal property. 205.6(2) General examples of sourcing of specified digital products. The following examples illustrate the sourcing principles of Iowa Code section 423.15(1) as applied to specified digital products. 205.6(3) Examples of sourcing of leases and rentals of tangible personal property other than transportation equipment or products described in Iowa Code section 423.16. The following examples illustrate the sourcing principles of Iowa Code section 423.15(2) as applied to leases or rentals of tangible personal property, other than transportation equipment as defined in Iowa Code section 423.15(3). This rule does not cover products described in Iowa Code section 423.16.In exchange for possession of the couch, X makes the required $50 down payment to Y at Y’s office in Des Moines, Iowa. X receives the couch at Y’s office in Des Moines, and X takes the couch to X’s home in Indianola, Iowa. While purchasing the couch, X provides Y with X’s Indianola address, which Y keeps on file. For the remainder of the rental period, X’s primary address remains the same.The first periodic payment—the down payment—is sourced the same as sales under Iowa Code section 423.15(1). More information can be found in Iowa Code section 423.15(2)“a.” In this case, the down payment was made and the product was received at the seller’s business location. Iowa Code section 423.15(1)“a” governs the sourcing of the down payment. More information can be found in subrule 205.5(1). Therefore, in this case, the down payment is sourced to Des Moines. Y must collect state sales tax and any local option sales tax imposed in the city of Des Moines on the down payment.Because X’s home address is on file with Y for the remainder of the rental period, X’s address is the “primary property location” of the couch during those periods. More information can be found in Iowa Code section 423.15(2)“a.” Therefore, the subsequent monthly payments are sourced to X’s Indianola address that is contained in the records maintained by Y in the ordinary course of business. More information can be found in Iowa Code section 423.15(2)“a.” Y must collect state sales tax and any local option sales tax imposed in the city of Indianola on the monthly payments.All other facts and results from Example 1A remain the same.Every payment that occurs after X informed Y of X’s new address is sourced to Clinton, Iowa, because the “primary property location” as indicated by an address for the property provided by the lessee was updated to Clinton, Iowa. More information can be found in Iowa Code section 423.15(2)“a.”Even though the couch is actually located in Ames, the “primary property location” indicated by an address for the property provided by X that is available to Y from records maintained in the ordinary course of business is the Indianola address. More information can be found in Iowa Code section 423.15(2)“a.” Therefore, Y is correct in sourcing each lease payment to Indianola. 205.6(4) Sales of items from vending machines. Sales from vending machines are sourced to the location of the individual vending machine at which the purchaser receives the item. 205.6(5) Sales of items by an itinerant merchant, peddler, or salesperson having a route. When an itinerant merchant, peddler, or mobile salesperson meets with a customer and solicits an order or completes a contract for sale and the customer receives the item at that location, the sale is sourced to that location pursuant to Iowa Code section 423.15(1)“b,” regardless of whether the location is the customer’s home, a business establishment, or elsewhere. This rule applies to all other sales by itinerant merchants, peddlers, and mobile salespersons in the same manner as they apply to any other seller. 205.6(6) Items purchased for resale but withdrawn from inventory. If a person purchases items for resale or processing but withdraws and uses any of those items from inventory or from a stock of materials held for processing, the gross receipts from the sales of the items withdrawn and used are sourced to the county in which they are withdrawn regardless of where the items were purchased for resale. 205.6(7) Items withdrawn from inventory by a manufacturer. Where a manufacturer manufactures tangible personal property and uses the property it manufactures for any purpose except for resale or processing, such use by the manufacturer is subject to sales tax and sourced to the county in which the manufacturer first used the property. Taxable use includes using such property as building materials, supplies, or equipment in the performance of a construction contract. Tax is computed upon the cost to fabricate the property. More information can be found in rule 701—219.6(423). These rules are intended to implement Iowa Code sections 423.2, 423.15, and 423B.5.ARC 7148CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to bundled transactions and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 206, “Bundled Transactions,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 423.2.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 206. This chapter was recently updated, and the Department has determined that it does not contain language that is obsolete, unnecessary, or duplicative of statutory language. The chapter describes the Department’s interpretation of the underlying statute to help the public understand the taxability of bundled transactions. The rules reduce uncertainty about how tax applies when items are sold together. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 206 and adopt the following new chapter in lieu thereof: CHAPTER 206BUNDLED TRANSACTIONS[Prior to 9/7/22, see Revenue Department[701] Ch 216]

701—206.1(423) Taxability of bundled transactions. The sales price of a bundled transaction is subject to tax if any product included in the bundled transaction would be taxable if sold separately. For purposes of this rule, products include tangible personal property, services, and specified digital products and exclude real property and services to real property.

701—206.2(423) Bundled transaction. A “bundled transaction” is the retail sale of two or more products where the products are otherwise distinct and identifiable and the products are sold for one nonitemized price. 206.2(1) Distinct and identifiable product. “Distinct and identifiable product” does not include any of the following: a. Packaging or other materials that accompany the retail sale of the products and are incidental or immaterial to the retail sales of the products. Packaging or other materials include but are not limited to containers, boxes, sacks, bags, bottles, envelopes, wrapping, labels, tags, twine, garment hangers, and instruction guides. b. A product that is provided free of charge to the consumer in conjunction with the required purchase of another product, if the sales price of the other product does not vary depending on whether the product provided free of charge is included in the transaction. Examples include a free car wash with the purchase of gasoline or free dinnerware with the purchase of groceries. c. Items specified in the definition of “sales price” in Iowa Code section 423.1. 206.2(2) One nonitemized price. “One nonitemized price” does not include the following: a. A price that is separately identified by product on a binding sales document, or other sales-related documentation, that is made available to the customer in paper or electronic form, including but not limited to an invoice, a bill of sale, a receipt, a contract, a service agreement, a lease agreement, a periodic notice of rates and services, a rate card or a price list. b. A price for which the sales price varies or is negotiable based on the purchaser’s selection of the products included in the transaction even if the seller only provides one price on its invoice to the purchaser.

701—206.3(423) Transactions not taxable as bundled transactions. Generally, the entire sales price from a bundled transaction is subject to sales tax. However, the transactions described in this rule are not taxable as bundled transactions. 206.3(1) Sales involving mixed tangible personal property and services. The retail sale of tangible personal property or specified digital product and a service, if the tangible personal property or specified digital product is essential to the use of the service, and provided exclusively in connection with the service, and if the true object of the transaction is the service. 206.3(2) Sales involving services. The retail sale of services, if one of the services is essential to the use or receipt of a second service, and provided exclusively in connection with the second service, and if the true object of the transaction is the second service. If the transaction is not a bundled transaction as a result of this exclusion, then the true object of the transaction will be the retail sale of the second service and should be taxed accordingly. 206.3(3) True object test. The true object of a transaction is the main product that is the subject of the transaction. Determining the true object of a transaction is a fact-based inquiry and shall be made on a case-by-case basis. Factors that may be considered in determining the true object of a transaction include but are not limited to the nature of the seller’s business and purchaser’s reason for making the purchase. 206.3(4) Sales involving de minimis taxable products. A transaction that includes taxable and nontaxable products and the seller’s purchase price or sales price of the taxable products is de minimis. “De minimis” means the seller’s purchase price or sales price of the taxable products is 10 percent or less of the total purchase price or sales price of the bundled products. A seller shall use either the seller’s purchase price or seller’s sales price of the products to determine whether the taxable products are de minimis. A seller may not use a combination of the seller’s purchase price and seller’s sales price of the products to determine whether the taxable products are de minimis. 206.3(5) Sales involving taxable and exempt food or medical products. The retail sale of exempt tangible personal property and taxable tangible personal property where all of the following apply: a. The transaction includes food and food ingredients, drugs, durable medical equipment, mobility enhancing equipment, prosthetic devices, or medical supplies; and b. The seller’s purchase price or sales price of the taxable tangible personal property is 50 percent or less of the total purchase price or sales price of the bundled tangible personal property. Sellers may not use a combination of the purchase price and sales price of the tangible personal property when making the 50 percent determination for a transaction. These rules are intended to implement Iowa Code section 423.2(8).ARC 7172CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to remote sales and marketplace sales and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 207, “Remote Sales and Marketplace Sales,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 423.14A.Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 207 and adopt a new Chapter 207 with revisions to remove unnecessary restrictive terms and provide additional clarity. These rules describe the Department’s interpretation of the underlying statute to help the public understand requirements for remote and marketplace sellers. These rules reduce uncertainty about who must collect and remit Iowa sales tax. Citations to rule 701—213.10(423) in rule 701—207.11(423) refer to a rule that will be adopted in a future rulemaking. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 207 and adopt the following new chapter in lieu thereof: CHAPTER 207REMOTE SALES AND MARKETPLACE SALES[Prior to 9/7/22, see Revenue Department[701] Ch 215]

701—207.1(423) Definitions. 207.1(1) Incorporation of definitions. To the extent they are consistent with Iowa Code chapter 423 and this chapter, all other words and phrases used in this chapter mean the same as defined in Iowa Code sections 423.1 and 423.14A and rule 701—200.1(423). 207.1(2) Chapter-specific definitions. For purposes of this chapter, unless the context otherwise requires: "Gross revenue from sales" means all revenue from Iowa sales. "Iowa sales" means the same as defined in Iowa Code section 423.14A(1)“a” and includes all retail sales, whether taxable or exempt, and other sales of tangible personal property, specified digital products, or services otherwise sold into Iowa or for delivery into Iowa, including wholesale or sale for resale. “Iowa sales” includes sales made through a marketplace. "Marketplace" means any physical or electronic place, including but not limited to a store, booth, Internet website, catalog, television or radio broadcast, or dedicated sales software application, where a marketplace seller sells or offers for sale tangible personal property, or specified digital products, or where services are offered for sale into Iowa regardless of whether the tangible personal property, specified digital product, marketplace seller, or marketplace has a physical presence in Iowa. "Physical presence in Iowa" means the activities described in Iowa Code section 423.1(48)“a”(1). "Remote seller" means a retailer that does not have a physical presence in Iowa but that makes sales of tangible personal property, specified digital products, or services that are sourced to Iowa. "Retailer" means the same as defined in Iowa Code section 423.1(47). “Retailer” includes a marketplace facilitator that meets or exceeds the sales threshold and includes a remote seller. "Sales threshold" means the revenue level that triggers collection and remittance obligations for Iowa sales tax and local option tax as described in Iowa Code section 423.14A(3): $100,000 or more in gross revenue from Iowa sales into Iowa in either the current or immediately prior calendar year.

701—207.2(423) Administration; incorporation of 701—Chapter 11. Except as otherwise stated in this chapter, the requirements of 701—Chapter 11 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit sales tax under this chapter.

701—207.3(423) Filing returns; payment of tax; penalty and interest; incorporation of 701—Chapter 202. Except as otherwise stated in this chapter, the filing requirements of 701—Chapter 202 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit sales tax under this chapter.

701—207.4(423) Permits; incorporation of 701—Chapter 201. Except as otherwise stated in this chapter, the permit requirements of 701—Chapter 201 apply to all retailers, including remote sellers and marketplace facilitators, required to collect and remit Iowa sales tax and applicable local option sales tax under this chapter.

701—207.5(423) Retailers with physical presence in Iowa. 207.5(1) Sales threshold inapplicable. The sales threshold does not apply to any seller, marketplace facilitator, or other retailer that has physical presence in Iowa. A seller, marketplace facilitator, or other retailer with physical presence in Iowa must collect and remit Iowa sales tax and any applicable local option sales tax pursuant to Iowa Code section 423.14 even if the sales threshold is not met. 207.5(2) Mixed marketplace and nonmarketplace sales. A retailer with physical presence in Iowa who makes both marketplace and nonmarketplace sales must do the following: a. Collect Iowa sales tax and any applicable local option tax on any taxable sales on which the marketplace does not collect tax. b. Report on its Iowa sales tax return its gross revenue from all Iowa sales, including any marketplace sales on which the marketplace facilitator collected Iowa sales tax and applicable local option tax, regardless of whether the sales threshold is met.

701—207.6(423) Remote sellers—registration and collection obligations. 207.6(1) Combined Iowa sales from all sources. The sum of the total amount of Iowa sales through marketplace and nonmarketplace Iowa sales determines whether remote sellers meet the sales threshold. 207.6(2) Remote sellers with Iowa sales solely through marketplaces. If a remote seller meets the sales threshold but only makes retail sales in Iowa through marketplaces, the remote seller’s registration and collection obligations depend on whether all of the marketplace facilitators through which the remote seller makes Iowa sales are registered to collect Iowa sales tax and applicable local option tax. a. Registered marketplace facilitators.If all the marketplace facilitators used by the remote seller to make taxable Iowa sales collect Iowa sales tax and applicable local option sales tax, the remote seller does not have to collect the tax. The marketplace facilitator will report and pay Iowa sales tax and applicable local option sales tax on a sales tax return filed by the marketplace facilitator. b. Nonregistered marketplace facilitators.If a marketplace facilitator is not required to or fails to register and collect tax in Iowa, remote sellers who exceed the sales threshold must obtain an Iowa sales tax permit, collect Iowa sales tax and applicable local option sales tax, and file Iowa sales tax returns for sales made on that marketplace. 207.6(3) Remote sellers making both marketplace and nonmarketplace sales. A remote seller that exceeds the sales threshold and makes nonmarketplace Iowa sales, such as through the remote seller’s own website, must obtain an Iowa sales tax permit. The remote seller must report on its Iowa sales tax return its gross revenue from all Iowa sales. The remote seller would be able to deduct the amount of gross sales made through any marketplaces registered to collect tax in Iowa on the remote seller’s sales tax return. A remote seller making Iowa sales through a marketplace operated by an unregistered marketplace facilitator must collect and remit Iowa sales tax and applicable local option sales tax on those sales.

701—207.7(423) Marketplace facilitators—registration and collection obligations. A marketplace facilitator that meets the sales threshold must collect and remit Iowa sales tax and applicable local option sales tax on all taxable sales made through the marketplace facilitator’s marketplace that are sourced to Iowa. A marketplace facilitator must collect Iowa sales tax on all taxable Iowa sales, regardless of the location or sales volume of a marketplace seller that makes sales on a marketplace facilitator’s marketplace.

701—207.8(423) Advertising on a marketplace. A marketplace seller does not sell or offer to sell tangible personal property, a specified digital product, or a service on a marketplace when merely advertising that product on a marketplace.

701—207.9(423) Commencement of collection obligation and sales tax liability. 207.9(1) Commencement of collection obligation. If a remote seller or marketplace facilitator without physical presence in Iowa did not exceed the sales threshold for the prior year and therefore does not collect sales tax in the current year, and exceeds the sales threshold in the current year, the remote seller or marketplace facilitator must collect Iowa sales tax and applicable local option sales tax starting on the first day of the next calendar month that starts at least 30 days from the day the remote seller or marketplace facilitator first exceeded the sales threshold. The remote seller or marketplace facilitator must collect tax through the end of the calendar year in which the sales threshold was met or exceeded as well as the entire next calendar year. 207.9(2) Commencement of sales tax liability. If a remote seller or marketplace facilitator without physical presence in Iowa exceeds the sales threshold as described in subrule 207.9(1), the remote seller or marketplace facilitator without physical presence in Iowa is not liable for any Iowa sales tax and applicable local option sales tax not collected beginning on January 1 of the current year through the day prior to the date the remote seller or marketplace facilitator without physical presence in Iowa is obligated to collect the tax as described in subrule 207.9(1). A purchaser will be liable for any use tax that accrues prior to the date the remote seller or marketplace facilitator without physical presence in Iowa is obligated to collect Iowa sales tax and applicable local option sales tax as described in subrule 207.9(1). 207.9(3) Permit registration. If a remote seller or marketplace facilitator without physical presence in Iowa that makes taxable sales exceeds the sales threshold, the remote seller or marketplace facilitator without physical presence in Iowa must register for a sales and use tax permit under 701—Chapter 201 prior to the date the remote seller or marketplace facilitator without physical presence in Iowa is obligated to collect Iowa sales tax and applicable local option sales tax as described in subrule 207.9(1).

701—207.10(423) Retailers registered and collecting who fail to meet or exceed sales threshold. If a retailer is registered to collect Iowa sales tax and applicable local option sales tax and collects in year 1 and fails to meet or exceed the sales threshold in year 2, the retailer must still collect all applicable sales taxes in year 2. If the retailer does not meet or exceed the sales threshold at any point in year 2, the retailer is not required to collect and remit Iowa sales tax or applicable local option sales tax in year 3. However, if a retailer is registered to collect, the retailer must continue collecting regardless of the impact of the sales threshold. A retailer that falls under the sales threshold may either submit sales tax returns demonstrating it did not collect tax until a time in the future when the retailer meets or exceeds the sales threshold or cancel its sales tax permit if it wishes to cease collecting. If the retailer meets or exceeds the sales threshold at any point thereafter, the retailer would need to register again in accordance with 701—Chapter 201 and begin collecting in accordance with this chapter.

701—207.11(423) Coupons; incorporation of rule 701—213.10(423). Coupons and other discounts offered by marketplace facilitators and remote sellers are retailers’ discounts, which reduce the sales price and thus the taxable amount of a sale. The requirements of rule 701—213.10(423) apply to marketplace facilitators and remote sellers in the same manner that those requirements apply to retailers.

701—207.12(423) Customer returns marketplace purchase directly to marketplace seller. 207.12(1) If a marketplace facilitator collects Iowa sales tax and applicable local option sales tax on the sale and the customer returns the item directly to the marketplace seller, either the marketplace facilitator or marketplace seller shall refund the full price paid by the customer, including all tax collected by the marketplace facilitator, upon acknowledgement of receipt of the item by the marketplace seller. 207.12(2) If the marketplace facilitator does not refund the amount paid and instead requires or permits the marketplace seller to do so, the marketplace seller shall refund the full price paid by the customer, including all tax collected by the marketplace facilitator. The marketplace seller shall seek reimbursement of Iowa sales tax and applicable local option sales tax from the marketplace facilitator. The marketplace facilitator shall reimburse the returned Iowa sales tax and applicable local option sales tax to the marketplace seller once the marketplace seller has adequately demonstrated that the marketplace seller returned the tax in conjunction with a return made directly to the marketplace seller. The marketplace facilitator may claim a credit for the return of Iowa sales tax and local option sales tax on its Iowa sales tax return. 207.12(3) Nothing in this rule requires a marketplace seller to accept a return as described in this rule. Nothing in this rule requires a marketplace facilitator to allow returns to be made directly to a marketplace seller.

701—207.13(423) Exempt and nontaxable sales. 207.13(1) Exempt sales. A retailer required to collect and remit Iowa sales tax and applicable local option sales tax in accordance with Iowa Code section 423.14A and this chapter is responsible for correctly applying exemptions for tangible personal property, specified digital products, and services. As a member of the streamlined sales tax governing board, the department maintains a taxability matrix to describe whether various items are taxable or exempt. See rule 701—204.6(423) for an explanation of the liability relief provided to retailers that rely on the taxability matrix in determining whether to collect tax on an item. 207.13(2) Nontaxable sales. A retailer, including an Iowa retailer with a physical presence in Iowa, a remote seller, or a marketplace facilitator, that makes or facilitates only nontaxable sales, such as sale for resale or wholesale transactions, is not required to register for a sales tax permit. 207.13(3) Exemption certificates submitted to a marketplace facilitator. An exemption certificate as described in rule 701—288.3(423) that identifies the marketplace facilitator as the seller may be used by the purchaser for sales made or facilitated by the marketplace facilitator.

701—207.14(423) Other taxes for marketplace sales and items not subject to sales/use tax. A marketplace facilitator is not obligated to collect tax on a product sold through a marketplace it operates that is not subject to Iowa sales and use tax. These rules are intended to implement Iowa Code section 423.14A.ARC 7173CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to multilevel marketer agreements and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 208, “Multilevel Marketer Agreements,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 421.5 and 421.17.Purpose and Summary The proposed rulemaking rescinds Chapter 208 and adopts a new Chapter 208 regarding multilevel marketer agreements. These agreements allow multilevel marketer companies to enter into contracts with the Department to collect and remit sales tax. The rules help the companies understand eligibility requirements for the multilevel marketer program. This rulemaking repromulgates the existing Chapter 208 with updated language and an additional rule to provide additional clarity that the Department determined was necessary. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 208 and adopt the following new chapter in lieu thereof: CHAPTER 208MULTILEVEL MARKETER AGREEMENTS[Prior to 9/7/22, see Revenue Department[701] Ch 4]

701—208.1(421) Multilevel marketers—in general. Multilevel marketer companies may enter into a written contract with the department to collect and remit state and local option sales taxes on sales of tangible personal property and specified digital products to independent distributors for resale and remit the taxes directly to the department. To be eligible for the multilevel marketer program, the company must meet certain eligibility requirements and agree to certain terms in the multilevel marketer agreement as set forth in 701—subrules 208.1(3) and 208.1(4). All written contacts with the department should be sent to Nonfiler Unit, Compliance Division, Iowa Department of Revenue, P.O. Box 10456, Des Moines, Iowa 50306-0456. 208.1(1) Definitions. The following definitions of terms are applicable to this chapter: "Independent distributor" means a seller who purchases products for resale to an Iowa consumer based on a price suggested by a multilevel marketer. "Multilevel marketer" means a wholesaler that sells tangible personal property or specified digital products for resale via a network of independent distributors who then sell the property to the ultimate consumers located in Iowa at a retail price suggested by the multilevel marketer. "Sales tax" "sales taxes" for the purpose of this rule means Iowa state sales tax, including local option sales and service taxes, and state use tax. To determine whether local option sales and service taxes are due, see rules 701—270.2(422B) and 701—270.3(422B). 208.1(2) Collection of tax. Iowa state sales tax is to be collected on the wholesale or retail selling price if delivery of the multilevel marketer’s tangible personal property or specified digital product occurs in Iowa or the property is used in Iowa (more information is contained in subparagraph 208.1(4)“a”(1)). In addition, local option sales tax is due on the sale if delivery of the tangible personal property or specified digital product to the consumer occurs within a local option tax jurisdiction. More information and examples illustrating delivery and taxation can be found in rules 701—270.2(422B) and 701—270.3(422B). 208.1(3) Eligibility requirements. For a multilevel marketer to be eligible for a multilevel marketer agreement, the following criteria must be met: a. Tangible personal property or specified digital products are sold by the multilevel marketer to an independent distributor for resale to an Iowa end user or for a distributor’s personal use. b. Unless authorized by the department, the multilevel marketer must not have been previously required to be registered to remit sales tax. c. The multilevel marketer must have contacted the department with a request to collect and remit sales taxes directly to the department on sales made by an independent distributor. d. The multilevel marketer must not be under audit or examination by the department on the effective date of the agreement.The department has full discretion to determine if a multilevel marketer meets the eligibility requirements for a multilevel marketer agreement. The department has full discretion to decide whether to enter a multilevel marketer agreement. The department can request any and all information and documentation necessary to determine whether eligibility requirements are met. Failure to timely submit information and documents requested by the department will result in the department’s refusal to enter into an agreement with the multilevel marketer. 208.1(4) Terms of the multilevel marketer agreement. The multilevel marketer agreement will become effective on the date an authorized representative of the multilevel marketer executes the agreement. Unless terminated in accordance with subrule 208.1(5), the multilevel marketer agreement remains in effect as long as the multilevel marketer has an independent distributor making sales in Iowa. Terms of agreements are based on results of negotiations between the multilevel marketer and the department. However, the following general terms must be in each multilevel marketer agreement: a. The multilevel marketer agrees to the following terms: (1) The multilevel marketer agrees to collect tax on the following three types of sales, excluding sales properly exempt from tax and evidenced by a valid exemption certificate: 1. The multilevel marketer agrees to collect sales tax from the independent distributors based on the suggested retail price of its product; 2. If the multilevel marketer allows independent distributors to purchase its product at a wholesale price for the distributor’s personal use, then the multilevel marketer agrees to collect sales tax on sales that are based on the wholesale price to the independent Iowa distributor, unless the department waives this requirement; and 3. The multilevel marketer agrees to collect sales tax on all retail sales by the multilevel marketer to consumers that are subject to sales tax; (2) The multilevel marketer will timely remit sales tax on transactions described in subparagraph 208.1(4)“a”(1); (3) The multilevel marketer will maintain records to establish the accuracy of the sales and use tax returns within the applicable statutes of limitation; (4) The multilevel marketer agrees that the sales tax shall be added to the retail price charged to the consumer, as required by Iowa Code section 423.14(2)“e”; (5) The multilevel marketer agrees to be subject to audit and to pay any tax, penalty, and interest that are ultimately found to be legally due and that were required to be collected by the multilevel marketer under Iowa law, these rules, and the multilevel marketer agreement; (6) The multilevel marketer agrees to abide by the rules in 701—Chapter 208; and (7) The multilevel marketer agrees to register for an Iowa sales and use tax permit. b. The department agrees to the following terms: (1) The department will not audit, assess or demand payment of sales tax, penalty or interest from the multilevel marketer for any tax periods ending before the effective date of the multilevel marketer agreement, unless the multilevel marketer had a permit registration with the department prior to the effective date of this multilevel marketing agreement. If a multilevel marketer had a permit registration with the department prior to the effective date of this multilevel marketing agreement, the department may audit, assess, refund, or demand payment of tax, penalty, and interest from the multilevel marketer for any of those previous tax periods within the applicable statute of limitation. (2) Unless required for transactions outside the multilevel marketer agreement, the department will not require the multilevel marketer to retroactively register for an Iowa sales and use tax permit or file Iowa sales and use tax returns for periods ending on or before the effective date of this agreement. (3) The department agrees to allow a deduction from taxable sales reported by the multilevel marketer for merchandise returned by an independent distributor for which tax has already been paid to the department and for which the multilevel marketer, via the distributor, has allowed a credit or refund of the tax to the consumer. c. Other general agreement terms: (1) The multilevel marketer agreement is binding upon all parties, including their successors and assignees; and (2) The terms, provisions, interpretations and enforcement of the multilevel marketer agreement are to be governed by the laws of the state of Iowa. d. Refunds. Refunds for any overpayment of taxes paid by a consumer as a result of a multilevel marketer agreement should be claimed on the proper Iowa refund claim form as designated by the director. Under this agreement, if the retail sale is made by an Iowa retailer to an out-of-state consumer, the multilevel marketer agrees to forego any claim for refund of tax that was paid on such sale. 208.1(5) Termination of a multilevel marketer agreement. If any of the following events occur, an executed multilevel marketer agreement may be declared null and void: a. Termination of a multilevel marketer agreement at the department’s discretion. (1) The multilevel marketer has misrepresented any material fact regarding its activities, operations, tax liabilities, or eligibility under the agreement. (2) It is determined by the department that the multilevel marketer had been notified that it was to be or was under audit by the department prior to the time the multilevel marketer executed the multilevel marketer agreement. b. Termination of a multilevel marketer agreement by mutual agreement of the parties. (1) Change occurs in law that impacts the tax liability subject to the multilevel marketer agreement. (2) Collection and remittance of sales tax as required under the agreement are more feasible by other means.Written notice of termination will be promptly given by the department in the event of termination under paragraph 208.1(5)“a.” To accommodate the time necessary to effectuate changes by the multilevel marketer and the department, the effective date of the termination of the multilevel marketer agreement shall be 60 days from the date of the notice of the written termination, unless a request for additional time is made by the multilevel marketer and the request is granted by the department. 208.1(6) Liability of independent distributors. After execution of a multilevel marketer agreement, an independent distributor must collect, report, and remit to the department, unless remitted to the multilevel marketer, any and all sales taxes that the independent distributor is required to collect, report, and remit that exceed the amount of tax that the independent distributor has previously remitted to the multilevel marketer company. If such excess tax is remitted to the multilevel marketer, the multilevel marketer shall report and remit the tax to the department.If an independent distributor makes sales that are exempt from sales taxes, then the independent distributor must obtain a valid exemption certificate from the purchaser to evidence the transaction and provide a copy of the completed exemption certificate to the multilevel marketer that has the multilevel marketer agreement with the department. 208.1(7) Legislative changes. All multilevel marketer agreements are subject to all applicable legislative enactments that are made subsequent to the agreement and that impact the agreement.

701—208.2(421) Other sources of tax collection requirements. Notwithstanding any provision in this chapter or any multilevel marketer agreement and notwithstanding whether a multilevel marketer agreement is entered between a person and the department, multilevel marketers and independent distributors may have an obligation to collect Iowa sales tax and any applicable local option sales tax if they meet the definition of “retailer” under Iowa Code section 423.1(47). These rules are intended to implement Iowa Code sections 421.5 and 421.17.ARC 7174CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to agricultural rules and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 214, “Agricultural Rules,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.2(1), 423.2(6), 423.3(2), 423.3(3), 423.3(5), 423.3(6), 423.3(8), 423.3(11) through 423.3(16), 423.3(51) and 423.3(57).Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 214 and adopt a new Chapter 214, which describes the Department’s interpretation of the underlying statutes to aid the public in understanding the application of sales and use tax statutes to taxpayers engaged in agricultural activity. The Department proposes revisions to the rules to provide clarification and to remove obsolete, unnecessary, and duplicative statutory language. The Department also renumbered some rules due to other edits and for organizational reasons. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 214 and adopt the following new chapter in lieu thereof: CHAPTER 214AGRICULTURAL RULES[Prior to 9/7/22, see Revenue Department[701] Ch 226]

701—214.1(423) Farm machinery and equipment and items used in agricultural production that are attached to a self-propelled implement of husbandry. The sales price from the sale of farm machinery and equipment directly and primarily used in production of agricultural products and certain items used in agricultural production that are attached to or towed by a self-propelled implement of husbandry is exempt from sales and use tax. 214.1(1) Farm machinery and equipment. a. Exempt.Under this rule, to be eligible for the exemption from the tax, the farm machinery or equipment must be directly and primarily used in production of agricultural products and must also be one of the following: (1) A self-propelled implement; or (2) An implement customarily drawn or attached to a self-propelled implement; or (3) A grain dryer; or (4) An auxiliary attachment that improves the performance, safety, operation, or efficiency of a qualifying implement or grain dryer; or (5) A replacement part for any item described in subparagraph (1), (2), (3), or (4). b. Taxable.A vehicle subject to registration as defined in Iowa Code section 423.1, an implement customarily drawn by or attached to a vehicle subject to registration, an auxiliary attachment for a vehicle subject to registration, or any replacement part for a vehicle, implement, or auxiliary attachment for a vehicle subject to registration is not eligible for the exemption allowed under this rule. 214.1(2) Attachments to self-propelled implements of husbandry. a. Exempt.Exempt from the tax under this rule are the following items if, and only if, they are used in agricultural production: (1) A snow blower that is to be attached to a self-propelled implement of husbandry; or (2) A rear-mounted or front-mounted blade that is to be attached to or towed by a self-propelled implement of husbandry; or (3) A rotary cutter that is to be attached to a self-propelled implement of husbandry. b. Used in agricultural production.Under this subrule, the items must be used in agricultural production, and not “directly and primarily” used in production of agricultural products as is required under subrule 214.1(1). 214.1(3) Definitions and specific provisions. For the purposes of this rule, the following definitions and provisions apply. a. Production of agricultural products.The term “production of agricultural products” means the same as the term “agricultural production,” which is defined in rule 701—200.1(423) to mean a farming operation undertaken for profit by the raising of crops or livestock. Nonexclusive examples of items not included within the meaning of the term “agricultural production” are the clearing or preparation of previously uncultivated land, the creation of farm ponds, and the erection of machine sheds, confinement facilities, storage bins, or other farm buildings. Machinery and equipment used for these purposes would be used for activities that are preparatory to, but not a part of, the production of agricultural products and, therefore, are not exempt. b. Farm machinery and equipment.The term “farm machinery and equipment” means machinery and equipment specifically designed for use in the production of agricultural products and machinery and equipment that are not specifically designed for use in the production of agricultural products but are directly and primarily used for that purpose. c. Self-propelled implement.The term “self-propelled implement” means an implement that is capable of movement from one place to another under its own power. An implement is not self-propelled merely because it has moving parts. The term “self-propelled implement” includes, but is not limited to, the following items: skid loaders and tractors. The term also includes, but is not limited to, the following machinery if capable of movement under its own power: combines, corn pickers, fertilizer spreaders, hay conditioners and windrowers, sprayers, and bean buggies. d. Implements customarily drawn or attached to self-propelled implements.The following is a nonexclusive, representative list of implements customarily drawn or attached to self-propelled implements: augers, balers, blowers, combines, conveyers, cultivators, disks, drags, dryers (portable), farm wagons, feeder wagons, fertilizer spreaders, front- and rear-end loaders, harrows, hay loaders, hay mowers, hay rakes, husking machines, manure spreaders, planters, plows, rotary hoes, sprayers and tanks, and tillage equipment. e. Directly used in agricultural production. (1) Property is “directly used” only if it is used to initiate, sustain, or terminate an exempt activity. In determining whether any property is directly used, consideration should be given to the following factors: 1. The physical proximity of the property to other property clearly exempt as directly used in agricultural production. The closer the property is to exempt property, the more likely it is that the property is directly used in agricultural production. 2. The chronological proximity of the use of the property in question to the use of property clearly exempt as directly used in agricultural production. The closer the proximity of the property’s use within the production process to the use of exempt property, the more likely the use is direct rather than remote. 3. The active causal relationship between the use of the property in question and agricultural production. The fewer intervening causes between the use of the property and the production of the product, the more likely it is that the property is directly used in agricultural production. (2) The fact that particular machinery or equipment is essential to the production of agricultural products because its use is required either by law or practical necessity does not, of itself, mean that the machinery or equipment is directly used in the production of agricultural products. Machinery or equipment that comes into actual physical contact with the soil or crops during the operations of planting, cultivating, harvesting, and soil preparation will be presumed to be machinery or equipment used in agricultural production. f. Primarily used in agricultural production.Property is “primarily used” in agricultural production based on the total time it is used in agricultural production in comparison to the time it is used for other purposes. Any property used in agricultural production more than 50 percent of its total use time is eligible for exemption. g. Beginning and end of agricultural production.Agricultural production begins with the cultivation of land previously cleared for the planting of crops or begins with the purchase or breeding of livestock or domesticated fowl. Agricultural production ceases when an agricultural product has been transported to the point where it will be sold by the producer or processed for further use. h. Grain dryer.The term “grain dryer” includes the heater and the blower necessary to force the warmed air into a grain storage bin. The term “grain dryer” does not include equipment, such as augers and spreaders, used in grain storage or movement, nor does it include any other equipment, such as specialized flooring, that is not a grain dryer. Equipment that is not a grain dryer but is used in grain drying may be exempt if the equipment is a self-propelled implement or customarily drawn or attached to a self-propelled implement and is directly and primarily used in agricultural production. i. Replacement parts. (1) The term “replacement parts” means any farm machinery or equipment that is substituted for another part that has broken, worn out or has become obsolete or otherwise unable to perform its intended function. Replacement parts are those parts that materially add to the value of farm machinery or equipment, appreciably prolong its life or keep it in its ordinarily efficient operating condition. Excluded from the meaning of the term “replacement parts” are supplies and computer software. Sales of supplies and computer software are taxable. Nonexclusive examples of supplies include: lubricants, oils, greases, and coolants. (2) Tangible personal property that has an expected useful life of 12 months or more and is used in the operation of farm machinery or equipment is rebuttably presumed to be a replacement part. Tangible personal property that is used in the same manner but has an expected useful life of less than 12 months is rebuttably presumed to be a supply. (3) The sale or lease of a replacement part is exempt from tax if the replacement part is used in any repair or reconstruction of the exempt piece of farm machinery or equipment used in the production of agricultural products. Nonexclusive examples of replacement parts to machinery and equipment that would be exempt include: air-conditioning parts, computer equipment parts, fire equipment parts, glass parts, mirrors, headlights, communication systems, and global positioning equipment parts. j. Implement of husbandry. (1) The term “implement of husbandry” means any tool, equipment, or machinery necessary to the carrying on of the business of agricultural production and without which that could not be done. To be an implement of husbandry, the following must both be true: 1. The tool, equipment, or machine must be necessary to the carrying on of the business of agricultural production; and 2. Agricultural production must be impossible without the use of the tool, equipment, or machine. (2) Whether a given item is an implement of husbandry depends on the facts of each particular case, and in each particular case the person claiming the exemption has the burden of proving that the person is entitled to the exemption. k. Snow blower.“Snow blower” as used in this rule means an attachment that has the primary purpose of snow removal by the throwing of snow and that is ordinarily thought of as a snow blower. l. Rear-mounted or front-mounted blade.“Rear-mounted or front-mounted blade” as used in this rule means a stationary attachment that has a primary purpose of pushing or leveling, for example, sand, dirt, snow, gravel, or manure. The term “rear-mounted or front-mounted blade” does not include mounted buckets or loaders that have a primary purpose of loading or digging. m. Rotary cutter.“Rotary cutter” as used in this rule means an attachment used for mowing of grassy areas, pastures, and brush, but does not include attachments often referred to as “finishing mowers” and “mid-mount mowers.” 214.1(4) Taxable and nontaxable transactions. The following are nonexclusive examples of sales and leases of and services for farm machinery or equipment subject to or exempt from tax. Taxable services performed on farm machinery or equipment are subject to tax even when the replacement parts are exempt. a. A lessor’s purchase of farm machinery or equipment is not subject to tax if the machinery or equipment is leased to a lessee who uses it directly and primarily in the production of agricultural products and if the lessee’s use of the machinery or equipment is otherwise exempt. To claim exemption from tax, the lessor does not need to make an exempt use of the machinery or equipment as long as the lessee uses the machinery or equipment for an exempt purpose. The lease of tangible personal property is treated as the sale of that property for the purposes of Iowa sales and use tax law because leases of tangible personal property are taxable retail sales of that property. b. A lessor’s purchase of a snow blower, rear-mounted or front-mounted blade, or rotary cutter is not subject to tax if such item is leased to a lessee who uses the item in agricultural production and the item will be attached to an implement of husbandry. c. The owner or lessee of farm machinery or equipment need not be a farmer as long as the machinery or equipment is directly and primarily used in the production of agricultural products and the owner or lessee and the machinery or equipment meet the other requirements of this rule. For example, a person who purchases an airplane designed for use in agricultural aerial spraying and who uses the airplane directly and primarily for agricultural production is entitled to the benefits provided under this rule even though that person is not the owner or occupant of the land where the airplane is used. d. The owner or lessee of a snow blower, rear-mounted or front-mounted blade, or rotary cutter need not be a farmer as long as the snow blower, rear-mounted or front-mounted blade, or rotary cutter is used in agricultural production and the snow blower, rear-mounted or front-mounted blade, or rotary cutter is attached to an implement of husbandry. e. The sale or lease, within Iowa, of any farm machinery, equipment, or replacement part for direct and primary use in agricultural production outside of Iowa is a transaction eligible for the exemption if the transaction is otherwise qualified for an exemption under this rule. f. The sale or lease, within Iowa, of any snow blower, rear-mounted or front-mounted blade, or rotary cutter that is used, outside of Iowa, in agricultural production while attached to an implement of husbandry is a transaction eligible for the exemption, if the transaction is otherwise qualified for an exemption under this rule. 214.1(5) Auxiliary attachments. The following is a nonexclusive list of auxiliary attachments for which the sale or use in Iowa is exempt from tax: auxiliary hydraulic valves, cabs, coil tine harrows, corn head pickup reels, dry till shanks, dual tires, extension shanks, fenders, fertilizer attachments and openers, fold kits, grain bin extensions, herbicide and insecticide attachments, kit wraps, no-till coulters, quick couplers, rear-wheel assists, rock boxes, rollover protection systems, rotary shields, stalk choppers, step extensions, trash whips, upper beaters, silage bags, and weights. This rule is intended to implement Iowa Code sections 423.3(8) and 423.3(11).

701—214.2(423) Farm implement repair of all kinds. 214.2(1) In general. Persons engaged in the business of repairing, restoring, or renovating implements, tools, machines, vehicles, or equipment used in the operation of farms, ranches, or acreages on which crops of all kinds are grown and on which livestock, poultry, or furbearing animals are raised or used for any purpose are selling a service subject to sales tax. 214.2(2) Installation not taxable. Those services relating to the installation of new parts or accessories that are not replacements are not taxable. This rule is intended to implement Iowa Code section 423.2(6)“r.”

701—214.3(423) Irrigation equipment used in agricultural production. The sales price from the sale or rental of irrigation equipment used in agricultural production is exempt from tax. The term “irrigation equipment” includes, but is not limited to, circle irrigation systems and trickle irrigation systems, whether installed aboveground or belowground, as long as the equipment is sold to or rented by a contractor or farmer and the equipment is directly and primarily used in agricultural production. The term “agricultural production” is defined in rule 701—200.1(423). This rule is intended to implement Iowa Code sections 423.3(12) and 423.3(13).

701—214.4(423) Sale of a draft horse. The sales price from the sale of draft horses, when they are purchased for use and used as draft horses, is not subject to tax. Draft horses are horses that pull loads, including loads in shows, or transport persons or property. For purposes of this rule, horses commonly known as Clydesdales, Belgians, Shires, and Percherons are draft horses. However, upon proper showing by the person or entity claiming exemption, the sales price exemption will be granted by the director for other breeds. However, the burden of proof lies with the person or entity claiming exemption. This rule is intended to implement Iowa Code section 423.3(14).

701—214.5(423) Veterinary services. Veterinary services are not subject to sales tax. Purchases of food, drugs, medicines, bandages, dressings, serums, tonics, and the like that are used in treating livestock raised as part of agricultural production are exempt from tax. Where these same items are used in treating animals maintained as pets or for hobby purposes, sales tax is due. Purchases of equipment and tools used in the veterinary practice are subject to tax. Rule 701—214.17(423) explains the exemption for machinery or equipment used in livestock or dairy production that may be applicable to veterinarians, but should only be claimed with caution. A veterinarian must charge sales tax on any sales of tangible property or enumerated services, such as pet grooming, that are not part of professional veterinarian services. This rule is intended to implement Iowa Code section 423.3(5).

701—214.6(423) Commercial fertilizer and agricultural limestone. 214.6(1) Commercial fertilizer. The sales price from the sales of commercial fertilizer is exempt from sales and use tax. Plant hormones are considered to be commercial fertilizer. 214.6(2) Agricultural limestone. The sales price from the sales of agricultural limestone is exempt from sales and use tax only if the purchaser intends to use the limestone for disease control, weed control, insect control, or health promotion of plants or livestock produced for market as part of agricultural production. Rule 701—200.1(423) contains definitions of “agricultural production” and “plants.” Sales of agricultural limestone used for other purposes are subject to sales tax. Examples of taxable sales include, but are not limited to, sales of agricultural limestone for application on a lawn, golf course, or cemetery. This rule is intended to implement Iowa Code sections 423.3(4) and 423.3(5).

701—214.7(423) Breeding livestock. The sales price from the sale of agricultural livestock is exempt from tax only if at the time of purchase the purchaser intends to use the livestock primarily for breeding. The sales price from the sale of agricultural livestock that is capable of breeding, but will not be used for breeding or primarily for breeding, is not exempt from tax. However, the sales price from the sale of most nonbreeding agricultural livestock to farmers would be a sale for resale and exempt from tax. Rule 701—200.1(423) contains a definition of “livestock.” This rule is intended to implement Iowa Code section 423.3(3).

701—214.8(423) Domesticated fowl. The sales price from the sale of domesticated fowl for the purpose of providing eggs or meat is exempt from tax, whether purchased by a person engaged in agricultural production or not. Rule 701—200.1(423) contains a definition of the term “domesticated fowl.” This rule is intended to implement Iowa Code section 423.3(3).

701—214.9(423) Agricultural health promotion items. 214.9(1) Definitions. For purposes of this rule, the following definitions apply: "Adjuvant" means any substance that is added to an herbicide, a pesticide, or an insecticide to increase its potency. "Agricultural production" means the same as defined in rule 701—200.1(423). "Food" includes vitamins, minerals, other nutritional food supplements, and hormones sold to promote the growth of livestock. "Herbicide" means any substance intended to prevent, destroy, or retard the growth of plants including fungi. The term includes preemergence, postemergence, lay-by, pasture, defoliant, and desiccant herbicides and fungicides. "Insecticide" means any substance used to kill insects. Any substance used merely to repel insects is not an insecticide. Mechanical devices that are used to kill insects are not insecticides. "Livestock" means the same as defined in rule 701—200.1(423). For the purposes of this rule, “livestock” includes domesticated fowl. "Medication" includes antibiotics or other similar drugs administered to livestock. "Pesticide" means any substance that is used to kill rodents or smaller vermin, other than insects, such as nematodes, spiders, or bacteria. For the purposes of this rule, a disinfectant is a pesticide. Excluded from the term “pesticide” is any substance that merely repels pests or any device, such as a rat trap, that kills pests by mechanical action. "Plants" means the same as defined in rule 701—200.1(423). "Surfactant" means a substance that is active on a surface. 214.9(2) Agricultural health promotion items and adjuvants. The sales price from the sale of herbicides, pesticides, insecticides, food, and medication that are to be used in disease, weed, or insect control or health promotion of plants or livestock produced as part of agricultural production for market is exempt from tax. Sales of adjuvants, surfactants, and other products that enhance the effects of herbicides, pesticides, or insecticides used in disease, weed, or insect control or health promotion of plants or livestock produced as part of agricultural production for market are also exempt from tax. The sales price from the sale of herbicides, pesticides, insecticides, food, medication, and products to any person not engaged in agricultural production for market are exempt if the property sold will be used for an exempt purpose, e.g., in disease control or on the behalf of another person engaged in agricultural production for market. This rule is intended to implement Iowa Code sections 423.3(5) and 423.3(16).

701—214.10(423) Drainage tile. The sales price from the sale or installation of drainage tile that is to be used in disease control or weed control or in health promotion of plants or livestock produced as part of agricultural production for market is exempt from tax. In all other cases, drainage tile will be considered a building material and subject to tax under the provisions of Iowa Code section 423.2. Sales of the following materials associated with the installation of agricultural drainage tile are also exempt from tax: tile intakes, outlet pipes and outlet guards, aluminum and gabion structures, erosion control fabric, water control structures, and tile fittings. This rule is intended to implement Iowa Code section 423.3.

701—214.11(423) Materials used for seed inoculations. The sales price from the sale of materials used for seed inoculations is exempt from sales tax. All forms of inoculation, whether for promotion of better growth and healthier plants or for the prevention or cure of plant mildew or disease of seeds and bulbs, are intended for the same general purpose and are therefore exempt. This rule is intended to implement Iowa Code section 423.3.

701—214.12(423) Fuel used in agricultural production. 214.12(1) Definitions. For purposes of this rule, the following definitions apply: "Aquaculture" means the same as defined in rule 701—200.1(423). "Fuel" includes electricity. "Implement of husbandry" means the same as defined in paragraph 214.1(1)“j.” "Livestock" means the same as defined in rule 701—200.1(423) and includes domesticated fowl. 214.12(2) Exemptions. a. Fuel used for livestock buildings.The sale of fuel used to provide heating or cooling for livestock buildings is exempt from tax. b. Fuel used for flowering, ornamental, or vegetable plant production buildings. (1) The sales price from the sale of fuel for heating or cooling greenhouses, buildings, or parts of buildings used for the production of flowering, ornamental, or vegetable plants intended for sale in the ordinary course of business is exempt from tax. See subparagraph (3) for the formula for calculating exempt use if a building is only partially used for growing flowering, ornamental, or vegetable plants. (2) Fuel used in a flowering, ornamental, or vegetable plant production building for purposes other than heating or cooling (e.g., lighting) or for purposes other than direct use in flowering, ornamental, or vegetable plant production (e.g., heating or cooling office space) is not eligible for this exemption. Examples of nonexempt purposes for which a portion of a greenhouse might be used include, but are not limited to, portions used for office space; loading docks; storage of property other than flowering, ornamental, or vegetable plants; housing of heating and cooling equipment; and packaging flowering, ornamental, or vegetable plants for shipment. (3) Calculating proportional exemption. It may be possible to calculate the amount of total fuel used in plant production by dividing the number of square feet of the greenhouse heated or cooled and used for raising flowering, ornamental, or vegetable plants by the number of square feet heated or cooled in the entire greenhouse. It may be necessary to alter this formula (by the use of separate metering, for example) if a greenhouse has a walk-in cooler and the cooler is used directly in flowering, ornamental, or vegetable plant production. Subrule 214.18(12) provides information about a seller’s and purchaser’s liability for sales tax.Total square footage used for raising flowering, ornamental, or vegetable plants=800Total square footage=1,000TOTAL: 800 ÷ 1,000=.80 or 80%Thus, 80 percent of the cost of the fuel used to heat and cool Martha Green’s greenhouse is exempt from sales tax. c. Sales of fuel used for aquaculture.Sales of fuel used in the raising of agricultural products by aquaculture are exempt from tax. d. Sales of fuel, gas, electricity, water, and heat consumed in implements of husbandry.The sale of fuel used in any implement of husbandry, whether self-propelled or not, is exempt from tax if the fuel is consumed while the implement is engaged in agricultural production. For example, the sale of fuel used not only in tractors or combines, but also used in implements that cannot move under their own power, is exempt from tax. The sale of fuel used in milk coolers and milking machines, grain dryers, and stationary irrigation equipment and in implements used to handle feed, grain, and hay and to provide water for livestock is exempt from tax even though these implements of husbandry would not ordinarily be considered self-propelled. 214.12(3) Partial use. If a building is used partially for an exempt agricultural purpose and partially for a nonexempt purpose, a proportional exemption from sales tax may be claimed based upon a percentage obtained by dividing the number of square feet of the building heated or cooled and used for an exempt agricultural purpose by the number of square feet heated or cooled in the entire building. This rule is intended to implement Iowa Code section 423.3(6).

701—214.13(423) Water used in agricultural production. The sales price from the sale of water sold to farmers who are purchasing water for household use, sanitation, swimming pools, or other personal use is subject to sales tax. The sales price from the sale of water sold to farmers and others and used directly as drinking water for livestock production (including the production of domesticated fowl) is exempt from sales tax. When water is used for exempt purposes, as in livestock production, as well as for taxable purposes, the water may, when practical, be separately metered and separately billed to clearly distinguish the water consumed for exempt purposes from taxable purposes. When it is impractical to separately meter exempt water from taxable water, the purchaser may furnish to the seller a statement enabling the seller to determine the percentage of water subject to exemption. In the absence of proof to the contrary, the retailer of the water bills and collects tax on the first 5,000 gallons of water per month. The first 5,000 gallons of water per month will be considered to be for nonexempt use, and the balance will be considered to be used as part of agricultural production. This rule is intended to implement Iowa Code section 423.3(5).

701—214.14(423) Hatcheries. The sales price from the sale of egg-type cockerel chicks, broiler chicks, and turkey poults is subject to tax. If sale of domestic poultry is for breeding, rule 701—214.7(423) provides information.When pullets and poults are sold for production purposes, the sales price from the sale is exempt from tax. This rule is intended to implement Iowa Code sections 423.2(1) and 423.3(3).

701—214.15(423) Sales by farmers. The sales price from the sale of grain, livestock, or any other farm or garden product by the producer thereof ordinarily constitutes a sale for resale, processing, or human consumption and is exempt from tax. In order to sell tangible personal property not otherwise exempt to ultimate consumers or users, farmers shall hold a permit and collect and remit sales tax on the sales price from their sales. This rule is intended to implement Iowa Code sections 423.3(2), 423.3(51), and 423.3(57).

701—214.16(423) Sales of livestock (including domesticated fowl) feeds. The sales price from the sale of feed for any form of animal life when the product of the animals constitutes food for human consumption is exempt from tax. The sales price from the sale of feed sold for consumption by pets is subject to tax. The sales price from the sale of antibiotics that are administered as an additive to feed or drinking water and vitamins and minerals that are sold for livestock (including domesticated fowl) is exempt from tax. This rule is intended to implement Iowa Code section 423.3(16).

701—214.17(423) Farm machinery, equipment, and replacement parts used in livestock or dairy production. 214.17(1) The sales price from the sale of farm machinery, equipment, and replacement parts used in livestock or dairy production is exempt from sales and use tax. 214.17(2) Definitions and special provisions. For purposes of this rule, the following definitions and special provisions apply. a. Machinery.The term “machinery” means major mechanical machines, or major components thereof, that contribute directly and primarily to the livestock or dairy production process. Usually, a machine is a large object with moving parts that performs work through the expenditure of energy, either mechanical (e.g., gasoline or other fuel) or electrical. b. Equipment.The term “equipment” means tangible personal property (other than a machine) that is directly and primarily used in livestock or dairy production. Equipment may be characterized as property that performs a specialized function and that has no moving parts, or if the equipment does possess moving parts, its source of power is external to it. The following nonexclusive examples differentiate between machinery and equipment: c. Property used in livestock or dairy production that is neither equipment nor machinery. (1) Real property. The ground or the earth is not machinery or equipment. A building is not machinery or equipment. Therefore, tangible personal property that is sold for incorporation into the ground or a building in such a manner that the property will become a part of the ground or the building is taxable except for machinery and equipment. Generally, property incorporated into the ground or a building has become a part of the ground or the building if its removal would substantially damage the property, ground, or building or would substantially diminish the value of the property, ground, or building. Fence posts embedded in concrete, electrical wiring, light fixtures, fuse boxes, and switches are examples of property sold for incorporation into the ground or a building, respectively. For the purpose of the following example, assume that property is being sold to a contractor rather than a person engaged in livestock or dairy production. If the property is sold to a contractor, the retailer would be required to consider the property building material and charge the contractor sales tax upon the purchase price of the building material. If the property is building material, sale of the property is not exempt from Iowa sales tax. Rule 701—219.3(423) contains a characterization of building material and a list of specific examples of building material. (2) Supplies. Supplies are neither machinery nor equipment. Tangible personal property is a farm supply if it is used up or destroyed by virtue of its use in livestock or dairy production or, because of its nature, can only be used once in livestock or dairy production. A light bulb is an example of a farm supply that is not machinery or equipment. Examples of farm supplies that could be mistaken for equipment and are not exempt from tax on other grounds can be found in subrule 214.19(4). d. Hand tools.The term “hand tools” means tools that can be held in the hand or hands and that are powered by human effort. Hand tools specifically designed for use in livestock or dairy production are exempt from tax as equipment. Mechanical devices that are held in the hand and driven by electricity from some source other than human muscle power are, if they meet all other qualifications, exempt from tax as farm machinery. e. “Directly used” in livestock or dairy production.To determine if machinery or equipment is “directly used” in livestock or dairy production, one must first ensure that the machinery or equipment is used during livestock or dairy production and not before that process has begun or after it has ended. Paragraph 214.17(2)“g” contains an explanation of when livestock or dairy production begins and ends. (1) Definition. If the machinery or equipment is used in livestock or dairy production, “directly used” means the use is an integral and essential part of production as distinguished from use that is incidental or merely convenient to production or use that is remote from production. Machinery or equipment may be necessary to livestock or dairy production, but its use is so remote from production that it is not directly used in that production. (2) Determination. In determining whether machinery or equipment is directly used, consideration should be given to the following factors: 1. The physical proximity of the machinery or equipment to other machinery or equipment clearly exempt as directly used in livestock or dairy production. The closer the machinery or equipment is to exempt machinery or equipment, the more likely it is that the machinery or equipment is directly used in livestock or dairy production. 2. The chronological proximity of the use of machinery or equipment in question to the use of machinery clearly exempt as directly used in livestock or dairy production. The closer the proximity of the machinery’s or equipment’s use within the production process to the use of exempt machinery or equipment, the more likely the use is direct rather than remote. 3. The active causal relationship between the use of the machinery or equipment in question and livestock or dairy production. The fewer intervening causes between the use of the machinery or equipment and the production of the product, the more likely it is that the machinery or equipment is directly used in production. f. “Primarily used” in livestock or dairy production.Machinery or equipment is “primarily used” in livestock or dairy production based on the total time it is used in livestock or dairy production in comparison to the time it is used for other purposes. Any unit of machinery or equipment directly used in livestock or dairy production more than 50 percent of its total use time is eligible for exemption. g. Beginning and end of livestock or dairy production.Livestock or dairy production begins with the purchase or breeding of livestock or dairy animals. Livestock or dairy production ceases when an animal or the product of an animal’s body (e.g., wool) has been transported to the point where it will be sold by the farmer or processed. h. Machinery and equipment design.Farm machinery and equipment used in livestock or dairy production is eligible for exemption if specifically designed for use in livestock or dairy production. Farm machinery and equipment that are not specifically designed for use in livestock or dairy production, but are directly and primarily used in livestock or dairy production, are eligible for exemption with the exception of common or ordinary hand tools. i. Replacement parts.The term “replacement parts” means the same as defined in paragraph 214.1(2)“i.” 214.17(3) Examples of machinery and equipment directly used in livestock or dairy production. a. Machinery and equipment used to transport or limit the movement of livestock or dairy animals (e.g., electric fence equipment, portable fencing, head gates, and loading chutes) are directly used in livestock or dairy production. b. Machinery and equipment used in the conception, birth, feeding, and watering of livestock or dairy animals (e.g., artificial insemination equipment, portable farrowing pens, feed carts, and automatic watering equipment) are directly used in livestock or dairy production. c. Machinery and equipment used to maintain healthful or sanitary conditions in the immediate area where livestock are kept (e.g., manure gutter cleaners, automatic cattle oilers, fans, and heaters if not real property) are directly used in livestock or dairy production. d. Machinery and equipment used to test or inspect livestock during production are directly used in livestock or dairy production. 214.17(4) Taxable examples. The following are nonexclusive examples of machinery or equipment that would not be directly used in livestock or dairy production. a. Machinery or equipment used to assemble, maintain, or repair other machinery or equipment directly used in livestock or dairy production (e.g., welders, paint sprayers, and lubricators). b. Machinery or equipment used in farm management, administration, advertising, or selling (e.g., a computer used for record keeping, calculator, office safe, telephone, books, and farm magazines). c. Machinery or equipment used in the exhibit of livestock or dairy animals (e.g., blankets, halters, prods, leads, and harnesses). d. Machinery or equipment used in safety or fire prevention, even though the machinery or equipment is required by law. e. Machinery or equipment for employee or personal use. Machinery or equipment used for the personal comfort, convenience, or use by a farmer, the farmer’s family or employees, or persons associated with the farmer is not exempt from tax. Examples of such machinery and equipment include the following: beds, mattresses, blankets, tableware, stoves, refrigerators, and other equipment used in conjunction with the operation of a farm home or other facilities for farm employees. f. Machinery or equipment used for heating, cooling, ventilation, and lighting of farm buildings generally. g. Vehicles subject to registration. 214.17(5) The sales price, not including services, of the following machinery or equipment is exempt from tax regardless of whether the machinery or equipment remains tangible personal property after installation or is incorporated into the realty: auxiliary attachments that improve the performance, safety, operation, or efficiency of the machinery and equipment, including auger systems, curtains and curtain systems, drip systems, fan and fan systems, shutters, inlets, shutter or inlet systems, refrigerators, and replacement parts if all of the following conditions are met: a. The implement, machinery, or equipment is directly and primarily used in livestock or dairy production. b. The implement is not a self-propelled implement or implement customarily drawn or attached to self-propelled implements. c. The replacement part is used in a repair or reconstruction of the exempt piece of farm machinery or equipment used in the production of agricultural products. 214.17(6) Auxiliary attachments exemption. Sales of auxiliary attachments that improve the performance, safety, operation, or efficiency of exempt machinery or equipment are exempt from tax. Sales of replacement parts for these auxiliary attachments are also exempt. 214.17(7) Seller’s and purchaser’s liability for sales tax. The seller is relieved of sales tax liability if the seller takes from the purchaser an exemption certificate stating that the purchase is of machinery and equipment meeting the requirements of this rule. The exemption certificate must be fully completed. If items purchased tax-free pursuant to an exemption certificate are used or disposed of by the purchaser in a nonexempt manner, the purchaser is solely and directly liable for sales tax and remits the tax to the department. This rule is intended to implement Iowa Code sections 423.3(11) and 423.3(15).

701—214.18(423) Machinery, equipment, and replacement parts used in the production of flowering, ornamental, and vegetable plants. 214.18(1) The sales price from the sale of machinery, equipment, and replacement parts used in the production of flowering, ornamental, and vegetable plants is exempt from sales and use tax. The production of flowering, ornamental, or vegetable plants by a grower in a commercial greenhouse or at another location is considered to be a part of agricultural production and exempt from sales tax. The term “flowering, ornamental, or vegetable plants” does not include silvicultural products or fungi. 214.18(2) Definitions and special provisions. For purposes of this rule, the following definitions and special provisions apply. a. Machinery.The term “machinery” means major mechanical machines, or major components thereof, that contribute directly and primarily to the flowering, ornamental, or vegetable plant production process. Usually, a machine is a large object with moving parts that performs work through the expenditure of energy, either mechanical (e.g., gasoline or other fuel) or electrical. b. Equipment.The term “equipment” means tangible personal property (other than a machine) that is directly and primarily used in the flowering, ornamental, or vegetable plant production process. Equipment may be characterized as property that performs a specialized function that, of itself, has no moving parts, or if the equipment does possess moving parts, its source of power is external to it. c. Property used in the flowering, ornamental, or vegetable plant production process that is neither equipment nor machinery. (1) Real property. The ground or the earth is not machinery or equipment. A building is not machinery or equipment. Therefore, tangible personal property that is sold for incorporation into the ground or a building in such a manner that the property will become a part of the ground or the building is taxable except for machinery and equipment. Generally, property incorporated into the ground or a building has become a part of the ground or the building if its removal would substantially damage the property, ground, or building or would substantially diminish the value of the property, ground, or building. Fence posts embedded in concrete, electrical wiring, light fixtures, fuse boxes, and switches are examples of property sold for incorporation into the ground or a building, respectively. For the purpose of this example, assume that the property is being sold to a contractor rather than a person engaged in the flowering, ornamental, or vegetable plant production process. If the property is sold to a contractor, the retailer would be required to consider the property building material and charge the contractor sales tax upon the purchase price of this building material. If the property is building material, sale of the property is not exempt from Iowa sales tax. Rule 701—219.3(423) contains a characterization of building material and a list of specific examples of building material. (2) Supplies. Supplies are neither machinery nor equipment. Tangible personal property is a supply if it is used up or destroyed by virtue of its use in the flowering, ornamental, or vegetable plant production process or, because of its nature, can only be used once in the flowering, ornamental, or vegetable plant production process. A light bulb is an example of a supply that is not machinery or equipment. Subrule 214.19(4) provides examples of supplies that could be mistaken for equipment and are not exempt from tax on other grounds. d. Hand tools.The term “hand tools” means tools that can be held in the hand or hands and that are powered by human effort. Hand tools specifically designed for use in the flowering, ornamental, or vegetable plant production process are exempt from tax as equipment. Mechanical devices that are held in the hand and driven by electricity from some source other than human muscle power are, if they meet all other qualifications, exempt from tax. e. “Directly used” in the flowering, ornamental, or vegetable plant production process.To determine if machinery or equipment is “directly used” in the flowering, ornamental, or vegetable plant production process, one must first ensure that the machinery or equipment is used during the flowering, ornamental, or vegetable plant production process and not before that process has begun or after it has ended. Paragraph 214.18(2)“g” contains an explanation as to when the flowering, ornamental, or vegetable plant production process begins and ends. (1) Definition. If the machinery or equipment is used in the flowering, ornamental, or vegetable plant production process, “directly used” means the use is an integral and essential part of production as distinguished from use that is incidental or merely convenient to production or use that is remote from production. Machinery or equipment may be necessary to the flowering, ornamental, or vegetable plant production process, but its use is so remote from production that it is not directly used in that production. (2) Determination. In determining whether machinery or equipment is directly used, consideration should be given to the following factors: 1. The physical proximity of the machinery or equipment to other machinery or equipment clearly exempt as directly used in the flowering, ornamental, or vegetable plant production process. The closer the machinery or equipment is to exempt machinery or equipment, the more likely it is that the machinery or equipment is directly used in the flowering, ornamental, or vegetable plant production process. 2. The chronological proximity of the use of machinery or equipment in question to the use of machinery clearly exempt as directly used in the flowering, ornamental, or vegetable plant production process. The closer the proximity of the machinery’s or equipment’s use within the production process is to the use of exempt machinery or equipment, the more likely the use is direct rather than remote. 3. The active causal relationship between the use of the machinery or equipment in question and the flowering, ornamental, or vegetable plant production process. The fewer intervening causes between the use of the machinery or equipment and the production of the product, the more likely it is that the machinery or equipment is directly used in production. f. “Primarily used” in flowering, ornamental, or vegetable plant production.Machinery or equipment is “primarily used” in flowering, ornamental, or vegetable plant production based upon the total time it is used in flowering, ornamental, or vegetable plant production in comparison to the time it is used for other purposes. Any unit of machinery or equipment directly used in flowering, ornamental, or vegetable plant production more than 50 percent of its total use time is eligible for exemption. g. Beginning and end of flowering, ornamental, or vegetable plant production.Flowering, ornamental, or vegetable plant production begins with the purchase of seeds or starter plants. Flowering, ornamental, or vegetable plant production ceases when a plant has grown to the size or weight at which it will be prepared for shipment to the destination where it will be marketed. h. Machinery and equipment design.Machinery and equipment used in flowering, ornamental, or vegetable plant production are eligible for exemption if they were specifically designed for use in flowering, ornamental, or vegetable plant production. Machinery and equipment that are not specifically designed for use in flowering, ornamental, or vegetable plant production, but are directly and primarily used in flowering, ornamental, or vegetable plant production, are eligible for exemption with the exception of common or ordinary hand tools. i. Replacement parts.The term “replacement parts” means the same as defined in paragraph 214.1(2)“i.” 214.18(3) Examples of machinery and equipment directly used in flowering, ornamental, or vegetable plant production can be found in subrule 214.19(3). 214.18(4) Taxable examples. The following are nonexclusive examples of machinery or equipment that would not be directly used in flowering, ornamental, or vegetable plant production. a. Machinery or equipment used to assemble, maintain, or repair other machinery or equipment directly used in flowering, ornamental, or vegetable plant production. b. Machinery or equipment used in the growing operation’s management, administration, advertising, or selling (e.g., calculators, office safes, telephones, books, and plant magazines). c. Machinery or equipment used in the exhibit of flowering, ornamental, or vegetable plants. d. Machinery or equipment used in safety or fire prevention, even though the machinery or equipment is required by law. e. Machinery or equipment for employee or personal use. Machinery or equipment used for the personal comfort, convenience, or use by a grower, the grower’s family or employees, or persons associated with the grower is not exempt from tax. Examples of such machinery and equipment include the following: beds, mattresses, blankets, tableware, stoves, refrigerators, and other equipment used in conjunction with the operation of a grower’s home, or other facilities for the grower’s employees. f. Machinery or equipment used for heating, cooling, ventilation, and lighting of office, retail, or display buildings where production does not occur. g. Vehicles subject to registration. 214.18(5) Packing material used in flowering, ornamental, or vegetable plant production. The sales price for the sale of property that is a container, label, carton, pallet, packing case, wrapping, baling wire, twine, bag, bottle, shipping case, or other similar article or receptacle sold for use in the production of flowering, ornamental, or vegetable plants in commercial greenhouses or other places that sell such items in the ordinary course of business is not subject to sales tax. Containers and packaging materials include but are not limited to boxes, trays, labels, sleeves, tape, and staples. 214.18(6) Self-propelled implements. The sales price from the sale of self-propelled implements or implements customarily drawn or attached to self-propelled implements and replacement parts for the same is exempt from tax if the implements are used directly and primarily in the production of flowering, ornamental, or vegetable plants in commercial greenhouses or elsewhere. Exempt implements include, but are not limited to, forklifts used to transport pallets of flowering, ornamental, or vegetable plants, wagons containing sterilized soil, and tractors used to pull these items. 214.18(7) Machinery and equipment used in flowering, ornamental, or vegetable plant production that are not self-propelled or attached to self-propelled machinery and equipment are exempt from tax. Rule 701—214.19(423) includes nonexclusive examples of machinery and equipment that are not self-propelled or attached to self-propelled machinery and equipment and that are directly and primarily used in flowering, ornamental, or vegetable plant production. 214.18(8) Fuel used in plant production is discussed in paragraph 214.12(2)“b.” 214.18(9) The sales price from the sale of water used in the production of plants is exempt from tax. If water is not separately metered, the plants’ grower must determine by use of a percentage the portion of water used for a taxable purpose and the portion used for an exempt purpose. Nonexclusive examples of taxable usage include rest rooms, sanitation, lawns, and vehicle wash. 214.18(10) Agricultural health promotion items. The sales price from the sale to a commercial greenhouse of fertilizer, limestone, herbicides, pesticides, insecticides, plant food, and medication for use in disease, weed, and insect control or in other health promotion of flowering, ornamental, or vegetable plants is exempt from tax. For the purposes of this rule, a virus, bacterium, fungus, or insect that is purchased for use in killing insects or other pests is an insecticide or pesticide. Rule 701—214.9(423) contains more information regarding these exemptions. 214.18(11) Miscellaneous exempt and taxable plant sales. a. Sales of pots, soil, seeds, bulbs, and starter plants for use in plant production are not the sale of machinery or equipment, but can be sales for resale and exempt from tax if the pots and soil are sold with the final product or become the finished product. b. The sales price from the sale of portable buildings that will be used to display plants for retail sales is taxable. c. The sales price from the sale of whitewash that will be painted on greenhouses to control the amount of sunlight entering those greenhouses is subject to tax as the sale of a supply rather than exempt from tax as a sale of equipment. 214.18(12) Seller’s and purchaser’s liability for sales tax. The seller is to be relieved of sales tax liability if the seller receives from the purchaser an exemption certificate stating that the purchase is of machinery and equipment meeting the requirements of this rule. The exemption certificate must be fully completed. If items purchased tax-free pursuant to an exemption certificate are used or disposed of by the purchaser in a nonexempt manner, the purchaser is solely and directly liable for the sales tax and remits the tax to the department. This rule is intended to implement Iowa Code sections 423.3(11) and 423.3(15).

701—214.19(423) Nonexclusive lists. The following tables list items that are taxable or exempt. 214.19(1) Exempt for agricultural production. adjuvantsirrigation equipment alternators and generators*kill cones augers*limestone, agricultural balersmanure spreaders bale transportation equipment mowers, hay baling wire and binding twineoil filtersbatteries for exempt machineryoil pumps blowers, grain dryerpacking materials brush hogs*pesticides combines, cornheads, platformspickersconveyors, temporary or portable*plants (seeds)corn pickers planterscrawlers, tractor plowscultipackers piston ringscultivators pruning and picking equipment*discsreplacement parts draft horsesrock pickers dragsrollers*drainage pipe and tile rotary blade mowers; not lawn mowers dusters*rotary hoes ensilage cutters seedersensilage forks and trucks (a pickup does not qualify) seed cleaners*farm wagons and accessories seed planters fertilizer, agricultural seedsfertilizer spreaders self-propelled implements filtersshellers*forage harvesters, boxes silo blowers, unloaders*fuel for grain drying or other agricultural productionsowersgasketsspark plugs for exempt machinery grain augers, portable*sprayers*grain drills spreadersgrain dryer, heater and blower only sprinklersgrain planters subsoilersharrowssurfactantshay conditioners tillershay hookstires for exempt machinery hay loaderstractor chainsherbicidestractors, farmimplements customarily drawn or attached to a self-propelled implement tractor weights insecticides vegetable harvesters weeders* * Exempt if drawn or attached to a self-propelled farm implement and directly and primarily used in agricultural production or, if portable, used directly and primarily in agricultural production. 214.19(2) Exempt for dairy and livestock production. adjuvantsheaters, portable alternators and generators 1 hog feeders, portableartificial insemination equipment hog ringers 3 auger systemshoof trimmers, portable 3 automatic feeding systems, portable hypodermic syringes and needles, nondisposablebatteries for exempt machineryimplements customarily drawn or attached to a self-propelled implementbarn ventilators incubators, portablebedding materials 2 inlets and inlet systemsbreeding stock, agricultural inoculation materialsbulk feeding tanks, portable insecticides bulk milk coolers and tanks, portable kill cones calf weaners and feeders, portable livestock feeding, watering and handling equipment, portablecattle feeders, portable loading chutes, portable chain and rope hoists, portable 1 manure brooms, portable 3 chicken pickers, plucking equipment manure handling equipment, including front- end and rear-end loaders, portable 3 chick guardsmanure scoops, portable 1 clipping machines, portable 3 medications conveyors, temporary or portable 1 milk coolers, portable cow stalls, portable milking equipment, including cans, etc. 3 cow ties, portable milking machines cow watering and feeding bowls, portable milk strainers and strainer disks, if not disposablecrawlers, tractor milk tanks, portable currying and oiling machines, portable pesticidescurtains and curtain systems poultry feeders, portable dehornerspoultry founts, portabledomestic fowl poultry litters, portable draft horses poultry nests, portable drip systems refrigerators electric fence equipment, portablereplacement parts fans and fan systems sawdustfarm wagons and accessories self-propelled implements farrowing houses, crates, stalls, portable shutters and shutter systems feedspace heaters, portable feed bins, portable specialized flooring, portable feed carts, portable sprayers 1 feed elevators, portable squeeze chutes, stalls, portable feed grinders, portable stanchions, portable feed scoops 3 surfactants feed tanks, portable tires for exempt machinery feeder chutes, portablethermometers 3 feeders, portabletractor chainsfence and fencing supplies, temporary or portable tractors, farmfoggers tractor weights fuel to heat or cool livestock buildings vacuum coolers gasketsventilators gates, portable water filters, heaters, pumps, softeners, portablegestation stalls, portable waterers/watering tanks, portablegrooming equipment, portable 3 weanershead gates, portable wood chips 2 1 Exempt if drawn or attached to a self-propelled farm implement and directly and primarily used in dairy or livestock production or, if portable, used directly and primarily in dairy or livestock production. 2 Exempt when used as livestock and poultry bedding. 3 Designed for farm use. 214.19(3) Exempt for flowering, ornamental, or vegetable plant production. air-conditioning padsgreenhouse monorail systems * airflow control tubesgreenhouse thermometersatmospheric CO 2 control and monitoring equipment handcarts used to move plantsbackup generatorslighting that provides artificial sunlightbins holding sterilized soiloverhead heating, lighting, and watering systems * control panels for heating and cooling systems * overhead tracks for holding potted plants * coolers used to chill plants * plant tablescooling wallsplant watering systemsequipment used to control water levels for subirrigationportable buildings used to grow plantsfans used for cooling and ventilating * seeding and transplanting machinesfloor mesh for controlling weedssoil pot and soil flat filling machinesgermination chamberssteam generators for soil sterilization * greenhouse boilers * warning devices that monitor excess heat or coldgreenhouse netting or mesh when used for light and heat controlwatering booms * Exempt if not real property. “Real property” is defined in Iowa Code section 4.1(13) as “lands, tenements, hereditaments, and all rights thereto and interests therein, equitable as well as legal.” More information can be found in 701—Chapter 219. 214.19(4) Taxable even if used in agricultural production. additiveslubricants and fluidsair compressorslumber * air conditioners, unless a replacement part for exempt machinery marking chalkair tanksmopsantifreezemotor oilsaxesnailsbarn cleaner, permanent office suppliesbasketsoxygenbelt dressing packing room suppliesbins, permanent ^ paint and paint sprayersbrooms pliersbuckets posthole diggers, hand toolbuilding materials * and suppliespoultry brooders, permanentburlap cleanerspoultry feeders, permanentcattle feeders, permanentpoultry nests, permanentcement # pruning toolschain sawspumps for household or lawn usecleaning brushesradios, unless a replacement part for exempt machinerycleansing agents and materialsrefrigerators for home usecomputers (including laptop), for personal userepair toolscomputer software road maintenance equipmentconstruction toolsroad scraperconcrete # roofingconveyors, permanentsanderscow ties, permanentscrapersear tagsscrewdriversfence, posts, wire, permanentshinglesfield toiletsshovelsfire prevention equipmentsilosfreonsnow fence, unless portable and used directly in dairy and livestock productionfuel additivessnow plows and snow equipmentfuel tanks and pumpsspace heaters, permanentgarden hoses and rakesspecialized flooring, permanentglasssprinklers, permanentgrain tanks, permanent *^ stalls, permanentgreasestaplesgrease gunsstanchions, permanenthammersstorage tankshog ringstarpshydraulic fluidstiling machinery and equipmenthypodermic syringes, disposabletractors, gardenlampswelderslanternswheel barrowslight bulbs (for household use)wrenches * Contractors and sponsors that purchase building materials, other than grain bin materials, are responsible for paying sales tax to the vendor or supplier or accruing and remitting use tax on those materials. ^ Does not include grain bins used to hold loose grain for drying or storage. # Does not include cement or concrete used in pads or foundations under grain bins. This rule is intended to implement Iowa Code sections 423.3(6), 423.3(8) and 423.3(11).

701—214.20(423) Grain bins. The Iowa Code exempts from sales and use tax the sales price from the sale of a grain bin, including material or replacement parts used to construct or repair a grain bin. “Grain bin” is defined by Iowa Code section 423.3(16A). Grain bins are real property, and grain bin materials are building materials as that term is used in rule 701—219.3(423). 214.20(1) Property considered to be a grain bin or material used to construct a grain bin. In general, materials that are permanently attached to a grain bin and are required to hold loose grain for drying or storage are used to construct a grain bin and thus exempt from sales and use tax. This generally does not include equipment used to move loose grain into or out of a grain bin. The following lists of exempt or taxable property are not exhaustive. a. Exempt property: (1) Grain bins, including hopper bins. (2) Corrugated metal or other similar material for the sides or roof of a grain bin. (3) Steps, ladders, or staircases permanently attached to a grain bin. (4) Structural support towers for a grain bin or for steps, ladders, or staircases providing access to a grain bin. (5) Catwalks. (6) Roof vents permanently attached to a grain bin. (7) Grain bin flooring and floor supports. (8) Concrete pad or foundation under a grain bin. (9) Stirring equipment permanently attached in a grain bin. (10) Fans permanently attached to a grain bin. (11) Temperature sensors or temperature cables permanently attached in a grain bin. (12) Spreaders permanently attached in a grain bin. (13) Sweeps or augers permanently attached in a grain bin. (14) Bolts and other builders’ hardware permanently attached to a grain bin. (15) Controls and devices to operate the above-listed property. (16) Motors for the above-listed property. (17) Replacement parts for the above-listed property. b. Taxable property: (1) Bucket elevators. (2) Distributors. (3) Receiving stations, including drag conveyors and dump pits. (4) Pneumatic or air systems. (5) Conveyors, including chain conveyors, belt conveyors, and drag conveyors. (6) Anchors, bin jacks, or other construction equipment used to assemble, construct, repair, or replace a grain bin or part of a grain bin. (7) Samplers. (8) Scales or weighers. (9) Other items that remain tangible personal property and are not permanently attached to a grain bin. 214.20(2) Primarily used to hold loose grain for drying or storage. Property is deemed to be “primarily used to hold loose grain for drying or storage” if it is used more than 50 percent of the time to hold loose grain for drying or storage. 214.20(3) Claiming the exemption. a. A contractor must provide an exemption certificate to its supplier when purchasing grain bins, grain bin materials, or grain bin replacement parts in order to purchase them free from sales tax. The contractor entering into a construction contract with a sponsor to erect a grain bin or entering into a contract to repair a grain bin must also obtain an exemption certificate from the sponsor of the construction/repair contract to avoid accruing and remitting use tax on the grain bins, grain bin materials, and the grain bin replacement parts that were purchased tax-free from the contractor’s supplier. b. The contractor must accrue consumer’s use tax on the purchase price of the grain bins, grain bin materials, and grain bin replacement parts unless the contractor obtains an exemption certificate from the sponsor of the construction or repair contract. If the grain bin materials or replacement parts are not used in an exempt manner or if an exemption certificate is not obtained, it is the contractor’s responsibility to accrue and remit use tax. The contractor must not charge sales tax to the sponsor of a construction or repair contract because those materials and replacement parts remain building materials used in the performance of a construction contract.A person, also known as a sponsor, enters into a construction contract with Company A to construct a grain bin on the sponsor’s property. The sponsor provides an exemption certificate to Company A also pursuant to Iowa Code section 423.3(16A). Company A may now fulfill the construction contract without accruing and remitting use tax on the grain bin materials purchased from its supplier tax-free.The sponsor enters into a construction contract with Company A to erect a grain bin. Whether or not the sponsor provides an exemption certificate to Company A pursuant to Iowa Code section 423.3(16A), Company A may now fulfill the construction contract without accruing and remitting use tax on the grain bin materials because Company A paid sales tax on the sales price of the grain bin materials when it purchased them from its supplier. This rule is intended to implement Iowa Code section 423.3.

701—214.21(423) Warehousing of raw agricultural products. 214.21(1) In general. The sales price on the warehousing of raw agricultural products is subject to sales tax unless the warehousing of raw agricultural products is storage in transit and has a destination outside of Iowa, regardless of whether the raw agricultural products originated within or outside of Iowa. Because the tax imposed by Iowa Code section 423.2(6)“ax” is imposed on the warehousing and not the sale of raw agricultural products, the interstate commerce exceptions found in Iowa Code section 423.3 do not apply. 214.21(2) Definition. For purposes of this rule: "Raw agricultural products" includes but is not limited to corn, beans, oats, milo, fruits, vegetables, animal semen, and like items that have not been subjected to any form of processing. For purposes of this rule, grain drying is not considered processing. 214.21(3) Other charges. Other charges relating to warehousing of raw agricultural products may be subject to sales tax when separately invoiced. 701—Chapter 206 contains more information about bundled transactions. 214.21(4) Transit warehouses. The warehousing of raw agricultural products to be delivered within Iowa is subject to sales tax, while the warehousing of those products placed into interstate commerce is not subject to sales tax. a. Formula.Transit warehouses may compute the tax on warehousing fees based upon a formula consisting of a numerator that is the quantity of raw agricultural products housed at the warehouse with intended intrastate delivery in Iowa and a denominator that is the total quantity of raw agricultural products housed in the warehouse. b. Definition.For purposes of this rule: "Transit warehouses" are those warehouses where raw agricultural products in bulk quantities are transported to and then shipped to different locations at different times. c. Numerator.Raw agricultural products picked up at the warehouse or delivered to a location in Iowa must be included in the numerator, even if the products may be or are subsequently delivered to a common carrier for shipment outside of Iowa. d. Information used to calculate tax.The information used in the formula for the computation of tax on storage fees must be, in most cases, supplied by the principal storing the products in the warehouse. The warehouse is responsible for acquiring and verifying the information used in the formula with the principal at least once every 90 days. 214.21(5) Exemptions. Warehousing service will not be subject to sales tax if a contract for the warehousing of raw agricultural products is with a tax-certifying or tax-levying body of the state of Iowa; any instrumentality of the state, county, or municipal government; the federal government or its instrumentalities; a tribal government as defined in Iowa Code section 216A.161; or an agency or instrumentality of a tribal government if used for public purposes. a. Consignment to federal government.Fees for the warehousing of raw agricultural products placed into storage by a producer that are later consigned to the federal government under a loan agreement are subject to sales tax. b. Federal government activity.Warehousing of raw agricultural products is exempt from sales tax only if the federal government makes payment to the warehouse for warehousing and the federal government actually owns the products or goods during the time the products or goods are warehoused. This rule is intended to implement Iowa Code sections 423.2(6)“ax” and 423.3(31). ARC 7182CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to exemptions primarily benefiting manufacturers and other persons engaged in processing and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 215, “Exemptions Primarily Benefiting Manufacturers and Other Persons Engaged in Processing,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.3(47) through 423.3(53), 423.3(82), 423.3(92), 423.3(93), 423.3(95), 423.4(7) and 423.4(8).Purpose and Summary The purpose of this proposed rulemaking is to rescind and readopt Chapter 215, which describes the Department’s interpretation of the underlying statutes to aid the public in understanding the taxability and exemption provisions and processes that are primarily applicable to taxpayers engaged in processing and manufacturing. The Department proposes revisions to the rules to provide clarification and to remove obsolete, unnecessary, and duplicative statutory language. The Department also renumbered some rules due to other changes and for organizational reasons. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 215 and adopt the following new chapter in lieu thereof: CHAPTER 215EXEMPTIONS PRIMARILY BENEFITING MANUFACTURERS AND OTHER PERSONS ENGAGED IN PROCESSING[Prior to 9/7/22, see Revenue Department[701] Ch 230]

701—215.1() Reserved.

701—215.2(423) Carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and taxable services used in processing. An expanded definition of “processing” is allowed to manufacturers of food or food ingredients using carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and taxable services. For the purposes of this rule, the rental or leasing of tangible personal property is treated as the furnishing of a taxable service and not as the sale of tangible personal property. 215.2(1) “Food or food ingredients” means the same as defined in Iowa Code section 423.3(49)“b.” This means that for purposes of this exemption, “food or food ingredients” means the same as “food and food ingredients” as defined in Iowa Code section 423.3(57)“d” and implemented by rule 701—220.3(423) but also includes tangible personal property that could be sold for ingestion or chewing by humans but is sold for another use.Manufacturer V’s product is food-grade vodka sold at grocery and convenience stores. Manufacturer V may claim exemption for the same inputs used in producing its vodka as Manufacturer C.Manufacturer F’s product is only sold to be used in motor vehicles and is harmful to humans if consumed. Manufacturer F cannot claim exemption under Iowa Code section 423.3(49) for any carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and taxable services used to produce its ethanol fuel. Manufacturer F may qualify for exemptions provided under other Iowa Code sections.Manufacturer P’s product is only sold for cosmetic purposes and is harmful to humans if consumed. Manufacturer P cannot claim exemption under Iowa Code section 423.3(49) for any carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and taxable services used to produce its perfume. Manufacturer P may qualify for exemptions provided under other Iowa Code sections. a. Certain entities eligible.An entity that processes a product owned by another entity is eligible for this exemption, subject to satisfying the other requirements to properly claim the exemption. b. Determination.The burden is on the taxpayer seeking to claim this exemption to establish that a product is a food or food ingredient for purposes of this exemption. The department’s determination is a fact-based determination based on the information provided by a manufacturer and the individual circumstances at issue. 215.2(2) The following activities constitute processing when performed by a manufacturer to create food or food ingredients. Any carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, or other taxable services primarily used in the performance of these activities is exempt from tax. a. Treatment of material that changes its form, context, or condition in order to produce the food or food ingredient. Washing, sorting, and grading of fruits or vegetables; washing, sorting, and grading of eggs; repairing or replacing defective or broken-down machinery and equipment; and the mixing or agitation of liquids are examples of activities that do not qualify as “processing.” b. Maintenance of the quality or integrity of the food or food ingredient and the maintenance or the changing of temperature levels necessary to avoid spoilage or to hold the food or food ingredient in marketable condition. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or other taxable service used in freezers, heaters, coolers, refrigerators, or evaporators used in cooling or heating that holds the food or food ingredient at a temperature necessary to maintain quality or integrity or to avoid spoilage of the food or food ingredient or to hold the food or food ingredient in marketable condition is exempt from tax. It is not necessary that the taxable service be used to raise or lower the temperature of the food or food ingredient. Also, processing of food or food ingredients does not cease when the food or food ingredient is in marketable form. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or taxable service used to maintain or to change a temperature necessary to keep the food or food ingredient marketable is exempt from tax. c. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or other taxable service primarily used in the maintenance of environmental conditions necessary for the safe or efficient use of machinery or material used to produce the food or food ingredient is exempt from tax. For example, electricity used to air-condition a room in which meat is stored is exempt from tax if the purpose of the air conditioning is to maintain the meat in a condition in which it is easy to slice rather than for the comfort of the employees who work in the room. d. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or taxable service primarily used in sanitation and quality control activities is exempt from tax. Nonexclusive examples exempt from tax include taxable services used in pH meters, microbiology counters and incubators used to test the purity or sanitary nature of the food or food ingredient. For example, electricity used in egg-candling lights would be exempt from tax. Also, electricity, steam, or any taxable service used to power equipment that cleans and sterilizes food production equipment would be exempt from tax. Electricity used to power refrigerators used to store food or food ingredient samples for testing would be exempt from tax. Finally, electricity used to power “bug lights” or other insect-killing equipment used in areas where food or food ingredients are manufactured or stored would be exempt from tax. e. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or taxable service used in the formation of packaging for food or food ingredients is exempt from tax. For example, electricity used in plastic bottle-forming machines by a food manufacturer is exempt from tax if the plastic bottles will be used to hold the food or food ingredient, such as milk. Any electricity, steam, or other taxable service used in the heating, compounding, liquefying and forming of plastic pellets into these plastic bottles is exempt. f. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or taxable service used in placement of the food or food ingredient into shipping containers is exempt from tax. For example, electricity used by a food manufacturer to place food or food ingredients into packing cases, pallets, crates, shipping cases, or other similar receptacles is exempt. g. Any carbon dioxide in liquid, solid, or gaseous form, electricity, steam, or taxable service used to move material that will become a food or food ingredient or used to move the food or food ingredient itself until shipment from the building of manufacture is exempt from tax. This includes, but is not limited to, taxable services used in pumps, conveyors, forklifts, and freight elevators moving the material or the food or food ingredient and taxable services used in door openers that open doors for forklifts or other devices moving the material or the food or food ingredient. Any loading dock that is attached to a building of manufacture is a part of that building. Any electricity, steam, or taxable service used to move any food or food ingredient to a loading dock is exempt from tax. If the food or food ingredient is carried outside its building of manufacture by any conveyor belt system, electricity used by any portion of the system located outside the building is taxable. This rule is intended to implement Iowa Code section 423.3(49).

701—215.3(423) Services used in processing. 215.3(1) Electricity, steam, or any taxable service is used in processing only when used in any operation that subjects raw material to some special treatment that changes, by artificial or natural means, the form, context, or condition of the raw material and results in a change of the raw material into marketable tangible personal property intended to be sold ultimately at retail. The following are nonexclusive examples of what would and would not be considered electricity, steam, or taxable services used in processing: a. The sales price from the sale of electricity or steam consumed as power or used in the actual processing of tangible personal property intended to be sold ultimately at retail would be exempt from tax. The sales price of electricity or steam consumed for the purpose of lighting, ventilating, or heating manufacturing plants; warehouses; or offices is subject to tax. Also subject to tax is the sales price of any taxable services used to repair or replace defective or broken-down machinery and equipment. b. The sales price from electricity used in the freezing of tangible personal property, ultimately to be sold at retail, to make the property marketable would be exempt from sales tax. c. Electricity used merely in the refrigeration or the holding of tangible personal property for the purpose of preventing spoilage or to preserve the property in its present state would not be “used in processing” and, therefore, its sales price would be subject to tax. 215.3(2) Measurement of taxable and nontaxable use of electricity and steam. The exemption provided in the case of electricity or steam applies only upon the sales price from the sale of electricity or steam when the energy is consumed as power or is used in the processing of food products or other tangible personal property intended to be sold ultimately at retail, as distinguished from electricity or steam that is consumed for taxable purposes. When practical, electricity or steam consumed as power or used in processing must be separately metered and separately billed by the supplier thereof to clearly distinguish energy so consumed from electricity or steam that is consumed for purposes or under conditions in which the exemption would not apply. If it is impractical to separately meter electricity or steam which is exempt from that electricity or steam upon which tax will apply, the purchaser must furnish an exemption certificate to the supplier with respect to what percentage of electricity or steam in the case of each purchaser is subject to the exemption. The exemption certificate must be supported by a study showing how the percentage was developed. When a certificate and study are accepted by the supplier as a basis for determining exemption, any changes in the processing method, changes in equipment, or alterations in plant size or capacity affecting the percentage of exemption will necessitate the filing of a new and revised statement by the purchaser. When the electric or steam energy is separately metered, enabling the supplier to accurately apply the exemption in the case of processing energy, the purchaser need only file an exemption certificate since the supplier, under such conditions, will separately record and compute the consumption of energy which is exempt from tax apart from that energy which is subject to tax. This rule is intended to implement Iowa Code section 423.3(50).

701—215.4(423) Chemicals, solvents, sorbents, or reagents used in processing. 215.4(1) Chemicals, solvents, sorbents, and reagents directly used and consumed, dissipated, or depleted in processing tangible personal property intended to be sold ultimately at retail are exempt from sales and use tax. For the purpose of this processing exemption rule, free newspapers and shoppers’ guides are considered to be retail sales. The terms “chemical,” “solvent,” “sorbent,” and “reagent” are defined in rule 701—200.1(423). 215.4(2) For the purpose of this rule, a catalyst is considered to be a chemical, solvent, sorbent, or reagent. A catalyst is a substance which promotes or initiates a chemical reaction and, as such, is exempt from tax if consumed, dissipated, or depleted during processing of tangible personal property intended to be ultimately sold at retail. 215.4(3) To qualify for this exemption, all of the following conditions must be met: a. The item must be a chemical, solvent, sorbent, or reagent. b. The chemical, solvent, sorbent, or reagent must be directly used and consumed, dissipated, or depleted during processing. c. The processing must be performed on tangible personal property intended to be sold ultimately at retail. d. The chemical, solvent, sorbent, or reagent need not become an integral or component part of the processed tangible personal property. This rule is intended to implement Iowa Code section 423.3(51).

701—215.5(423) Exempt sales of gases used in the manufacturing process. Sales of argon and other similar gases to be used in the manufacturing process are exempt from tax. For the purposes of this rule, only inert gases are gases that are similar to argon. An “inert gas” is any gas that is normally chemically inactive. It will not support combustion and cannot be used as either a fuel or as an oxidizer. Argon, helium, neon, krypton, radon, and xenon are inert gases. Oxygen, hydrogen, and methane are nonexclusive examples of gases that are not inert. These sales are exempt only if the gas is purchased by a “manufacturer,” for use in “processing,” as those terms are defined in Iowa Code section 423.3(47)“d.” This rule is intended to implement Iowa Code section 423.3(52).

701—215.6(423) Sale of electricity to water companies. The sales price from the sale of electricity to water companies assessed for property tax pursuant to Iowa Code sections 428.24, 428.26, and 428.28, that is used solely for the purpose of pumping water from a river or well is exempt from sales tax. For the purposes of this rule, “river” means a natural body of water or waterway that is commonly known as a river. “Well,” for the purposes of this rule, means an issue of water from the earth; a mineral spring; a pit or hole sunk into the earth to reach a water supply; a shaft or hole sunk to obtain water. This rule is intended to implement Iowa Code section 423.3(53).

701—215.7() Reserved.

701—215.8(423) Exempt sales or rentals of core-making and mold-making equipment, and sand-handling equipment. 215.8(1) Exempt sales and rentals of machinery and equipment. The sales price from sales or rentals of core-making, mold-making, and sand-handling machinery and equipment, including replacement parts, directly and primarily used by a foundry in the mold-making process is exempt from tax. For the purposes of this rule, a “foundry” is an establishment where metal, but not plastic, is melted and poured into molds. A nonexclusive list of equipment that may be exempt includes sand storage tanks, conveyors, patterns, mallor controllers, and sand mixers. A nonexclusive list of items that would not be exempt includes sand and other materials (as opposed to equipment) used to build molds or cores, and supplies. Services used in the mold-making process are not exempted from tax by this rule. Subrule 215.14(2) provides definitions of “directly used,” “equipment,” and “machinery.” Iowa Code section 423.3(47)“d” provides definitions of “replacement part” and “supplies.” 215.8(2) Exempt sales of fuel and electricity. The sales price from sales of fuel used in creating heat, power, or steam for, or used for generating electric current for, or electric current sold for use in machinery or equipment the sale or rental of which is exempt under subrule 215.8(1) is exempt from tax. 215.8(3) Exempt design and installation services. The sales price from furnishing design and installation services, including electrical and electronic installation, of machinery and equipment the sale or rental of which is exempt under subrule 215.8(1) is exempt from tax. This rule is intended to implement Iowa Code section 423.3(82).

701—215.9(423) Chemical compounds used to treat water. Chemical compounds placed in water that is ultimately sold at retail should be purchased exempt from the tax. The chemical compounds become an integral part of property sold at retail. Chemical compounds placed in water that is directly used in processing are exempt from the tax, even if the water is consumed by the processor and not sold at retail.Chemical compounds that are used to treat water that is not sold at retail or that are not used directly in processing are subject to tax. An example would be chlorine or other chemicals used to treat water for a swimming pool.Special boiler compounds used by processors when live steam is injected into the mash or substance, whereby the steam liquefies and becomes an integral part of the product intended to be sold at retail and also becomes a part of the finished product, is exempt from tax. This rule is intended to implement Iowa Code section 423.3(51).

701—215.10(423) Exclusive web search portal business and its exemption. A business that qualifies as a web search portal business that has a physical location in Iowa and that meets specific criteria may obtain an exemption from sales and use tax on specific purchases that are used in the operation and maintenance of the web search portal business. This exemption from sales and use tax also applies to the affiliates of a qualifying web search portal business. 215.10(1) Definitions. For the purpose of this exemption, “affiliate,” “control,” and “web search portal business” mean the same as defined in Iowa Code section 423.3(92)“e.” 215.10(2) Claiming the exemption. Iowa Code section 423.3(92)“b” provides the criteria to claim this exemption. If a business fails to meet the investment qualification found in Iowa Code section 423.3(92)“d,” the web search portal business loses the right to claim the exemption and the business is required to pay all sales or use taxes that would have been due on the purchase or rental of all purchases previously claimed exempt from sales and use tax, plus any and all applicable statutory penalty and interest due on the tax. 215.10(3) Exempt purchases. Sales and leases of the following are exempt from sales and use tax when sold or leased to a qualifying web search portal business: a. Computers and equipment that are necessary for the maintenance and operation of the web search portal business; b. All equipment used for the operation and maintenance of the cooling system for the computers and equipment used in the operation of the web search portal; c. All equipment used for the operation and maintenance of the cooling towers for the cooling system referenced in paragraph 215.10(3)“b”; d. All equipment used for the operation and maintenance of the temperature control infrastructure for the computers and equipment used in the operation of the web search portal; e. All equipment used for the operation and maintenance of the power infrastructure that is used for the transformation, distribution, or management of electricity used for the operation and maintenance of the web search portal. This equipment includes, but is not limited to, exterior dedicated business-owned power substations, backup power generation systems, battery systems, and related infrastructure; f. All equipment used in the racking system, including cabling and trays; g. Fuel purchased by the web search portal business that is used in the backup power generation system and in all items listed in paragraphs 215.10(3)“a” through “f.” This provision includes the fuel used in backup generators that may be located outside of the building that are used if power is interrupted to ensure the web search portal continues operation; and h. Electricity purchased for use in operating the web search portal. 215.10(4) Limitation of exemption. The purchases or leases of the items listed in subrule 215.10(3) are only exempt if the items being purchased or leased are being used in the operation or maintenance of the web search portal business. Such purchases or leases will not be exempt from sales or use tax if the item is to be used in the business for another purpose not related to operations or maintenance. Examples of items included in this limitation include but are not limited to: a. Electricity not used for operation or maintenance, such as in the office or employee break room; b. Tangible personal property used in areas of the web search portal facility that is not used for operation or maintenance, such as cleaning equipment and supplies; c. Building materials that become part of real property, such as concrete, steel or roofing; and d. Tangible personal property that becomes part of real property, such as a dishwasher. 215.10(5) Initial date of exemption. The exemption from sales and use tax begins on and after the date of the initial investment in or the initiation of site preparation activities for the facility that will contain the qualifying web search portal business. This rule is intended to implement Iowa Code section 423.3(92).

701—215.11(423) Web search portal business and its exemption. A business that qualifies as a web search portal business that has a physical location in Iowa and that meets specific criteria may obtain an exemption from sales and use tax on specific purchases that are used in the operation and maintenance of the web search portal business. This exemption from sales and use tax also applies to the affiliates of a qualifying web search portal business. 215.11(1) Definitions. For the purpose of this exemption, “affiliate,” “control,” and “web search portal business” mean the same as defined in Iowa Code section 423.3(93)“e.” 215.11(2) Claiming the exemption. Iowa Code section 423.3(93)“b” provides the criteria to claim this exemption. If a business fails to meet the investment qualification found in Iowa Code section 423.3(93)“d,” the web search portal business loses the right to claim the exemption and the business is required to pay all sales or use taxes that would have been due on the purchase or rental of all purchases previously claimed exempt from sales and use tax, plus any and all applicable statutory penalty and interest due on the tax. 215.11(3) Exempt purchases. Sales and leases of the following are exempt from sales and use tax when sold or leased to a qualifying web search portal business: a. Computers and equipment that are necessary for the maintenance and operation of the web search portal business; b. All equipment used for the operation and maintenance of the cooling system for the computers and equipment used in the operation of the web search portal business; c. All equipment used for the operation and maintenance of the cooling towers for the cooling system referenced in paragraph 215.11(3)“b”; d. All equipment used for the operation and maintenance of the temperature control infrastructure for the computers and equipment used in the operation of the web search portal business; e. All equipment used for the operation and maintenance of the power infrastructure that is used for the transformation, distribution, or management of electricity used for the operation and maintenance of the web search portal business. This equipment includes, but is not limited to, exterior dedicated business-owned power substations and backup power generation systems, battery systems, and related infrastructure; f. All equipment used in the racking system, including cabling and trays; g. Fuel purchased by the web search portal business that is used in the back-up power generation system and in all items listed in paragraphs 215.11(3)“a” through “f.” This includes the fuel used in the backup generators that may be located outside the building and that are used if power is interrupted to ensure the web search portal business continues operation; and h. Electricity purchased for use in operating the web search portal business. 215.11(4) Limitation of exemption. The purchase or lease of the items listed in subrule 215.11(3) is only exempt if the items being purchased or leased are being used in the operation or maintenance of the web search portal business. Such purchases or leases will not be exempt from sales or use tax if the item is to be used in the business for another purpose. For example, the purchase of electricity for use in the office portion of the web search portal facility would not be exempt. The purchase of building materials that become real property would not be exempt. For example, the purchase of a dishwasher that will be built into a kitchen area in the break room for employees would not be exempt from tax. The purchase of a dishwasher is the purchase of tangible personal property. However, upon installation, the dishwasher becomes part of the building and realty and is not exempt from Iowa sales or use tax. This rule is intended to implement Iowa Code section 423.3(93).

701—215.12(423) Large data center business exemption. A data center business that has a physical location in Iowa and that meets specific criteria may obtain an exemption from sales and use tax on specific purchases that are used in the operation and maintenance of the data center business. 215.12(1) Definitions. For the purpose of this rule, “data center” and “data center business” mean the same as defined in Iowa Code section 423.3(95)“e.” 215.12(2) Claiming the exemption. Iowa Code section 423.3(95)“b” provides the criteria to claim this exemption. If a business fails to meet the investment qualification found in Iowa Code section 423.3(95)“d,” the data center business loses the right to claim the exemption and the business is required to pay all sales or use taxes that would have been due on the purchase or rental of all purchases previously claimed exempt from sales and use tax, plus any and all applicable statutory penalty and interest due on the tax. 215.12(3) Exempt purchases. Paragraphs 215.11(3)“a” through “h” are incorporated in full by this reference. 215.12(4) Limitation of exemption. The purchase or lease of the items listed in subrule 215.12(3) is only exempt if the items being purchased or leased are being used in the operation or maintenance of the data center business. Such purchases or leases will not be exempt from sales or use tax if the item is to be used in the business for another purpose. For example: a. The purchase of electricity for use in the office portion of the data center business facility would not be exempt. b. The purchase of building materials that become real property would not be exempt. For example, the purchase of a dishwasher that will be built into a kitchen area in the break room for employees would not be exempt from tax. Although the purchase of a dishwasher is the purchase of tangible personal property, upon installation, the dishwasher becomes part of the building and realty and, therefore, is not exempt from Iowa sales and use tax. This rule is intended to implement Iowa Code section 423.3(95).

701—215.13(423) Data center business sales and use tax refunds. Data center businesses in Iowa meeting certain criteria may make an annual application to the department for a refund of 50 percent of the sales and use tax paid on the sales price of certain computers, equipment, fuel, and electricity used in the operation of the data center business. 215.13(1) Definitions. For the purpose of this rule, “data center” and “data center business” mean the same as defined in Iowa Code section 423.3(95)“e.” "Refund year" means the year beginning with the date of initial site preparation of the data center facility. "Rehabilitation" means a process of substantial repair, remodeling, or alteration, which may include but is not limited to upgrading mechanical systems, plumbing, roofing, wiring, windows, and heating and cooling systems, and performing significant interior or exterior structural modification. Although they may be included as part of an overall rehabilitation project, singular actions such as the installation of a new information system or cosmetic changes to the interior or exterior appearance of a building do not, in and of themselves, constitute a rehabilitated building. 215.13(2) Basis and criteria for refunds. The amount, type, and length of refunds available to data center businesses depend upon the dollar amount of investment made, the type of construction undertaken, and the size in square feet of the facility. a. Investment of $136 million to $200 million.Data center businesses which make investments in an Iowa facility of $136 million to $200 million in the first six years of operations and which facility contains at least 5,000 square feet are eligible for a refund of 50 percent of the sales and use tax paid on qualifying computers and equipment, backup fuel, and electricity for the first seven years of operation. b. Investment of $10 million to $136 million—new construction.Data center businesses which make investments of $10 million to $136 million in the first six years of operations in the new construction of an Iowa facility that is at least 5,000 square feet are eligible for a refund of 50 percent of the sales and use tax paid on qualifying computers and equipment, backup fuel, and electricity for the first ten years of operation. c. Investment of $5 million to $136 million—rehabilitation.Data center businesses which make investments of $5 million to $136 million in the first six years of operations in the rehabilitation of an Iowa facility that is at least 5,000 square feet are eligible for a refund of 50 percent of the sales and use tax paid on qualifying computers and equipment, backup fuel, and electricity for the first ten years of operation. d. Investment of $1 million to $10 million—new construction.Data center businesses which make investments of $1 million to $10 million in the first three years of operations in the new construction of an Iowa facility of any size are eligible for a refund of 50 percent of the sales and use tax paid on fuel and electricity for the first five years of operation. e. Investment of $1 million to $5 million—rehabilitation.Data center businesses which make investments of $1 million to $5 million in the first three years of operations in the rehabilitation of an Iowa facility of any size are eligible for a refund of 50 percent of the sales and use tax paid on fuel and electricity for the first five years of operation. 215.13(3) Purchases eligible for refunds. Paragraphs 215.11(3)“a” through “h” are incorporated in full by this reference. 215.13(4) Sustainable design standards. In order to claim the refunds detailed in paragraphs 215.13(3)“a” through “h,” data center businesses must comply with the sustainable design and construction standards as required by 661—Chapter 310 as established by the state building code commissioner pursuant to Iowa Code section 103A.8B. 215.13(5) Failure to meet investment qualifications. If a business fails to meet the investment qualification found in Iowa Code section 423.3(95)“d,” the data center business loses the right to claim the refund and the business is required to return the refund of sales and use tax paid on qualifying computers, equipment, fuel, and electricity, plus any and all applicable statutory penalty and interest due on the tax. 215.13(6) Limitation of refunds. a. Use in operation or maintenance.The purchase or lease of the items listed in subrule 215.13(3) is only eligible for a refund of sales and use tax if the items being purchased or leased are being used in the operation or maintenance of the data center business. Such purchases or leases will not be eligible for a refund of sales and use tax if the item is to be used in the business for another purpose. For example: (1) The purchase of electricity for use in the office portion of the data center business facility would not be eligible for a refund. (2) The purchase of building materials that become real property would not be eligible for a refund. For example, the purchase of a dishwasher that will be built into a kitchen area in the break room for employees would not be eligible for a refund of tax. Although the purchase of a dishwasher is the purchase of tangible personal property, upon installation, the dishwasher becomes part of the building and realty and, therefore, is not eligible for a refund of Iowa sales and use tax. b. State sales tax only.Refunds issued under this rule may not exceed 6 percent of the sales price of computers and equipment listed in subrule 215.13(3) and the fuel used to create heat, power and steam for processing or generating electrical current or from the sales price of electricity consumed by computers, machinery, or other equipment for operation of the data center business facility. The refund will not include any local option sales and services taxes. c. Qualifying dates for fuel and electricity refund.To qualify for the 50 percent refund, the following must be on or after the first day of the first month through the last day of the last month of the refund year: (1) The dates of the utility billing or meter reading cycle for the sale or furnishing of metered gas and electricity; (2) The dates of the sale or furnishing of fuel for purposes of commercial energy; and (3) The delivery of the fuel used for purposes of commercial energy. 215.13(7) Form and filing requirements. a. Form.The owner of a data center business seeking a refund of sales and use tax imposed upon the sale or lease of any qualifying computers, equipment, fuel, and electricity must complete and file with the department Form IA 843, Claim for Refund. All of the information on the Claim for Refund must be completed. b. Due date.The refund request form must be filed with the department no later than one year after the purchase of the qualifying computers, equipment, fuel, or electricity and within three months after the end of the refund year. The refund for sales and use tax begins with purchases made on and after July 1, 2009, or on and after the date of the initial investment in or the initiation of site preparation activities for the facility that will contain the qualifying data center business. c. Date required.The refund request must include detailed schedules of the items being claimed including dates of purchase of tangible personal property, amount of purchase, and tax paid. The purchase of fuel and electricity must be computed and documented separately from other purchases. d. Affidavit.In addition to completing and filing Form IA 843, Claim for Refund, the owner of a data center business seeking a refund as specified in this rule must also complete and file with the department an affidavit certifying that qualifications for the refund have been met. The affidavit must be approved by the department before a refund claim can be reviewed. The following format must be used for the affidavit:Iowa Department of Revenue Sales Tax Refund Affidavit NAME OF AFFIANTADDRESS OF AFFIANT } AFFIDAVIT FORDATA CENTER BUSINESSThe undersigned duly swears that the named data center business complies with criteria to be entitled to refund of sales tax as required in Iowa Code section 423.4 as follows:

The facility is a data center business as defined by Iowa Code section 423.4(7) or 423.4(8);
The data center business facility will be a minimum of 5,000 square feet, as applicable, located upon Iowa land; and located at ______________________________________; with total square footage of ____________;
The data center business will make an investment of (check only one):

□ $136 million to $200 million within the first six years of operation (refund available for first seven years). □ $10 million to $136 million for new construction within the first six years of operation (refund available for first ten years). □ $5 million to $136 million for rehabilitation of an existing facility within the first six years of operation (refund available for first ten years). □ $1 million to $10 million for new construction within the first three years of operation (refund of tax paid on fuel and electricity only; refund available for first five years). □ $1 million to $5 million for rehabilitation of an existing facility within the first three years of operation (refund of tax paid on fuel and electricity only; refund available for first five years).

The data center business facility will be constructed in accordance with the sustainable design and construction standards as required by Iowa Administrative Code 661—Chapter 310 and established by the building code commissioner pursuant to Iowa Code section 103A.8B;
Construction of the data center business facility was commenced on or after July 1, 2009; and the date of the initial site preparation or building rehabilitation was _____________; and
Purchases of qualifying computers, equipment, fuel or electricity were made on or after July 1, 2009.

The undersigned duly swears that he or she is the owner of the qualifying data center business or that the undersigned is the authorized representative of the qualifying data center business and has the authority to sign this document. The undersigned swears that he or she has personal knowledge regarding the facts contained in this affidavit and that the statements set forth in this affidavit are true and accurate and that the qualifying data center business has met all of the requirements as contained herein.___________________________________________________________ _____________Name of Affiant Date___________________________________________________________Position of Affiant This rule is intended to implement Iowa Code section 423.4(7) and 423.4(8).

701—215.14(423) Exemption for the sale of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies used for certain manufacturing purposes. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt when used for an exempt manufacturing purpose. Rule 701—215.21(423) exempts the purchase of fuel used in such computers, computer peripherals, machinery, and equipment. Rule 701—215.22(423) exempts the service of designing or installing new industrial machinery and equipment. 215.14(1) Generally. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt from sales and use tax if the property is any of the following: a. Directly and primarily used in processing by a manufacturer (as described in rule 701—215.15(423)). b. Directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer, including test equipment used to control quality and specifications of the product (as described in rule 701—215.16(423)). c. Directly and primarily used in research and development of new products or processes of processing (as described in rule 701—215.17(423)). d. Directly and primarily used in recycling or reprocessing of waste products (as described in rule 701—215.19(423)). e. Pollution-control equipment used by a manufacturer, including but not limited to that required or certified by an agency of this state or of the United States government (as described in rule 701—215.20(423)). f. Fuel used in creating heat, power, steam, or for generating electrical current, or from the sale of electricity, consumed by computers, computer peripherals, machinery, or equipment used in an exempt manner described in paragraphs 215.14(1)“a” through “e” (as described in rule 701—215.21(423)). 215.14(2) Computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies. a. Computers and computer peripherals.“Computer” and “computer peripheral” mean the same as defined in Iowa Code section 423.1. b. Machinery.“Machinery” is any mechanical, electrical, or electronic device designed and used to perform some function and to produce a certain effect or result. The term includes not only the basic unit of the machinery but also any adjunct or attachment necessary for the basic unit to accomplish its intended function. “Machinery” also includes all devices used or required to control, regulate, or operate a piece of machinery, provided such devices are directly connected with or are an integral part of the machinery and are used primarily for control, regulation, or operation of machinery. Other devices necessary to the operation of or used in conjunction with the operation of what would be ordinarily thought of as machinery are also considered to be machinery. “Machinery” does not include tangible personal property that becomes a structure or a part of real property after installation. c. Equipment.In general usage, “equipment” refers to devices or tools used to produce a final product or achieve a given result. Exempt “equipment” under these rules includes tables on which property is assembled on an assembly line, if those tables are directly and primarily used in processing by a manufacturer. “Equipment” does not include tangible personal property that becomes a structure or a part of real property after installation. d. Replacement parts.“Replacement part” means the same as defined in Iowa Code section 423.3(47)“d.” e. Supplies.“Supplies” means the same as defined in Iowa Code section 423.3(47)“d.” f. Materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies.“Materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies” means tangible personal property that is incorporated into a computer, computer peripheral, machinery, equipment, replacement part, or supply when the computer, computer peripheral, machinery, equipment, replacement part, or supply is constructed or assembled. g. Exclusions.Sales of the following property, or materials used to construct or self-construct the following property, are not exempt under rules 701—215.14(423) through 701—215.20(423), regardless of how the property is used. (1) Land. (2) Intangible property. (3) Hand tools. “Hand tool” means a tool that can be held in the hand or hands and is powered by human effort. (4) Point-of-sale equipment, computers, and computer peripherals. “Point-of-sale equipment, computers, and computer peripherals” means input, output, and processing equipment, computers, and computer peripherals used to consummate a sale and to record or process information pertaining to a sale transaction at the time the sale takes place and is located at the counter, desk, or other specific point where the transaction occurs. Point-of-sale equipment, computers, and computer peripherals do not include equipment, computers, and computer peripherals used primarily for depositing or withdrawing funds from financial institution accounts. (5) Certain centrally assessed industrial machinery, equipment, computers, and computer peripherals. Property that is centrally assessed by the department of revenue under Iowa Code sections 428.24 to 428.29 or chapters 433, 434, 437, 437A, 437B, and 438 does not qualify for exemption under rules 701—215.14(423) through 701—215.20(423). Property used but not owned by persons whose property is defined by such provisions of the Iowa Code, which would be assessed by the department of revenue if the persons owned the property, also does not qualify for exemption under rules 701—215.14(423) through 701—215.20(423). (6) Vehicles subject to registration. The general sales and use tax does not apply to vehicles subject to registration under Iowa Code chapter 321. Instead, such vehicles are subject to the fee for new registration under Iowa Code section 321.105A. Vehicles subject to registration are not exempt from the fee for new registration under rules 701—215.14(423) through 701—215.20(423), unless the vehicle is directly and primarily used in recycling or reprocessing of waste products (as described in rule 701—215.19(423)). h. Examples.When used for an exempt purpose under rules 701—215.14(423) through 701—215.20(423), the following items may be exempt computers, computer peripherals, machinery, equipment, replacement parts, or supplies. This list is not all-inclusive. (1) Coolers, including coolers that do not change the nature of materials stored in them. (2) Equipment that eliminates bacteria. (3) Palletizers. (4) Storage bins. (5) Property used to transport raw, semifinished, or finished goods. (6) Vehicle-mounted cement mixers. (7) Self-constructed machinery and equipment. (8) Packaging and bagging equipment, including conveyor systems. (9) Equipment that maintains an environment necessary to preserve a product’s integrity. (10) Equipment that maintains a product’s integrity directly. (11) Quality control equipment. (12) Water used for cooling. 215.14(3) Leased and rented property. The exemptions under rules 701—215.14(423) through 701—215.22(423) apply to property regardless of how it is sold, including leased or rented property. The lease of computers, computer peripherals, machinery, equipment, replacement parts, or supplies may be exempt from sales and use tax if the lessee uses the property in an exempt manner under rules 701—215.14(423) through 701—215.20(423). Additionally, a lessor’s purchase of computers, computer peripherals, machinery, equipment, replacement parts, or supplies for lease or resale may be an exempt sale for resale under Iowa Code section 423.3(2). 215.14(4) Recordkeeping. Individuals claiming an exemption must always be able to prove they qualify for the exemption. To claim the exemptions described in this rule, purchasers must be able to prove that computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct the same are used for an exempt purpose under rules 701—215.14(423) through 701—215.20(423). When both exempt and nonexempt machinery and equipment are used in the same facility, replacement parts and supplies used in the machinery and equipment are exempt under these rules only to the extent the purchaser can prove which replacement parts and supplies were used in the exempt machinery and equipment. Detailed, contemporaneous records should be maintained to verify that qualifying property is used for an exempt purpose. The precise records required may vary from purchaser to purchaser. Computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct the same are not exempt under rules 701—215.14(423) through 701—215.20(423) if the property is not used for an exempt purpose. This rule is intended to implement Iowa Code section 423.3(47).

701—215.15(423) Exemption for the sale of property directly and primarily used in processing by a manufacturer. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt from sales and use tax when the property is directly and primarily used in processing by a manufacturer. 215.15(1) Required elements. To qualify for exemption under this rule, the purchaser must prove the property is: a. Computers, computer peripherals, machinery, equipment, replacement parts, supplies, or materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, or supplies as described in subrule 215.14(2); b. Directly used as described in subrule 215.15(2); c. Primarily used as described in subrule 215.15(2); d. Used in processing as described in subrule 215.15(3); and e. Used by a manufacturer as described in subrule 215.15(4). 215.15(2) Directly and primarily used. a. Directly used. (1) Generally. Property is “directly used” only if it is used to initiate, sustain, or terminate an exempt activity. In determining whether any property is “directly used,” consideration should be given to the following factors: 1. The physical proximity of the property to the exempt activity; 2. The temporal proximity of the use of the property to the use of other property that is directly used in the exempt activity; and 3. The active causal relationship between the use of the property and the exempt activity. The fact that a particular piece of property may be essential to the conduct of the activity because its use is required either by law or practical necessity does not, of itself, mean that the property is directly used. (2) Examples. The following property typically is not directly used in an exempt manner: 1. Property used exclusively for the comfort of workers, such as air cooling, air conditioning, or ventilation systems. 2. Property used in support operations, such as a machine shop, where production machinery is assembled, maintained, or repaired. 3. Property used by administrative, accounting, or personnel departments. 4. Property used by security, fire prevention, first aid, or hospital stations. 5. Property used in communications or safety. b. Primarily used.The primary use of property is the activity or activities for which the property is used more than half of the time. 215.15(3) Processing. a. Generally.“Processing” and “receipt or producing of raw materials” mean the same as defined in Iowa Code section 423.3(47)“d.” With respect to raw materials produced from or upon real estate, “production of raw materials” is deemed to occur immediately following the severance of the raw materials from the real estate. b. The beginning of processing.Processing begins with a processor’s receipt or production of raw material. Thus, when a processor produces its own raw material, it is engaged in processing. Processing also begins when a supplier transfers possession of raw materials to a processor. c. The completion of processing.Processing ends when the finished product is transferred from the processor or delivered for shipment by the processor. Therefore, a processor’s packaging, storage, and transport of a finished product after the product is in the form in which it will be sold at retail are part of the processing of the product. d. Examples of the beginning, intervening steps, and the ending of processing.Of the following, Examples A and B illustrate when processing begins under various circumstances, Example C demonstrates the middle stages of processing, and Example D demonstrates when the end of processing takes place. 215.15(4) Manufacturer. a. Generally.Iowa Code section 423.3(47)“d”(4) abrogates The Sherwin-Williams Company v. Iowa Department of Revenue, 789 N.W.2d 417 (Iowa 2010). b. Definitions. "Construction contracting" means engaging in or performing a construction contract as described in rule 701—219.8(423). "Manufacturer" means the same as defined in Iowa Code section 423.3(47). "Transporting for hire" means the service of moving persons or property for consideration, including but not limited to the use of a “personal transportation service” as that term is described in Iowa Code section 423.2(6) and rule 701—211.51(423). c. Primarily engaged in an excluded activity.A person is not considered a manufacturer if the person is “primarily engaged” in any of the activities listed in Iowa Code section 423.3(47)“d”(4)(c). A person is “primarily engaged” in an activity if the person generates more than 50 percent of the person’s gross revenue from its operating business from, or spends more than 50 percent of the person’s time engaging in, any combination of those activities during the 12-month period after the date the person engages in one of the listed activities. 215.15(5) Manufacturing. a. Activities commonly understood to be manufacturing.“Manufacturing” means the same as defined in Iowa Code section 423.3(47). b. Premises primarily used to make retail sales. (1) A person engaged in activities on a premises primarily used to make retail sales is not engaged in manufacturing at that premises and cannot claim this exemption for items used at that premises. (2) The following are “premises primarily used to make retail sales”: 1. Restaurants. 2. Mobile food vendors, vehicles, trailers, and other facilities used for retail sales. 3. Retail bakeries. 4. Prepared food retailers establishments. 5. Bars and taverns. 6. Racing and gaming establishments. 7. Racetracks. 8. Casinos. 9. Gas stations. 10. Convenience stores. 11. Hardware and home improvement stores. 12. Grocery stores. 13. Paint or paint supply stores. 14. Floral shops. 15. Other retail stores. c. Rebuttable presumption.In addition to the premises listed in paragraph 215.15(5)“b,” a premises shall be presumed to be “primarily used to make retail sales” when more than 50 percent of the gross sales of a business and its affiliates attributable to the premises are retail sales sourced to the premises under Iowa Code section 423.15(1)“a.” (1) For purposes of paragraph 215.15(5)“c”: "Attributable to the premises" means sales of tangible personal property at the premises or shipped from the premises to another location for sale or eventual sale. "Premises" means any contiguous parcels, as defined in Iowa Code section 426C.1, which are owned, leased, rented, or occupied by a business or its affiliates and are operated by that business or its affiliates for a common business purpose. A “common business purpose” means the participation in any stage of manufacturing, production, or sale of a product. Whether a business is operating for a common business purpose is a fact-based determination that will depend on the individual circumstances at issue. (2) Calculation. If a business seeking to claim this exemption makes retail sales sourced to a premises under Iowa Code section 423.15(1)“a” and the location is not one of those listed in paragraph 215.15(5)“b,” the business shall determine whether a specific premises are primarily used to make retail sales by determining the amount of retail sales sourced to the premises under Iowa Code section 423.15(1)“a” during the 12-month period after the date the tangible personal property claimed to be exempt is used at the premises. The calculation should be done as follows: Retail sales sourced to the premises ______________________________ Gross sales attributable to the premises If the result is less than or equal to 0.5 (or 50 percent), the premises is not primarily used to make retail sales. If the result is greater than 0.5, the premises is presumed to be primarily used to make retail sales. (3) Rebutting the presumption. If a premises is presumed to be primarily used to make retail sales under subparagraph 215.15(5)“c”(2), a manufacturer may prove to the department the premises is not primarily used to make retail sales by providing information regarding the following nonexclusive list of factors to support its assertion: 1. The square footage of the premises allocated to the manufacturing process. 2. The number of employees or employee work hours allocated to the manufacturing process. 3. The wages and salaries of employees working at the premises allocated to the manufacturing process. 4. The cost of operating the premises attributable to the manufacturing process.The department’s determination is a fact-based determination based on the information provided by a manufacturer and the individual circumstances at issue.Twelve months ago, Company A purchased and put into use at Location 1 a new molding machine for making new widgets. Company A paid tax on the sales price of the molding machine at the time of purchase. During the 12-month period after Company A first used the molding machine, 2 percent of the gross sales attributable to Location 1 were from retail sales sourced to Location 1 and 98 percent of the gross sales attributable to Location 1 were from sales of widgets to retailers.Because less than half of the sales attributable to Location 1 during the 12-month period after the molding machine was first used at Location 1 were generated from retail sales sourced to Location 1, Location 1 is not primarily used to make retail sales. Therefore, if Company A’s use of the molding machine satisfies all other requirements of the exemption, Company A’s activities occurring on the premises constitute manufacturing.Twelve months ago, Company A purchased new molding machines for Location 1 and Location 2. Company A paid tax on the sales price of the molding machines. During this 12-month period, 2 percent of the gross sales attributable to Location 1 were retail sales sourced to Location 1 and 98 percent of the gross sales attributable to Location 1 were from sales of widgets to distributors. Also during this 12-month period, 60 percent of the gross sales attributable to Location 2 were retail sales sourced to Location 2 and 40 percent of the gross sales attributable to Location 2 were from sales of widgets to distributors.With respect to Location 1, the outcome is the same as in Example 1A. Because less than half of the sales attributable to Location 1 during the 12-month period after the molding machine was used at Location 1 were generated from retail sales sourced to Location 1, Location 1 is not primarily used to make retail sales.However, Location 2 is presumed to be primarily used to make retail sales because more than half of the gross sales attributable to Location 2 are from retail sales sourced to Location 2.Twelve months pass since the new molding machines were used at their respective locations. At Location 1, the gross sales attributable to the premises and retail sales sourced to the premises remained the same. However, at Location 2, Company A experienced a decrease in on-site retail sales and an increase in distribution sales. Because of a shift in sales, 45 percent of the gross sales attributable to Location 2 were retail sales sourced to Location 2, and 55 percent of the gross sales attributable to Location 2 were from sales of widgets to distributors.Therefore, this year, Location 2 is no longer presumed to be primarily used to make retail sales because in the 12 months after the machine was used at Location 2, less than half of the gross sales attributable to Location 2 were from retail sales sourced to Location 2.Company A is seeking to purchase several new lathes to use in its bat production. In the last year, 95 percent of Company A’s gross sales attributable to the premises came from selling bats to distributors, and 5 percent of Company A’s gross sales attributable to the premises were from retail sales at a small on-site location. Also in the last year, 100 percent of Company B’s gross sales attributable to the premises were from on-site retail sales.Because Company A and Company B are not affiliated in any way, none of Company B’s sales are attributable to Company A. Therefore, for purposes of Company A’s determining its eligibility to claim the exemption, Company A’s premises are not primarily used to make retail sales because less than half of its gross sales attributable to the premises are from retail sales sourced to the premises.The result is the same; while Company B is an affiliate of Company A, the premises are not being operated for a common business purpose because Company B is not selling any of the bats manufactured by Company A. Therefore, none of Company B’s business is attributable to Company A. For purposes of Company A’s determining its eligibility to claim the exemption, Company A’s premises are not primarily used to make retail sales because less than half of its gross sales attributable to the premises are from retail sales sourced to the premises.In this case, Company B’s sales are attributable to Company A because both companies use the premises for a common business purpose: the sale of baseball bats manufactured by Company A. Therefore, the gross sales attributable to the premises of both Company A and Company B must be included in Company A’s gross sales attributable to the premises. The premises will be presumed to be primarily used to make retail sales if the combined retail sales by Company A and Company B that are sourced to the premises exceed 50 percent of the gross sales attributable to the premises.Company A dedicates 75 percent of the square footage of the premises to the production of widgets, 20 percent to storage, and 5 percent to a loading dock. Company A employs a total of 50 people, 40 of whom work on the production floor making widgets. Company A’s production staff accounts for 80 percent of its total wages and salaries paid to all employees. The cost of operating the widget production area accounts for 90 percent of Company A’s total expenses. Upon claiming this exemption, Company A provides information satisfactory to the department to demonstrate these facts. Company A qualifies for the exemption. 215.15(6) Replacement parts and supplies. a. Replacement parts.To qualify for exemption under this rule, replacement parts must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt replacement part must replace a component of a computer, computer peripheral, machinery, or equipment that is directly and primarily used in processing by a manufacturer. Tangible personal property is not an exempt replacement part under this rule if the property exclusively replaces a component of a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in processing by a manufacturer. b. Supplies.To qualify for exemption under this rule, supplies must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt supply must be connected to, be used in conjunction with, or come into physical contact with a computer, computer peripheral, machinery, or equipment that is directly and primarily used in processing by a manufacturer, or an exempt supply must itself be directly and primarily used in processing by a manufacturer. Tangible personal property is not an exempt supply under this rule if the property exclusively is connected to, is used in conjunction with, or comes into physical contact with a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in processing by a manufacturer. This rule is intended to implement Iowa Code section 423.3(47)“a”(1).

701—215.16(423) Exemption for the sale of property directly and primarily used by a manufacturer to maintain integrity or unique environmental conditions. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt from sales and use tax when the property is directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer, including test equipment used to control quality and specifications of the product. 215.16(1) Required elements. To qualify for exemption under this rule, the purchaser must prove the property is: a. Computers, computer peripherals, machinery, equipment, replacement parts, supplies, or materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, or supplies as described in subrule 215.14(2); b. Directly used as described in subrule 215.15(2); c. Primarily used as described in subrule 215.15(2); d. Used by a manufacturer as described in subrule 215.15(4); and e. Used to maintain: (1) A manufactured product’s integrity; (2) Unique environmental conditions required for a manufactured product; or (3) Unique environmental conditions required for other computers, computer peripherals, machinery, equipment, replacement parts, or supplies directly and primarily used in processing by a manufacturer. 215.16(2) Replacement parts and supplies. a. Replacement parts.To qualify for exemption under this rule, replacement parts must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt replacement part must replace a component of a computer, computer peripheral, machinery, or equipment that is directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer. Tangible personal property is not an exempt replacement part under this rule if the property exclusively replaces a component of a computer, computer peripheral, machinery, or equipment that is not directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer. b. Supplies.To qualify for exemption under this rule, supplies must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt supply must be connected to, be used in conjunction with, or come into physical contact with a computer, computer peripheral, machinery, or equipment that is directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer, or an exempt supply must itself be directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer. Tangible personal property is not an exempt supply under this rule if the property exclusively is connected to, is used in conjunction with, or comes into physical contact with a computer, computer peripheral, machinery, or equipment that is not directly and primarily used to maintain the integrity of the product or to maintain unique environmental conditions required for either the product or the computers, computer peripherals, machinery, and equipment used in processing by a manufacturer. 215.16(3) Example of property directly and primarily used to maintain integrity or unique environmental conditions. A manufacturer purchases a cooling system or heating system that qualifies as machinery. The manufacturer uses the system to directly and primarily maintain the proper temperature of other machinery and equipment. The manufacturer uses such machinery and equipment directly and primarily in processing. The system is not used for the comfort of the workers. Because the system directly and primarily maintains the environmental conditions necessary for machinery and equipment directly and primarily used in processing, the system is exempt from sales and use tax under this rule. This rule is intended to implement Iowa Code section 423.3(47)“a”(2).

701—215.17(423) Exemption for the sale of property directly and primarily used in research and development of new products or processes of processing. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt from sales and use tax when the property is directly and primarily used in research and development of new products or processes of processing. 215.17(1) Required elements. To qualify for exemption under this rule, the purchaser must prove the property is: a. Computers, computer peripherals, machinery, equipment, replacement parts, supplies, or materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, or supplies as described in subrule 215.14(2); b. Directly used as described in subrules 215.15(2) and 215.17(3); c. Primarily used as described in subrule 215.15(2); and d. Used in research and development as described in subrule 215.17(2) of: (1) New products; or (2) Processes of processing. 215.17(2) “Research and development” means experimental or laboratory activity that has as its ultimate goal the development of new products or processes of processing. 215.17(3) Property is used “directly” in research and development only if it is used in actual experimental or laboratory activity that qualifies as research and development under this rule. 215.17(4) Replacement parts and supplies. a. Replacement parts.To qualify for exemption under this rule, replacement parts must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt replacement part must replace a component of a computer, computer peripheral, machinery, or equipment that is directly and primarily used in research and development of new products or processes of processing. Tangible personal property is not an exempt replacement part under this rule if the property exclusively replaces a component of a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in research and development of new products or processes of processing. b. Supplies.To qualify for exemption under this rule, supplies must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt supply must be connected to, be used in conjunction with, or come into physical contact with a computer, computer peripheral, machinery, or equipment that is directly and primarily used in research and development of new products or processes of processing, or an exempt supply must itself be directly and primarily used in research and development of new products or processes of processing. Tangible personal property is not an exempt supply under this rule if the property exclusively is connected to, is used in conjunction with, or comes into physical contact with a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in research and development of new products or processes of processing. 215.17(5) Examples. This rule is intended to implement Iowa Code section 423.3(47)“a”(3).

701—215.18() Reserved.

701—215.19(423) Exemption for the sale of property directly and primarily used in recycling or reprocessing of waste products. The sales price of computers, computer peripherals, machinery, equipment, replacement parts, supplies, and materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, and supplies is exempt from sales and use tax when the property is directly and primarily used in recycling or reprocessing of waste products. 215.19(1) Required elements. To qualify for exemption under this rule, the purchaser must prove the property is: a. Computers, computer peripherals, machinery, equipment, replacement parts, supplies, or materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, or supplies as described in subrule 215.14(2); b. Directly used as described in subrule 215.15(2); c. Primarily used as described in subrule 215.15(2); and d. Used in: (1) Recycling of waste products as described in subrule 215.19(2); or (2) Reprocessing of waste products as described in subrule 215.19(2). 215.19(2) Recycling and reprocessing. a. “Recycling” is any process by which waste or materials that would otherwise become waste are collected, separated, or processed and revised or returned for use in the form of raw materials or products. Recycling includes, but is not limited to, the composting of yard waste that has been previously separated from other waste. Recycling does not include any form of energy recovery. b. “Reprocessing” is not a subcategory of processing. Reprocessing of waste products is an activity separate and independent from the processing of tangible personal property. c. Recycling or reprocessing generally begins when the waste products are collected or separated. Recycling or reprocessing generally ends when waste products are in the form of raw material or another nonwaste product. Activities that occur between these two points and are an integral part of recycling or processing qualify as recycling or reprocessing. 215.19(3) Replacement parts and supplies. a. Replacement parts.To qualify for exemption under this rule, replacement parts must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt replacement part must replace a component of a computer, computer peripheral, machinery, or equipment that is directly and primarily used in recycling or reprocessing of waste products. Tangible personal property is not an exempt replacement part under this rule if the property exclusively replaces a component of a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in recycling or reprocessing of waste products. b. Supplies.To qualify for exemption under this rule, supplies must satisfy the definition contained in Iowa Code section 423.3(47)“d.” In addition to the other requirements, an exempt supply must be connected to, be used in conjunction with, or come into physical contact with a computer, computer peripheral, machinery, or equipment that is directly and primarily used in recycling or reprocessing of waste products, or an exempt supply must itself be directly and primarily used in recycling or reprocessing of waste products. Tangible personal property is not an exempt supply under this rule if the property exclusively is connected to, is used in conjunction with, or comes into physical contact with a computer, computer peripheral, machinery, or equipment that is not directly and primarily used in recycling or reprocessing of waste products. 215.19(4) Examples. a. Computers, computer peripherals, machinery, and equipment that may be exempt from sales and use tax under this rule include, but are not limited to, compactors, balers, crushers, grinders, cutters, and shears if directly and primarily used in recycling or reprocessing. b. End loaders, forklifts, trucks, conveyor systems, and other moving devices directly and primarily used in the movement of waste products during recycling or reprocessing may be exempt from sales and use tax under this rule. c. A bin or other container used to store waste products before collection for recycling or reprocessing is not directly and primarily used in recycling or reprocessing, and its sales price is not exempt from sales and use tax under this rule. d. A vehicle used directly and primarily for collecting waste products for recycling or reprocessing could be a vehicle used for an exempt purpose under this rule, and such a vehicle could be exempt from the fee for new registration. Thus, a garbage truck could qualify for this exemption if the truck is directly and primarily used in recycling; however, a garbage truck primarily used to haul garbage to a landfill does not qualify for exemption under this rule. This rule is intended to implement Iowa Code sections 321.105A(2)“c”(24) and 423.3(47)“a”(5).

701—215.20(423) Exemption for the sale of pollution-control equipment used by a manufacturer. The sales price of pollution-control equipment, including but not limited to equipment required or certified by an agency of Iowa or of the United States government, is exempt from sales and use tax when the property is used by a manufacturer. 215.20(1) Required elements. To qualify for exemption under this rule, the purchaser must prove the property is: a. Pollution-control equipment as described in subrule 215.20(2); and b. Used by a manufacturer as described in subrule 215.15(4). 215.20(2) “Pollution-control equipment” is any disposal system or apparatus used or placed in operation primarily for the purpose of reducing, controlling, or eliminating air or water pollution. Other property, including replacement parts and supplies, is not exempt under this rule. Pollution-control equipment does not include any apparatus used to eliminate noise pollution. Liquid, solid, and gaseous wastes are included within the meaning of the word “pollution.” Pollution-control equipment specifically includes, but is not limited to, any equipment the use of which is required or certified by an agency of this state or of the United States government. Wastewater treatment equipment, dust mitigation systems, and scrubbers used in smokestacks are examples of pollution-control equipment. However, pollution-control equipment does not include any equipment used only for worker safety, such as a gas mask. This rule is intended to implement Iowa Code section 423.3(47)“a”(6).

701—215.21(423) Exemption for the sale of fuel or electricity used in exempt property. The sales price of fuel or electricity consumed by computers, computer peripherals, machinery, or equipment that is exempt from sales and use tax under rule 701—215.14(423), 701—215.15(423), 701—215.16(423), 701—215.17(423), 701—215.19(423), or 701—215.20(423) is also exempt from sales and use tax. The sales price of electricity or other fuel consumed by replacement parts, supplies, computers, or computer peripherals used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise remains subject to tax even if such property is exempt under rules 701—215.14(423) through 701—215.20(423). This rule is intended to implement Iowa Code section 423.3(47)“b.”

701—215.22(423) Exemption for the sale of services for designing or installing new industrial machinery or equipment. The sales price from the services of designing or installing new industrial machinery or equipment is exempt from sales and use tax. The enumerated services of electrical or electronic installation are included in this exemption. 215.22(1) Required elements. To qualify for the exemption, the purchaser must prove the service is: a. A design or installation service as described in subrule 215.22(2); b. Of new as described in subrule 215.22(3); and c. Industrial machinery or equipment as described in subrule 215.22(4). 215.22(2) Design or installation services include electrical and electronic installation. “Design or installation” services do not include any repair service. 215.22(3) “New” means never having been used or consumed by anyone. The exemption does not apply to design or installation services on reconstructed, rebuilt, repaired, or previously owned machinery or equipment. 215.22(4) Industrial machinery or equipment. a. Generally.“Industrial machinery or equipment” means machinery or equipment, as defined in subrule 215.14(2). The sale of industrial machinery or equipment must also qualify for exemption under any of the following: (1) Property used directly and primarily in processing by a manufacturer as described in rule 701—215.15(423). (2) Property used directly and primarily by a manufacturer to maintain the integrity of the manufacturer’s product or to maintain unique environmental conditions for computers, computer peripherals, machinery, or equipment as described in rule 701—215.16(423). (3) Property used directly and primarily in research and development of new products or processes of processing as described in rule 701—215.17(423). (4) Property used directly and primarily in recycling or reprocessing of waste products as described in rule 701—215.19(423). (5) Pollution-control equipment used by a manufacturer as described in rule 701—215.20(423). b. Exclusions.The following property is not industrial machinery or equipment regardless of how the purchaser uses it: (1) Computers or computer peripherals as described in Iowa Code section 423.1. (2) Replacement parts as described in Iowa Code section 423.3(47)“d.” (3) Supplies as described in Iowa Code section 423.3(47)“d.” (4) Materials used to construct or self-construct computers, computer peripherals, machinery, equipment, replacement parts, or supplies as described in paragraph 215.14(2)“f.” 215.22(5) Billing. The sales price for designing or installing new industrial machinery or equipment must be separately identified, charged separately, and reasonable in amount for the exemption to apply. The exemption applies to new industrial machinery or equipment regardless of how it is purchased, including leased or rented machinery or equipment. This rule is intended to implement Iowa Code section 423.3(48).ARC 7183CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to telecommunication services and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 217, “Telecommunication Services,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 34A.7B and 423.3(47A).Purpose and Summary The purpose of the proposed rulemaking is to rescind Chapter 217 and adopt a new Chapter 217. The Department proposes revisions to the chapter to remove portions of the rules that the Department determined are obsolete, unnecessary, or duplicative of statutory language. The chapter describes the Department’s interpretation of the underlying statute to help the public understand the taxability of telecommunication services. The chapter also contains definitions necessary for the State to maintain compliance with the Streamlined Sales and Use Tax Agreement. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 217 and adopt the following new chapter in lieu thereof: CHAPTER 217TELECOMMUNICATION SERVICES[Prior to 9/7/22, see Revenue Department[701] Ch 224]

701—217.1(423) Taxable telecommunication service and ancillary service. The sales price of all telecommunication service and ancillary service are subject to the sales or use tax.

701—217.2(423) Definitions. 217.2(1) Incorporation of definitions. To the extent they are consistent with Iowa Code chapter 423 and this chapter, all other words and phrases used in this chapter mean the same as defined in Iowa Code section 423.1. 217.2(2) Chapter-specific definitions. For purposes of this chapter, unless the context otherwise requires: "800 service" means a telecommunication service that allows a caller to dial a toll-free number without incurring a charge for the call. The service is typically marketed under the name “800,” “855,” “866,” “877,” and “888” toll-free calling and any subsequent numbers designated by the Federal Communications Commission. "900 service" means an inbound toll telecommunication service purchased by a subscriber that allows the subscriber’s customers to call in to the subscriber’s prerecorded announcement or live service. A 900 service does not include the charge for collection services provided by the seller of the telecommunication service to the subscriber or to services or products sold by the subscriber to the subscriber’s customer. The service is typically marketed under the name “900 service” and any subsequent numbers designated by the Federal Communications Commission. "Ancillary services" means services that are associated with or incidental to the provision of a telecommunication service. “Ancillary services” includes, but is not limited to, detailed telecommunication billing, directory assistance, vertical service, and voice mail services. "Conference bridging service" means an ancillary service that links two or more participants of an audio or video conference call and may include the provision of a telephone number. “Conference bridging service” does not include telecommunication services used to reach the conference bridge. "Detailed telecommunication billing service" means an ancillary service of separately stating information pertaining to individual calls on a customer’s billing statement. "Directory assistance" means an ancillary service of providing telephone number information and address information. "Fixed wireless service" means a telecommunication service that provides radio communication between fixed points. "Home service provider" means the same as defined in Section 124(5) of Public Law 106-252, 4 U.S.C. §124(5) (Mobile Telecommunications Sourcing Act). The home service provider is the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunication services. "International" means a telecommunication service that originates or terminates in the United States and terminates or originates outside the United States, respectively. United States includes the District of Columbia or a U.S. territory or possession. "Interstate" means a telecommunication service that originates in one United States state or a United States territory or possession and terminates in a different United States state or a United States territory or possession. "In this state" means that telecommunication service is provided “in this state” only if both the points of origination and termination of the communication are within the borders of Iowa. Telecommunication service between any other points is “interstate” in nature and not subject to tax. "Intrastate" means a telecommunication service that originates in one United States state or a United States territory or possession and terminates in the same United States state or a United States territory or possession. "Mobile telecommunication service" means the same as that term is defined in Section 124(7) of Public Law 106-252, 4 U.S.C. §124(7) (Mobile Telecommunications Sourcing Act) and is a radio communication service carried on between mobile stations or receivers and land stations and by mobile stations communicating among themselves. More information is contained in Iowa Code section 423.2(9). "Mobile wireless service" means a telecommunication service that is transmitted, conveyed, or routed regardless of the technology used, whereby the origination or termination point or both of the transmission, conveyance, or routing are not fixed, including, by example only, telecommunication services that are provided by a commercial mobile radio service provider. "Paging service" means a telecommunication service that provides transmission of coded radio signals for the purpose of activating specific pagers. This transmission may include messages and sounds. "Pay telephone service" means a telecommunication service provided through any pay telephone. “Pay telephone service” also includes coin-operated telephone service paid for by inserting money into a telephone accepting direct deposits of money to operate. "Private communication service" means a telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels. "Residential telecommunication service" means telecommunication services or ancillary services provided to an individual for personal use at a residential address, including an individual dwelling unit, such as an apartment. In the case of institutions where individuals reside, such as schools or nursing homes, telecommunication services are considered residential if they are provided to and paid for by an individual resident rather than the institution. "Sales price from the sale of telecommunication service" "sales price" means all charges to any person that are necessary for the end user to secure the service, except those charges that are in the nature of a sale for resale (more information is contained in subrule 217.4(9)). Such charges shall be taxable if the charges are necessary to secure telecommunication service in this state, even though payment of the charge may also be necessary to secure other services. "Telecommunication service" means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. The term includes any transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice-over Internet protocol services or is classified by the Federal Communications Commission as enhanced or value-added. “Telecommunication service” does not include the following:

Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where the purchaser’s primary purpose for the underlying transaction is the processed data or information;
Installation or maintenance of wiring or equipment on a customer’s premises;
Tangible personal property;
Advertising, including but not limited to directory advertising;
Billing and collection services provided to third parties;
Internet access service;
Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, or routing of the service by the programming service provider. Radio and television audio and video programming services shall include but not be limited to cable service as defined in 47 U.S.C. §522.6 and audio and video programming services delivered by a commercial mobile radio service provider as defined in 47 CFR §20.3;
Ancillary services;
Digital products delivered electronically, including but not limited to software, music, video, reading materials or ring tones.

"Value-added non-voice data service" means a service that otherwise meets the definition of telecommunication service in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance, or routing. "Vertical service" means an ancillary service that is offered in connection with one or more telecommunication services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections. Nonexclusive examples of vertical service include call forwarding, caller ID, three-way calling, and conference bridging services. "Voice mail service" means an ancillary service that enables the customer to store, send, or receive recorded messages. Voice mail service does not include any vertical services that the customer may be required to have in order to utilize the voice mail service. This rule is intended to implement Iowa Code section 423.2(9).

701—217.3(423) Imposition of tax. 217.3(1) Taxable telecommunication service and ancillary service. The sales price of the sale of telecommunication service and ancillary service are subject to Iowa sales or use tax. The following is a nonexclusive list of taxable telecommunication services: a. Air-to-ground radio telephone service; b. Ancillary services except detailed communications billing service; c. Conference bridging service; d. Fixed wireless service; e. Mobile wireless service; f. Pay telephone service; g. Postpaid calling service; h. Prepaid calling service; i. Prepaid wireless calling service; j. Private communication service; k. Residential telecommunication service. 217.3(2) Other taxable services and circumstances. The following is a description of services and circumstances under which certain charges associated with telecommunication service are subject to tax: a. Long distance charges.Charges imposed or approved by the utilities division of the department of commerce that are necessary to secure long distance service in this state, for example, “end user intrastate access charges,” are taxable. These charges are taxable whether they result from an expense incurred from operations or are imposed by the mandate of the utilities division and unrelated to any expense actually incurred in providing the service. b. Sales price of services performed by another company.The sales price collected by a company (selling company) from the end users of telecommunication services and ancillary services performed in this state by another company (providing company) are considered to be the taxable sales price of the selling company. The situation is similar to a consignment sale of tangible personal property. Tax must be remitted by the selling company. c. Directory assistance.Charges for directory assistance service rendered in this state are subject to tax. d. Electrical and electronic installation and repair.The sales price of the installation or repair of any inside wire that provides electrical current that allows an electronic device to function is subject to tax. The sales price is from the enumerated service of electrical and electronic repair and installation. The sales price of inside wire maintenance charges for services performed under a service or warranty contract is also subject to tax. Depending upon the circumstances, the sales price is for the enumerated service of electrical and electronic repair and installation or is incurred under an optional service or warranty contract for an enumerated service. In either event, the receipts are subject to tax. e. Electrical and electronic installation and repair: billing methodology.The sales price of the repair or installation of inside wire or the repair or installation of any electronic device, including a telephone or telephone switching equipment, is subject to tax regardless of the method used to bill the customer for the service. These methods include but are not limited to: (1) A flat fee or a flat hourly charge that covers all costs, including labor and materials; (2) A premises visit or trip charge; (3) A single charge covering and not distinguishing between charges for labor and materials; (4) A charge with labor and material segregated; or (5) A charge for labor only. f. Nonitemized taxes and charges.Any federal taxes or charges that are not separately stated or billed are subject to Iowa sales tax. g. Rental of tangible personal property.The sales price of the rental of any device for home or office use or to provide a telecommunication service to others is taxable as the rental of tangible personal property. The sales price of rental includes rents, royalties, and copyright and license fees. Any periodic fee for maintenance of the device that is included in the sales price of the rental of the device is also subject to tax. h. Sales of tangible personal property.The sale of any device, new or used, is subject to tax both when the device is in place on the customer’s premises at the time of the sale and if the device is sold to the customer elsewhere. The sale of an entire inventory of devices may or may not be subject to tax, depending upon whether it qualifies for the casual sales exemption. More information is contained in Iowa Code section 423.3. Other exemptions may be applicable, as well. i. Mandatory charges or fees.Any mandatory handling or other charges billed to a customer for sending the customer an electronic device by mail or by a delivery service are subject to tax. Charges for a mandatory service rendered in connection with the sale of tangible personal property are considered by the department to be a part of the sales price of the sale of the property itself and therefore subject to tax. j. Deposits.Any portion of a deposit utilized by a company as payment for the sale of tangible personal property or a taxable service is subject to tax as part of the sales price. k. Municipal utilities.Sales of telecommunication service and ancillary service to any tax-levying body used by or in connection with the operation of any municipally owned utility engaged in selling gas, electricity or heat to the general public are subject to tax. These sales are an exception to the exemption for federal and state government. More information is contained in subrule 217.4(5). l. Fax.The service of sending or receiving any document commonly referred to as a “fax” from one point to another within this state is subject to sales tax. This rule is intended to implement Iowa Code section 423.2(9).

701—217.4(423) Exempt from the tax. This rule provides various specific circumstances involving nontaxable telecommunication service and ancillary service. The following is a nonexclusive list of services that are not subject to the Iowa sales and use tax: 217.4(1) Detailed communications billing service. 217.4(2) Internet access fees or charges. 217.4(3) Value-added non-voice data service. 217.4(4) Separately stated and separately billed charges. Fees and charges that are separately stated and billed are exempt from the sales and use tax. This exemption includes the following items when separately stated and billed: a. Fees and charges for securing only interstate telecommunication services. b. Federal taxes. c. Fees and charges for only interstate directory assistance. 217.4(5) Government entities. Sales of telecommunication service and ancillary service to the United States government or its agencies or to the state of Iowa or its agencies are not subject to sales or use tax. This exemption includes sales made to all divisions, boards, commissions, agencies or instrumentalities of federal, Iowa, county or municipal government. In order to be a sale to the United States government or to the state of Iowa, the government or agency involved must make the purchase of the services and pay the purchase price of the services directly to the vendor. Telecommunication service providers should obtain an exemption certificate from each agency for their records. An exception to this exemption is sales to any tax-levying body used by or in connection with the operation of any municipally owned utility engaged in selling gas, electricity or heat to the general public; such sales are subject to tax. 217.4(6) Private nonprofit educational institutions. Sales of telecommunication service and ancillary service to private, nonprofit educational institutions in this state for educational purposes are exempt from tax. 217.4(7) 911 surcharge. A 911 emergency telephone service surcharge is a surcharge for a service that routes a 911 call to the appropriate public safety answering point and automatically displays a name, address, and telephone number of an incoming 911 call at that answering point. A surcharge for 911 emergency telephone service is not subject to sales tax if: a. The amount is no more than $1 per month per telephone access line; and b. The surcharge is separately identified and separately billed. 217.4(8) Return of deposit. The return to the customer of any portion of a deposit amount paid by that customer to a company providing telecommunication service is not subject to tax. 217.4(9) Resale exemption. A service or facility furnished by one telecommunication company to another commercial telecommunication company that the second telecommunication company then furnishes to its customers qualifies for the resale exemption under Iowa Code section 423.3(2), including any carrier access charges. 217.4(10) Online services. Any contracted online service is exempt from tax if the information is made available through a computer server. The exemption applies to all contracted online services, as long as they provide access to information through a computer server. 217.4(11) New construction. The repair or installation of inside wire or the repair or installation of any electronic device, including a telephone or telephone switching equipment, that is performed as part of or in connection with new construction, reconstruction, alteration, expansion or remodeling of a building or structure is exempt from Iowa tax. More information is contained in 701—Chapter 219. This rule is intended to implement Iowa Code section 423.3.

701—217.5(423) Bundled transactions in telecommunication service. More information on general rules on bundled transactions is contained in 701—Chapter 206. In the case of a bundled transaction that includes telecommunication service, ancillary service, Internet access, or audio or video programming service, either separately or in combination: 217.5(1) If the price is attributable to products that are taxable and products that are nontaxable, the portion of the price attributable to the nontaxable products will be subject to tax unless the provider can identify by reasonable and verifiable standards the portion from the provider’s books and records that are kept in the regular course of business for other purposes, including but not limited to nontax purposes. 217.5(2) If the price is attributable to products that are subject to tax at different tax rates, the total price may be treated as attributable to the products subject to tax at the highest tax rate, unless the provider can identify by reasonable and verifiable standards the portion of the price attributable to the products subject to tax at the lower rate from the provider’s books and records that are kept in the regular course of business for other purposes, including but not limited to nontax purposes. This rule is intended to implement Iowa Code section 423.2(8).

701—217.6(423) Sourcing telecommunication service. 217.6(1) The general sourcing principles found in Iowa Code section 423.15 apply to telecommunication services and ancillary services, unless the service falls under one of the exceptions set forth in subrule 217.6(2). 217.6(2) Exceptions. The following telecommunication services and products are sourced as follows: a. Mobile telecommunication service is sourced to the place of primary use, unless the service is prepaid wireless calling service. b. The sale of prepaid calling service or prepaid wireless calling service is sourced as provided under Iowa Code section 423.15. However, in the case of prepaid wireless calling service, Iowa Code section 423.15(1)“e” shall include as an option the location associated with the mobile telephone number. c. A sale of a private telecommunication service is sourced as follows: (1) Service for a separate charge related to a customer channel termination point is sourced to each level of jurisdiction in which the customer channel termination point is located. (2) Service where all customer termination points are located entirely within one jurisdiction or levels of jurisdiction is sourced in the jurisdiction in which the customer channel termination points are located. (3) Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged is sourced 50 percent in each level of jurisdiction in which the customer channel termination points are located. (4) Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points. d. The sale of Internet access service is sourced to the customer’s place of primary use. e. The sale of an ancillary service is sourced to the customer’s place of primary use. f. A postpaid calling service is sourced to the origination point of the telecommunication signal as first identified by either: (1) The seller’s telecommunication system; or (2) Information received by the seller from its service provider, where the system used to transport the signals is not that of the seller. g. The sale of telecommunication service sold on a call-by-call basis is sourced to: (1) Each level of taxing jurisdiction where the call originates and terminates in that jurisdiction; or (2) Each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located. h. The sale of telecommunication service sold on a basis other than a call-by-call basis is sourced to the customer’s place of primary use. i. The sale of the following telecommunication services is sourced to each level of taxing jurisdiction as follows: (1) A sale of mobile telecommunication service, other than prepaid calling service, is sourced to the customer’s place of primary use as required by the federal Mobile Telecommunications Sourcing Act. (2) A sale of postpaid calling service is sourced to the origination point of the telecommunication signal as first identified by either the seller’s telecommunication system or information received by the seller from its service provider, where the system used to transport such signals is not that of the seller. This rule is intended to implement Iowa Code section 423.20.

701—217.7(423) General billing issues. This rule is specifically applicable to companies and other persons providing telecommunication service and ancillary service in this state. 217.7(1) Retailers liable for collecting and remitting tax. A retailer that sells taxable telecommunication service and ancillary service is liable for collecting and remitting the state sales or use tax and any applicable local sales tax on the amounts of the sales. 217.7(2) Billing date and tax period. A company that bills the company’s subscribers for telecommunication service on a quarterly, semiannual, annual, or any other periodic basis must include the amount of those billings in the company’s sales price. The date of the billing determines the period for which sales tax is remitted. For example, if the date of a billing is March 31, and the due date for payment of the bill without penalty is April 20, tax upon the sales price stated in the bill must be included in the sales tax return for the first quarter of the year. The same principle must be used to determine when tax will be included in payment of a sales tax deposit to the department. 217.7(3) Permitting business offices. A company must have a permit for each business office that provides telecommunication service in this state. The company must collect and remit tax upon the sales price of the operation of each office. 217.7(4) Credit. A taxpayer subject to sales or use tax on telecommunication service and ancillary service who has paid any legally imposed sales or use tax on such service to another jurisdiction outside the state of Iowa is allowed a credit against the sales or use tax imposed by the state of Iowa equal to the sales or use tax paid to the other taxing jurisdiction(s). 217.7(5) Direct pay permit not applicable to telecommunication services. The department may issue a direct pay permit that allows the holder to purchase tangible personal property or taxable services without payment of the tax to the seller. However, a direct pay permit holder cannot use the direct pay permit for the purchase of telecommunication services and ancillary services. The seller must charge and collect the sales or use tax from the purchaser on the taxable sales of telecommunication services and ancillary services. 217.7(6) Guaranteed amounts for coin-operated telephones. If a minimum amount is guaranteed to a company from the operation of any coin-operated telephone, tax is computed on the greater of the minimum amount guaranteed or the actual taxable sales price collected. This rule is intended to implement Iowa Code section 423.36.

701—217.8(34A) Prepaid wireless 911 surcharge. 217.8(1) Definitions. The definitions in rule 701—217.2(423) apply to this rule. The following definitions are also applicable to this rule: "Consumer" means a person who purchases prepaid wireless telecommunications service in a retail transaction. "Department" means the department of revenue. "Prepaid wireless 911 surcharge" means the surcharge that is required to be collected by a seller from a consumer in the amount established under this rule. "Provider" means a person who provides prepaid wireless telecommunications service pursuant to a license issued by the Federal Communications Commission. "Retail transaction" means the purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale. If more than one separately priced item of prepaid wireless calling service is purchased by an end user, each item purchased shall be deemed to be a separate retail transaction.Items of prepaid wireless calling service include but are not limited to prepaid wireless phones, prepaid wireless phone calling cards, rechargeable prepaid wireless phones, rechargeable prepaid wireless phone calling cards, and prepaid wireless service plans. "Seller" means a person who sells prepaid wireless telecommunications service to another person. 217.8(2) Registration. Each seller that sells prepaid wireless service must register according to the procedures established by the department. The department will make information regarding the procedures available to the public. 217.8(3) Collecting, filing, and remitting. a. Each seller is responsible for collecting the applicable 911 surcharge from the consumer with respect to each retail transaction occurring in this state. A seller may determine whether the transaction occurs in this state by referring to the department rules on the sourcing of sales of prepaid wireless telecommunications service in paragraph 217.6(2)“b.” More information is also contained in Iowa Code sections 34A.7B(4), 423.15 and 423.20. b. The surcharge must be separately itemized on the invoice, receipt or other similar document, or otherwise disclosed to the consumer. c. The prepaid wireless 911 surcharge is the liability of the consumer and not of the seller or any provider, except that the seller shall be liable to remit all prepaid wireless 911 surcharges that the seller collects from consumers as provided in paragraph 217.8(3)“a,” including all such surcharges that the seller is deemed to collect where the amount of the surcharge has not been separately stated on an invoice, receipt, or similar document provided to the consumer by the seller. d. The amount of the prepaid wireless 911 surcharge that is collected by a seller from a consumer, if such amount is separately stated on an invoice, receipt, or other similar document provided to the consumer by the seller, shall not be included in the base for measuring any tax, fee, other surcharge, or other charge that is imposed by this state, any political subdivision of this state, or any intergovernmental agency. e. The seller must complete a 911 Surcharge Schedule and the surcharge portion of the Iowa Sales Tax and Surcharge Return or Iowa Retailer’s Use Tax and Surcharge Return and file the information with the department. f. The schedule, return and the collected surcharge are due at the times provided by Iowa Code chapter 423 with respect to the sales and use tax. g. The seller may deduct and retain 3 percent of prepaid wireless 911 surcharges that are collected by the seller from consumers. h. The seller is not required to collect the surcharge if a minimal amount of prepaid wireless telecommunications service is sold in conjunction with a prepaid wireless device for a single, nonitemized price. A minimal amount of service is any service denominated as $5 or less or ten minutes or less. 217.8(4) Audit, appeal, and enforcement. a. The audit and appeal procedures applicable to sales and use tax under Iowa Code chapter 423 shall apply to the prepaid wireless 911 surcharge. More information is contained in Iowa Code sections 421.10 and 421.60. b. Pursuant to the authority established in Iowa Code chapter 423, the department shall have the power to assess the seller for penalty and interest on any past due surcharge and exercise any other enforcement powers established in Iowa Code chapter 423. More information is contained in Iowa Code sections 421.7 and 421.27. c. The seller shall maintain, and shall make available to the department for inspection for three years, its books and records in a manner that will permit the department to determine whether the seller has complied with or is complying with the provisions of Iowa Code section 34A.7B. 217.8(5) Procedures for documenting that a sale is not a retail transaction. The procedures for establishing that a sale of prepaid wireless telecommunications service is not a sale is similar to the procedure for documenting sale for resale transactions under Iowa Code chapter 423. 217.8(6) Procedures for remitting the surcharge to the treasurer. The department shall transfer all remitted prepaid wireless 911 surcharges to the treasurer of state for deposit in the 911 emergency communications fund created under Iowa Code section 34A.7A(2) within 30 days of receipt of the 911 surcharge from sellers. Prior to remitting the surcharges to the treasurer, the department shall deduct and retain an amount, not to exceed 2 percent of collected surcharges, to reimburse the department’s direct costs of administering the collection and remittance of prepaid wireless 911 surcharges. This rule is intended to implement Iowa Code section 34A.7B.

701—217.9(423) State sales tax exemption for central office equipment and transmission equipment. Central office equipment and transmission equipment primarily used in the furnishing of telecommunications services on a commercial basis are exempt when used by certain providers enumerated in Iowa Code section 423.3(47A)“a.” 217.9(1) Definitions. The following definitions are applicable to this rule: "Central office equipment" means the same as defined in Iowa Code section 423.3(47A)“b”(1). "Transmission equipment" means the same as defined in Iowa Code section 423.3(47A)“b”(4). 217.9(2) Central office equipment or transmission equipment. The following are central office equipment or transmission equipment: a. Stored program control digital switches and their associated equipment used to switch or route communication signals with a system from the origination point to the appropriate destination. b. Peripheral equipment used to support the transmission of communications over the network, such as emergency power equipment, lightning arrestors, fault alarm equipment, multiplex equipment, digital cross connects, terminating equipment, fiber optic electronics, communication hardware equipment, and test equipment. c. Circuit equipment that utilizes the message path to carry signaling information or that utilizes separate channels between switching offices to transmit signaling information independent of the subscribers’ communication paths or transmission channels. d. Radio equipment, including radio-transmitters and receivers utilized to transmit communication signals through the air from one location to another. Radio equipment also includes repeaters, which are located every 20 to 30 miles; at these points, radio signals are received, amplified and retransmitted. 217.9(3) Not central office equipment or transmission equipment. The following are not central office equipment or transmission equipment: a. Telecommunications towers. These towers are structures and, as such, constitute real property. Real property is outside the scope of “equipment.” b. Equipment shelters or enclosures erected on concrete or other foundations. These shelters or enclosures are structures and, as such, constitute real property. Real property is outside the scope of “equipment.” c. Fencing erected around the telecommunications towers and equipment shelters or enclosures. This rule is intended to implement Iowa Code section 423.3(47A).ARC 7149CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to resale and processing exemptions primarily of benefit to retailers and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 225, “Resale and Processing Exemptions Primarily of Benefit to Retailers,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.1(24), 423.1(39), 423.1(46), 423.1(54), 423.1(55), 423.2(1), 423.3(2), 423.3(50), 423.3(98), 423.3(104) and 423.15(2).Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 225. This chapter provides the Department’s interpretation of the underlying statutes and how those statutes apply to retailers who qualify for a resale or other sales or use tax exemptions on certain purchases in order to aid retailers’ understanding of the underlying statutes and to reduce uncertainty about the application of certain exemptions to retailers’ purchases. The Department proposes adding to the rules to add clarification and removing portions that the Department has determined are unnecessary, obsolete, or duplicative of statutory language. The Department also renumbered some rules due to those changes and for organizational reasons. A citation in subrule 225.5(5) to rule 701—221.5(423) refers to a rule that will be adopted in a future rulemaking. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 225 and adopt the following new chapter in lieu thereof: CHAPTER 225RESALE AND PROCESSING EXEMPTIONS PRIMARILY OF BENEFIT TO RETAILERS

701—225.1(423) Paper or plastic plates, cups, and dishes; paper napkins; wooden or plastic spoons and forks; and straws. When paper or plastic cups, plates, and dishes, paper napkins, and wooden or plastic spoons, forks, and other utensils are sold with food or other items to a buyer, and the buyer uses or consumes the utensils, sales of those utensils to retailers are considered sales for resale. The sales price from the sale of such items by retailers to consumers or users is subject to tax.When these articles are transferred in connection with a service or sold for free distribution by retailers apart from a retail sale, the transaction is deemed to be a retail sale to the retailer and therefore is taxable.Sales of reusable placemats to retailers that sell meals are also subject to tax. This rule is intended to implement Iowa Code section 423.3(2).

701—225.2(423) Services used in the repair or reconditioning of certain tangible personal property. Services are exempt from tax when used in the reconditioning or repairing of tangible personal property of the type that is normally sold in the regular course of the retailer’s business and that is held for sale by the retailer. This rule is intended to implement Iowa Code sections 423.1(55) and 423.3(50).

701—225.3(423) Tangible personal property purchased by a person engaged in the performance of a service. 225.3(1) In general. a. Tangible personal property purchased by a person engaged in the performance of a service is purchased for resale and not subject to tax if (1) the provider and user of the service intend that a sale of the property will occur, and (2) the property is transferred to the user of the service in connection with the performance of the service in a form or quantity capable of a fixed or definite price value, and (3) the sale is evidenced by a separate charge for the identifiable piece or quantity of property. b. Tangible personal property that is not sold in the manner set forth in paragraph 225.3(1)“a” above is not purchased for resale and thus is subject to tax at the time of purchase by a person engaged in the performance of a service. Such tangible personal property is considered to be consumed by the purchaser who is engaged in the performance of a service, and the person performing the service shall pay tax upon the sale at the time of purchase. 225.3(2) Purchases made by automobile body shops or garages with body shops. Tangible personal property purchased by body shops can be purchased for resale provided both of the following conditions are met: a. The property purchased for resale is actually transferred to the body shop’s customer by becoming an ingredient or component part of the repair work. More information is contained in Iowa Code section 423.3(2). b. The property purchased for resale is itemized as a separate item on the invoice to the body shop’s customer and is transferred to the customer in a form or quantity capable of a fixed or definite price value.If either of the above two conditions is not met, there is no purchase for resale and the body shop is deemed the consumer of the item purchased.When body shops purchase items that will be resold (detailed list below) in the course of the repair activity, the vendors selling to the body shops are encouraged to accept a valid resale certificate at the time of purchase. Failure of the vendor to accept a valid resale certificate may subject that vendor to sales tax liability since the burden of proof would be on the vendor that a sale was made for resale. If the vendor cannot meet that burden, the vendor will be liable for the sales tax. Such burden is not met merely by a showing that the purchaser had obtained from the department an Iowa retail sales tax permit or retail use tax permit.For insurance purposes, body shops are reimbursed by insurance companies for “materials” that such shops consume in rendering repair services. Some of the materials are transferred to the recipients of the repair services and some are not. Of those so transferred, such transfer is in irregular quantities and is not in a form or quantity capable of a fixed or definite price value. Therefore, body shops are generally deemed to be the consumers of materials and must pay tax on these items at the time of purchase. Nonexclusive examples of items most likely to be included in this category of “materials,” whether actually transferred to customers of body shops or not, are as follows:AbrasivesBattery waterBody filler or puttyBody leadBolts, nuts and washersBrake fluidBuffing padsChamoisCleaning compoundsDegreasing compoundsFloor dryHydraulic jack oilLubricantsMasking tapePaintPolishesRagsRivets and cotter pinsSanding discsSandpaperScuff padsSealer and primerSheet metalSolderSolventsSpark plug sandStriping tapeThinnerUpholstery tacksWaxesWhite sidewall cleanerThe following are nonexclusive examples of parts which can be purchased for resale since they are generally transferred to the body shop’s customer during the course of the repair in a form or quantity capable of a fixed or definite price value and are generally itemized separately as parts:AccessoriesBatteriesBracketsBulbsBumpersCab cornersChassis partsDoor guardsDoor handlesDoorsEngine partsFendersFloor matsGrillesHeadlampsHoodsHubcapsRadiatorsRocker panelsShock absorbersSide moldingSpark plugsTiresTrimTrunk lidsWheelsWindow glassWindshield ribbonWindshieldsThe following are nonexclusive examples of tools and supplies that are generally not transferred to the body shop’s customer during the course of the repair and, therefore, could not be purchased for resale. The body shop is deemed the consumer of these items since they are not transferred to a customer. Therefore, the body shop must pay tax to the vendor at the time of purchase:Air compressors and partsBody frame straightening equipmentBrooms and mopsBuffersChiselsDrill bitsDrop cordsEquipment partsFire extinguisher fluidsFloor jacksHand soapHand toolsOffice suppliesPaint brushesPaint sprayersSandersSignsSpreaders for puttyWashing equipment and partsWelding equipment and partsBecause of the nature of the body shop business and the formulas devised by the insurance industry to reimburse a body shop for cost of “materials,” it is possible for a body shop, in the body shop’s invoices to customers, to separately set forth labor, resold parts, and materials. While the materials can be separately invoiced as one general item, there is no way to ascertain a definite and fixed price for each item of the materials listed in this rule and consumed by the body shop, and some of such individual materials are not even transferred by the body shop to the body shop’s customers. Therefore, the body shop is generally the “consumer” of “materials” and does not purchase those materials for resale. Thus, the body shop should pay tax to retailers on all materials purchased and consumed by the body shop. If materials are purchased from non-Iowa retailers that do not collect Iowa tax from the body shop, such a body shop should remit consumer use tax to the department of revenue on such materials.A body shop must collect sales tax on the taxable service of repairing motor vehicles. More information is contained in rule 701—218.2(423). However, due to the nature of the insurance formulas, it is possible for the body shop to itemize that portion of the body shop’s billing that would be for repair services and that portion relating to consumed “materials.” It is also possible for the body shop to itemize that portion of the body shop’s charges for parts that the body shop purchases for resale to the body shop’s customers. A body shop does not and cannot resell the tools and supplies previously listed in this rule; the body shop’s purchases of such items are taxable.Therefore, as long as a body shop separately itemizes on the body shop’s invoices to the body shop’s customers the amounts for labor, parts, and “materials,” the body shop should collect sales tax on the labor and the parts, but not on the materials as enumerated in this rule.In this example, if the “materials” were not separately listed on the invoice, but had been included in either or both of the labor or parts charges by marking up such charges, the body shop would have to collect sales tax on the full charges for parts or labor even though tax was paid on materials by the body shop to the shop’s supplier at the time of purchase. This rule is intended to implement Iowa Code sections 423.1(39) and 423.3(2).

701—225.4(423) Maintenance or repair of fabric or clothing. Sales of chemicals, solvents, sorbents, or reagents directly used and consumed in the maintenance or repair of fabric or clothing are exempt from tax. This rule’s exemption is mainly applicable to dry-cleaning and laundry establishments; however, it is also applicable to soap or any chemical or solvent used to clean carpeting. The department presumes that a substance is “directly used” in the maintenance or repair of fabric or clothing if the substance comes in contact with the fabric or clothing during the maintenance or repair process. Substances that do not come into direct contact with fabric or clothing may, under appropriate circumstances, be directly used in the maintenance or repair of the fabric or clothing, but direct use will not be presumed.The following are examples of substances directly used and consumed in the maintenance or repair of fabric or clothing: perchloroethylene (also known as “perch”) or petroleum solvents used in dry-cleaning machines and coming in direct contact with the clothing being dry-cleaned. Substances used to clean or filter the “perch” or petroleum solvents would also be exempt from tax, even though these substances do not come in direct contact with the clothing being cleaned. The sale of soap or detergents especially made for mixing with “perch” or petroleum solvents is exempt from tax. The sale of stain removers to dry cleaners is exempt from tax.A commercial laundry’s purchase of detergents, bleaches, and fabric softeners is exempt from tax. A commercial laundry’s purchase of water, which is a solvent, is also exempt from tax if purchased for use in the cleaning of clothing.The purchase of starch by laundries and “sizing” by dry cleaners is not exempt from tax. This rule is intended to implement Iowa Code section 423.3(51).

701—225.5(423) The sales price from the leasing of all tangible personal property subject to tax. 225.5(1) Leases. The rental of tangible personal property is treated as the sale of that property for the purposes of Iowa sales and use tax law because “leases” and “rentals” of tangible personal property are taxable retail “sales” of that property. The rental of tangible personal property is not a taxable enumerated service. The resale exemption in favor of sales for resale of tangible personal property is applicable to sales and leases of tangible personal property for subsequent rental or lease. 225.5(2) Distinguishing leases and rentals of tangible personal property from the furnishing of nontaxable services. In order to determine whether a particular fee is charged for the rental of tangible personal property or for the furnishing of a nontaxable service, the department looks at the substance, rather than the form, of the transaction. When the possession and use of tangible personal property by the recipient is merely incidental as compared to the nontaxable service performed, all of the sales price is derived from the furnishing of such nontaxable service and, unless a separate fee or charge is made for the possession and use of tangible personal property, no sales price is derived from the rental of tangible personal property. When the nontaxable service is merely incidental to the possession and use of the tangible personal property by the recipient, all of the sales price is derived from the furnishing of tangible personal property rental and, unless a separate fee or charge is made for the nontaxable service, no sales price is derived from the nontaxable service. When a tangible personal property rental agreement contains separate fee schedules for rent and for nontaxable service, only the sales price derived from the tangible personal property rental is subject to tax. This rule is not to be so construed as to be at variance with Iowa Code sections 423.2(6)“bf” and 423.2(8) concerning transportation services and bundled service contracts, respectively. 225.5(3) Rental of real property distinguished from rental of tangible personal property. If a rental contract allows the renter exclusive possession or use of a defined area of real property and, incident to that contract, tangible personal property is provided that allows the renter to utilize the real property, if there is no separate charge for rental of tangible personal property, the sales price is for the rental of real property and is not subject to tax, unless taxable room rental is involved.If a person rents tangible personal property and, incidental to the rental of the property, space is provided for the property’s use, the sales price from the rental shall be subject to tax. It may at times be difficult to determine whether a particular transaction involves the rental of real property with an incidental use of tangible personal property or the rental of tangible personal property with an incidental use of real property. 225.5(4) Rental of tangible personal property and rental of fixtures. The rental of tangible personal property that shall, prior to its use by the renter under the rental contract, become a fixture shall not be subject to tax. Such a rental is the rental of real property rather than tangible personal property. In general, any tangible personal property that is connected to real property in a way that it cannot be removed without damage to itself or to the real property is a fixture. The rental of a mobile home or manufactured housing, not sufficiently attached to realty to constitute a fixture, is room rental rather than tangible personal property rental and subject to tax on that basis. 225.5(5) Rental of tangible personal property embodying intangible personal property rights—transactions taxable and exempt. Under the law, the sales price from rental of tangible personal property includes royalties and copyright and license fees. The rental of all property that is a tangible medium of expression for the intangible rights of royalties and copyright and license fees is subject to tax. Therefore, the sales price from the rental of films, videodiscs, videocassettes, and computer software that are the tangible means of expression of intangible property rights is subject to tax. The rental of such tangible personal property is subject to tax whether the property is held for rental to the general public or for rental to one or a few persons. More information is contained in rule 701—221.5(423) for an exemption from the requirements of this subrule for rental of films, videotapes and other media to lessees imposing a taxable charge for viewing or rental of the media or to lessees that broadcast the contents of these media for public viewing or listening. 225.5(6) Deposits and additional fees. Taxability of a deposit required by an owner of rental property as a condition of the rental depends upon the type of deposit required. A deposit subject to forfeiture for the lessee’s failure to comply with the rental agreement is not subject to tax. This type of deposit is separate from the rental payments and therefore is not taxable as part of the rental. Such deposits may include those for reservation, late return of the rental property or damage to the rental property. Deposits not subject to forfeiture which represent part of the rental receipts are considered part of the taxable rental and are subject to tax. Such deposits may include a deposit of the first rental payment that is applied to the rental receipts.When tangible personal property is rented for a flat fee per month, per year, or for other designated periods, plus an additional fee based on quantity and capacity of production or use, the entire charge is taxable. 225.5(7) Leasing of tangible personal property moving in interstate commerce. a. In the case of a lease or rental that requires recurring periodic payments, the first periodic payment is taxed to Iowa if the property was delivered to the lessee in Iowa. Periodic payments made subsequent to the first payment may be taxed only by the state in which the property is primarily located for the period covered by the payment. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location shall not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls. b. Where a nonresident lessor leases tangible personal property to a resident or nonresident lessee and the lessee uses the property in Iowa, the nonresident lessor has the responsibility of collecting Iowa use tax on the lease payments if Iowa is the primary location of the property, provided the lessor is a retailer maintaining a place of business in this state as defined in Iowa Code section 423.1(48). Whether the lease agreement is executed in Iowa or not is irrelevant. c. Where a lessee rents equipment sourced to Iowa and no tax has been collected from such lessee by the lessor, the lessee should remit Iowa use tax to the department of revenue. In the event no tax is remitted, the department, in its discretion, may seek to collect the tax from the lessor or lessee. In the event that the lessee rents tangible personal property, and the lessor does not maintain a place of business in Iowa and does not collect use tax pursuant to Iowa Code section 423.14, such lessee shall remit tax on its rental payments to the department. d. Where a resident lessor leases equipment to a nonresident lessee outside Iowa and the equipment is delivered to the lessee outside Iowa, the act of leasing is exempt from the Iowa sales tax on the rental payments. However, in the event the lessee brings the equipment into Iowa, uses it in Iowa, and Iowa becomes the primary location of the property, Iowa use tax applies to subsequent rental payments. e. If sales or use tax has already been paid to another state on the sales price of tangible personal property prior to the use of that property in Iowa, a tax credit against the Iowa use tax on the purchase price will be given. After the equipment is brought into Iowa, if sales or use tax is properly payable and is paid to another state on the rental payments of equipment, for the same time the Iowa tax is imposed on such rentals, a tax credit against the Iowa use tax on such rental payments will be given. This rule is intended to implement Iowa Code sections 423.1(24), 423.1(43), 423.1(46), 423.1(54), 423.2(1), and 423.15(2).

701—225.6(423) Certain inputs used in taxable vehicle wash and wax services. The sales price from the sale of water, electricity, chemicals, solvents, sorbents, or reagents to a retailer to be used in providing a service that includes a vehicle wash and wax that is subject to Iowa Code section 423.2(6) is exempt from tax. 225.6(1) Definitions. For the purposes of this rule, terms mean the same as defined in Iowa Code section 423.1 and 701—Chapter 200. Additionally, the following definitions apply: "Secondary vehicle wash and wax facility" means a vehicle wash and wax facility whose primary purpose is to sell tangible personal property or services other than vehicle wash and wax services, but which also provides vehicle wash and wax services that are taxable under Iowa Code section 423.2(6). Examples of “secondary vehicle wash and wax facilities” include but are not limited to vehicle dealerships, convenience stores, service stations, and wholesale and retail fuel marketing locations that provide taxable vehicle wash and wax services in addition to their primary business purpose. A facility that provides vehicle wash and wax services that also sells tangible personal property or other services is presumed to be a “secondary vehicle wash and wax facility” unless it can prove otherwise. "Stand-alone vehicle wash and wax facility" means a vehicle wash and wax facility whose primary purpose is to provide vehicle wash and wax services that are taxable under Iowa Code section 423.2(6). A vehicle wash and wax facility is considered a “stand-alone vehicle wash and wax facility” although it sells a de minimis amount of products and services related to vehicle wash and wax services. Nonexclusive examples of products and services related to vehicle wash and wax services include coin-operated vacuum stations and air fresheners and vehicle wipes that are sold out of vending machines. "Vehicle" means the same as defined in Iowa Code section 321.1. "Vehicle wash and wax facility" means any retailer that provides vehicle wash and wax services. "Vehicle wash and wax services" "vehicle wash and wax" means washing and waxing services performed inside or outside of the vehicle or both whether the services are performed by hand, machine, or coin-operated devices. "Water" means water directly consumed or used in providing the taxable vehicle wash and wax service. “Water” does not include, for example, charges or fees for storm water, sanitary sewer, or solid waste services since these are not fees for water directly used or consumed in providing the taxable vehicle wash and wax service. 225.6(2) Purchases made by a stand-alone vehicle wash and wax facility. Purchases of water, electricity, chemicals, solvents, sorbents, or reagents by a stand-alone vehicle wash and wax facility are presumed to be 100 percent exempt from sales tax. The stand-alone vehicle wash and wax facility is not required to provide the retailers of such items with an exemption certificate. 225.6(3) Purchases made by a secondary vehicle wash and wax facility. a. Sales price of electricity and water.The exemption for the sales price of electricity and water purchased by secondary vehicle wash and wax facilities applies only to the sales price from the sale of electricity and water directly consumed or used in providing vehicle wash and wax services, as distinguished from electricity and water used and consumed for other purposes not related to vehicle wash and wax services (e.g., electricity to operate office equipment or lighting, and water used for cleaning the inside of a gas station or for irrigation). (1) Separately metered electricity and water. Ideally, a secondary vehicle wash and wax facility will have separate meters to measure its nonexempt electricity and water usage and its exempt electricity and water used for providing taxable vehicle wash and wax services. A secondary vehicle wash and wax facility that separately meters its exempt and nonexempt electricity and water usage and does not use the exempt electricity and water for any other purpose than providing a taxable vehicle wash and wax service does not have to file an exemption certificate with the retailers. The retailer should not charge tax on the charges associated with the meters that measure electricity and water used solely for providing the taxable vehicle wash and wax services.However, if water or electricity that is measured by the meter that separately measures the vehicle wash and wax facility is used for both taxable vehicle wash and wax services and nonexempt purposes (e.g., consumed in performance of its business operations), the secondary vehicle wash and wax facility must allocate the use of the electricity or water according to exempt and nonexempt use if an exemption for nontaxable use is to be claimed. To obtain the exemption for electricity or water under this rule, a secondary vehicle wash and wax facility that has both exempt and nonexempt electricity or water usage measured by the same meter must request the exemption by providing an exemption certificate to the electricity or water retailer.The exemption certificate shall indicate what percentage of the electricity or water is used for taxable vehicle wash and wax services and is therefore exempt. The exemption certificate shall be in writing and detail how the percentages of exempt and nonexempt usage were developed. The rationale provided for the percentage of exempt water and electricity must be reasonable after the nature of the secondary vehicle wash and wax service facility’s primary purpose and all other facts and circumstances are considered. A secondary vehicle wash and wax facility that cannot, or does not want to, determine the percentage of exempt electricity or water usage may forego the exemption. The exemption certificate is valid for three years, but the secondary vehicle wash and wax facility must amend its exemption certificate to reflect any changes that would affect the exemption amount (e.g., summer month water usage compared to winter month water usage). (2) Exempt and nonexempt usage measured by the same meter. When electricity and water are purchased for vehicle wash and wax services as well as for taxable uses, and the use of the electricity or water is recorded on a single meter, a secondary vehicle wash and wax facility must allocate the use of the electricity or water according to exempt and nonexempt use if an exemption for nontaxable use is to be claimed. To obtain the exemption for electricity or water under this subparagraph, a secondary vehicle wash and wax facility that has both exempt and nonexempt electricity or water usage measured by the same meter must request the exemption by providing an exemption certificate to the electricity or water retailer.The exemption certificate must indicate what percentage of the electricity or water is used for taxable vehicle wash and wax services and is therefore exempt. The exemption certificate shall be in writing and detail how the percentages of exempt and nonexempt usage were developed. The rationale provided for the percentages of exempt water and electricity must be reasonable after the nature of the secondary vehicle wash and wax service provider’s primary purpose and all other facts and circumstances are considered. A secondary vehicle wash and wax facility that cannot, or does not want to, determine the percentages of exempt electricity and water usage may either forego the exemption or install a separate meter. The exemption certificate is valid for three years, but the secondary vehicle wash and wax facility must amend its exemption certificate to reflect any changes that would affect the exemption amount (e.g., summer month water usage compared to winter month water usage).Exemption statutes are strictly construed against the taxpayer in favor of taxation. The secondary vehicle wash and wax facility has the burden of proof regarding the exempt percentages and is liable for any mistakes or misrepresentations made regarding the computation or for failure to notify the electricity or water retailer in writing of the percentage of exempt usage, if required. b. Sales price of chemicals, solvents, sorbents, or reagents.The sales price of chemicals, solvents, sorbents, or reagents sold to a secondary vehicle wash and wax facility to be used in providing a taxable vehicle wash and wax service is presumed to be 100 percent exempt from sales tax if the secondary vehicle wash and wax facility’s primary business does not consume or sell the same chemicals, solvents, sorbents, or reagents that are used in providing taxable vehicle wash and wax services. If the secondary vehicle wash and wax facility’s primary business does not use or sell the same products used in providing the taxable vehicle wash and wax service, the facility does not have to provide the retailer with an exemption certificate. However, if the secondary vehicle wash and wax facility may consume the chemicals, solvents, sorbents, or reagents for any purpose other than providing taxable vehicle wash and wax services, the secondary vehicle wash and wax facility shall either: (1) Purchase such items without tax liability if the majority of the chemicals, solvents, sorbents, or reagents are used in performing the vehicle wash and wax service and remit the tax to the department at the time such items are consumed in the operation of the primary business. The secondary vehicle wash and wax facility shall provide to the retailer an exemption certificate that indicates that not all items will be used in providing a taxable vehicle wash and wax service and the tax on such items will be remitted at a later date; or (2) Pay tax to retailers at the time of purchase if the majority of the chemicals, solvents, sorbents, or reagents will be consumed in the operation of the primary business and deduct the original cost of any such items subsequently used in the vehicle wash and wax service when reporting tax on the facility’s returns.The automobile dealership has electricity and water meters that each separately measure the electricity and water used and consumed in using the vehicle wash and wax facility. Although the automobile dealership separately meters electricity and water, the separate meters do not measure only taxable vehicle wash and wax services. Therefore, to claim the exemption, the automobile dealership shall provide the electricity and water retailers with an exemption certificate that states the percentages of water and electricity used in providing taxable vehicle wash and wax services. The electricity and water retailers shall separately state and bill for the taxable and exempt amounts.The automobile dealership also uses some of the chemicals, solvents, sorbents, or reagents while washing and waxing its inventory, so the automobile dealership may either (1) purchase such items without tax liability if the majority of the chemicals, solvents, sorbents, or reagents are used in performing the vehicle wash and wax service and remit the tax at the time such items are consumed in the operation of the primary business, or (2) pay tax to retailers at the time of purchase if the majority of the chemicals, solvents, sorbents, or reagents will be consumed in the operation of the primary business and deduct the original cost of any such items subsequently used in the vehicle wash and wax service when reporting tax on the dealership’s returns.The exemption is available for the quantity of items used in providing the taxable vehicle wash and wax services even though the automobile dealership does not separately itemize on its receipts the amounts of electricity, water, chemicals, solvents, sorbents, or reagents used in providing the taxable vehicle wash and wax services.Additionally, because the gas station only sells gasoline and taxable vehicle wash and wax services, it is unlikely that the gas station will consume the chemicals, solvents, sorbents, or reagents for any purpose other than providing taxable vehicle wash and wax services. Therefore, the sales price of the chemicals, solvents, sorbents, or reagents that the gas station purchased for use in providing taxable vehicle wash and wax services is 100 percent exempt from sales tax. The gas station does not have to provide the retailers of the chemicals, solvents, sorbents, or reagents with an exemption certificate. This rule is intended to implement Iowa Code section 423.3(98).

701—225.7(423) Exemption for certain purchases by commercial enterprises. 225.7(1) Exemption. The sales price from the sale of specified digital products and of prewritten computer software sold, and of enumerated services described in Iowa Code section 423.2(1)“a”(5) or 423.2(6)“bq,” “br,” “bs,” and “bu” furnished to a commercial enterprise for use exclusively by a commercial enterprise is exempt from tax. 225.7(2) Commercial enterprise as purchaser. A purchaser seeking this exemption must be a commercial enterprise as defined in Iowa Code section 423.3(104)“b”(1). For purposes of Iowa Code section 423.3(104)“b”(1). For purposes of Iowa Code section 423.3(104)“b”(1), the following definitions apply: a. Insurance company.“Insurance company” means the same as defined in Iowa Code section 423.3(47)“d.” Excluded from the definition of "insurance company" is the following nonexhaustive list of entities: benevolent associations governed by Iowa Code chapter 512A, fraternal benefit societies governed by Iowa Code chapter 512B, and health maintenance organizations governed by Iowa Code chapter 514B. b. Occupation.“Occupation” means the principal business of an individual, such as the business of farming. c. Profession.“Profession” means a vocation or employment requiring specialized knowledge and often long and intensive academic preparation. 225.7(3) Exclusive use by a commercial enterprise. A commercial enterprise must be the exclusive user of the product. Use in the ordinary course of a commercial enterprise’s business constitutes exclusive use by a commercial enterprise. Uses by all other users, including entities other than commercial enterprises, do not constitute uses by a commercial enterprise. a. Examples of exclusive uses.The following are examples of exclusive uses by a commercial enterprise in the normal course of business: (1) Word processing software loaded onto employees’ work computers. (2) Software that displays a menu on a tablet used by customers at a restaurant. (3) Information services used by temporary employees of a commercial enterprise in the ordinary course of business. b. Examples of disqualifying nonexclusive uses.The following are examples of uses that are not exclusive uses by a commercial enterprise or uses in the ordinary course of business: (1) Software shared by a commercial enterprise with an entity that is not a commercial enterprise. (2) Video games that customers may purchase on a tablet that is provided at a restaurant for customers to use while waiting for service. 225.7(4) Noncommercial purposes. “Noncommercial purposes” means purposes that are outside of carrying out the business purpose of a commercial enterprise or purposes outside of the ordinary course of business of a commercial enterprise. The following are examples of uses for noncommercial purposes: a. Personal and recreational use. b. Holding a product for future use for a noncommercial purpose. 225.7(5) De minimis. “De minimis” means an amount of use of a product for noncommercial purposes that, when considering the product’s value and the frequency with which the use for noncommercial purposes occurs during the product’s total use time, is so small as to make accounting for that use unreasonable or impractical. Whether a use is de minimis is a fact-based determination that shall be made on a case-by-case basis. This rule is intended to implement Iowa Code section 423.3(104).ARC 7150CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to local option sales and services tax and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 270, “Local Option Sales and Services Tax,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 99F.10(6) and 423B.5.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 270. The Department proposes revisions to the chapter to remove portions of the rules that the Department determined are obsolete or unnecessary or are duplicative of statutory language. The proposed chapter describes the Department’s interpretation of the underlying statute to help the public understand local option taxes. These rules reduce uncertainty about when tax applies. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 270 and adopt the following new chapter in lieu thereof: CHAPTER 270LOCAL OPTION SALES AND SERVICES TAX[Prior to 12/17/86, Revenue Department [730]][Prior to 9/7/22, see Revenue Department[701] Ch 107]

701—270.1(423B) Definitions. 270.1(1) Incorporation of definitions. To the extent it is consistent with Iowa Code chapter 423B and this chapter, all other words and phrases used in this chapter shall mean the same as defined in Iowa Code section 423.1 and chapter 423B and rule 701—200.1(423). 270.1(2) Chapter-specific definitions. For purposes of this chapter, unless the context otherwise requires: "City" means the same as defined in Iowa Code section 362.2(4). "Local option tax" "local option taxes" means the taxes imposed by Iowa Code chapter 423B. "Most recent certified federal census" means the final count from the most recent decennial census conducted by the United States Department of Commerce, Bureau of the Census, as modified by subsequent certifications from the Bureau of the Census. If a subsequent certified census occurs that modifies the “most recent certified federal census” for a participating jurisdiction, then the formula set forth in this rule for computations for distribution of the tax shall reflect any population adjustments reported by the subsequent certified census. "Unincorporated area of the county" means all areas of a county that are outside the corporate limits of all cities that are located within the geographical area of the county. This rule is intended to implement Iowa Code section 423B.7.

701—270.2(423B) Imposition of local option taxes and notification to the department. This rule describes notification and other requirements as related to the department. More information on election forms and instructions can be found in 721—Chapter 21. 270.2(1) Notice to the department. Within ten days of the election at which a majority of those voting on the question of imposition, repeal, or change in the rate of tax vote in favor, the county auditor must give notice of the election results to the director by sending a copy of the abstract of votes and a copy of the sample ballot from the election. 270.2(2) Avoiding a lapse in tax due to expiration of a former local option tax. A jurisdiction that has a local option tax that is set to expire may vote to impose another local option tax. However, due to the required imposition dates previously set forth, there may be a lapse in the tax because of an expiration of the former local option tax and the required imposition dates for imposition of a local option tax. A local option jurisdiction may avoid a lapse in local option tax. To avoid a lapse in the tax, a jurisdiction may place on the ballot that the new local option tax will continue without repeal of the prior tax. If the required vote is in favor of imposition of the local option tax, the continued local option tax can be imposed so there is no lapse in the tax. This rule is intended to implement Iowa Code section 423B.6.

701—270.3(423B) Administration. 270.3(1) Generally. The department is charged with the administration of the tax, once imposed, and must administer the tax as nearly as possible in conjunction with the administration of the state sales tax. 270.3(2) Incorporation of 701—Chapter 11. Except as otherwise stated in this chapter, the requirements of 701—Chapter 11 apply to retailers required to collect local option taxes in the same manner that those requirements apply to all sellers and retailers making sales subject to state sales tax. This rule is intended to implement Iowa Code section 423B.6.

701—270.4(423B) Filing returns; payment of tax; penalty and interest. 270.4(1) Incorporation of 701—Chapter 202. Except as otherwise stated in this chapter, the requirements of 701—Chapter 202 apply to retailers required to collect local option tax in the same manner as those requirements apply to all sellers and retailers making sales subject to state sales tax. 270.4(2) Local tax collections not included to determine filing frequency. Local option tax collections are included in computation of the total tax to determine frequency of filing under Iowa Code section 423.31. This rule is intended to implement Iowa Code section 423B.6.

701—270.5(423B) Permits. Except as otherwise stated in this chapter, the requirements of 701—Chapter 201 apply to retailers required to collect local option tax in the same manner that those requirements apply to all sellers and retailers making sales subject to state sales tax. This rule is intended to implement Iowa Code section 423B.6.

701—270.6(423B) Sales subject to local option sales and services tax. All sales subject to sales tax under Iowa Code chapter 423 are subject to local option sales and services tax. There is no local option use tax. 270.6(1) Sourcing. The general sourcing rules described in Iowa Code section 423.15 and 701—Chapter 205 are used to determine whether a sale is subject to local option taxes and, if so, in what jurisdiction. A local sales and services tax is not applicable to transactions sourced to a place of business, as defined in Iowa Code section 423.1, of a retailer if such place of business is located in part within a city or unincorporated area of the county where the tax is not imposed. 270.6(2) Sellers responsible for collecting local option sales and services tax. Sales sourced to Iowa and made by sellers subject to Iowa Code section 423.1(48) or 423.14A are subject to local option sales and services tax. This rule is intended to implement Iowa Code section 423B.5(1).

701—270.7(423B,423E) Sales not subject to local option tax, including transactions subject to Iowa use tax. The local option sales and services tax is imposed upon the same basis as the Iowa state sales and services tax, with the following exceptions:

Local option tax is not imposed on the sales price from the sale of tangible personal property and services that are excluded from local option tax as described in Iowa Code section 423B.5(1).
A local taxing jurisdiction is prohibited from taxing the sales price from a pay television service consisting of a direct-to-home satellite service to the extent precluded by Section 602 of the Telecommunications Act of 1996. A “local taxing jurisdiction” is any municipality, city, county, township, parish, transportation district, or assessment jurisdiction, or any other local jurisdiction in the territorial jurisdiction of the United States, with the authority to impose a tax or fee, but does not include a state.
Sales subject to Iowa use tax. Since the local option tax is imposed only on the same basis and not on any greater basis than the Iowa sales and services tax, local option tax is not imposed on any transactions subject to Iowa use tax, including the one-time registration fee applicable to vehicles subject to registration or subject only to the issuance of a certificate of title. Also, exemptions that are applicable only to Iowa use tax cannot be claimed to exempt any transaction subject to local option sales tax.

This rule is intended to implement Iowa Code section 423B.5.

701—270.8(423B) Local option sales and services tax payments to local governments. 270.8(1) County-imposed local sales and services tax; division of funds from accounts. Division of the amount from each county’s account to be distributed is done with these steps. a. The total amount in the county’s account to be distributed is first divided into two parts. One part is equal to 75 percent of the total amount to be distributed. The second part is the remainder to be distributed. b. The part comprised of 75 percent of the total receipts to be distributed is further divided into an amount for each participating city or unincorporated area. This division is based upon the most recent certified federal census population and any subsequent certified census. Population for each participating city and unincorporated area is determined separately and totaled. The population for each sales tax-imposing city or unincorporated area is divided by the total population to produce a percentage for each city or the unincorporated area. The percentages are rounded to the nearest one-hundredth of a percent with the total of all percentages equal to 100 percent. Each government’s percentage is multiplied by 75 percent of the sales tax receipts to be distributed. Distributions are to be rounded to the nearest cent.There are two types of certified federal censuses. The first is the usual decennial census that is always conducted throughout the entire area of any county imposing a local option sales tax.The second type of certified federal census is the “interim” or “subsequent” census that is conducted between decennial censuses. An interim or subsequent census is not necessarily conducted within an entire county but may be used to count increases or decreases in only one or some of the jurisdictions within that county, for instance, one particular municipality. If an interim census is conducted within only certain participating jurisdictions of a county where a local option sales tax is imposed, the changes in population which that census reflects must be included within both the numerator and the denominator of the fraction that is used to compute the participating jurisdiction’s share of the revenue from the county’s account that is based on county population. Example 3 of this rule contains a demonstration of how an interim census can affect a population distribution formula. c. The remaining 25 percent of the amount to be distributed is further divided based upon property taxes levied. The sum of property tax dollars to be used is the amount levied for the three years from July 1, 1982, through June 30, 1985, as obtained by using data from county tax rate reports and city tax rate reports compiled by the department of management. Property taxes levied by participating cities or the board of supervisors, if the local sales tax is imposed in unincorporated areas, are to be determined separately, then totaled. The property tax amount for each sales tax-imposing city and the board of supervisors, if the sales tax is imposed in unincorporated areas, is divided by the totaled property tax to produce a percentage. The percentages are rounded to the nearest one-hundredth of a percent with the total of all percentages equal to 100 percent. Each percentage is multiplied by 25 percent of the sales tax receipts to be distributed. Distributions are to be rounded to the nearest cent. d. For each participating city, or the board of supervisors if unincorporated areas of the county participate, the amount determined in paragraph 270.8(1)“c” is added to the amount found in paragraph 270.8(1)“b.” This amount is then to be remitted to the appropriate local government.In order to illustrate the division of local option sales and services tax receipts, the following examples are provided. The numbers are shown in an attempt to reflect reality but are hypothetical.Step 1: Distribution BasisAmount Population$ 75,000.00 Property Taxes Levied25,000.00 Total$100,000.00Step 2:Certified PopulationReceipts to beJurisdictionNumberPercentageDistributedAvoca1,6501.91%$ 1,432.50Carson7160.83%622.50Carter Lake3,4383.98%2,985.00Council Bluffs56,44965.30%48,975.00Crescent5470.63%472.50Hancock2540.29%217.50Macedonia2790.32%240.00McClelland1770.20%150.00Minden4190.49%367.50Neola8390.97%727.50Oakland1,5521.80%1,350.00Treynor9811.13%847.50Underwood4480.52%390.00Walnut8971.04%780.00Unincorporated17,79620.59%15,442.50 Total86,442100.00%$75,000.00Note: The portion of the city of Shelby in Pottawattamie County is excluded.Step 3:Three-Year Total Taxes LeviedReceipts to beJurisdictionAmountPercentageDistributedAvoca$ 454,5560.82%$ 205.00Carson202,8820.37%92.50Carter Lake946,0261.71%427.50Council Bluffs30,290,73254.81%13,702.50Crescent7,7320.01%2.50Hancock56,7050.10%25.00Macedonia64,5040.12%30.00McClelland24,3000.04%10.00Minden155,1120.28%70.00Neola206,5600.38%95.00Oakland319,1530.58%145.00Treynor346,8490.63%157.50Underwood139,5710.25%62.50Walnut264,1450.48%120.00Unincorporated21,782,45739.42%9,855.00 Total$55,262,284100.00%$25,000.00Step 4:Amount to be DistributedTotalJurisdictionBy PopulationBy TaxesDistributionAvoca$ 1,432.50$ 205.00$ 1,637.50Carson622.5092.50715.00Carter Lake2,985.00427.503,412.50Council Bluffs48,975.0013,702.5062,677.50Crescent472.502.50475.00Hancock217.5025.00242.50Macedonia240.0030.00270.00McClelland150.0010.00160.00Minden367.5070.00437.50Neola727.5095.00822.50Oakland1,350.00145.001,495.00Treynor847.50157.501,005.00Underwood390.0062.50452.50Walnut780.00120.00900.00Unincorporated15,442.509,855.0025,297.50 Total$75,000.00$25,000.00$100,000.00Step 1: Distribution BasisAmount Population$ 7,500.00 Property Taxes Levied2,500.00 Total$10,000.00Step 2:Certified PopulationReceipts to be JurisdictionNumberPercentageDistributed Avoca1,650 39.45%$2,958.75 Oakland1,552 37.10% 2,782.50 Treynor 981 23.45% 1,758.75 Total4,183100.00%$7,500.00Step 3:Three-Year Total Taxes LeviedReceipts to be JurisdictionAmountPercentageDistributed Avoca$ 454,556 40.56%$1,014.00 Oakland 319,153 28.48% 712.00 Treynor 346,849 30.96% 774.50 Total$1,120,558100.00%$2,500.00Step 4:Amount to be DistributedTotal JurisdictionBy PopulationBy TaxesDistribution Avoca$2,958.75$1,014.00$ 3,972.75 Oakland 2,782.50 712.00 3,494.50 Treynor 1,758.75 774.00 2,532.75 Total$7,500.00$2,500.00$10,000.00Avoca’s Percentage Equals1,752=41.45%1,752 + 1,493 + 981Oakland’s Percentage Equals1,493=35.32%1,493 + 1,752 + 981Amounts in Step 2 are then revised as follows:Certified PopulationReceipts to be JurisdictionNumberPercentageDistributed Avoca1,752 41.46%$3,109.50 Oakland1,493 35.33% 2,649.75 Treynor 981 23.21% 1,740.75 Total4,226100.00%$7,500.00The “amount to be distributed by population” found in Step 4 of Example 2 would then be recomputed based on the new figures. 270.8(2) City-imposed local option sales and services tax. More information on the distribution of city-imposed local sales and services tax can be found in Iowa Code section 423B.7(1). This rule is intended to implement Iowa Code section 423B.7.

701—270.9(423B) Allocation procedure when sourcing of local option sales tax remitted to the department is unknown. If the director is unable to determine from which county local option sales tax was collected, that local option sales tax shall be allocated among the various counties in which local option sales and services tax is imposed according to the following procedure:

The calculations performed under this procedure shall be performed at least quarterly, but in no event less often than the treasurer of the state is obligated to distribute shares of each county’s account in the local sales and services tax fund.
The total amount of receipts for which the director is unable to determine a county of collection that have accumulated since the last allocation of these receipts shall be added together to form one lump sum.
The amount of population (according to the most recent certified federal census) within the areas of each individual county in which a local option sales and services tax is imposed shall be determined.
The amount of population so determined in numbered paragraph “3” above for each county shall be added to the amount for every other county in Iowa in which the local option sales and services tax is imposed, until the figure for the amount of population of all areas of Iowa in which the local option sales and services tax is imposed is determined.
The sum determined to exist in numbered paragraph “2” above shall be multiplied by a fraction, the numerator of which is the population of any one county determined in numbered paragraph “3” above and the denominator of which is the number calculated by the method described in numbered paragraph “4.” The procedure described herein in numbered paragraph “5” shall be used until the amount of tax due to every county imposing local option sales and services tax is calculated. After calculations are complete, the treasurer of the state must distribute shares of each county’s account in the local sales and services tax fund. Characterization of the term “most recent certified federal census” can be found in rule 701—270.1(423B), and methods of rounding off percentages and monetary sums can be found in rule 701—270.8(423B).

This rule is intended to implement Iowa Code section 423B.7(1).

701—270.10(423B) Application of payments. Since a combined state sales and local option return is utilized by the department, all payments received will be applied to satisfy state sales tax and local option sales and services tax, which include tax, penalty and interest. Application of payments received with the tax return and any subsequent payments received will be applied based on a ratio formula, unless properly designated by the taxpayer as provided in Iowa Code section 421.60(2)“d.” The ratio for applying all payments received with the return and all subsequent payments for the given tax period will be based upon the calculated total of state sales and local option sales and services tax due for the given tax period in relation to combined total payment of sales and local option sales and services tax actually received for that tax period. This rule is intended to implement Iowa Code section 423B.7.

701—270.11(423B) Computation of local option tax due from mixed sales on excursion boats. Particular difficulties exist in calculating the amount of local option sales tax due for sales occurring on an excursion gambling boat sailing into and out of jurisdictions imposing the local option sales tax. Ordinarily, whether local option sales tax is payable to a particular jurisdiction is based on destination sourcing. More information can be found in Iowa Code section 423.15 and 701—Chapter 205. However, it can be quite difficult to determine if a moving excursion gambling boat is at any one point in time within or outside of a jurisdiction imposing the local option tax. Thus, it is difficult to determine if a delivery of property or provision of a service on the boat has occurred inside or outside of a local option tax jurisdiction. Because of this, the department will accept the use of any formula that rationally apportions the progress of an excursion gambling boat among jurisdictions that impose a local option tax and those that do not.Below are four examples setting out two possible formulas for apportionment. Examples 1 and 3 utilize a “distance” formula for apportionment. Examples 2 and 4 utilize a “time” formula for apportionment. In Examples 1 and 2, state sales tax is included in the sales price of the taxable items. In Examples 3 and 4, state sales tax is added to taxable gross receipts. In all examples, local option sales tax is included in the sales price; also, for every example, it is assumed that the local option sales tax rate is 1 percent in every jurisdiction where it is imposed.

(25 ÷ 50) × 0.01 = 0.005 (miles in LOST jurisdiction ÷ total miles) × LOST rate = effective LOST rate
1 + 0.06 + 0.005 = 1.065 1 + state sales tax rate + effective LOST rate = (1 + effective total tax rate)
$10,000.00 ÷ 1.065 = $9,389.67 Gross receipts ÷ (1 + effective total tax rate) = total sales
$9,389.67 × 0.06 = $563.38 Total sales × state tax rate = state tax amount
$9,389.67 × 0.005 = $46.95 Total sales × effective LOST rate = LOST amount
$563.38 + $46.95 = $610.33 State tax amount + LOST amount = total tax amount

(2 ÷ 3) × 0.01 = 0.00666 (hours in LOST jurisdiction ÷ total hours) × LOST rate = effective LOST rate
1 + 0.06 + 0.00666 = 1.06666 1 + state sales tax rate + effective LOST rate = (1 + effective total tax rate)
$10,000.00 ÷ 1.06666 = $9,375.06 Gross receipts ÷ (1 + effective total tax rate) = total sales
$9,375.06 × 0.06 = $562.50 Total sales × state tax rate = state tax amount
$9,375.06 × 0.00666 = $62.44 Total sales × effective LOST rate = LOST amount
$562.50 + $62.44 = $624.94 State tax due + LOST due = total tax amount

(25 ÷ 50) × 0.01 = 0.005 (miles in LOST jurisdiction ÷ total miles) × LOST rate = effective LOST rate
1 + 0.005 = 1.005 1 + effective LOST rate
$100,000.00 ÷ 1.005 = $99,502.49 Gross receipts including LOST ÷ (1+ effective LOST rate) = total sales
$99,502.49 × 0.06 = $5,970.15 Total sales × state tax rate = state tax amount
$100,000.00 – 99,502.49 = $497.51 Gross receipts including LOST – total sales = LOST amount
$5,970.15 + $497.51 = $6,467.66 State tax due + LOST due = total tax amount
$99,502.49 + $497.51 + $5,970.15 = $105,970.15 Total sales + LOST amount + state tax amount = total amount collected by vendor

(2 ÷ 3) × 0.01 = 0.00666 effective LOST rate (hours in LOST jurisdiction ÷ total hours) × LOST rate = effective LOST rate
1 + 0.00666 = 1.00666 1 + effective LOST rate
$150,000.00 ÷ 1.00666 = $149,007.61 Gross receipts including LOST but not state tax ÷ (1 + effective LOST rate) = total sales
$149,007.61 × 0.06 = $8,940.46 Total sales × state tax rate = state tax amount
$150,000.00 – 149,007.61 = $992.39 Gross receipts including LOST but not state tax – total sales = LOST amount
$8,940.46 + $992.39 = $9,932.85 State tax amount + LOST amount = total tax amount
$149,007.61 + $992.39 + $8,940.46 = $158,940.46 Total sales + LOST amount + state tax amount = total amount collected by vendor

Upon beginning operation, a licensee may choose to employ either the “distance” method of apportionment set out in Examples 1 and 3 or the “time” method set out in 2 and 4 above without informing the department in advance of filing a sales tax return of the licensee’s choice. A licensee cannot use both methods of apportionment. If a licensee commencing operation wishes to use another method of apportionment, the licensee must petition the department for permission to use this alternative method and present whatever evidence the department shall rationally require that the alternative method better reflects the ratio of taxable to nontaxable sales before using the alternative method. Any licensee wishing to change from any existing method of apportionment to another method must also petition the department and receive permission to change its method of apportionment. This rule is intended to implement Iowa Code sections 99F.10(6) and 423B.5.ARC 7151CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to new school infrastructure local option sales and services tax and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 271, “New School Infrastructure Local Option Sales and Services Tax—Effective On or After April 1, 2003, Through Fiscal Years Ending December 31, 2022,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423E.1 to 423E.6.Purpose and Summary Pursuant to Part IV of Executive Order 10, the Department was directed on September 22, 2023, to propose this Notice of Intended Action to rescind and reserve Chapter 271. The Department determined the chapter was unnecessary or obsolete because the underlying statutes it implemented have been repealed. This chapter implemented rules related to the School Infrastructure Local Option (SILO) Tax Fund, which has since been replaced by the Secure an Advanced Vision for Education (SAVE) Fund. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 701—Chapter 271.ARC 7184CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to flood mitigation program and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 272, “Flood Mitigation Program,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 418.12 and 421.14.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 418 and sections 423.2A(2) and 423.2A(3).Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 272 and adopt a new Chapter 272, which consists of rules relating to the Department’s role in the administration of the Flood Mitigation Program. These rules are required under Iowa Code chapter 418. These rules interpret the underlying statutes about the calculation and remittance of the sales tax increment funding to projects approved under Iowa Code chapter 418. The Department proposes revisions to the rules to provide clarification and to remove portions of the rules that the Department has determined are unnecessary, obsolete, and duplicative of statutory language. The Department further proposes to add a rule to provide clarification about the administrative fee authorized under Iowa Code section 423.2A(3) that the Department retains from the amount it would otherwise distribute for the Flood Mitigation Program. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306–3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 272 and adopt the following new chapter in lieu thereof: CHAPTER 272FLOOD MITIGATION PROGRAM[Prior to 9/7/22, see Revenue Department[701] Ch 238]

701—272.1(418) Flood mitigation program. Iowa Code chapter 418 authorizes and governs the flood mitigation program to assist governmental entities in undertaking approved projects. This chapter sets forth rules for the department of revenue’s administration of the calculation and remittance of the sales tax increment funding. The Iowa department of homeland security and emergency management’s administrative rules for other aspects of this program are found at 605—Chapter 14. This rule is intended to implement Iowa Code chapter 418 and sections 423.2(11), 423.2A(2) and 423.2A(3).

701—272.2(418) Definitions. For purposes of this chapter, terms mean the same as defined in Iowa Code chapter 418. Additionally, the following definitions apply: "Corresponding quarter" means the quarter in the base year and the quarter in the year in which the increment is measured that end in the same month. For example, if the base year is fiscal year 2013 and the year in which the increment is first measured is 2014, then the quarter ending in September 2012 of the base year would correspond to the quarter ending in September 2014 of the calendar year. "Department" means the Iowa department of revenue. This rule is intended to implement Iowa Code section 418.1.

701—272.3(418) Sales tax increment calculation. 272.3(1) Sales tax increment calculation formula. The department will calculate quarterly the amount of the sales tax increment as described in Iowa Code section 418.11(2). To do so, the department will determine the base year for the flood mitigation project when the period for processing returns for the final quarter in the base year is complete. 272.3(2) Sales considered within the calculation formula. Only sales that are made by retail establishments in the area are taken into consideration when the sales subject to tax are determined. Sales otherwise sourced to the area are not considered in the calculation. 272.3(3) Identification of retailers. Each governmental entity that has established a project under Iowa Code chapter 418 must notify the department of retail establishments in the governmental entity’s applicable area that are collecting sales tax as soon as possible. This process shall be ongoing until the governmental entity ceases to utilize sales tax revenue under Iowa Code chapter 418. This rule is intended to implement Iowa Code sections 418.11 and 423.2A(2).

701—272.4(418) Sales tax increment fund. 272.4(1) Deposits. For each governmental entity that establishes a flood mitigation project under Iowa Code chapter 418, the department will deposit collected funds into each applicable area’s sales tax increment fund as described in Iowa Code section 418.12(3). Additionally, moneys will not be deposited in the fund before the period for processing returns is complete. 272.4(2) Requests for remittances; limitations. a. Each quarter, the department will transfer into the sales tax increment fund the full amount of the increased sales tax subject to the limitations described in Iowa Code section 418.12(4)“a.” The director of the department may adjust the amount transferred during the year if it becomes apparent that the total amount transferred will exceed the limitations stated in this rule. If, when the total of all the transfers made to a governmental entity during the year is calculated at the end of the fiscal year, it is determined that the governmental entity received more than the maximum amount permissible under this rule, the department may withhold funds in the subsequent fiscal year to recoup the excess payments. b. If the governmental entity has unused funds from a prior quarter in its account within the sales tax increment fund, subject to the limitations in Iowa Code section 418.12(4)“a,” those funds will be available in subsequent quarters so long as the amount is necessary for the purposes of this chapter. 272.4(3) Authorized expenditures. Funds from requests for remittances made to the department by a governmental entity shall only be used for the governmental entities’ costs or obligation to the project as described in Iowa Code section 418.13(1). 272.4(4) Remittance of funds to the general fund. The board shall assist the department in determining whether the fund or accounts within the fund have met the limitations found in Iowa Code section 418.12(5). This rule is intended to implement Iowa Code sections 418.12, 418.13 and 423.2A(2).

701—272.5(418) Administrative fee. 272.5(1) Administrative fee. Pursuant to Iowa Code section 423.2A(3), the department will retain an administrative fee from the amount it would otherwise distribute to the flood mitigation program. 272.5(2) Amount retained. The amount retained each quarter will be the total of the prorated shares amongst all projects in both the flood mitigation program and the reinvestment districts program authorized under Iowa Code chapter 15J. 272.5(3) Prorated share. Each entity’s prorated share of the administrative fee for each quarter will be calculated as follows:Flood mitigation entity’s distribution for the quarter Total distributions of both the flood mitigation and reinvestment districts for the quarter xEither $25,000 or the department’s actual expenses, whichever is less This rule is intended to implement Iowa Code section 423.2A(3).ARC 7185CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to reinvestment districts program and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 273, “Reinvestment Districts Program,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 15J.6 and 421.14.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 15J and sections 423.2A(2) and 423.2A(3).Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 273 and adopt a new Chapter 273, which consists of rules relating to the Department’s role in the administration of the Reinvestment Districts Program. These rules are required under Iowa Code chapter 15J. These rules interpret the underlying statutes about the calculation and remittance of the sales tax revenues to reinvestment district and reinvestment project funds pursuant to Iowa Code chapter 15J. The Department proposes revisions to the rules to provide clarification and to remove portions of the rules that the Department has determined are unnecessary, obsolete, and duplicative of statutory language. The Department also renumbered some rules due to other edits and for organizational reasons. The Department further proposes to add a rule to provide clarification about the administrative fee authorized under Iowa Code section 423.2A(3) that the Department retains from the amount it would otherwise distribute to the Reinvestment Districts Program. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 273 and adopt the following new chapter in lieu thereof: CHAPTER 273REINVESTMENT DISTRICTS PROGRAM[Prior to 9/7/22, see Revenue Department[701] Ch 237]

701—273.1(15J) Purpose and definitions. The Iowa reinvestment Act provides for the reinvestment of as much as $100 million in state hotel and motel and state sales tax revenues from revenue-generating projects within certain districts. The economic development authority board is authorized to oversee the implementation and administration of certain provisions of this program, including evaluating projects and making funding decisions. This chapter sets forth rules for the department of revenue’s administration of the calculation, collection, and remittance of funds for this program. The economic development authority board’s administrative rules about this program are found at 261—Chapter 200. Terms mean the same as defined in Iowa Code chapter 15J. This rule is intended to implement Iowa Code chapter 15J.

701—273.2(15J) New state tax revenue calculations. 273.2(1) State sales tax. For districts established before July 1, 2020, the department will calculate the state sales tax revenues as described in Iowa Code section 15J.5(1)“b”(1). For those established on or after July 1, 2020, the calculations are as described in Iowa Code section 15J.5(1)“b”(2). 273.2(2) State hotel and motel tax. For districts established before July 1, 2020, the department will calculate the state hotel and motel tax revenues as described in Iowa Code section 15J.5(2)“b”(1). For those established on or after July 1, 2020, the calculations are as described in Iowa Code section 15J.5(2)“b”(2). 273.2(3) Identification of new retail establishments and lessors. Each municipality that has established a district under Iowa Code chapter 15J must notify the department of new retail establishments and lessors in the district that are created as soon as possible. This process shall be ongoing until the municipality ceases to utilize state sales tax revenue or state hotel and motel tax revenue under this chapter or the district is dissolved. This rule is intended to implement Iowa Code sections 15J.5, 423.2(11) and 423A.6.

701—273.3(15J) State reinvestment district fund. 273.3(1) Deposits. The department shall deposit moneys into the appropriate district fund as described in Iowa Code section 15J.6; however, moneys shall not be deposited in the fund before the period for processing returns is complete. 273.3(2) Late-filed returns. Moneys described in Iowa Code section 15J.6 that are collected from late-filed returns shall be deposited in the fund. Such moneys shall be deposited following the period for processing returns for the quarter in which the late return is received, subject to the limitations of Iowa Code chapter 15J. 273.3(3) Refund claims. If the moneys described in Iowa Code section 15J.6 are the subject of a refund claim and that claim is granted by the department, the department may offset any refund at a later date against funds remitted to the district in which the new retail establishment or new lessor that had remitted the refunded tax amount is located. This rule is intended to implement Iowa Code section 15J.6.

701—273.4(15J) Reinvestment project fund. State sales tax revenue and state hotel and motel tax revenue will be remitted by the department and deposited into reinvestment project funds as described in Iowa Code section 15J.7. Moneys deposited in the fund shall only be used to fund projects as described in Iowa Code section 15J.7(1) and not those projects described in Iowa Code section 15J.7(4). This rule is intended to implement Iowa Code section 15J.7.

701—273.5(15J) End of deposits—district dissolution. 273.5(1) Cessation of deposits. a. The department shall cease to deposit state sales tax revenues and state hotel and motel revenues once the limitations described in either Iowa Code section 15J.8(1) or 15J.8(2) are met. b. The department shall cease to deposit new tax revenues into a district’s account within the fund once the maximum benefit amount approved by the board for the district has been reached. If a district reaches the maximum benefit amount, the department shall notify the municipality and the board within a reasonable amount of time. 273.5(2) District dissolution. a. If a municipality dissolves a district pursuant to Iowa Code section 15J.8(2), the municipality must notify the department as required by Iowa Code section 15J.8(2). b. When a municipality is notified that its maximum benefit amount has been reached, the municipality shall dissolve the district by ordinance as soon as practicable after notification. This rule is intended to implement Iowa Code section 15J.8.

701—273.6(15J) Administrative fee. 273.6(1) Administrative fee. Pursuant to Iowa Code section 423.2A(3), the department will retain an administrative fee from the amount it would otherwise distribute to the reinvestment district program. 273.6(2) Amount retained. The amount retained each quarter will be the total of the prorated shares amongst all projects in both the reinvestment districts programs and the flood mitigation program authorized under Iowa Code chapter 418. 273.6(3) Prorated share. Each entity’s prorated share of the administrative fee for each quarter will be calculated as follows:Reinvestment district entity’s distribution for the quarter Total distributions of both the flood mitigation and reinvestment districts for the quarter xEither $25,000 or the department’s actual expenses, whichever is less This rule is intended to implement Iowa Code section 423.2A(3).ARC 7152CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to local option sales tax urban renewal projects and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 274, “Local Option Sales Tax Urban Renewal Projects,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14 and 423B.7.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.2A, 423B.1, 423B.7 and 423B.10.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 274. The chapter provides the Department’s rules for administering the Local Option Sales Tax (LOST) Urban Renewal Projects. The rules provide explanations to local governments and the public about the process for the calculation, collection, and distribution of funds used for the projects as well as the information required of local governments to assist the Department in this process. The Department proposes revisions to the rules to remove portions that the Department has determined are unnecessary, obsolete, or duplicative of statutory language. The Department also renumbered some rules due to the other edits and for organizational reasons. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 274 and adopt the following new chapter in lieu thereof: CHAPTER 274LOCAL OPTION SALES TAX URBAN RENEWAL PROJECTS[Prior to 9/7/22, see Revenue Department[701] Ch 239]

701—274.1(423B) Purpose and definitions. This chapter sets forth the department of revenue’s rules on administration of the calculation, collection, and distribution of funds to be deposited for use to fund urban renewal projects as described in Iowa Code chapter 423B. For purposes of this chapter, “local sales and service tax” means the local tax imposed by a jurisdiction pursuant to an election authorized by Iowa Code section 423B.1 and described in Iowa Code section 423B.5. All other terms have the same meaning as defined in Iowa Code sections 423B.1 and 423B.10.

701—274.2(423B) Establishing sales and revenue growth. For purposes of establishing the sales amount in the base year and the revenue growth in subsequent fiscal years, the department will calculate sales as described in Iowa Code section 423B.10(3).

701—274.3(423B) Requirements for cities adopting an ordinance. 274.3(1) Within at least 90 days following the adoption of an ordinance, an eligible city must notify the director of the department of revenue of its intent to pursue funding for an urban renewal project based upon the increase in local sales and services tax revenue. The notification must include the following information: a. A copy of the resolution of the board of supervisors from each county in the urban renewal area from which local sales and services tax revenues are to be collected approving the collection and use of local sales and services tax; b. A copy of the urban renewal plan and the resolution adopting the city’s urban renewal plan; c. A copy of the adopted ordinance, including: (1) The current and original, if applicable, purpose or purposes for which the local option sales and services tax was enacted; and (2) The amount and proportion of revenue that will be redistributed from each current revenue purpose to fund urban renewal within the urban renewal area; d. The legal description of the urban renewal area covered by the ordinance; e. A map showing the geographic boundaries of the urban renewal area; and f. A geographic information system boundary file, if available, showing the geographic boundaries of the urban renewal area. 274.3(2) Each urban renewal area must have its own separate ordinance, and the department shall be notified separately for each urban renewal area. Notification shall be mailed or otherwise submitted to: Director, Iowa Department of Revenue, Hoover State Office Building, 1305 E. Walnut Street, Des Moines, Iowa 50319. 274.3(3) Each urban renewal area must have its own separate resolution of the board of supervisors from each county from which local option sales and services tax revenues will be collected and used for urban renewal projects located within the urban renewal area.

701—274.4(423B) Identification of retail establishments. The eligible city shall assist the department of revenue in identifying retail establishments in the urban renewal area that are collecting the local sales and services tax. The department of revenue will identify sales tax permit holders within the urban renewal area using the geographic information system boundary file, if available, provided to the department. If no boundary file is provided, the department will rely upon the map submitted by the eligible city. If any of the urban renewal area boundaries submitted are street centerlines, the information provided to the department shall indicate whether only retail establishments within the bounded area should be considered part of the urban renewal area, or if in addition to the retail establishments within the bounded area, retail establishments immediately adjacent to the bounded area should also be included.

701—274.5(423B) Calculation of base year taxable sales amount. The calculation of the base year taxable sales amount is as follows: 274.5(1) The base year taxable sales and services amount will be the total taxable sales and services subject to the local sales and services tax that are made by retail establishments within the urban renewal area during the base year. 274.5(2) Taxable sales of tangible personal property and services that are subject to the local sales and services tax that are made by retail establishments or service providers located within the urban renewal area include only those sales that are sourced to the county in which the urban renewal area is located. 274.5(3) Those sales made by retail establishments or service providers located within the urban renewal area that are sourced outside of the county are not subject to the local sales and services tax. For sourcing rules, more information can be found in Iowa Code section 423.15 and 701—Chapter 205.

701—274.6(423B) Determination of tax growth increment amount. The local sales and services tax growth increment amount for the urban renewal area will be computed for each fiscal year following the base year. The annual local option sales and services tax growth increment amount is equal to the current year taxable sales and services subject to the local sales and services tax that are made by retail establishments located in the urban renewal area minus the corresponding base year taxable sales and services amount for the urban renewal area multiplied by the current local sales and services tax rate applicable to the jurisdiction.

701—274.7(423B) Distribution of tax base and growth increment amounts. The revenues from the local sales and services tax growth amount for urban renewal areas in jurisdictions that have enacted ordinances pursuant to Iowa Code section 423B.10 shall be determined annually and shall be distributed to the city within 120 days following the end of the fiscal year in which they are collected. These rules are intended to implement Iowa Code sections 423.2A, 423B.1, 423B.7, and 423B.10.ARC 7186CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to rebate of Iowa sales tax paid and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 275, “Rebate of Iowa Sales Tax Paid,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 423.4.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423.2A and 423.4.Purpose and Summary The purpose of this proposed rulemaking is to rescind Chapter 275 and adopt a new Chapter 275, which consists of rules relating to and interpreting sales and use tax rebates granted to sanctioned automobile racetrack facilities, baseball and softball complexes, and raceway facilities. The rules provide the rebate’s scope and applicability and the methods for obtaining a rebate by the eligible entities. The Department proposes revisions to the rules for clarification and removal of portions of the rules that the Department has determined are unnecessary and duplicative of statutory language. The Department also renumbered some rules due to other edits and for organizational reasons. A Regulatory Analysis, including the proposed rule text, was published on October 18, 2023. A public hearing was held on November 8, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 21, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 275 and adopt the following new chapter in lieu thereof: CHAPTER 275REBATE OF IOWA SALES TAX PAID[Prior to 9/7/22, see Revenue Department[701] Ch 235]

701—275.1(423) Sanctioned automobile racetrack facilities. Iowa Code section 423.4(5) provides for rebates of qualifying sales made at sanctioned automobile racetrack facilities. Definitions of key terms may be found in Iowa Code section 423.4(5)“a.” 275.1(1) Affidavit by owner or operator. The owner or operator of an automobile racetrack facility seeking a rebate allowed under Iowa Code section 423.4(5) of the sales tax imposed and collected by retailers upon sales of tangible personal property or services furnished to purchasers at the automobile racetrack facility must file with the department the following affidavit certifying that qualifications for the rebate have been met: Iowa Department of RevenueSales Tax Rebate Affidavit NAME OF AFFIANTADDRESS OF AFFIANT * * * * AFFIDAVIT FOR SANCTIONED AUTOMOBILE RACETRACK FACILITYThe undersigned duly swears that the named Automobile Racetrack Facility complies with criteria to be entitled to rebate of sales tax as required in Iowa Code section 423.4 as follows:

The facility is sanctioned as an automobile racetrack facility;
The sanctioned automobile racetrack facility is located as part of a racetrack and entertainment complex, including any museum attached to or included in the sanctioned automobile racetrack facility, but excluding any restaurant;
The sanctioned automobile racetrack facility has not and will not receive any grants under the community attraction and tourism program pursuant to Iowa Code chapter 15F, subchapter II, or the vision Iowa program pursuant to Iowa Code chapter 15F, subchapter III;
The sanctioned automobile racetrack facility is located on a maximum of 232 acres of Iowa land;
The sanctioned automobile racetrack facility is located in a city with a population, as defined by this rule, of at least 14,500, but not more than 16,500;
The city in which the sanctioned automobile racetrack facility is located is in a county with a population, as defined by this rule, of at least 35,000, but no more than 40,000;
Construction of the sanctioned automobile racetrack facility was commenced on or before July 1, 2006;
Cost of construction of the automobile racetrack facility upon completion is at least $35 million; and
There has not been a “change of control” as defined in the rules governing this program regarding the legal ownership or operation of the automobile racetrack facility.

The undersigned duly swears that he or she is the owner or operator of the sanctioned automobile racetrack facility or that the undersigned is the authorized representative of the sanctioned automobile racetrack facility and has the authority to sign this document. The undersigned swears that he or she has personal knowledge regarding the facts contained in this affidavit and that the statements set forth in this affidavit are true and accurate and that the sanctioned automobile racetrack facility has met all of the requirements as contained herein.________________________________________________________________ ________________Name of Affiant DatePosition of Affiant 275.1(2) Notification to the department of revenue. The owner or operator of the automobile racetrack facility will provide the department with the identity of all retailers at the automobile racetrack facility that will be collecting sales tax and is required to keep the information current. The owner or operator of the automobile racetrack facility will notify the department within ten days of the termination of a retailer from collecting sales tax at the racetrack facility. In addition, the owner or operator of the automobile racetrack facility will notify the department within ten days of the start-up of a retailer collecting sales tax at the automobile racetrack facility. 275.1(3) Limitations. The automobile racetrack facility rebate program applies only to transactions that occur on or after January 1, 2006, but before the end date provided in Iowa Code section 423.4(5), and for which sales tax was collected. Only the state sales tax is subject to rebate. Local option taxes paid and collected are not subject to rebate. Rebates of sales taxes to an automobile racetrack facility are not authorized for transactions that occur on or after the date of the change of control of the automobile racetrack facility. The rebate is limited to 5 percent. 275.1(4) Termination of rebate program. The rebate program for automobile racetrack facilities terminates on the earliest of the dates listed in Iowa Code section 423.4(5)“g.” 275.1(5) Sourcing of sales. Advance ticket and admissions sales shall be considered occurring at the automobile racetrack facility regardless of where the transactions actually occur. Consequently, the state sales tax and any applicable local option tax in effect for the jurisdiction in which the automobile racetrack facility is located must be imposed.Other types of sales eligible for rebate under this program include but are not limited to sales by vendors and sales at concessions, gift shops, and museums. However, sales by a restaurant on facility land are not subject to rebate. 275.1(6) Requirements to obtain a rebate of state sales tax by the racetrack facility. In order to obtain a rebate, a request is considered timely and complete when the authorized form containing all requested information is filed quarterly with the department. This rule is intended to implement Iowa Code section 423.4(5).

701—275.2(423) Baseball and softball complex sales tax rebate. 275.2(1) Generally. a. Rebate approval.An entity whose project pursuant to Iowa Code section 15F.207 is reviewed and recommended by the economic development authority and approved by the enhance Iowa board is entitled to rebates of qualifying sales tax in accordance with Iowa Code section 423.4(10) and this rule, not to exceed the amount awarded by the economic development authority. b. Qualifying rebates.Qualifying rebates of Iowa state sales tax may be made to the owner or operator of a complex as defined in this rule for sales occurring on or after the project completion date for a period of ten years or the date the award was made, whichever is later. Qualifying rebates are for state sales tax only. Local option taxes are not subject to rebate under this program. 275.2(2) Definitions. For the purpose of this program, the definitions found in Iowa Code section 423.4(10) apply. In addition, the following definitions apply: "Department" means the department of revenue. "Eligible baseball and softball complex" "complex" means a facility located in this state that has a project completion date that is after July 1, 2016, is designed and built to host baseball and softball games and has a cost of construction upon completion that is at least $10 million. The boundaries of a “complex” may be a portion or the entirety of a premises. After granting an award to a complex, the enhance Iowa board shall describe in writing to the department the physical boundaries of the complex and provide the department a map illustrating the approved boundaries of the complex. "Placed into service" means the first day a complex is able to host a baseball or softball game. 275.2(3) Notification to the department of revenue. The owner or operator of the complex shall provide the department with a copy of the award notice from the enhance Iowa board. 275.2(4) Retailer identification. a. Identification of retailers.The owner or operator shall provide the department with the identity of all retailers at the complex that will be collecting sales tax, provide sales tax permit numbers for each retailer, and keep the information current. b. Notification to department.The owner or operator of the complex shall notify the department within ten days of the start-up or termination of a retailer collecting sales tax at the complex. For purposes of this subrule, termination occurs when the retailer provides notice to the owner or operator that the retailer will no longer collect sales tax at the complex or after one calendar year expires since the retailer collected sales tax at the complex. c. Verification by department.The department shall verify the identity of a retailer collecting sales tax at the complex before rebates are paid for sales made by that retailer. 275.2(5) Baseball and softball complex rebate request form and filing requirements. To obtain the rebate, the owner or operator must submit a rebate request to the department on the authorized form furnished by the department. A properly completed form shall adhere to the following rules: a. Who may file the claim.The claim must be filed by the owner or operator. Claims filed under the name of an affiliated entity will be denied. b. Information regarding retailers making sales at the complex.The following information shall be provided: (1) Business name, (2) Responsible party, (3) Federal employer identification number (FEIN), and (4) Sales tax permit number, which must be associated with an address at the complex. c. Sales at the complex.Information on sales at the complex and sales tax collected on those sales must be reported. Only sales by retailers meeting the requirements of paragraph 275.2(5)“b” and Iowa Code section 423.4(10) are eligible for rebate. d. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. e. Sworn statement.The department may require a sworn statement regarding the truthfulness and eligibility of the claim. f. Filing frequency.The forms are due quarterly, on or before the last day of the month following the quarter in which the sales at the complex took place. 275.2(6) Fund transfers. The amount of sales tax revenues transferred from the general fund to the complex fund is that portion of sales tax receipts remaining in the general fund after other department transfers, as described in Iowa Code section 423.4(10)“e.” 275.2(7) Termination of rebate program. The rebate program terminates 30 days following the date on which $5 million in total rebates has been provided. The rebate award for each complex terminates on the earliest of the following dates: a. Ten years after the project completion date; or b. The date on which total rebates equal to the amount of the rebate award have been provided to the complex; or c. The date of the change of control of the facility. 275.2(8) Sourcing of sales. a. Generally.In general, sales are considered to occur “at the complex” if they occur within the boundaries identified in the physical description provided by the enhance Iowa board and are sourced to a location within those boundaries under Iowa Code section 423.15. b. Advance ticket and admissions sales.Advance ticket and admissions sales shall be considered occurring at the baseball and softball complex regardless of where the transactions actually occur. Consequently, the state sales tax and any applicable local option tax in effect for the jurisdiction in which the facility is located must be imposed on the purchase price of advance ticket and admissions sales. This rule is intended to implement Iowa Code section 423.4(10).

701—275.3(423) Raceway facility sales tax rebate. Qualifying rebates of Iowa state sales and use tax may be made to the owner or operator of a raceway facility that meets the requirements of Iowa Code section 423.4(11). 275.3(1) Definitions. For purposes of this rebate, unless further defined below, the terms used in this rule mean the same as defined in Iowa Code section 423.4(11). Additionally, “incurred date” means the date on which the payment for the project cost was made or the performance of the work that gave rise to the payment occurred, whichever is later. 275.3(2) Retailer identification. a. Identification of retailers.The owner or operator shall provide the identity of all retailers at the raceway facility that will be collecting sales tax and provide the department with the sales tax permit number for each retailer. During the period in which rebates may be claimed, the owner or operator shall keep the information current. b. Notification to department.The owner or operator shall notify the department within ten days of the termination or start-up of a retailer collecting sales tax at the raceway facility. For purposes of this subrule, termination occurs when the retailer provides notice to the owner or operator that the retailer will no longer collect sales tax at the raceway facility or after one calendar year expires since the retailer collected sales tax at the raceway facility. c. Verification by department.The department shall verify the identity of a retailer collecting sales tax at the raceway facility before rebates are paid for sales made by that retailer. 275.3(3) Project cost report and rebate form and filing requirements. To request a rebate, the owner or operator must timely submit a project cost report and rebate request to the department on the authorized form, furnished by the department, in addition to the retailer sales report, as described in subrule 275.3(4). A properly completed rebate form shall contain the following: a. Documentation and information required. (1) Invoices for project costs. (2) An explanation of how each cost meets the definition of “project costs.” (3) The date each cost was incurred and the date each cost was paid. b. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. c. Sworn statement.The department may require a sworn statement regarding the truthfulness and eligibility of the report. d. Filing frequency.To be considered timely, the form and supporting documentation must be provided to the department within 90 days of the date the project cost was paid. Generally, this report is filed quarterly with the rebate request form; however, the project cost report may be filed more frequently if necessary to meet the 90-day filing requirement. Project cost reports and rebate forms will not be accepted on or after the earliest date provided in Iowa Code section 423.4(11)“g.” 275.3(4) Raceway facility retailer sales report and filing requirements. The owner or operator must submit a retailer sales report to the department on the authorized form furnished by the department. A properly completed form shall contain the following. a. Who may file the claim.Rebate claims shall only be filed by the owner or operator. Claims filed under the name of an affiliated entity will be denied. b. Information regarding retailers making sales at the raceway facility.Retailer information must include: (1) Business name, (2) Responsible party, (3) Federal employer identification number (FEIN), and (4) Sales tax permit number. c. Sales at the raceway facility.Sales occurring at the raceway facility and sales tax collected on those sales must be reported. Only sales by retailers meeting the requirements of paragraph 275.3(4)“b” and Iowa Code section 423.4(11) that occur during the time period specified in Iowa Code section 423.4(11)“c”(3) are eligible for the rebate. d. Additional information.The department may request any other additional information, from any person, necessary to verify the rebate. e. Sworn statement.The department may require a sworn statement by the retailer and the owner or operator regarding the truthfulness and eligibility of the claim. f. Filing frequency.The forms are due quarterly, on or before the last day of the month following the quarter in which the sales at the raceway facility took place. 275.3(5) Sourcing of sales. a. Generally.In general, sales are considered to occur at the raceway facility if they occur within the boundaries of the raceway facility portion of the fairgrounds and are sourced to that raceway facility under Iowa Code section 423.15. b. Advance ticket and admissions sales.Advance ticket and admissions sales shall be considered occurring at the raceway facility regardless of where the transactions actually occur. Consequently, the state sales tax and any applicable local option tax in effect for the jurisdiction in which the raceway facility is located must be imposed on the sales price of advance ticket and admissions sales. 275.3(6) Local option sales tax. Local option taxes imposed under Iowa Code chapter 423B are not eligible for rebate under this program. This rule is intended to implement Iowa Code section 423.4(11).ARC 7153CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to facilitating business rapid response to state-declared disasters and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 276, “Facilitating Business Rapid Response to State-Declared Disasters,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code section 29C.24.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 29C.24.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 276, which provides the Department’s rules for administering Iowa Code section 29C.24. Iowa Code section 29C.24 helps facilitate the rapid response of businesses and workers to a disaster by providing that out-of-state businesses and employees that perform disaster and emergency-related work on critical infrastructure during a disaster response period due to a state-declared disaster are not subject to income, corporate income, use, equipment; or property tax or tax filing, permit, or return requirements. The Department proposes revisions to the rules to remove portions of the chapter that the Department determined are unnecessary and duplicative of statutory language. In its Red Tape Review Report, the Department recommended amending the statute to make rulemaking on this topic permissive rather than mandatory because there is little need for additional information in rules. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 276 and adopt the following new chapter in lieu thereof: CHAPTER 276FACILITATING BUSINESS RAPID RESPONSE TO STATE-DECLARED DISASTERS[Prior to 9/7/22, see Revenue Department[701] Ch 242]

701—276.1(29C) Purpose. The Iowa department of revenue, the Iowa department of homeland security and emergency management and the secretary of state are authorized and tasked by the legislature to jointly administer and oversee mutual aid among the political subdivisions of Iowa, other states and the federal government and to ensure the state government and its departments and agencies facilitate the rapid response of businesses and workers in the state and other states to a disaster.

701—276.2(29C) Definitions. For purposes of this chapter, the definitions from Iowa Code section 29C.24 are adopted by reference.

701—276.3(29C) Disaster or emergency-related work. 276.3(1) Out-of-state business. An out-of-state business conducting operations within the state solely for the purpose of performing disaster or emergency-related work during a disaster response period does not establish a level of presence that would subject the out-of-state business to any of the requirements and responsibilities listed in Iowa Code section 29C.24(3)“a.” 276.3(2) Out-of-state employee. The performance of disaster or emergency-related work during a disaster response period by an out-of-state employee is not a basis to determine that the out-of-state employee has established residency or a level of presence in Iowa that would subject the out-of-state employee to any of the requirements or responsibilities listed in Iowa Code section 29C.24(3)“b.” 276.3(3) After the disaster response period ends. An out-of-state business or out-of-state employee remaining in Iowa after the disaster response period for which the disaster or emergency-related work was performed is responsible for all taxes, fees, registration, filing or other requirements the out-of-state business or out-of-state employee would have been subject to but for Iowa Code section 29C.24. These rules are intended to implement Iowa Code section 29C.24.ARC 7154CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to sales and use tax refund for biodiesel production and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 277, “Sales and Use Tax Refund for Biodiesel Production,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.4(9).State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code section 423.4(9).Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 277, which consists solely of rule 701—277.1(423), which provides and describes the process for taxpayers to obtain a refund of sales or use tax paid by biodiesel producers. The Department proposes revisions to this chapter to remove portions of the rule that the Department determined were unnecessary and duplicative of statutory language. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 277 and adopt the following new chapter in lieu thereof: CHAPTER 277SALES AND USE TAX REFUND FOR BIODIESEL PRODUCTION

701—277.1(423) Biodiesel production refund. A refund of sales or use tax is available for certain producers of biodiesel for calendar year 2012 to the ending year specified in Iowa Code section 423.4(9)“e.” 277.1(1) Qualifications for the refund. To be eligible for the refund, a biodiesel producer that produces biodiesel in Iowa must meet the criteria listed in Iowa Code section 423.4(9)“a.” 277.1(2) Calculation of the refund. The amount of refund is calculated as described in Iowa Code section 423.4(9)“b” and up to the number of gallons identified in Iowa Code section 423.4(9)“c.” No refund will be allowed for gallons produced at a facility on or after the date identified in Iowa Code section 423.4(9)“e.” 277.1(3) Claiming the refund. In order to claim a refund for each calendar quarter, a biodiesel producer must file Form IA 843, Refund Return, on which the biodiesel producer will include the number of biodiesel gallons produced during the quarter, the calculation of the biodiesel production refund, and the amount of biodiesel production refund claimed. The biodiesel producer must also timely file all sales and use tax returns due and timely pay all sales and use taxes owed on the biodiesel producer’s purchases, even when the amount of the biodiesel production refund due exceeds the amount of sales and use taxes owed for the quarter. The department will reduce the amount of the refund issued by the amount of any sales and use taxes owed by the biodiesel producer. This rule is intended to implement Iowa Code section 423.4(9).ARC 7155CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to refunds for eligible businesses under economic development authority programs and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 278, “Refunds for Eligible Businesses Under Economic Development Authority Programs,” Iowa Administrative Code, and to adopt a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapter 15.Purpose and Summary The purpose of this proposed rulemaking is to readopt Chapter 278, which consists solely of rule 701—278.1(15). This proposed rule interprets the underlying statutes and provides the scope and methods for obtaining a refund of sales and use tax paid for eligible businesses approved under programs by the Iowa Economic Development Authority. The Department proposes to revise the rule for clarification and to remove portions that the Department has determined are unnecessary and duplicative of statutory language. A Regulatory Analysis, including the proposed rule text, was published on October 4, 2023. A public hearing was held on October 25, 2023. No public comments on the Regulatory Analysis were received at the hearing or in writing. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind 701—Chapter 278 and adopt the following new chapter in lieu thereof: CHAPTER 278REFUNDS FOR ELIGIBLE BUSINESSES UNDER ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS[Prior to 7/13/22, see rule 701—12.19(15)][Prior to 9/7/22, see Revenue Department[701] Ch 258]

701—278.1(15) Sales and use tax refund for eligible businesses. For eligible businesses approved under the high quality jobs program or workforce housing tax incentives program by the economic development authority, a refund of sales and use tax is available. 278.1(1) Sales and use tax eligible for refund. Eligible businesses can receive a refund of the sales and use tax paid for those items listed in Iowa Code section 15.331A to the extent applicable for purposes of the particular program. 278.1(2) Sales and use tax ineligible for refund. The sales and use tax for which the eligible business cannot receive a refund consists of the following: a. Any local option sales tax paid is not eligible for the refund. The refund is limited to the state sales and use tax paid. b. Any sales and use tax attributable to intangible property, furniture, or furnishings is not eligible for the refund. “Furnishings” means any furniture, appliances, equipment, and accessories that are movable and with which a room or building is furnished for comfort, convenience, or aesthetic value. Examples include rugs, décor, and window coverings. “Furnishings” does not include installed flooring such as hardwood, carpet, ceramic, stone, laminate, or vinyl. 278.1(3) When to claim the refund. To receive a refund, the eligible business must file a claim for refund within the following period of time: a. High quality jobs program.The first date the eligible business may file a claim for refund is after the contract completion as defined in Iowa Code section 15.331A. The last date the eligible business may file a claim for refund is one year after the project completion date as defined in Iowa Code section 15.329. b. Workforce housing tax incentives program.The first date the eligible business may file a claim for refund is after the agreement completion date as defined in Iowa Code section 15.355. The last date the eligible business may file a claim for refund is one year after the agreement completion date as defined in Iowa Code section 15.355. 278.1(4) How to claim the refund. a. Gas, electric, water, or sewer utility services.To request a refund of the sales and use tax paid for gas, electric, water, or sewer utility services used during construction, the eligible business must file Form IA 843, Refund Return, with the department of revenue. The claim shall include the tax credit certificate number given by the Iowa economic development authority, along with copies of invoices or a schedule to support the refund amount. b. Contractor or subcontractor.To request a refund of the sales and use tax paid on tangible personal property, or on services rendered to, furnished to, or performed for a contractor or subcontractor relating to the construction or equipping of a facility, the eligible business must file the Construction Contract Claim for Refund form, along with the Iowa Contractor’s Statement, with the department of revenue. The Construction Contract Claim for Refund form shall include the tax credit certificate number given by the Iowa economic development authority. It is not necessary to attach invoices to the Construction Contract Claim for Refund form, but the department of revenue reserves the right to request invoices when reviewing the refund claim. c. Racks, shelving, and conveyor equipment.To request a refund of the sales and use tax attributable to racks, shelving, and conveyor equipment, the eligible business must file Form IA 843, Refund Return, with the department of revenue. The claim shall include the tax credit certificate number given by the Iowa economic development authority, along with copies of invoices or a schedule to support the refund amount. This rule is intended to implement Iowa Code chapter 15.ARC 7156CRevenue Department[701]Notice of Intended Action

Proposing rulemaking related to underground storage tank rules and providing an opportunity for public comment

The Revenue Department hereby proposes to rescind Chapter 289, “Underground Storage Tank Rules Incorporated By Reference,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is proposed under the authority provided in Iowa Code sections 421.14, 422.68 and 423.42.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 423E.3 to 423E.6.Purpose and Summary Pursuant to Part IV of Executive Order 10, the Department was directed on September 22, 2023, to propose this Notice of Intended Action to rescind Chapter 289. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Public Comment Any interested person may submit written or oral comments concerning this proposed rulemaking. Written or oral comments in response to this rulemaking must be received by the Department no later than 4:30 p.m. on January 2, 2024. Comments should be directed to: Nick Behlke Department of Revenue Hoover State Office Building P.O. Box 10457 Des Moines, Iowa 50306-3457 Phone: 515.336.9025 Email: nick.behlke@iowa.gov Public Hearing Public hearings at which persons may present their views orally or in writing will be held as follows: January 3, 2024 9 to 11 a.m. Via video/conference call January 3, 2024 1 to 3 p.m. Via video/conference call Persons who wish to participate in a video/conference call should contact Nick Behlke before 4:30 p.m. on January 2, 2024, to facilitate an orderly hearing. A video link will be provided to participants prior to the hearing. Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking. Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs. Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6). The following rulemaking action is proposed:

ITEM 1. Rescind and reserve 701—Chapter 289.ARC 7130CCollege Student Aid Commission[283]Filed Emergency After Notice

Rulemaking related to uniform policies, future ready Iowa skilled workforce grant program, and workforce grant and incentive program

The College Student Aid Commission hereby amends Chapter 10, “Uniform Policies”; rescinds Chapter 16, “Future Ready Iowa Skilled Workforce Grant Program,” Iowa Administrative Code, and adopts a new chapter with the same title; and adopts a new Chapter 34, “Workforce Grant and Incentive Program.” Legal Authority for Rulemaking This rulemaking is adopted under the authority provided in Iowa Code section 261.3.State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, Senate File 560.Purpose and Summary The rulemaking rescinds and replaces rule 283—10.2(261) to leverage Chapter 10 for definitions and policies that are consistent among state financial aid programs in order to streamline and reduce redundancies in accord with Executive Order 10. As additional chapters are rescinded and promulgated anew in the future under Executive Order 10, the consistent definitions and policies will be cited from Chapter 10 rather than duplicated in each chapter. Additionally, the rulemaking rescinds and adopts a new Chapter 16 for the Future Ready Iowa Skilled Workforce Grant Program. Statutory amendments to the program were enacted in 2023 Iowa Acts, Senate File 560, division VIII. Given the extent of the amendments, the existing chapter is now rescinded and a new chapter promulgated in lieu thereof under Executive Order 10 to ensure that outdated and obsolete provisions are eliminated. Lastly, the rulemaking adopts a new Chapter 34 to implement the Workforce Grant and Incentive Program, which was enacted in 2023 Iowa Acts, Senate File 560, division VI. Citations in the rules to Iowa Code sections 261.132, 256.230 and 84A.1B are to those sections as enacted by 2023 Iowa Acts, Senate File 560. The rulemaking includes two standards that are adopted by reference, each of which aligns to standards in Title IV of the federal Higher Education Act of 1965. The first standard is the cost of attendance, which generally includes tuition and fees, books, supplies, transportation and miscellaneous personal expenses, and an allowance for food and housing costs. The second reference is to the process in which a student who is in default on a student loan regains eligibility for financial aid, which generally includes making nine consecutive on-time payments, repaying the defaulted loan in full, or consolidating the defaulted loan with other student loans in good standing.Public Comment and Changes to Rulemaking Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on October 4, 2023, as ARC 7100C. Public hearings were held on October 25, 2023, and October 26, 2023, at 4 p.m. at 475 SW 5th Street, Suite D, Des Moines, Iowa. No one attended the public hearing. No public comments were received. No changes from the Notice have been made.Reason for Waiver of Normal Effective Date Pursuant to Iowa Code section 17A.5(2)“b”(1)(b), the Commission finds that the normal effective date of this rulemaking, 35 days after publication, should be waived and the rulemaking made effective on November 17, 2023, because statute requires grants to be allocated equally among the fall and spring semesters. The waiver of the normal effective date will allow grants under each program to be awarded and applied to student accounts during the fall term of enrollment, providing recipients with the benefit of those funds during the term in which they were intended to be awarded.Adoption of Rulemaking This rulemaking was adopted by the Commission on November 17, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Commission for a waiver of the discretionary provisions, if any, pursuant to 283—Chapter 7.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rulemaking became effective on November 17, 2023. The following rulemaking action is adopted:

ITEM 1. Rescind rule 283—10.2(261) and adopt the following new rule in lieu thereof:

283—10.2(261) Definitions. "Financial metric" is the means by which the commission ranks the relative financial need of an applicant for financial assistance. The calculated financial metric shall be evaluated annually on the basis of a confidential statement of family finances filed on a form designated by the commission. The commission has adopted the use of the Free Application for Federal Student Aid (FAFSA), a federal form developed by the U.S. Department of Education, which is used to determine the financial metric. Relative need will be ranked based on the applicant’s financial metric provided by the U.S. Department of Education. The FAFSA must be received by the processing agent by the date specified by the commission. A negative financial metric is the equivalent of zero. "Financial need" is the difference between the applicant’s cost of attendance, as defined in Title IV of the federal Higher Education Act of 1965, as of July 1, 2023, and the applicant’s financial metric and other available financial assistance at the eligible institution. "Full-time" means enrollment in at least 12 semester credit hours, or the equivalent, that are part of a program of study. Credits that a student receives through “life experience credit” and “credit by examination” are not eligible for funding. Only coursework required for the student’s eligible program of study can be used to determine enrollment status for state award calculations. "Iowa resident" means a person who:

If attending an Iowa regent university, Iowa private college or university, or Iowa barber or cosmetology college, meets the criteria used by the state board of regents to determine residency for tuition purposes as described in rule 681—1.4(262) and, if the person qualifies for residency only as described in 681—paragraph 1.4(2)“b,” meets the following additional criteria:
Is a veteran or qualifying military person domiciled in the state of Iowa who is not dependent upon a parent for financial support;
Is a dependent veteran or qualifying military person whose parent is domiciled in the state of Iowa; or
Is the spouse, domestic partner, or dependent child of a veteran or qualifying military person who is domiciled in the state of Iowa; or
If attending an Iowa community college, meets the criteria defined by the Iowa department of education to determine residency for community college tuition purposes as defined in 281—subrule 21.2(11) and, if the person qualifies for residency only as described in 281—subparagraph 21.2(11)“b”(5), meets the following additional criteria:
Is a veteran of uniformed service or a national guard member domiciled in the state of Iowa who is not dependent upon a parent for financial support;
Is a dependent veteran of uniformed service or a national guard member whose parent is domiciled in the state of Iowa; or
Is the spouse, domestic partner, or dependent child of a veteran of uniformed service or a national guard member who is domiciled in the state of Iowa.

"Part-time" means enrollment which includes 3 to 11 semester credit hours, or the equivalent, that are part of a program of study. Credits that a student receives through “life experience credit” and “credit by examination” are not eligible for funding. Only coursework required for the student’s eligible program of study can be used to determine enrollment status for state award calculations. "Program of study" means a course of study that is eligible for federal student aid programs and leads to an undergraduate diploma, certificate, or degree. "Satisfactory academic progress" is determined by the eligible institution, the standards of which meet the criteria for participation in federal student aid programs and are published on the eligible institution’s website.

ITEM 2. Adopt the following new rule 283—10.3(261):

283—10.3(261) Policies. 10.3(1) Restrictions. A student who is in default on a Stafford Loan, SLS Loan, or a Perkins/National Direct/National Defense Student Loan or who owes a repayment on any Title IV grant assistance or state award shall be ineligible for assistance under the program. The student regains eligibility under this rule by providing documentation to the institution that the student has regained eligibility under Title IV of the Higher Education Act of 1965, as of July 1, 2023. 10.3(2) Reserved.

ITEM 3. Rescind 283—Chapter 16 and adopt the following new chapter in lieu thereof: CHAPTER 16FUTURE READY IOWA SKILLED WORKFORCE GRANT PROGRAM

283—16.1(261) Basis for aid. Assistance available under the future ready Iowa skilled workforce grant program is for Iowa residents who are aged 25 or older and are enrolled in approved programs aligned with high-demand jobs.

283—16.2(261) Definitions. As used in this chapter: "Approved program" means an eligible program of study as defined in 283—Chapter 10 that is approved through the process described in 283—16.6(261). "Continuous enrollment" means an eligible student is enrolled on a full-time or part-time basis in successive fall and spring semesters, or the equivalent, after receiving the award. Enrollment in the summer semester is not required to meet this condition. "Eligible institution" meets the criteria in Iowa Code section 261.132 and the provisions of 283—16.7(261). "Full-time" means the same as defined in 283—10.2(261). "Iowa resident" means the same as defined in 283—10.2(261). "Part-time" means enrollment in at least 6 but less than 12 hours per semester, or the equivalent. An eligible student may enroll in fewer than six semester hours, or the equivalent, in the semester that the credential will be completed if part-time enrollment is not required to complete the program of study. "Satisfactory academic progress" means the same as defined in 283—10.2(261). "Semester" means the fall, spring, or summer term of enrollment at an eligible institution, if the eligible institution is on a semester system, or the equivalent, if the institution is on a system other than a semester system.

283—16.3(261) Eligible applicant. An eligible applicant is an Iowa resident who is enrolled full-time or part-time in an approved program at an eligible institution and who meets the following provisions: 1. Annually completes the applications the college student aid commission (commission) deems necessary on or before the date established by the commission and attends orientation, registers for classes with an academic advisor, and participates in career advising sessions. 2. Meets satisfactory academic progress standards, does not meet a condition in 283—subrule 10.3(1), and upon receipt of the grant, maintains continuous full-time or part-time enrollment during successive fall and spring semesters. 3. Is aged 25 or older as of July 1 prior to the year of enrollment.

283—16.4(261) Awarding of funds. 16.4(1) Selection criteria. All eligible applicants will be considered for an award. 16.4(2) Extent of award and maximum award. Eligible applicants may receive no more than the equivalent of four full-time awards. The maximum award will be established annually by the commission but will not be less than $1,000 for a full-time student over the course of the fall and spring semesters. 16.4(3) Priority for awards. In the event that funds available are insufficient to provide maximum awards to all eligible applicants, awards are prioritized in the following order: a. Eligible applicants who received the grant in the prior state fiscal year, by application date. b. Eligible applicants who did not receive the grant in the prior state fiscal year, by application date. 16.4(4) Awarding process. a. The commission will provide notice of the eligibility criteria and maximum award to participating eligible institutions annually to authorize awarding. b. The commission will designate eligible applicants for awards and provide eligible institutions with rosters of designated eligible applicants. c. Eligible institutions will notify recipients of the awards, clearly indicating the award amount and the state program from which funding is being provided and stating that the award is contingent on the availability of state funds. d. Eligible institutions will apply awards directly to student accounts to cover items included in the cost of attendance, as defined in Title IV of the federal Higher Education Act of 1965, as of July 1, 2023. e. Eligible institutions will provide information about eligible applicants to the commission in a format specified by the commission. Eligible institutions will make necessary changes to awards due to a change in enrollment, program of study, and financial situation, and promptly report those changes to the commission. f. Eligible institutions will complete necessary verification and coordinate other aid to ensure compliance with student eligibility requirements and allowable award amounts. Eligible institutions will report changes in student eligibility to the commission. g. The commission will periodically investigate and review compliance of eligible institutions participating in this program with the criteria established in Iowa Code section 261.132 and this rule.

283—16.5(261) Exceptions. If an eligible applicant discontinues enrollment at the eligible institution due to military deployment, a temporary medical incapacity, in relation to a declaration of a national or state emergency, or other exceptional circumstances approved by the commission, the eligible applicant may apply for a waiver. If the waiver is approved, the eligible applicant is not required to maintain continuous enrollment during the period covered by the waiver.

283—16.6(261) Determination of programs of study aligned with high-demand jobs. 16.6(1) High-demand jobs. The commission will utilize the department of workforce development’s most recent list of statewide high-demand jobs pursuant to Iowa Code section 84A.1B(14) and align those jobs to eligible programs of study. 16.6(2) Eligible programs of study. The eligible institution will offer a baccalaureate degree that is aligned with a high-demand job. The classification of instructional program code and the standard occupation code will be used to align eligible programs of study to high-demand jobs. 16.6(3) Designation. Eligible institutions will designate the eligible programs of study offered in the corresponding academic year. 16.6(4) Approved program. Before an eligible program of study is considered an approved program of study, the department of workforce development and the commission will jointly certify that the program of study is aligned with a high-demand job pursuant to Iowa Code section 84A.1B(14). 16.6(5) Grandfather clause. If the state workforce development board removes a high-demand job from a list created pursuant to Iowa Code section 84A.1B(14), an eligible applicant who received an award in a program of study aligned with that high-demand job will continue to receive the award as long as the eligible applicant continues to meet all other eligibility criteria.

283—16.7(261) Institution eligibility requirements. 16.7(1) Application process. An institution requesting to participate in the program may apply to the commission using the commission’s designated application. An applicant institution will provide the commission with documentation establishing the applicant institution’s eligibility as an eligible institution that offers eligible programs of study. Applicant institutions will submit the application and documentation establishing the applicant institution’s eligibility before October 1 of the year prior to the beginning of the academic year for which the applicant institution is applying for participation. 16.7(2) Public information. A list of all eligible programs of study, as well as the necessary courses and the suggested course sequence, will be available in a prominent location on the eligible institution’s website. These rules are intended to implement Iowa Code section 261.132.

ITEM 4. Adopt the following new 283—Chapter 34: CHAPTER 34WORKFORCE GRANT AND INCENTIVE PROGRAM

283—34.1(261) Basis of aid. Assistance available under the Iowa workforce grant and incentive program is based on the financial need of Iowa residents enrolled in eligible programs of study at universities under the Iowa board of regents.

283—34.2(261) Definitions. "Academic year" is defined as the fall, spring and summer semesters, in that sequence, within a state fiscal year. "Eligible institution" means the same as defined in Iowa Code section 256.230. "Eligible program" means an undergraduate program of study as defined in 283—Chapter 10 that meets the provisions of Iowa Code section 256.230. "Financial metric" means the same as defined in 283—Chapter 10. "Financial need" means the same as defined in 283—Chapter 10. "Full-time" means the same as defined in 283—Chapter 10. "High-demand job" means the same as described in Iowa Code section 84A.1B(17). "Iowa resident" means the same as defined in 283—Chapter 10. "Part-time" means the same as defined in 283—Chapter 10. "Satisfactory academic progress" means the same as defined in 283—Chapter 10.

283—34.3(261) Eligible workforce grant applicant. An eligible applicant is an Iowa resident who is enrolled full-time or part-time as an undergraduate student in an eligible program at an eligible institution and who meets the following provisions:

Annually completes the applications the commission deems necessary on or before the date established by the commission.
Establishes financial need, has an eligible financial metric, meets satisfactory academic progress standards, and does not meet a condition in 283—subrule 10.3(1).

283—34.4(261) Awarding of workforce grant funds. 34.4(1) Selection criteria. All eligible applicants will be considered for an award. 34.4(2) Extent of award and maximum award. Eligible applicants may receive no more than four full-time or eight part-time semesters of awards, or the equivalent. a. The maximum award for full-time students will not exceed the student’s financial need and will not exceed $2,000 per full-time semester. b. A part-time student will receive a prorated award, as established by the commission, based on the number of credit hours for which the student is enrolled. c. Awards will be provided during the fall and spring semesters of enrollment. Awards during the summer semester of enrollment may be provided if funding allows. 34.4(3) Priority for awards. In the event that funds available are insufficient to provide an award to all eligible applicants, awards will be prioritized as follows: a. Eligible applicants who received a workforce grant in the prior academic year. b. Eligible applicants with the lowest financial metrics. c. Eligible applicants who are closest to the completion of their eligible program. 34.4(4) Awarding process. a. The commission will provide notice of the eligibility criteria and maximum award to participating eligible institutions annually to authorize awarding. b. Eligible institutions will notify recipients of the awards, clearly indicating the award amount and the state program from which funding is being provided and stating that the award is contingent on the availability of state funds. c. Eligible institutions will apply awards directly to student accounts to cover items included in the cost of attendance, as defined in Title IV of the federal Higher Education Act of 1965, as of July 1, 2023. d. Eligible institutions will provide information about eligible applicants to the commission in a format specified by the commission. Eligible institutions will make necessary changes to awards due to a change in enrollment, program of study, and financial situation and promptly report those changes to the commission. e. Eligible institutions will complete necessary verification and coordinate other aid to ensure compliance with student eligibility requirements and allowable award amounts. Eligible institutions will report changes in student eligibility to the commission. f. The commission will periodically investigate and review compliance of eligible institutions participating in this state program with the criteria established in Iowa Code section 256.230 and this rule.

283—34.5(261) Eligible incentive payment applicant. Individuals who received a workforce grant and completed the eligible program within the same academic year may apply for the incentive payment if they meet the criteria of Iowa Code section 256.230 and are employed in Iowa.

283—34.6(261) Awarding of incentive payments. 34.6(1) Selection criteria. All eligible incentive payment applicants will be considered for an award. 34.6(2) Extent of award and maximum award. Eligible incentive payment applicants may apply for no more than one incentive payment of up to $2,000. 34.6(3) Awarding process. a. The commission will provide notice of the availability of the incentive payment application to eligible incentive payment applicants following completion of the eligible program. Eligible incentive payment applicants will apply for the incentive and begin full-time employment in a high-demand job in Iowa within six months of completing the eligible program. b. Following the application deadline, the commission will designate eligible applicants for awards and begin tracking their employment. c. After the applicant has completed 12 consecutive months of full-time employment, commission staff will verify with the Iowa employer that the applicant was employed full-time in a job position that is aligned with a high-demand job. d. Following verification with the employer, the commission will make payment to the eligible incentive payment applicant. These rules are intended to implement 2023 Iowa Acts, Senate File 560. [Filed Emergency After Notice 11/17/23, effective 11/17/23][Published 12/13/23]Editor’s Note: For replacement pages for IAC, see IAC Supplement 12/13/23.ARC 7127CAgriculture and Land Stewardship Department[21]Adopted and Filed

Rulemaking related to the dairy innovation program

The Agriculture and Land Stewardship Department hereby amends Chapter 52, “Marketing,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is adopted under the authority provided in 2023 Iowa Acts, House File 700.State or Federal Law Implemented This rulemaking implements, in whole or in part, 2023 Iowa Acts, House File 700.Purpose and Summary This rulemaking implements 2023 Iowa Acts, House File 700, by creating rules for the Dairy Innovation Program. The rules create definitions, provide eligibility criteria, and establish the application and review process as well as criteria to score applications. The rules also establish grant agreement terms and provide an explanation for how grant funds will be disbursed to awardees.Public Comment and Changes to Rulemaking Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on September 20, 2023, as ARC 7069C. A public hearing was held on October 13, 2023, at 1 p.m. in the Second Floor Conference Room, Wallace State Office Building, Des Moines, Iowa. No one attended the public hearing. No public comments were received. No changes from the Notice have been made.Adoption of Rulemaking This rulemaking was adopted by the Department on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 21—Chapter 8.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rulemaking will become effective on January 17, 2024. The following rulemaking action is adopted:

ITEM 1. Reserve rules 21—52.25 to 21—52.40.

ITEM 2. Adopt the following new division heading after rule 21—52.40:DAIRY INNOVATION PROGRAM

ITEM 3. Adopt the following new rules 21—52.41(159) to 21—52.47(159):

21—52.41(159) Definitions. For purposes of this division: "Agreement" means a contract for financial assistance under the program describing the terms on which the financial assistance is to be provided. "Applicant" means a person applying for assistance under the program. This includes but is not limited to an individual or business. "Grant" means an award of financial assistance with the expectation that, with the fulfillment of the conditions, terms, and obligations of the agreement with the department for the project, repayment of funds is not required by the recipient. "Project" means an activity or activities undertaken by the applicant to be carried out to meet the goals of the program. "Recipient" means a person who has applied for and been chosen to receive financial assistance through the program.

21—52.42(159) Eligibility. 52.42(1) Eligible businesses. The department has the sole authority in determining the eligibility of an applicant for participation in the program. To be eligible for a grant under the dairy innovation program, an applicant shall meet all the eligibility requirements in Iowa Code section 159.31A(4) as enacted by 2023 Iowa Acts, House File 700, as well as the following: a. The business must currently be permitted by the department or actively working with the department to obtain a permit. b. The business must not have been subject to any department license or permit suspension or revocation within the last five years from the date of the application submission. 52.42(2) Eligible projects. To be eligible for a grant under the program, a project shall meet the requirements of Iowa Code section 159.31A as enacted by 2023 Iowa Acts, House File 700, as well as the following requirements: a. Not be in progress until a grant is awarded. b. Be completed in 12 months or less. c. Be conducted in Iowa. 52.42(3) Ineligible expenses. The following items are not eligible expenses under the program: a. Expenses incurred prior to the awarding of a grant. b. Start-up costs including but not limited to inventory, license, or permit fees or working capital. c. Advertising, public relations, or entertainment costs. d. Employee benefits and wages. e. Paying off existing debt, related collection costs, or legal costs. f. Paying off existing fines, penalties, or settlements from failure to comply with any applicable law or regulations. 52.42(4) Grant amount and terms. The maximum amount of financial assistance awarded to a recipient under the program shall not exceed $100,000.

21—52.43(159) Application and review process. 52.43(1) The department will establish a uniform application process and make information about applying available on its website. 52.43(2) Applications will only be accepted during the times established by the department. Late submissions will not be accepted. 52.43(3) An applicant must demonstrate the ability to provide matching support for the project on a one-to-one basis. The matching financial support shall be from private sources. 52.43(4) A scoring committee established by the department will review and evaluate applications based on the scoring criteria described in rule 21—52.44(159). 52.43(5) Projects for processing and projects for labor-reducing technology will be scored independently of each other. 52.43(6) The department, after considering the recommendations made by the scoring committee, will determine which applications to fund and how much should be awarded to each applicant. The department has final decision-making authority on requests for financial assistance for the program. The department will notify the applicant in writing of the approval or denial.

21—52.44(159) Scoring criteria. 52.44(1) Application scoring. A scoring committee will be established by the department to evaluate applications with a score of 0 to 100. Projects receiving a score below 60 will not be considered. 52.44(2) Scoring criteria. The department will use the following criteria to evaluate each application: a. The extent to which the project addresses the goals of the program to create new jobs, expand opportunities and provide greater flexibility or convenience for local small-scale farmers, and reduce labor associated with the on-farm production and storage of milk: 25 points. b. The sufficiency of the project’s budget and financing structure: 20 points. c. The sufficiency of the project’s proposed work plan and timeline including a detailed description of the steps the applicant will take to complete the project as well as estimated dates: 20 points. d. The ability of the applicant to demonstrate sound business management, financial aptitude, and stability: 15 points. e. The extent to which measurable objectives can be determined that demonstrate the proposed project’s benefit to the agriculture community: 10 points. f. The completeness of the application information and sufficiency of detail used to describe the project in the application: 10 points.

21—52.45(159) Grant agreement. 52.45(1) Agreement terms. An agreement shall not be for more than one year. The department, in its sole discretion, may grant an extension, not to exceed three months, if the department determines extenuating circumstances are likely to delay or have delayed the completion of the project. 52.45(2) Termination of agreement. An agreement shall be terminated if the recipient no longer meets the qualifications for an eligible business. Additionally, an agreement may be terminated if the recipient, in the sole opinion of the department, does any of the following: a. Substantially violates any applicable statute or rule; b. Violates any agreement between the department and the recipient; or c. Acts in a manner that may damage the reputation of the program.

21—52.46(159) Disbursement of funds. The department will disburse funds for a project only after an agreement has been executed between the recipient and the department and all the applicable conditions for disbursement have been met, including the submission of documentation pertaining to the eligible expenditures. Disbursement of funds under the agreement will be on a reimbursement basis for expenses incurred by the applicant and will be disbursed upon final completion of a project.

21—52.47(159) Authority of department. The department may enter upon the premises of any recipient to examine any records or materials necessary to ensure compliance with these rules.

ITEM 4. Adopt the following new division implementation sentence after rule 25—52.47(159): This division is intended to implement 2023 Iowa Acts, House File 700. [Filed 11/13/23, effective 1/17/24][Published 12/13/23]Editor’s Note: For replacement pages for IAC, see IAC Supplement 12/13/23.ARC 7129CAgriculture and Land Stewardship Department[21]Adopted and Filed

Rulemaking related to weights and measures

The Agriculture and Land Stewardship Department hereby rescinds Chapter 85, “Weights and Measures,” Iowa Administrative Code, and adopts a new chapter with the same title.Legal Authority for Rulemaking This rulemaking is adopted under the authority provided in Iowa Code sections 214.10, 214A.1A, 215.24 and 215A.3 and 2023 Iowa Acts, House File 666.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code chapters 214, 214A, 215 and 215A and 2023 Iowa Acts, House File 666.Purpose and Summary This rulemaking updates the State’s weights and measures rules by removing outdated or redundant provisions that are covered by statute. The rulemaking also simplifies and restructures the chapter to enhance readability for the public. Additionally, the rulemaking implements 2023 Iowa Acts, House File 666, by adopting rules related to testing the accuracy and correctness of electric vehicle charging stations to assist in the proper collection of Road Use Tax Fund moneys. The standards being utilized are included in the 2023 version of the National Institute of Standards and Technology Handbook 44.Public Comment and Changes to Rulemaking Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on September 20, 2023, as ARC 7072C. A public hearing was held on October 13, 2023, at 2 p.m. in the Second Floor Conference Room, Wallace State Office Building, Des Moines, Iowa. No one attended the public hearing. Three comments were received. All comments encouraged the Department to update the ASTM reference date for biodiesel standards since those have recently changed. This request has been incorporated into rule 21—85.20(214A,208A).Adoption of Rulemaking This rulemaking was adopted by the Department on November 9, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to 21—Chapter 8.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rulemaking will become effective on January 17, 2024. The following rulemaking action is adopted:

ITEM 1. Rescind 21—Chapter 85 and adopt the following new chapter in lieu thereof: CHAPTER 85WEIGHTS AND MEASURES

21—85.1(215) Definitions. "Automatic grain scale" means a scale constructed with a mechanical device so that a stream of grain flowing into its hopper can be checked at any given weight, long enough to register said weight and dump the load. The garner above the scale should have at least three times the capacity of the scale to ensure a steady flow at all times.

On automatic-indicating scales. On a particular scale, the maintenance tolerances applied shall be not smaller than one-fourth the value of the minimum reading-face graduation; the acceptance tolerances applied shall be not smaller than one-eighth the value of the minimum reading-face graduation.
However, on a prepacking scale (D.11, D.12) having graduated intervals of less than one-half ounce, the maintenance tolerances applied shall not be smaller than one-eighth ounce and the acceptance tolerances applied shall be not smaller than one-sixteenth ounce.

"Counter scale" means a scale of any type that is especially adopted on account of its compactness, light weight, moderate capacity and arrangements of parts for use upon a counter, bench, or table. "Motor truck scale" means a scale built by the manufacturer for the use of weighing commodities transported by motor truck. This rule is intended to implement Iowa Code section 215.18.

21—85.2(189,215) Weights and measures. 85.2(1) The specifications, tolerances and regulations for commercial weighing and measuring devices, together with amendments thereto, as recommended by the National Institute of Standards and Technology (NIST) and published in NIST Handbook 44 amended or revised as of January 1, 2020, shall be the specifications, tolerances and regulations for commercial weighing and measuring devices in the state of Iowa, except as modified by state statutes, or by rules adopted and published by the Iowa department of agriculture and land stewardship and not rescinded. 85.2(2) The NIST Handbook 130, Uniform Laws and Regulations in the Areas of Legal Metrology and Fuel Quality, Handbook 133, Checking the Net Contents of Packaged Goods, Type Evaluation, and all supplements to these handbooks, as published by the NIST amended or revised as of January 1, 2020, are adopted in their entirety by reference except as modified by state statutes, or by rules adopted and published by the department. This rule is intended to implement Iowa Code sections 189.9, 189.13, 189.17, 215.14, 215.18 and 215.23.

21—85.3() Reserved.

21—85.4() Reserved.

21—85.5() Reserved.

21—85.6() Reserved.

21—85.7() Reserved.

21—85.8() Reserved.

21—85.9() Reserved.WEIGHTS AND SCALES

21—85.10(215) Scale design. A scale shall be of such materials and construction that (1) it will support a load of its full nominal capacity without developing undue stresses or deflections, (2) it may reasonably be expected to withstand normal usage without undue impairment of accuracy or the correct functioning of parts, and (3) it will be reasonably permanent in adjustment. 85.10(1) Stability of indications. A scale shall be capable of repeating with reasonable precision its indications and recorded representations. This requirement shall be met irrespective of repeated manipulation of any scale element in a manner duplicating normal usage, including: a. Displacement of the indicating elements to the full extent allowed by the construction of the scale, b. Repeated operation of a locking device, and c. Repeated application or removal of unit weights. 85.10(2) Interchange or reversal of parts. Parts that may readily be interchanged or reversed in the course of normal usage shall be so constructed that their interchange or reversal will not materially affect the zero-load balance or the performance of the scale. Parts which may be interchanged or reversed in normal field assembly shall be: a. So constructed that their interchange or reversal will not affect the performance of the scale, or b. So marked as to show their proper positions. 85.10(3) Pivots. Pivots shall be made of hardened steel, except that agate may be used in prescription scales, and shall be firmly secured in position. Pivot knife-edges shall be sharp and straight, and cone-pivot points shall be sharp. 85.10(4) Position of equipment, primary or recording indicating elements (electronic weighing elements). A device equipped with a primary or recording element shall be so positioned that its indications may be accurately read and the weighing operations may be observed from some reasonable “customer” position; the permissible distance between the equipment and a reasonable customer position shall be determined in each case upon the basis of individual circumstances, particularly the size and character of the indicating element; a window large enough should be placed in the building and the installation should be so arranged as to afford an unobstructed view of the platform. This rule is intended to implement Iowa Code section 215.18.

21—85.11(215) Scale pit. 85.11(1) In the construction of a scale pit, walls must be of reinforced concrete. A slab floor must be installed in the pit. The floor must be at least 12 inches thick with a minimum of grade 40 reinforcement rod running into all piers and sidewalls, installed according to the manufacturer’s specifications. There shall be an approach at each end of the scale of not less than ten feet, and said approach shall be of reinforced concrete 12 inches thick on a level with the scale deck. A slope of a one-inch drop across the ten-foot span may be allowed for drainage. 85.11(2) Electronic scales shall have a vertical clearance of not less than four feet from the floor line to the bottom of the I-beam of the scale bridge, thus providing adequate access for inspection and maintenance. The load-bearing supports of all scales installed in a fixed location shall be constructed to ensure the strength, rigidity and permanence required for proper scale performance. This rule is intended to implement Iowa Code section 215.15.

21—85.12(215) Pitless scales. A person may install pitless electronic, self-contained and vehicle scales in a permanent location provided the following conditions for the construction are incorporated: 85.12(1) Scale installation applications and permits must be submitted to the department the same as the pit scale installation, with specifications being furnished by the manufacturer, for approval. 85.12(2) Piers shall extend below the frost line or be set on solid bedrock, and they shall be of reinforced concrete. 85.12(3) A reinforced concrete slab the width of the scale, at least six inches thick, shall run full length under the scale. Slab and piers shall be tied together with reinforcement rod, with a minimum clearance of eight inches between floor and weighbridge. 85.12(4) Reinforced Portland cement approaches at least 12 inches thick, ten feet long and as wide as the scale shall be provided on each end in a level plane with the scale platform. 85.12(5) A scale shall be installed at an elevation to ensure adequate drainage away from the scale. 85.12(6) A scale platform and indicator shall be protected from wind and other elements that could cause inaccurate operation of the scale. Protection modifications that attach to or touch the scale or parts attached to the scale shall be approved by the department prior to installation. This rule is intended to implement Iowa Code section 215.14.

21—85.13(215) Master weights. Master scale test weights used for checking scales after being overhauled must be sealed as to their accuracy once every two years. Said weights after being sealed are to be used only as master test weights. This rule is intended to implement Iowa Code section 215.17.

21—85.14(215) Provision for sealing coin slot. Provision shall be made on a coin-operated scale for applying a lead and wire seal in such a way that insertion of a coin in the coin slot will be prevented. This rule is intended to implement Iowa Code section 215.18.

21—85.15(215) Lengthening of platforms. The length of the platform of a vehicle scale shall not be increased beyond the manufacturer’s designed dimension except when the modification has been approved by a competent scale-engineering authority, preferably that of the engineering department of the manufacturer of the scale, and by the weights and measures bureau. This rule is intended to implement Iowa Code section 215.18.

21—85.16(215) Accessibility for testing purposes. A large capacity scale shall be so located, or such facilities for normal access thereto shall be provided, that the test weights of the weights and measures official, in the denominations customarily provided, and in the amount deemed necessary by the weights and measures official for the proper testing of the scale, may readily be brought to the scale by the customary means; otherwise, it shall be the responsibility of the scale owner or operator to supply such special facilities, including necessary labor, as may be required to transport the test weights to and from the scale, for testing purposes, as required by the weights and measures official. If the design, construction or location of a large-capacity scale is such as to require a testing procedure involving special accessories or an abnormal amount of handling of test weights, such accessories or needed assistance in the form of labor shall be supplied by the owner or operator of the scale, as required by the weights and measures official. This rule is intended to implement Iowa Code sections 215.1A and 215.10.

21—85.17(215) Wheel-load weighers and axle-load scales. The requirements for wheel-load weighers and axle-load scales apply only to such scales in official use for the enforcement of traffic in highway laws or for the collection of statistical information by government agencies. This rule is intended to implement Iowa Code section 215.18.

21—85.18() Reserved.

21—85.19() Reserved.MEASURES

21—85.20(214A,208A) Motor fuel and antifreeze tests and standards. 85.20(1) In the interest of uniformity, the tests and standards for motor fuel, including but not limited to renewable fuels such as ethanol blended gasoline, biodiesel, and biodiesel blended fuel, and components such as an oxygenate, raffinate natural gasoline and motor vehicle antifreeze shall be those established by ASTM International in effect on June 30, 2023, with the following exceptions: a. Biodiesel blended fuel classified as higher than B-20 but less than B-99. b. Tests and standards that are otherwise required by statute. 85.20(2) The components used to produce biodiesel blended fuel classified as higher than B-20 but less than B-99 must meet the following department standards: a. The biodiesel must meet ASTM International specification D6751. b. The diesel must meet ASTM International specification D975. 85.20(3) Diesel fuel that does not comply with ASTM International specifications may be blended with biodiesel, additives, or other diesel fuel so that the finished blended product does meet the applicable specifications. This rule is intended to implement Iowa Code sections 208A.5, 208A.6, 214A.2, and 215.18.

21—85.21(215) Tolerances on petroleum products measuring devices. All pumps or meters at filling stations may have a tolerance of not over five cubic inches per five gallons, minus or plus. All pumps or measuring devices of a large capacity shall have a maintenance tolerance of 50 cubic inches, minus or plus, on a 50-gallon test. An additional one-half cubic inch tolerance shall be added per gallon over and above a 50-gallon test. Acceptance tolerances on large capacity pumps and measuring devices shall be one-half the maintenance tolerances. This rule is intended to implement Iowa Code sections 214.2 and 215.20.

21—85.22(215) Meter adjustments and tagging. If a meter is found to be incorrect and also capable of further adjustment, said meter shall be adjusted, rechecked and sealed. If a seal is broken for any cause other than by a state inspector, the department shall be promptly notified of same. 85.22(1) Companies specializing in testing and repairing gasoline and fuel oil dispensing pumps or meters shall be registered with the weights and measures bureau upon meeting requirements set forth by the department. 85.22(2) In accordance with the NIST Handbook 44, accredited repair and testing companies shall be authorized to affix a security seal, properly marked with the identification of such company. 85.22(3) If a meter is found to be inaccurate, an inspection report shall be left by the inspector requiring repair. After the meter has been repaired and placed in service, the licensee shall notify the weights and measures bureau. 85.22(4) If the meter has not been repaired within 30 days, the meter may be condemned and a red condemned tag may be attached to the meter. This rule is intended to implement Iowa Code sections 215.5, 215.12 and 215.20.

21—85.23(215) Servicer’s license fee. The fee for a servicer’s license shall be $10. This rule is intended to implement Iowa Code section 215.23.

21—85.24(215) Recording elements. All weighing or measuring devices shall be provided with appropriate recording or indicating elements, which shall be definite, accurate and easily read under any conditions of normal operation of the device. Graduations and a suitable indicator shall be provided in connection with indications and recorded representations designed to advance continuously. Graduations shall not be required in connection with indications or recorded representations designed to advance intermittently or with indications or recorded representations of the selector type. This rule is intended to implement Iowa Code section 215.18.

21—85.25(215) Air eliminator. All gasoline or oil metering devices shall be equipped with an effective air eliminator to prevent passage of air or vapor through the meter. The vent from such eliminator shall not be closed or obstructed. This rule is intended to implement Iowa Code section 215.18.

21—85.26(215) Delivery outlets. No means shall be provided by which any measured liquid can be diverted from the measuring chamber of the meter or the discharge line therefrom. However, two or more delivery outlets may be installed, if automatic means is provided to ensure that liquid can flow from only one such outlet at one time and the direction of flow for which the mechanism may be set at any time is definitely and conspicuously indicated. This rule is intended to implement Iowa Code section 215.18.

21—85.27(215) LP-gas delivery. In the delivery of LP-gas by commercial bulk trucks (bobtail) across state lines, it shall be mandatory for all trucks delivering products in Iowa to be equipped with a meter that has been licensed by the state of Iowa and carries the seal of an accredited meter service and proving company. This rule is intended to implement Iowa Code section 215.20.

21—85.28(215) LP-gas meter registration. The location of all LP-gas liquid meters in retail trade shall be listed, by the owner, with the department. Upon putting a new or used meter into service in the state of Iowa, the user shall report to the weights and measures bureau. This rule is intended to implement Iowa Code section 215.20.

21—85.29(214A,215) Advertisement of the price of liquid petroleum products for retail use. 85.29(1) Nothing in this rule shall be deemed to require that the price per gallon or liter or any grade or kind of liquid petroleum product sold on the station premises be displayed or advertised except on the liquid petroleum metering distribution pumps. 85.29(2) Petroleum product retailers, if they elect to advertise the unit price of their petroleum products at or near the curb, storefront or billboard, shall display the price per gallon or liter. The advertised price shall equal the computer price settings shown on the metering pump or shall be displayed in a manner clear to the purchaser for discounts offered for cash payment. Product names displayed shall match the product names on the retail motor fuel dispensers and all consumer receipts. 85.29(3) Notwithstanding the provisions of subrule 85.29(2), cash only prices may be posted by the petroleum marketer on the following basis: a. Cash only prices must be disclosed on the posted sign as “cash only” or similar unequivocal wording in lettering 3″ high and ¼″ in stroke when the whole number price being shown is 36″ or less in height; or in lettering at least 6″ high and ½″ in stroke when the whole number price being shown is more than 36″ in height. b. Cash prices posted or advertised must be available to all customers, regardless of type of service (e.g., full service or self-service); or grade of product (e.g., regular, unleaded, gasohol and diesel). c. Cash and credit prices or discounts must be prominently displayed on the dispenser. d. A chart showing applicable cash discounts expressed in terms of both the computed and posted price shall be available to the customer on the service station premises. 85.29(4) On all outside display signs, the whole number shall not be less than 6″ in height and not less than 3/8″ in stroke, and any fraction shall be at least one-third of the size of the whole number in both height and width. 85.29(5) The price must be complete, including taxes, without any missing numerals or fractions in the price. 85.29(6) Price advertising signs shall identify the type of product (e.g., regular, unleaded, gasohol and diesel), in lettering at least 3″ high and ¼″ in stroke when the whole number price being shown is 36″ or less in height, or in lettering at least 6″ high and ½″ in stroke when the whole number price being shown is more than 36″ in height. 85.29(7) A price advertising sign shall display if the price is in liters, and may display if the price is in gallons, the unit measure in letters of 3″ minimum. 85.29(8) Directional or informational signs for customer location of the type of service or product advertised shall be clearly and prominently displayed on the station premises in a manner not misleading to the public. 85.29(9) The advertising of other commodities or services offered for sale by petroleum retailers in such a way as to mislead the public with regard to petroleum product pricing shall be prohibited. 85.29(10) Ethanol blended gasoline classified with an octane rating of 87 or higher may be labeled or advertised as “super” or “plus.” 85.29(11) The octane rating of fuel offered for sale shall be posted on the pump in a conspicuous place. The octane rating shall be posted for registered fuels. No octane rating shall be posted on the pump for ethanol blended gasoline classified as higher than E-15. The minimum octane rating for gasoline offered for sale by a retail dealer is 87 for regular grade gasoline and 91 for premium grade gasoline. 85.29(12) A wholesale dealer selling ethanol blended gasoline or biodiesel fuel to a purchaser shall provide the purchaser with a statement indicating the actual volume percentage present. The statement may be on the sales slip provided or a similar document such as a bill of lading or invoice. This statement shall include the specific amount of biodiesel, even if the amount of renewable fuel is 5 percent or less. This rule is intended to implement Iowa Code sections 214A.3, 214A.16 and 215.18.

21—85.30(214A,215) Gallonage determination for retail sales. The method of determining gallonage on gasoline or diesel motor vehicle fuel for retail sale shall be on a gross volume basis. Temperature correction or any deliberate methods of heating shall be prohibited. This rule is intended to implement Iowa Code sections 214A.3 and 215.18.

21—85.31(214,214A,215) Blender pumps. Motor fuel blender pumps or blender pumps installed or modified after November 1, 2008, that sell both ethanol blended gasoline classified as higher than E-15 and gasoline need to have at least two hoses per pump to separate registered gasoline fuels from flex fuels. This rule is intended to implement Iowa Code section 214A.2.

21—85.32() Reserved.

21—85.33() Reserved.

21—85.34() Reserved.

21—85.35() Reserved.

21—85.36() Reserved.

21—85.37() Reserved.

21—85.38() Reserved.

21—85.39() Reserved.MOISTURE-MEASURING DEVICES

21—85.40(215A) Testing devices. All moisture-measuring devices will be tested against a measuring device that will be furnished by the department, and all moisture-measuring devices will be inspected to determine whether they are in proper operational condition and supplied with the proper accessories. This rule is intended to implement Iowa Code section 215A.2.

21—85.41(215A) Rejecting devices. Moisture-measuring devices may be rejected for any of the following reasons: 85.41(1) The moisture-measuring device tested is found to be out of tolerance with the measuring device used by the department by one of the inspectors so assigned by more than 0.7 percent on grain moisture content. 85.41(2) The person does not have available the latest charts for the type of device being used. 85.41(3) The person does not have available the proper scale or scales and thermometers for use with the type of device being used. 85.41(4) The moisture-measuring device is not free from excessive dirt, debris, or cracked glass or is not kept in good operational condition at all times. This rule is intended to implement Iowa Code section 215A.6.

21—85.42(215,215A) Specifications and standards for moisture-measuring devices. The specifications and tolerances for moisture-measuring devices are those established by the United States Department of Agriculture as of November 15, 1971, in chapter XII of GR instruction 916-6, equipment manual, used by the Federal Grain Inspection Service; and those recommended by the National Bureau of Standards and published in National Bureau of Standards Handbook 44 as of July 1, 1985. This rule is intended to implement Iowa Code section 215A.3.

21—85.43(215) Testing high-moisture grain. When testing high-moisture grain, the operator of a moisture-measuring device shall use the following procedure: Test each sample six times, adding the six measurements thus obtained and dividing the total by six to obtain an average, which shall be deemed to be the moisture content of such sample. This rule is intended to implement Iowa Code section 215A.7.

21—85.44() Reserved.

21—85.45() Reserved.

21—85.46() Reserved.

21—85.47() Reserved.

21—85.48() Reserved.

21—85.49() Reserved.TESTING AND ACCURACY

21—85.50(452A) Electric vehicle charging stations. 85.50(1) The department will inspect licensed electric fuel dealers and users for accuracy and correctness from a list provided by the department of revenue. 85.50(2) The specifications and tolerances for electric fuel and charging stations shall be those as published in the NIST Handbook 44, Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices, amended or revised as of January 1, 2023, in the state of Iowa, except as modified by state statutes, or by rules adopted and published by the department. 85.50(3) A charging station and each connector installed on a charging station will be tested for accuracy and correctness utilizing a measuring device that will be furnished by the department and tested against the electric fuel meter serving that charging station. 85.50(4) For purposes of this rule, “connector” means the portion of the charging station that directly interfaces, connects or plugs into an electric vehicle through which electric fuel is supplied to an electric vehicle. This rule is intended to implement Iowa Code section 452A.21. [Filed 11/17/23, effective 1/17/24][Published 12/13/23]Editor’s Note: For replacement pages for IAC, see IAC Supplement 12/13/23.ARC 7128CPharmacy Board[657]Adopted and Filed

Rulemaking related to controlled substances

The Board of Pharmacy hereby amends Chapter 10, “Controlled Substances,” and Chapter 12, “Precursor Substances,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is adopted under the authority provided in Iowa Code sections 124.201 and 124B.2(2).State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 124.201 and 124B.2(2).Purpose and Summary This rulemaking temporarily adds one List I chemical (a substance used to manufacture illicit fentanyl) to the list of precursor substances in Iowa Code chapter 124B and one hallucinogen to Schedule I of the Controlled Substances Act in response to similar action taken by the federal Drug Enforcement Administration. Public Comment and Changes to Rulemaking Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on July 26, 2023, as ARC 7048C. No public comments were received. No changes from the Notice have been made.Adoption of Rulemaking This rulemaking was adopted by the Board on November 7, 2023.Fiscal Impact This rulemaking has no fiscal impact to the State of Iowa. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Board for a waiver of the discretionary provisions, if any, pursuant to 657—Chapter 34.Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rulemaking will become effective on January 17, 2024. The following rulemaking action is adopted:

ITEM 1. Amend subrule 10.39(6) as follows: 10.39(6) Amend Iowa Code section 124.204(4) by adding the following new paragraphparagraphs: cl. 2-(ethylamino)-2-(3-methoxyphenyl)cyclohexan-1-one. Other names: methoxetamine, MXE. cm. 1-(1,3-benzodioxol-5-yl)-2-(ethylamino)butan-1-one. Other names: eutylone, bk-EBDB.

ITEM 2. Amend subrule 12.1(1) as follows: 12.1(1) Amend Iowa Code section 124B.2(1) by adding the following new paragraphs: ah. Methyl alpha-phenylacetoacetate (other names: MAPA; methyl 3-oxo-2-phenylbutanoate) and its optical isomers. ai. 1-boc-4-AP (tert-butyl 4-(phenylamino)piperidine-1-carboxylate) and its salts. aj. 4-piperidone (piperidin-4-one), its acetals, its amides, its carbamates, its salts, and salts of its acetals, its amides, and its carbamates, and any combination thereof, whenever the existence of such is possible. [Filed 11/14/23, effective 1/17/24][Published 12/13/23]Editor’s Note: For replacement pages for IAC, see IAC Supplement 12/13/23.ARC 7192CRevenue Department[701]Adopted and Filed

Rulemaking related to settlement authority

The Revenue Department hereby rescinds Chapter 3, “Voluntary Disclosure Program”; amends Chapter 7, “Appeals, Taxpayer Representation, and Other Administrative Procedures,” and Chapter 10, “Interest, Penalty, Exceptions to Penalty, and Jeopardy Assessments”; adopts Chapter 19, “Settlements—Compromises and Abatements of Tax, Penalty, and Interest”; amends Chapter 101, “Replacement Tax and Statewide Property Tax,” Chapter 108, “Replacement Tax and Statewide Property Tax on Rate-Regulated Water Utilities,” Chapter 254, “Administration,” Chapter 300, “Administration,” Chapter 305, “Assessments and Refunds,” Chapter 504, “Assessments, Refunds, Appeals,” Chapter 603, “Assessments, Refunds, Appeals,” Chapter 700, “Fiduciary Income Tax,” and Chapter 900, “Inheritance Tax,” Iowa Administrative Code.Legal Authority for Rulemaking This rulemaking is adopted under the authority provided in Iowa Code sections 421.5 and 421.14.State or Federal Law Implemented This rulemaking implements, in whole or in part, Iowa Code sections 17A.10, 421.5, 422.25(3), 422.28, 423.47, 450.94 and 452A.65.Purpose and Summary The purpose of this rulemaking is to implement division VI of 2023 Iowa Acts, Senate File 565. Division VI amends several Iowa Code sections related to settlement authority, including the authority to fully abate liabilities under certain circumstances. The Act also establishes new procedures related to estimated assessments. The statutory changes related to settlement authority in Iowa Code section 421.5 include a requirement that the Department adopt rules to administer the section. A new chapter is adopted to cover the various types of settlements that the Department may enter into. The chapter defines key terms of the statute and describes procedures related to different types of settlements. The settlement authority is very discretionary. Adopting rules on this authority provides taxpayers with information on the required procedures and limitations. The sections of the Act related to estimated assessments did not include mandatory rulemaking authority. The Department did not find it necessary to adopt any new rules on the estimated assessment provisions of the statute at this time but did find that several rules that would otherwise need to be amended could instead be rescinded because they largely repeated the statute. One relevant rule, 701—700.11(422), is amended and significantly shortened as a result of the changes to ensure accuracy.Public Comment and Changes to Rulemaking Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on October 18, 2023, as ARC 7101C. No public comments were received and no public hearing was requested. No changes from the Notice have been made.Adoption of Rulemaking This rulemaking was adopted by the Department on November 22, 2023.Fiscal Impact This rulemaking has no fiscal impact beyond that of the legislation it is intended to implement. Jobs Impact After analysis and review of this rulemaking, no impact on jobs has been found.Waivers Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A). Review by Administrative Rules Review Committee The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).Effective Date This rulemaking will become effective on January 17, 2024. The following rulemaking action is adopted:

ITEM 1. Rescind and reserve 701—Chapter 3.

ITEM 2. Amend rule 701—7.11(17A), parenthetical implementation statute, as follows:

701—7.11(17A,421) Informal stage of the appeals process.

ITEM 3. Amend subrule 7.11(5) as follows: 7.11(5) Settlements. Settlement proposals may be submitted to the department employee assigned to the appeal or through GovConnectIowa using the manage appeal feature.Only the director, the deputy director, or the division administrator of the legal services and appeals division may approve and sign settlements of appeals. If a settlement is reached during informal procedures, a closing order stating that a settlement was reached by the parties and that the case is terminated shall be issued by the director and provided to all parties.

ITEM 4. Amend rule 701—7.11(17A), implementation sentence, as follows: This rule is intended to implement Iowa Code sectionsections17A.10and 421.5.

ITEM 5. Rescind and reserve rule 701—7.31(421).

ITEM 6. Amend rule 701—10.3(422,423,450,452A), parenthetical implementation statute, as follows:

701—10.3(421,422,423,450,452A) Interest on refunds and unpaid tax.

ITEM 7. Amend subrule 10.3(2) as follows: 10.3(2) Interest on unpaid tax. Interest due on unpaid tax is not a penalty, but rather it is compensation to the government for the period the government was deprived of the use of money. Therefore, interestInterest due cannot be waivedexcept in accordance with the settlement authority described in Iowa Code sections 421.5 and 17A.10. Vick v. Phinney, 414 F.2d 444, 448 (5th CA 1969); Time, Inc. v. United States, 226 F.Supp. 680, 686 (S.D. N.Y. 1964); In Re Jeffco Power Systems, Dep’t of Revenue Hearing Officer decision, Docket No. 77-9-6A-A (1978); Waterloo Courier, Inc. v. Iowa Department of Revenue and Finance, Case No. LACV081252, Black Hawk County District Court, December 30, 1999.

ITEM 8. Amend rule 701—10.3(422,423,450,452A), implementation sentence, as follows: This rule is intended to implement Iowa Code sections 421.5,422.25(3), 422.28, 423.47, 450.94 and 452A.65.

ITEM 9. Adopt the following new 701—Chapter 19: CHAPTER 19SETTLEMENTS—COMPROMISES AND ABATEMENTS OF TAX, PENALTY, OR INTEREST

701—19.1(421) Settlements. Pursuant to Iowa Code section 421.5, in addition to the authority granted to the department pursuant to Iowa Code section 17A.10 and notwithstanding Iowa Code section 7D.9, the department may, in its sole discretion, settle any taxes, penalties, or interest. A settlement may be a compromise or full abatement of any amount in dispute.

701—19.2(421) Amounts qualifying for settlement. To be eligible for settlement under Iowa Code section 421.5, the amount must be of doubtful liability or doubtful collectability or must cause severe economic hardship, or the settlement of the amount must promote effective tax administration. The decision whether to accept a settlement amount will be based on a taxpayer’s facts and circumstances; verifiable documentation is required for all grounds. 19.2(1) Doubtful collectability. Doubt as to collectability may exist in any case where the taxpayer’s assets and discretionary income may not satisfy the full amount of the liability after satisfying senior priority liabilities. An offer to settle based on doubt as to collectability may be considered acceptable if it is unlikely that the tax, penalty, and interest can be collected in full and the offer reasonably reflects the amount the department could collect through other means, including administrative and judicial collection remedies. This amount is the reasonable collection potential of a case. In determining the reasonable collection potential of a case, the department will take into account the taxpayer’s verifiable reasonable basic living expenses. In some cases, the department may accept an offer of less than the reasonable collection potential of a case if there are special circumstances. 19.2(2) Severe economic hardship. The department may settle where it determines that, although collection in full could be achieved, collection of the full amount would cause the taxpayer severe economic hardship. Severe economic hardship is defined as the inability to pay reasonable basic living expenses. An offer to settle based on economic hardship may be considered acceptable when, even though the tax, penalty, and interest could be collected in full, the amount offered reflects the amount the department can collect without causing the taxpayer severe economic hardship. 19.2(3) Doubtful liability. A doubtful liability may exist where there is a significant doubt as to the existence or amount of the correct tax liability under the law. A doubtful liability does not exist where the liability has been established by a final court judgment or administrative ruling or final order of the department concerning the existence or amount of the liability. An offer to settle a doubtful liability may be considered acceptable if it reasonably reflects the likelihood the department could expect to collect through litigation. This analysis may include consideration of the hazards and costs of litigation that would be involved if the liability were litigated. The evaluation of the hazards and costs of litigation is not an exact science and is within the discretion of the department. 19.2(4) Promote effective tax administration. The department may settle to promote effective tax administration where compelling public policy or equity considerations identified by the taxpayer provide a sufficient basis for settling the liability that is equitable under the particular facts and circumstances of the case. Settlements pursuant to this subrule may be justified only where, due to exceptional circumstances, collection of the full liability may undermine public confidence that the tax laws are being administered in a fair and equitable manner. The taxpayer will be expected to demonstrate circumstances that justify settlement even though a similarly situated taxpayer may have paid the liability in full. The department may settle cases where doing so will promote voluntary compliance with the law. The department may decline a settlement for reasons promoting effective tax administration if the settlement of the liability would undermine compliance by taxpayers with the tax laws.

701—19.3(421) Settlement procedures and limitations, generally. 19.3(1) Whether to seek a settlement. When determining whether to seek a settlement, a taxpayer should first consider whether a settlement is necessary. Nothing in this chapter is intended to preclude a taxpayer who misses the time provided by law to appeal a notice of assessment from paying the amount due, filing a refund claim, and contesting any denial of that refund claim as described in Iowa Code section 421.60(2)“h.” If a taxpayer has not received a billing but has information that would adjust the liability down, the appropriate remedy is to file an amended return within the statute of limitations. If a taxpayer has received an estimated assessment and is within three years of when the assessment was issued, the taxpayer should file a return. If a taxpayer has received an assessment and is within the time period to file an appeal, it is proper to file an appeal rather than a settlement request. If a taxpayer does not dispute the liability, but is unable to pay the liability due to financial hardship, the taxpayer should submit an offer in compromise application. 19.3(2) Which type of settlement to seek. Different types of settlements require different forms and procedures. Procedures for abatement, offer in compromise, and voluntary disclosure agreements are described in specific rules below. For matters currently under appeal pursuant to 701—Chapter 7, settlement requests must be submitted to the appeals section of the legal services and appeals division in accordance with 701—subrule 7.11(5). For matters currently under audit, settlement requests must be submitted to the department employee assigned to the audit. 19.3(3) Who may authorize a department settlement. Only the director, the deputy director, or the division administrator of the legal services and appeals division may approve and sign settlements under this chapter unless otherwise specified in rule or designated by the director. 19.3(4) Discretionary nature of settlements. There is no right to appeal an abatement denial, offer in compromise denial, or other settlement decision by the department under 701—Chapter 7. As described in Iowa Code section 421.5, a taxpayer shall not have the right to a settlement of any tax, penalty, or interest liability under this chapter or Iowa Code section 421.5. Any determination shall be discretionary and shall be final and conclusive except in the case of fraud or mutual mistake of material fact or as otherwise stated in a written settlement agreement between the taxpayer and the department.

701—19.4(421) Applications for abatement. 19.4(1) When to file. Abatement is intended to be a possible remedy for taxpayers who have received a billing or refund denial letter and have information that could lead to a reduction in the liability, but failed to file a timely appeal. Grounds for abatement include doubt as to liability and promoting effective tax administration. 19.4(2) How to file an application. To apply, a taxpayer must submit an application for abatement in the department’s prescribed paper or electronic format. The application can be submitted through GovConnectIowa or by using the form available on the department’s website and following the submission instructions on the form. 19.4(3) Required information. A request for abatement must be submitted on the department’s form. The form must be fully completed and properly signed. 19.4(4) Review of requests. a. After the application has been submitted, it will be reviewed by department staff. b. Additional information may be requested to assist the department in its review. c. A letter will be issued to the applicant notifying the applicant of the decision to grant, deny or partially grant the abatement request. The department’s decision on an abatement application will only be contained in a formal determination letter. d. Applicants whose applications are granted in part will receive an agreement describing the terms of the partially granted abatement request and must sign and return that agreement to the department in order to receive the partially granted abatement. e. Decisions to accept an abatement request in full or in part for doubt as to liability may be approved by the bureau chief of the compliance section of the tax management division or another staff member designated by the director. f. Decisions to accept an abatement request to promote effective tax administration may only be approved by the director, the deputy director, or the division administrator of the legal services and appeals division. 19.4(5) Limitations. The department will accept applications for abatement during the appeal period but will not review such applications until the appeal period has passed. The department will generally not refund amounts already paid in response to an application for abatement. Some exceptions may include the following circumstances: a. The application is received within three years after the return related to the application for abatement was due or within one year after the payment related to the application for abatement was made, whichever is later. b. The application is received within one year of the final determination date of any final federal adjustment arising from an internal revenue service audit or other similar action by the internal review service with respect to the particular tax year at issue in the application. c. Payments were received in violation of Title 11 of the United States Code. d. Exceptional circumstances demonstrate that a refund would promote effective tax administration as described in subrule 19.2(4).

701—19.5(421) Offers in compromise. 19.5(1) When to file. An offer in compromise packet should be used to apply for relief based on doubtful collectability or severe economic hardship. 19.5(2) How to submit a packet. To apply, a taxpayer must submit an offer in compromise packet in the department’s prescribed paper or electronic format. An offer in compromise packet can be submitted through GovConnectIowa or by using the form available on the department’s website and following the submission instructions on the form. 19.5(3) Required information. An offer in compromise must be submitted using the department’s offer in compromise packet. 19.5(4) Review of requests. a. After the packet has been submitted, it will be reviewed by department staff. b. Additional information may be requested to assist the department in its review. c. A letter will be issued to the applicant notifying the applicant of the decision to grant, deny or partially grant the offer in compromise request. The department’s decision on an offer in compromise request will only be contained in a formal determination letter. d. Applicants whose applications are granted in part will receive an agreement describing the terms of the partially granted offer in compromise request and must sign and return that agreement to the department in order to receive the partially granted offer in compromise. e. Decisions to enter into an offer in compromise must be approved by the bureau chief of the central collections unit, the director, the deputy director, the division administrator of the legal services and appeals division, or another staff member designated by the director. 19.5(5) Limitations. The department will not review offer in compromise applications until a liability is at least one year old. Premature applications will be denied. Denial on this basis does not prevent the taxpayer from reapplying at a later date.

701—19.6(421) Voluntary disclosure agreements. 19.6(1) When to file. Any person who is subject to Iowa tax or tax collection responsibilities may be eligible for the voluntary disclosure program. Being subject to Iowa tax may occur when a person has Iowa source income, business activities, or representatives or other presence in Iowa. Certain activities by such persons may create Iowa tax return filing requirements for Iowa source income. In addition, activities may also result in tax liabilities that are past due and owing. 19.6(2) Purpose of the voluntary disclosure program. The purpose of the voluntary disclosure program is to promote effective tax administration through voluntary compliance by encouraging unregistered business entities and persons to voluntarily contact the department regarding unreported Iowa source income or other Iowa taxes described in subrule 19.6(4). 19.6(3) Anonymity. A person or the person’s representative may initially contact the department on an anonymous basis. Anonymity of the taxpayer can be maintained until the voluntary disclosure agreement is executed by the taxpayer and the department. The voluntary disclosure program may be used by the department and the taxpayer to report previous periods of Iowa source income and to settle outstanding tax, penalty and interest liabilities, but it must also ensure future tax compliance by the taxpayer. 19.6(4) Type of taxes eligible. Only taxes, penalties, and interest related to the following tax types are eligible for settlement under the voluntary disclosure program: corporate income tax, franchise tax, fiduciary income tax, withholding income tax, individual income tax, composite return tax, local option school district income surtax, state sales tax, state use tax, fuel taxes, cigarette and tobacco taxes, local option tax, state and local hotel and motel taxes, automobile rental excise tax, equipment excise tax, water service excise tax, and the prepaid wireless 911 surcharge. 19.6(5) Eligibility of the taxpayer. The department has discretion to determine who is eligible for participation in the voluntary disclosure program. In making the determination, the department may consider the following factors: a. The person must be subject to Iowa tax on Iowa source income or have Iowa tax collection responsibilities; b. The person must have tax due; c. The person must not currently be under audit or examination by the department or under criminal investigation by the department; d. The person must not have had any prior contact with the department or a representative of the department that could lead to audit or assessment associated with the tax types or tax periods sought to be addressed under the program; e. The type and extent of activities resulting in Iowa source income; f. Failure to report the Iowa source income or pay any liability was not due to fraud, intentional misrepresentation, an intent to evade tax, or willful disregard of Iowa tax laws; and g. Any other factors which are relevant to the particular situation. 19.6(6) How to file an application. a. Required format.To apply, a taxpayer must submit an application in the department’s prescribed paper or electronic format. A voluntary disclosure application can be submitted through GovConnectIowa or by using the form available on the department’s website and following the submission instructions on the form. b. Required information.A voluntary disclosure application must be submitted using the department’s form. c. Review of the application. (1) After the application is submitted, it will be reviewed by department staff. (2) Additional information may be requested to assist the department in its review. (3) The department will notify an applicant in writing regarding whether the applicant’s application for participation in the program is accepted or rejected. 19.6(7) Terms of the voluntary disclosure agreement. a. Discretion.The department has the discretion to settle any outstanding Iowa tax, penalty, and interest liabilities of the eligible applicant. Settlement terms are on a case-by-case basis. Items considered by the department in determining the settlement terms include: the type of tax, the tax periods at issue, the reason for noncompliance, whether the tax is deemed to be held in trust for the state of Iowa, the types of activities resulting in the tax, the frequency of the activities that resulted in the tax, and any other matters which are relevant to the particular situation. b. Maximum scope of audit.If a taxpayer initiates the contact with the department and is eligible for the voluntary disclosure program and complies with the agreement terms, the maximum prior years for which the department will generally audit and pursue settlement and collection will be five years, absent an intent to defraud, the making of material misrepresentations of fact, or an intent to evade tax. c. Future filing requirements.All voluntary disclosure agreements must require that the applicant file future Iowa tax returns, unless the activity by the applicant resulting in the Iowa source income has changed or there has been a change in the law, rules, or court cases that dictate a different result. d. Audit and assessment rights.The department reserves the right to audit all returns and other documents submitted by the applicant or a third party to verify the facts and whether the terms of the voluntary disclosure agreement have been met. The department may audit information submitted by the applicant at any time within the allowed statutory limitation period. The department may also assess any tax, penalty, and interest found to be due in addition to the amount of original tax reported. The statute of limitations for assessment and statute of limitations for refunds begin to run as provided by law. 19.6(8) Commencement of the voluntary disclosure agreement. The voluntary agreement commences on the date the voluntary disclosure agreement is fully executed by all parties or another date specified by the agreement. Execution of the agreement is complete when the agreement is executed by the taxpayer or taxpayers and the bureau chief of the compliance section of the tax management division or another staff member designated by the director. Prior to the execution of the voluntary disclosure agreement by the taxpayer and the department, the taxpayer is not protected from the department’s regular audit process if the identity of the taxpayer, as an applicant, is unknown to the department. However, if the department has knowledge of the taxpayer’s identity, as an applicant, the department will not take audit action against the taxpayer during the voluntary disclosure process. If a voluntary disclosure agreement is not reached, the department may assess tax, penalty, and interest as provided by law at the time the identity of the applicant becomes known to the department. 19.6(9) Voiding a voluntary disclosure agreement. a. Authority.The department has the authority to declare a voluntary disclosure agreement null and void subsequent to the execution of the agreement. The department may void the contractual agreement if the department determines that a misrepresentation of a material fact was made by the person or a third party representing the person to the department. The department may also void a voluntary disclosure agreement if the department determines any of the following has occurred: (1) The person does not submit information requested by the department within the time period specified by the department, including any extensions granted by the department; (2) The person fails to file future Iowa returns as agreed to in the voluntary disclosure agreement; (3) The person does not pay the agreed settlement liability within the time period designated by the department, including any extensions of time that may be granted by the department; (4) The person does not remit all taxes imposed upon or collected by the person for all subsequent tax periods and all tax types that are subject to the voluntary disclosure agreement; (5) The person fails to prospectively comply with Iowa tax law. Whether the person has failed to prospectively comply with Iowa tax law is determined by the department on a case-by-case basis; (6) The person, based on a determination by the department, materially understates the person’s tax liability; or (7) The person has made a material breach of the terms of the voluntary disclosure agreement. b. Audit rights.Voiding of the agreement results in nonenforceability of the agreement by the applicant and allows the department to proceed to assess tax, penalty, and interest for that person’s Iowa tax and tax collection responsibilities for all periods within the statute of limitations. If the applicant is justifiably rejected for the voluntary disclosure program or the agreement between the person and the department is declared by the department to be null and void, the department reserves the right to audit all returns or other documents submitted by the applicant or a third party on behalf of the applicant and to make an assessment for all tax, penalty, and interest owed. If the voluntary disclosure agreement is voided or the application for the program is rejected and the department issues an assessment, the taxpayer may appeal the assessment pursuant to 701—Chapter 7. If the department does not issue an assessment, but does reject the application or voids the agreement, such action is not subject to appeal under 701—Chapter 7 but is considered to be “other agency action.” 19.6(10) Partnerships, partners, S corporations, shareholders in S corporations, trusts, and trust beneficiaries. Once the department has initiated an audit or investigation of any type of partnership, partners of the partnership, S corporations, a shareholder in an S corporation, a trust, or trust beneficiaries, the department is deemed to have initiated an audit or investigation of the entity and of all those who receive Iowa source income from or have an interest in such an entity for purposes of eligibility for participation in the voluntary disclosure program. 19.6(11) Transfer or assignment. The terms of the voluntary disclosure agreement are valid and enforceable by and against all parties, including their transferees and assignees. These rules are intended to implement Iowa Code sections 421.5 and 421.17.

ITEM 10. Amend rule 701—101.8(437A) as follows:

701—101.8(437A) Abatement of tax. Theabatementprovisions of rule 701—7.31(421)701—Chapter 19 are applicable to replacement tax. In the event that the taxpayer files a request for abatement with the director, the appropriate county treasurer shall be notified. The director’sdepartment’s decision on the abatement request shall be sent to the taxpayer and the appropriate county treasurer.

ITEM 11. Amend rule 701—101.21(437A) as follows:

701—101.21(437A) Abatement of tax. Theabatement provisions of rule 701—7.31(421)701—Chapter 19 are applicable to the statewide property tax.

ITEM 12. Amend rule 701—108.8(437B) as follows:

701—108.8(437B) Abatement of tax. Theabatement provisions of rule 701—7.31(421)701—Chapter 19 are applicable to replacement tax. In the event that the taxpayer files a request for abatement with the directordepartment, the appropriate county treasurer shall be notified. The director’sdepartment’s decision on the abatement request shall be sent to the taxpayer and the appropriate county treasurer.

ITEM 13. Amend rule 701—108.20(437B) as follows:

701—108.20(437B) Abatement of tax. Theabatement provisions of rule 701—7.31(421)701—Chapter 19 are applicable to the statewide property tax.

ITEM 14. Rescind and reserve rule 701—254.11(453A).

ITEM 15. Rescind and reserve rule 701—300.11(422).

ITEM 16. Rescind and reserve rule 701—305.5(422).

ITEM 17. Rescind and reserve rule 701—504.4(421).

ITEM 18. Rescind and reserve rule 701—504.5(422).

ITEM 19. Rescind and reserve rule 701—603.4(421).

ITEM 20. Rescind and reserve rule 701—603.5(422).

ITEM 21. Amend rule 701—700.11(422) as follows:

701—700.11(422) Appeals to the director. An estate or trust has the right to appeal to the director for a revision of an assessment for additional tax due, the denial or reduction of a claim for refund, the denial of a request for a waiver of a penalty and theThe denial of a request for an income tax certificate of acquittancemay be appealed. The beneficiary of an estate or trust has the right to appeal a determination of the correct amount of income distributed and a determination of the correct allocation of deductions, credits, losses and expenses between the estate or trust and the beneficiary. The personal representative of an estate and the trustee of a trust have the right to appeal a determination of personal liability for income taxes required to be paid or withheld and for a penalty personally assessed. An appeal to the director must be in writing and must be made within 60 days of the notice of assessment and the other matters which are subject to appeal or for assessments issued on or after January 1, 1995, if the beneficiary of an estate or trust, the personal representative of an estate, or the trustee of a trust fails to timely appeal a notice of assessment, the person may pay the entire assessment and file a refund claim within the period provided by law for filing such claimsdenial. 701—Chapter 7 shall govern appeals to the director. See specifically rules 701—7.8(17A) to 701—7.22(17A) governing taxpayer protests. This rule is intended to implement Iowa Code chapter 17A and sections 421.60 and 422.28.

ITEM 22. Rescind and reserve rule 701—900.4(450).

ITEM 23. Amend subrule 900.8(18) as follows: 900.8(18) Appeals. Rule 701—86.4(450)701—Chapter 7providing for an appeal to the director and a subsequent appeal to district court under the Iowa administrative procedure Act for disputes involving the inheritance tax imposed by Iowa Code chapter 450 shall also be the rule for appeal for disputes concerning special use valuation and the additional inheritance tax imposed by Iowa Code chapter 450B.

ITEM 24. Amend subparagraph 900.9(2)"f" as follows: (1) Real estate. If the department, the estate and the persons succeeding to the decedent’s property have not reached an agreement as to the value of real estate under 86.9(2)“e,” the market value for inheritance tax purposes will be established by the appraisal proceedings specified in Iowa Code sections 450.27 to 450.36. For the purposes of appraisal, “real estate or real property” means the land and appurtenances, including structures affixed thereto. Use of the inheritance tax appraisers to determine value for other purposes such as, but not limited to, determining the share of the surviving spouse in the estate or for determining the fair market value of real estate for the purposes of sale, is not controlling in determining values for inheritance tax purposes. In re Estate of Giffen, 166 N.W.2d 800 (Iowa 1969); In re Estate of Lorimor, 216 N.W.2d 349 (Iowa 1974). Appraisals of real estate must be made in fee simple including land, all appurtenances and structures affixed to the real estate. Discounts in the value of real estate are not to be considered in the valuation of real property for the purposes of an appraisal. Such discounts in valuation are to be resolved by mutual agreement through informal procedures between the personal representative of the estate and the department. If an agreement between the personal representative of the estate and the department cannot be obtained, then the valuation placed on the property by the department may be appealed by the personal representative of the estate pursuant to the procedures set forth in rule 701—86.4(450)701—Chapter 7. If either the department or the estate does not agree with the results of an appraisal that is conducted pursuant to Iowa Code sections 450.27 through 450.36, either the department or the estate may file an objection to the appraisal pursuant to Iowa Code section 450.31. See 701—subrule 86.9(2) forInformation on additional factors to assist in the determination of fair market value of real propertycan be found in 701—subrule 86.9(2). [Filed 11/22/23, effective 1/17/24][Published 12/13/23]Editor’s Note: For replacement pages for IAC, see IAC Supplement 12/13/23.

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