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Iowa Administrative Bulletin

Published Biweekly VOLUME XX NUMBER 12 December 3, 1997 Pages 1065 to 1144

CONTENTS IN THIS ISSUE

Pages 1078 to 1143 include ARC 7671A to ARC 7700A

AGENDA

Administrative rules review committee 1070

Committee actions 1072

AGRICULTURE AND LAND STEWARDSHIP
DEPARTMENT[21]

Notice, Milk haulers and milk graders,
68.40 to 68.71 ARC 7684A 1078

ALL AGENCIES

Schedule for rule making 1068

Publication procedures 1069

Agency identification numbers 1076

BLIND, DEPARTMENT FOR THE[111]

Filed, Personnel, ch 2 ARC 7673A 1098

CITATION OF ADMINISTRATIVE RULES 1067

ENGINEERING AND LAND SURVEYING
EXAMINING BOARD[193C]

Professional Licensing and Regulation Division[193]

COMMERCE DEPARTMENT[181]"umbrella"

Notice, License denial; peer review;
discipline, 1.11, 4.4(1), rescind 4.2(6)
ARC 7672A
1082

ETHICS AND CAMPAIGN DISCLOSURE
BOARD, IOWA[351]

Notice of public hearing, Corporate
contributions ARC 7683A 1083

Notice, Income tax return checkoff, 2.1(7)
ARC 7681A 1083

Filed Emergency, Income tax return checkoff,
2.1(7) ARC 7682A 1094

HUMAN SERVICES DEPARTMENT[441]

Notice, Federally qualified health centers and
rural health clinics, 79.1(2), 88.14
ARC 7678A
1084

Filed, Child support program, 7.1, amendments
to chs 95, 98, 99, new ch 96
ARC 7674A
1099

Filed, FIP policy, 7.9, 9.10(16), 40.27(1), 41.22,
41.24, 41.27, 41.28, 42.24(1), 42.25, 46.24(3),
93.105 ARC 7675A 1116

Filed, FIP policy, 40.23, 40.26, 40.27(5),
41.22(6), 41.25, 41.27(11), 43.22(1), 46.29
ARC 7676A
1120

Filed, HCBS MR and BI waivers, 77.37, 77.39,
78.41, 78.43, 79.1(2), 79.14, 83.60, 83.67(9),
83.81 ARC 7677A 1122

Filed Emergency, Federally qualified health
centers and rural health clinics, 79.1(2), 88.14
ARC 7679A 1094

Filed, Child support program, 99.62(2), 99.81
to 99.92 ARC 7680A 1132

INSPECTIONS AND APPEALS DEPARTMENT[481]

Notice, Health care facilities--infection control,
57.11, 57.12(1), 58.10(8), 58.11(1), 59.12(11),
59.13(1), 62.9(2), 62.19, 63.9, 63.11(1),
65.9(2), 65.21(4) ARC 7687A 1084

Notice, Health care facilities--dependent adult
abuse and criminal history record checks for
employees, 57.12(3), 58.11(3), 59.13(3),
62.9(5), 63.11(3), 64.34, 65.9(5) ARC 7685A 1085

Filed Emergency, Health care facilities--
dependent adult abuse and criminal history
record checks for employees, 57.12(3),
58.11(3), 59.13(3), 62.9(5), 63.11(3),
64.34, 65.9(5) ARC 7686A 1095

Filed, Health care facilities--dependent adult
abuse and criminal history record check for
employees, 57.12(3), 58.11(3), 59.13(3),
62.9(5), 63.11(3), 64.34, 65.9(5) ARC 7688A 1136

NATURAL RESOURCE COMMISSION[571]

NATURAL RESOURCES DEPARTMENT[561]"umbrella"

Notice, County, city and private open space
lands, 33.50 ARC 7690A 1086

Notice, Wild turkey spring hunting, 98.14
ARC 7689A 1086

Filed, Hunter safety, ethics, 15.1 ARC 7697A 1137

Filed, Dock flotation, 16.5(4) ARC 7696A 1138

Filed, Black bass fishing, 81.2(2) ARC 7693A 1138

NATURAL RESOURCE COMMISSION[571](Cont'd)

Filed, Migratory game birds--harvest
information program, 92.7 ARC 7695A 1139

Filed Emergency After Notice, Nonresident
deer hunting, 94.7 ARC 7692A 1096

Filed, Wild turkey spring hunting--license quotas,
98.12 ARC 7694A 1139

Filed Emergency After Notice, Deer management
units, 105.3, 105.4 ARC 7691A 1096

PROFESSIONAL LICENSING AND
REGULATION DIVISION[193]

COMMERCE DEPARTMENT[181]"umbrella"

Filed, Vendor appeals, ch 3 ARC 7671A 1139

PUBLIC HEARINGS

Summarized list 1073

REVENUE AND FINANCE DEPARTMENT[701]

Notice, Sales and use tax--machinery, equipment,
and computers, 15.3(3), 17.3, 17.14(2),
18.29(7), 18.45, 18.58 ARC 7698A 1087

Notice, Fiduciary income tax, 89.8(8)
ARC 7699A
1092

Filed, Sales, use, or local option sales and
service tax--direct pay permits, 12.3, 13.1,
15.3, 29.3, 30.1, 107.8 ARC 7700A 1141

USURY

Notice 1093

PUBLISHED UNDER AUTHORITY OF IOWA CODE SECTIONS 2B.5 AND 17A.6

__________________________________

PREFACE

The Iowa Administrative Bulletin is published biweekly in pamphlet form pursuant to Iowa Code chapters 2B and 17A and contains Notices of Intended Action on rules, Filed and Filed Emergency rules by state agencies.

It also contains Proclamations and Executive Orders of the Governor which are general and permanent in nature; Economic Impact Statements to proposed rules and filed emergency rules; Objections filed by Administrative Rules Review Committee, Governor or the Attorney General; and Delay by the Committee of the effective date of filed rules; Regulatory Flexibility Analyses and Agenda for monthly Administrative Rules Review Committee meetings. Other "materials deemed fitting and proper by the Administrative Rules Review Committee" include summaries of Public Hearings, Attorney General Opinions and Supreme Court Decisions.

The Bulletin may also contain Public Funds Interest Rates [12C.6]; Workers' Compensation Rate Filings [515A.6(7)]; Usury [535.2(3)"a"]; Agricultural Credit Corporation Maximum Loan Rates [535.12]; and Regional Banking--Notice of Application and Hearing [524.1905(2)].

PLEASE NOTE: Italics indicate new material added to existing rules; strike through letters indicate deleted material.

KATHLEEN K. BATES, Administrative Code Editor Telephone: (515)281-3355

ROSEMARY DRAKE, Assistant Editor (515)281-7252

SUBSCRIPTION INFORMATION

Iowa Administrative Bulletin

The Iowa Administrative Bulletin is sold as a separate publication and may be purchased by subscription or single copy. All subscriptions will expire on June 30 of each year. Subscriptions must be paid in advance and are prorated quarterly as follows:

First quarter July 1, 1997, to June 30, 1998 $237.00 plus $11.85 sales tax

Second quarter October 1, 1997, to June 30, 1998 $178.00 plus $8.90 sales tax

Third quarter January 1, 1998, to June 30, 1998 $118.00 plus $5.90 sales tax

Fourth quarter April 1, 1998, to June 30, 1998 $ 60.00 plus $3.00 sales tax

Single copies may be purchased for $17.50 plus $0.88 tax. Back issues may be purchased if the issues are available.

Iowa Administrative Code

The Iowa Administrative Code and Supplements are sold in complete sets and subscription basis only. All subscriptions for the Supplement (replacement pages) must be for the complete year and will expire on June 30 of each year.

Prices for the Iowa Administrative Code and its Supplements are as follows:

Iowa Administrative Code - $1,086.00 plus $54.30 sales tax

(Price includes 22 volumes of rules and index, plus a one-year subscription to the Code Supplement and the Iowa Administrative Bulletin. Additional or replacement binders can be purchased for $10.55 plus $0.53 tax.)

Iowa Administrative Code Supplement - $382.00 plus $19.10 sales tax

(Subscription expires June 30, 1998)

All checks should be made payable to the Iowa State Printing Division. Send all inquiries and subscription orders to:

Customer Service Center

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Telephone: (515)242-5120

Schedule for Rule Making
1997

NOTICE
SUBMISSION DEADLINE

NOTICE PUB.
DATE
HEARING OR
COMMENTS 20 DAYS
FIRST
POSSIBLE ADOPTION DATE
35 DAYS
ADOPTED FILING DEADLINE
ADOPTED PUB.
DATE
FIRST
POSSIBLE EFFECTIVE DATE
POSSIBLE EXPIRATION OF NOTICE 180 DAYS
Dec. 13 '96
Jan. 1
Jan. 21
Feb. 5
Feb. 7
Feb. 26
Apr. 2
June 30
Dec. 27 '96
Jan. 15
Feb. 4
Feb. 19
Feb. 21
Mar. 12
Apr. 16
July 14
Jan. 10
Jan. 29
Feb. 18
Mar. 5
Mar. 7
Mar. 26
Apr. 30
July 28
Jan. 24
Feb. 12
Mar. 4
Mar. 19
Mar. 21
Apr. 9
May 14
Aug. 11
Feb. 7
Feb. 26
Mar. 18
Apr. 2
Apr. 4
Apr. 23
May 28
Aug. 25
Feb. 21
Mar. 12
Apr. 1
Apr. 16
Apr. 18
May 7
June 11
Sept. 8
Mar. 7
Mar. 26
Apr. 15
Apr. 30
May 2
May 21
June 25
Sept. 22
Mar. 21
Apr. 9
Apr. 29
May 14
May 16
June 4
July 9
Oct. 6
Apr. 4
Apr. 23
May 13
May 28
May 30
June 18
July 23
Oct. 20
Apr. 18
May 7
May 27
June 11
June 13
July 2
Aug. 6
Nov. 3
May 2
May 21
June 10
June 25
June 27
July 16
Aug. 20
Nov. 17
May 16
June 4
June 24
July 9
July 11
July 30
Sept. 3
Dec. 1
May 30
June 18
July 8
July 23
July 25
Aug. 13
Sept. 17
Dec. 15
June 13
July 2
July 22
Aug. 6
Aug. 8
Aug. 27
Oct. 1
Dec. 29
June 27
July 16
Aug. 5
Aug. 20
Aug. 22
Sept. 10
Oct. 15
Jan. 12 '98
July 11
July 30
Aug. 19
Sept. 3
Sept. 5
Sept. 24
Oct. 29
Jan. 26 '98
July 25
Aug. 13
Sept. 2
Sept. 17
Sept. 19
Oct. 8
Nov. 12
Feb. 9 '98
Aug. 8
Aug. 27
Sept. 16
Oct. 1
Oct. 3
Oct. 22
Nov. 26
Feb. 23 '98
Aug. 22
Sept. 10
Sept. 30
Oct. 15
Oct. 17
Nov. 5
Dec. 10
Mar. 9 '98
Sept. 5
Sept. 24
Oct. 14
Oct. 29
Oct. 31
Nov. 19
Dec. 24
Mar. 23 '98
Sept. 19
Oct. 8
Oct. 28
Nov. 12
Nov. 14
Dec. 3
Jan 7 '98
Apr. 6 '98
Oct. 3
Oct. 22
Nov. 11
Nov. 26
Nov. 28
Dec. 17
Jan. 21 '98
Apr. 20 '98
Oct. 17
Nov. 5
Nov. 25
Dec. 10
Dec. 12
Dec. 31
Feb. 4 '98
May 4 '98
Oct. 31
Nov. 19
Dec. 9
Dec. 24
Dec. 26
Jan. 14 '98
Feb.18 '98
May 18 '98
Nov. 14
Dec. 3
Dec. 23
Jan. 7 '98
Jan. 9 '98
Jan. 28 '98
Mar. 4 '98
June 1 '98
Nov. 28
Dec. 17
Jan. 6 '98
Jan. 21 '98
Jan. 23 '98
Feb. 11 '98
Mar. 18 '98
June 15 '98
Dec. 12
Dec. 31
Jan. 20 '98
Feb. 4 '98
Feb. 6 '98
Feb. 25 '98
Apr. 1 '98
June 29 '98
Dec. 26
Jan. 14 '98
Feb. 3 '98
Feb. 18 '98
Feb. 20 '98
Mar. 11 '98
Apr. 15 '98
July 13 '98

PRINTING SCHEDULE FOR IAB


ISSUE NUMBER
SUBMISSION DEADLINE
ISSUE DATE
14
Friday, December 12, 1997
December 31, 1997
15
Friday, December 26, 1997
January 14, 1998
16
Friday, January 9, 1998
January 28, 1998

PLEASE NOTE:

Rules will not be accepted after 12 o'clock noon on the Friday filing deadline days unless prior approval has been received from the Administrative Rules Coordinator's office.

If the filing deadline falls on a legal holiday, submissions made on the following Monday will be accepted.

PUBLICATION PROCEDURES

TO: Administrative Rules Coordinators and Text Processors of State Agencies

FROM: Kathleen K. Bates, Iowa Administrative Code Editor

SUBJECT: Publication of Rules in Iowa Administrative Bulletin

The Administrative Code Division uses Interleaf 6 to publish the Iowa Administrative Bulletin and can import documents directly from most other word processing systems, including Ami Pro, Microsoft Word, Professional Write, Word for Windows (Word 7 or earlier), and WordPerfect.

1. To facilitate the processing of rule-making documents, we request a 3.5" High Density (not Double Density) IBM PC-compatible diskette of the rule making. Please indicate on each diskette the following information: agency name, file name, format used for exporting, and chapter(s) amended. Diskettes may be delivered to the Administrative Code Division, 4th Floor, Lucas State Office Building or included with the documents submitted to the Governor's Administrative Rules Coordinator.

2. Alternatively, if you have Internet E-mail access, you may send your document as an attachment to an E-mail message, addressed to both of the following:

bcarr@legis.state.ia.us

kbates@legis.state.ia.us

Please note that changes made prior to publication of the rule-making documents are reflected on the hard copy returned to agencies by the Governor's office; diskettes are returned unchanged.

Your cooperation helps us print the Bulletin more quickly and cost-effectively than was previously possible and is greatly appreciated.

AGENDA

The Administrative Rules Review Committee will hold its regular, statutory meeting on Tuesday, December 9, 1997, at10 a.m. and Wednesday, December 10, 1997, at 9 a.m. in Room 116, State Capitol. The following rules will be reviewed:

NOTE: See also Agenda published in the November 19, 1997, Iowa Administrative Bulletin.

Bulletin

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Licensing and regulation of milk haulers and milk graders, 68.40 to 68.71, Notice ARC 7684A 12/3/97

BLIND, DEPARTMENT FOR THE[111]

Personnel, ch 2, Filed ARC 7673A 12/3/97

ENGINEERING AND LAND SURVEYING EXAMINING BOARD[193C]

Professional Licensing and Regulation Division[193]

COMMERCE DEPARTMENT[181]"umbrella"

License denial, peer review consultant, discipline, 1.11, 4.2(6), 4.4(1), Notice ARC 7672A 12/3/97

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

Iowa election campaign fund--distribution of unallocated funds, 2.1(7), Notice ARC 7681A,
also Filed Emergency ARC 7682A 12/3/97

HUMAN SERVICES DEPARTMENT[441]

Child support, 7.1, 95.1 to 95.3, 95.6, 95.6(2)"b," 95.6(7), 95.7, 95.8(1), 95.14(1), 95.14(1)"g," 95.14(3), 95.14(4),
95.15, 95.18 to 95.24, ch 96, 98.3(2)"a," 98.5, 98.7(2), 98.8, 98.21, 98.39, 98.40, 98.42(1), 98.42(1)"j," 98.42(2)"e,"
98.42(3), 98.43(2)"b"(2), 98.43(2)"c"(4), 98.43(3), 98.45, 98.101 to 98.104, 98.106, 98.107, 98.121, 98.122, 99.1,
99.10, 99.28, 99.36, 99.39, 99.41(7)"a," 99.41(9)"c," 99.61, 99.62(1), 99.70(2), 99.101, 99.102, 99.107(4)"f,"
Filed ARC 7674A 12/3/97

Family investment program, 7.9(3), 7.9(5), 9.10(16), 40.27(1)"a"(1) and (2), 41.22(6)"a"(4), 41.22(6)"b"(5),
41.22(6)"e," 41.22(7)"e," 41.24(1)"d," 41.24(2)"a" and "b," 41.24(3)"a" and "b," 41.24(11), 41.27,
41.27(1)"h"(2) to (4), 41.27(6)"ac," 41.27(7)"aa" and "af," 41.27(9)"a"(2) and (3), 41.28(2)"a"(8) and (9),
41.28(3)"c" and "d," 42.24(1), 42.24(1)"a" and "e," 42.25, 46.24(3)"b," 93.105(1), 93.105(1)"a" to "c,"
93.105(2), 93.105(2)"a" to "f," 93.105(3), 93.105(3)"a" to "c," Filed ARC 7675A 12/3/97

FIP amendments effective March 1, 1998, 40.23, 40.26, 40.27(5)"i," 41.22(6)"f," 41.25(8)"g,"
41.25(10), 41.27(11), 43.22(1)"c," 46.29, Filed ARC 7676A 12/3/97

HCBS MR and BI waivers, 77.37, 77.39, 78.41(1), 78.41(1)"c" and "e" to "o," 78.41(2), 78.41(4)"a," 78.43(2),
78.43(2)"c" and "e" to "n," 78.43(3)"a," 78.43(5)"a," 79.1(2), 79.14(1), 79.14(1)"e" to "g," 79.14(2),
79.14(3), 79.14(5), 83.60, 83.67(9)"b," 83.81, Filed ARC 7677A 12/3/97

Medicaid reimbursement policies for federally qualified health centers and rural health clinics, 79.1(2), 88.14,
Notice ARC 7678A, also Filed Emergency ARC 7679A 12/3/97

Support establishment and adjustment services--administrative modification, 99.62(2), 99.81 to 99.92, Filed ARC 7680A 12/3/97

INSPECTIONS AND APPEALS DEPARTMENT[481]

Infection control, 57.11(11)"b," "c," "e," "g," and "h," 57.11(12)"a," "d," "f," and "g," 57.12(1)"c,"
58.10(8)"b," "e," "h," and "i"(1), 58.11(1)"c," 59.12(11)"b," "e," "h," and "i"(1), 59.13(1)"c," 62.9(2)"a,"
62.19(4)"b," "c," "e," "g," and "h," 62.19(5)"a," "d," "f," and "g," 63.9(10)"b," "c," "e," "g," and "h,"
63.9(11)"a," "d," "f," and "g," 63.11(1)"c," 65.9(2)"b," 65.21(4)"b," "c," "e," and "g" to "i," Notice ARC 7687A 12/3/97

Dependent adult abuse and criminal history record checks, 57.12(3), 58.11(3), 59.13(3), 62.9(5), 63.11(3),
64.34, 65.9(5), Filed ARC 7688A 12/3/97

Criminal and dependent adult abuse record checks--violation classifications, 57.12(3)"a" to "e," 58.11(3)"a" to "e,"
59.13(3)"a" to "e," 62.9(5)"a" to "e," 63.11(3)"a" to "e," 64.34(1) to 64.34(5), 65.9(5)"a" to "e,"
Notice ARC 7685A, also Filed Emergency ARC 7686A 12/3/97

NATURAL RESOURCE COMMISSION[571]

NATURAL RESOURCES DEPARTMENT[561]"umbrella"

Hunter safety and ethics certification course completion criteria, 15.1(2) to 15.1(5), Filed ARC 7697A 12/3/97

Dock flotation devices, 16.5(4), Filed ARC 7696A 12/3/97

Protection of open space lands in Iowa--granting of funds to private entities, 33.50(1), 33.50(6), Notice ARC 7690A 12/3/97

Black bass, 81.2(2), Filed ARC 7693A 12/3/97

Migratory game birds--harvest information program, 92.7, Filed ARC 7695A 12/3/97

Nonresident deer hunting, 94.7(3), 94.7(4), Filed Emergency After Notice ARC 7692A 12/3/97

Wild turkey spring hunting license quotas, 98.12, Filed ARC 7694A 12/3/97

Application procedure for wild turkey spring hunting license, 98.14, Notice ARC 7689A 12/3/97

Deer population management units, 105.3(12), 105.3(13), 105.4(12), 105.4(13),
Filed Emergency After Notice ARC 7691A 12/3/97

PROFESSIONAL LICENSING AND REGULATION DIVISION[193]

COMMERCE DEPARTMENT[181]"umbrella"

Vendor appeals, ch 3, Filed ARC 7671A 12/3/97

REVENUE AND FINANCE DEPARTMENT[701]

Direct pay permits, 12.3, 13.1, 15.3, 15.3(1), 29.3, 30.1(2), 107.8, Filed ARC 7700A 12/3/97

Exempt sales or rentals of computers, industrial machinery and equipment, and exempt sales of fuel and electricity on and
after July 1, 1997, 15.3(3)"a," 17.3(1), 17.3(2), 17.14(2)"b," 18.29(7)"g" to "l," 18.45, 18.58, Notice ARC 7698A 12/3/97

Fiduciary income tax, 89.8(8)"j" and "m," Notice ARC 7699A 12/3/97

ADMINISTRATIVE RULES REVIEW COMMITTEE MEMBERS

Regular statutory meetings are held the second Tuesday of each month at the seat of government as provided in Iowa Code section 17A.8. A special meeting may be called by the Chair at any place in the state and at any time.

EDITOR'S NOTE: Terms ending April 30, 1999.

Senator H. Kay Hedge, Chairperson

3208 335th Street

Fremont, Iowa 52561

Representative Christopher Rants, Vice-Chairperson

2740 South Glass

Sioux City, Iowa 51106

Senator Merlin E. Bartz

2081 410th Street

Grafton, Iowa 50440

Representative Danny Carroll

244 400th Avenue

Grinnell, Iowa 50112

Senator John P. Kibbie

4285 440th Avenue

Emmetsburg, Iowa 50536

Representative Minnette Doderer

2008 Dunlap Court

Iowa City, Iowa 52245

Senator William Palmer

1002 Lakeview Drive

Ankeny, Iowa 50021

Representative Janet Metcalf

12954 NW 29th Drive

Des Moines, Iowa 50325

Senator Sheldon Rittmer

3539 230th Street

DeWitt, Iowa 52742

Representative Keith Weigel

315 W. Main, P.O. Box 189

New Hampton, Iowa 50659

Joseph A. Royce

Legal Counsel

Capitol, Room 116A

Des Moines, Iowa 50319

Telephone (515) 281-3084

Fax (515)281-5995

Jackie Van Ekeren Romp

Administrative Rules Coordinator

Governor's Ex Officio Representative

Capitol, Room 15

Des Moines, Iowa 50319

Telephone (515) 281-6331

Fax (515)281-6611

ADMINISTRATIVE RULES REVIEW COMMITTEE ACTIONS
DECEMBER 1996 THROUGH NOVEMBER 1997

OBJECTION (17A.4(2) and 17A.4(4)"a")

CORRECTIONS DEPARTMENT[201]
Inmate telephone commissions, 20.20, ARC 7298A, IAB 6/18/97, ARRC meeting 7/8/97.
Objection filed 7/22/97 (Pursuant to Iowa Code section 17A.4(2), the rule ceases to be effective January 18, 1998.)
PERSONNEL DEPARTMENT[581]
Deferred compensation, 15.6, 15.13, ARC 7464A, IAB 8/27/97, ARRC meeting 11/10/97.
SECRETARY OF STATE[721]
County and city election ordinances, 21.30, 21.31, ARC 7295A, IAB 6/18/97, ARRC meeting 7/8/97.
The rules were amended ARC 7456A, IAB 8/27/97; objection was withdrawn ARRC meeting 9/8/97.
70-DAY DELAY (17A.4(5))

ENVIRONMENTAL PROTECTION COMMISSION[567]
Regents tire-derived fuel program, ch 216, ARC 7242A, IAB 5/21/97, delayed 70 days from 6/25/97, ARRC meeting 6/10/97.
Delay withdrawn ARRC meeting 8/19/97, effective 8/20/97.
REVENUE AND FINANCE DEPARTMENT[701]
Communication services, 18.20(5), 18.20(6), ARC 6997A, IAB 1/15/97, delayed 70 days from 2/19/97, ARRC meeting 2/10/97.
Delay expired 4/30/97.
TELECOMMUNICATIONS AND TECHNOLOGY COMMISSION, IOWA[751]
Authorized use and users, ch 7, ARC 7186A, IAB 4/9/97, delayed 70 days from 5/14/97, ARRC meeting 5/13/97.
Ch 7 rescinded effective 7/9/97, ARC 7361A, IAB 7/16/97.
GENERAL REFERRAL TO SPEAKER OF THE HOUSE AND PRESIDENT OF THE SENATE (17A.8(7))

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]
Groundwater protection fund, ch 45, ARRC meeting 7/8/97
CORRECTIONS DEPARTMENT[201]
Inmate telephone commissions, 20.20, ARC 7298A, IAB 6/8/97, ARRC meeting 7/8/97
HUMAN SERVICES DEPARTMENT[441]
Disability services management, 25.42, ARC 6960A, IAB 1/1/97, ARRC meeting 1/6/97
FIP, Medicaid and social service block grant programs, amendments to chs 41, 75, 86, 153, ARC 6961A, IAB 1/1/97, ARRC meeting 1/6/97
Eligibility for child care, ch 130, ARRC meeting 6/10/97
INSURANCE DIVISION[191]
Postdelivery benefits and care, 70.8, 70.9, ch 81, ARC 6991A, IAB 1/1/97, ARRC meeting 1/7/97
LABOR SERVICES DIVISION[347]
Construction contractor registration, ch 150, ARC 7062A, IAB 2/16/97, ARRC meeting 3/10/97
NATURAL RESOURCE COMMISSION[571]
Deer depredation, 106.11, ARC 7574A, IAB 10/8/97, ARRC meeting 11/10/97
PUBLIC HEALTH DEPARTMENT[641]
Decision-making assistance program and parental notification of intent to terminate a pregnancy through abortion, ch 89,
ARC 6896A, IAB 12/4/96, ARRC meeting 1/6/97
PUBLIC SAFETY DEPARTMENT[661]
Direct breath testing, 7.2, ARRC meeting 10/14/97
REVENUE AND FINANCE DEPARTMENT[701]
Motor vehicle use tax on long-term leases, 26.68, 31.4, 31.5, 32.11, 34.5, 34.9, 34.10, ARC 6974A, IAB 1/1/97, ARRC meeting 1/7/97
SECRETARY OF STATE[721]
City and county election ordinances--initiative and referendum, 21.30, 21.31, ARC 7295A, IAB 6/18/97, ARRC meeting 8/19/97
TELECOMMUNICATIONS AND TECHNOLOGY COMMISSION[751]
Access to facilities, dial-up from remote locations, ARC 7578A, IAB 10/8/97, ARRC meeting 11/10/97
TRANSPORTATION DEPARTMENT[761]
Handicapped parking, 411.3, ARRC meeting 2/10/97
POW license plates--retention and renewal by surviving spouse, ARRC meeting 10/14/97
MISCELLANEOUS

Joe Royce's salary--one step increase, effective 6/27/97, ARRC meeting 7/8/97
Approved paying $350 NAARR membership dues, ARRC meeting 9/8/97
Approved proposed budget for FY '98-99, ARRC meeting 11/10/97

PUBLIC HEARINGS

To All Agencies:

The Administrative Rules Review Committee voted to request that Agencies comply with Iowa Code section 17A.4(1)"b" by allowing the opportunity for oral presentation (hearing) to be held at least twenty days after publication of Notice in the Iowa Administrative Bulletin.




ENVIRONMENTAL PROTECTION COMMISSION[567]



Water wells; wastewater treatment
and disposal systems,
ch 49, 60.3(2), 64.15(3), ch 69
IAB 11/19/97 ARC 7652A
Conference Rooms 4E and 4W
Wallace State Office Bldg.
Des Moines, Iowa
December 9, 1997
9 a.m. to 12 noon

Atlantic Public Library
507 Poplar
Atlantic, Iowa
December 10, 1997
1 to 4 p.m.

Siebens Forum--Room 9
Buena Vista University
4th and Grand Avenue
Storm Lake, Iowa
December 11, 1997
9 a.m. to 12 noon

Amana Bldg., Iowa Hall, Rooms A-B
Kirkwood Community College
6301 Kirkwood Blvd. S.W.
Cedar Rapids, Iowa
December 15, 1997
1 to 4 p.m.

City Council Chambers
112 S. Main St.
Fairfield, Iowa
December 16, 1997
9 a.m. to 12 noon

Muse-Norris Conference Room
North Iowa Area Community College
Mason City, Iowa
December 17, 1997
12 noon to 3 p.m.
ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]


Corporate contributions
IAB 12/3/97 ARC 7683A
Room 19
State Capitol Bldg.
Des Moines, Iowa
December 11, 1997
10 a.m. to 12 noon
INSPECTIONS AND APPEALS DEPARTMENT[481]


Health care facilities--infection
control,
57.11, 57.12(1), 58.10(8), 58.11(1),
59.12(11), 59.13(1), 62.9(2), 62.19,
63.9, 63.11(1), 65.9(2), 65.21(4)
IAB 12/3/97 ARC 7687A
Director's Conference Room
Sixth Floor
Lucas State Office Bldg.
Des Moines, Iowa
December 23, 1997
1 p.m.
Health care facilities--dependent
adult abuse and criminal history
record checks for employees,
57.12(3), 58.11(3), 59.13(3),
62.9(5), 63.11(3), 64.34, 65.9(5)
IAB 12/3/97 ARC 7685A
(See also ARC 7686A herein)
Director's Conference Room
Sixth Floor
Lucas State Office Bldg.
Des Moines, Iowa
December 23, 1997
1 p.m.
LABOR SERVICES DIVISION[875]


Boilers and pressure vessels,
rescind 347--chs 41, 42, 49;
adopt 875--chs 200 to 203;
transfer and amend 347--chs 43
to 48 to 875--chs 204 to 209
IAB 11/19/97 ARC 7666A
1000 E. Grand Ave.
Des Moines, Iowa
December 11, 1997
3 p.m.
(If requested)
NATURAL RESOURCE COMMISSION[571]


County, city, and private open spaces,
33.50
IAB 12/3/97 ARC 7690A
Conference Room--4th Floor
Wallace State Office Bldg.
Des Moines, Iowa
December 23, 1997
10 a.m.
Wild turkey spring hunting,
98.14
IAB 12/3/97 ARC 7689A
Wildlife Bureau Office
Wallace State Office Bldg.
Des Moines, Iowa
December 29, 1997
10 a.m.
PETROLEUM UST FUND BOARD, IOWA COMPREHENSIVE[591]


Remedial and insurance claims,
11.1(3)"b"
IAB 11/19/97 ARC 7668A
Conference Room--6th Floor
Lucas State Office Bldg.
Des Moines, Iowa
December 9, 1997
10 a.m.
PROFESSIONAL LICENSURE DIVISION[645]


Cosmetology,
60.2(2)"a," 60.5, 60.6(3), 60.7(2),
60.10(1), 60.12, 61.6, 62.1
IAB 11/19/97 ARC 7663A
Room 19--Lower Level
Capitol Bldg.
Des Moines, Iowa
December 9, 1997
1 to 3 p.m.
SUBSTANCE ABUSE COMMISSION[643]


Assessment and evaluation,
3.25
IAB 11/19/97 ARC 7662A
(ICN Network)

Continuing Ed. Bldg.--ICN Room 2
Iowa Western Community College
2700 College Rd.
Council Bluffs, Iowa
December 11, 1997
10 a.m. to 12 noon

ICN Room 326--3rd Floor
Lucas State Office Bldg.
Des Moines, Iowa
December 11, 1997
10 a.m. to 12 noon

Larson Hall--Room 60
Muscatine Community College
152 Colorado St.
Muscatine, Iowa
December 11, 1997
10 a.m. to 12 noon

Buena Vista University--Room 7A
610 W. 4th St.
Storm Lake, Iowa
December 11, 1997
10 a.m. to 12 noon

Pinecrest Office Bldg.
1407 Independence Ave.
Waterloo, Iowa
December 11, 1997
10 a.m. to 12 noon
SUBSTANCE ABUSE COMMISSION[643]
(Cont'd)


OWI law, ch 8
IAB 11/19/97 ARC 7664A
(ICN Network)

Continuing Ed. Bldg.--ICN Room 2
Iowa Western Community College
2700 College Rd.
Council Bluffs, Iowa
December 11, 1997
10 a.m. to 12 noon

ICN Room 326--3rd Floor
Lucas State Office Bldg.
Des Moines, Iowa
December 11, 1997
10 a.m. to 12 noon

Larson Hall--Room 60
Muscatine Community College
152 Colorado St.
Muscatine, Iowa
December 11, 1997
10 a.m. to 12 noon

Buena Vista University--Room 7A
610 W. 4th St.
Storm Lake, Iowa
December 11, 1997
10 a.m. to 12 noon

Pinecrest Office Bldg.
1407 Independence Ave.
Waterloo, Iowa
December 11, 1997
10 a.m. to 12 noon
TRANSPORTATION DEPARTMENT[761]


OWI and implied consent,
620.5, 620.15, 620.16
IAB 11/19/97 ARC 7644A
Conference Room--Lower Level
Park Fair Mall
100 Euclid Ave.
Des Moines, Iowa
December 11, 1997
10 a.m.
(If requested)
WORKFORCE DEVELOPMENT BOARD/SERVICES DIVISION[877]


Iowa job training partnership
program, rescind 345--ch 14;
adopt 877--ch 12
IAB 11/19/97 ARC 7658A
Room 135
150 Des Moines St.
Des Moines, Iowa
December 9, 1997
10 a.m.

CITATION of Administrative Rules

The Iowa Administrative Code shall be cited as (agency identification number) IAC
(chapter, rule, subrule, lettered paragraph, or numbered subparagraph).

441 IAC 79 (Chapter)

441 IAC 79.1(249A) (Rule)

441 IAC 79.1(1) (Subrule)

441 IAC 79.1(1)"a" (Paragraph)

441 IAC 79.1(1)"a"(1) (Subparagraph)

The Iowa Administrative Bulletin shall be cited as IAB (volume), (number), (publication
date), (page number), (ARC number).

IAB Vol. XII, No. 23 (5/16/90) p. 2050, ARC 872A

AGENCY IDENTIFICATION NUMBERS

Due to reorganization of state government by 1986 Iowa Acts, chapter 1245, it was necessary to revise the agency identification numbering system, i.e., the bracketed number following the agency name.

"Umbrella" agencies and elected officials are set out below at the left-hand margin in CAPITAL letters.

Divisions (boards, commissions, etc.) are indented and set out in lowercase type under their statutory "umbrellas."

Other autonomous agencies which were not included in the original reorganization legislation as "umbrella" agencies are included alphabetically in small capitals at the left-hand margin, e.g., BEEF INDUSTRY COUNCIL, IOWA[101].

The following list will be updated as changes occur:

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Agricultural Development Authority[25]

Soil Conservation Division[27]

ATTORNEY GENERAL[61]

AUDITOR OF STATE[81]

BEEF INDUSTRY COUNCIL, IOWA[101]

BLIND, DEPARTMENT FOR THE[111]

CITIZENS' AIDE[141]

CIVIL RIGHTS COMMISSION[161]

COMMERCE DEPARTMENT[181]

Alcoholic Beverages Division[185]

Banking Division[187]

Credit Union Division[189]

Insurance Division[191]

Professional Licensing and Regulation Division[193]

Accountancy Examining Board[193A]

Architectural Examining Board[193B]

Engineering and Land Surveying Examining Board[193C]

Landscape Architectural Examining Board[193D]

Real Estate Commission[193E]

Real Estate Appraiser Examining Board[193F]

Savings and Loan Division[197]

Utilities Division[199]

CORRECTIONS DEPARTMENT[201]

Parole Board[205]

CULTURAL AFFAIRS DEPARTMENT[221]

Arts Division[222]

Historical Division[223]

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

City Development Board[263]

Iowa Finance Authority[265]

EDUCATION DEPARTMENT[281]

Educational Examiners Board[282]

College Student Aid Commission[283]

Higher Education Loan Authority[284]

Iowa Advance Funding Authority[285]

Libraries and Information Services Division[286]

Public Broadcasting Division[288]

School Budget Review Committee[289]

EGG COUNCIL[301]

ELDER AFFAIRS DEPARTMENT[321]

EMPLOYMENT SERVICES DEPARTMENT[341]

Job Service Division[345]

Labor Services Division[347]

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

EXECUTIVE COUNCIL[361]

FAIR BOARD[371]

GENERAL SERVICES DEPARTMENT[401]

HUMAN INVESTMENT COUNCIL[417]

HUMAN RIGHTS DEPARTMENT[421]

Community Action Agencies Division[427]

Criminal and Juvenile Justice Planning Division[428]

Deaf Services Division[429]

Persons With Disabilities Division[431]

Latino Affairs Division[433]

Status of Blacks Division[434]

Status of Women Division[435]

HUMAN SERVICES DEPARTMENT[441]

INSPECTIONS AND APPEALS DEPARTMENT[481]

Employment Appeal Board[486]

Foster Care Review Board[489]

Racing and Gaming Commission[491]

State Public Defender[493]

INTERNATIONAL NETWORK ON TRADE (INTERNET)[497]

LAW ENFORCEMENT ACADEMY[501]

LIVESTOCK HEALTH ADVISORY COUNCIL[521]

MANAGEMENT DEPARTMENT[541]

Appeal Board, State[543]

City Finance Committee[545]

County Finance Committee[547]

NARCOTICS ENFORCEMENT ADVISORY COUNCIL[551]

NATIONAL AND COMMUNITY SERVICE, IOWA COMMISSION ON[555]

NATURAL RESOURCES DEPARTMENT[561]

Energy and Geological Resources Division[565]

Environmental Protection Commission[567]

Natural Resource Commission[571]

Preserves, State Advisory Board[575]

PERSONNEL DEPARTMENT[581]

PETROLEUM UNDERGROUND STORAGE TANK FUND
BOARD, IOWA COMPREHENSIVE[591]

PREVENTION OF DISABILITIES POLICY COUNCIL[597]

PUBLIC DEFENSE DEPARTMENT[601]

Emergency Management Division[605]

Military Division[611]

PUBLIC EMPLOYMENT RELATIONS BOARD[621]

PUBLIC HEALTH DEPARTMENT[641]

Substance Abuse Commission[643]

Professional Licensure Division[645]

Dental Examiners Board[650]

Medical Examiners Board[653]

Nursing Board[655]

Pharmacy Examiners Board[657]

PUBLIC SAFETY DEPARTMENT[661]

RECORDS COMMISSION[671]

REGENTS BOARD[681]

Archaeologist[685]

REVENUE AND FINANCE DEPARTMENT[701]

Lottery Division[705]

SECRETARY OF STATE[721]

SEED CAPITAL CORPORATION, IOWA[727]

SESQUICENTENNIAL COMMISSION, IOWA STATEHOOD[731]

SHEEP AND WOOL PROMOTION BOARD, IOWA[741]

TELECOMMUNICATIONS AND TECHNOLOGY COMMISSION, IOWA[751]

TRANSPORTATION DEPARTMENT[761]

Railway Finance Authority[765]

TREASURER OF STATE[781]

UNIFORM STATE LAWS COMMISSION[791]

VETERANS AFFAIRS COMMISSION[801]

VETERINARY MEDICINE BOARD[811]

VOTER REGISTRATION COMMISSION[821]

WALLACE TECHNOLOGY TRANSFER FOUNDATION[851]

WORKFORCE DEVELOPMENT DEPARTMENT[871]

Industrial Services Division[873]

Labor Services Division[875]

Workforce Development Board and
Workforce Development Center Administration Division[877]

NOTICES

ARC 7684A

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 159.5(11) and 192.102, the Iowa Department of Agriculture and Land Stewardship gives Notice of Intended Action to amend Chapter 68, "Dairy," Iowa Administrative Code.

These proposed rules are intended to implement 1997 Iowa Acts, Senate File 451, relating to the licensing and regulation of milk haulers and milk graders. These proposed rules specify the conditions for licensing as well as the proper tools required, techniques to be used, and sanitation needed to operate as a milk hauler or a milk grader.

Any interested person may make written suggestions or comments on the following proposed rules prior to 4:30 p.m. on December 23, 1997. Such written material should be directed to Jake Wakefield, Chief of the Dairy Products Control Bureau, Iowa Department of Agriculture and Land Stewardship, Wallace State Office Building, Des Moines, Iowa 50319. Comments may also be faxed to (515)281-8888.

These proposed rules are intended to implement Iowa Code chapter 192.

Reserve rules 21--68.37 to 21--68.39 and adopt the following new rules:

MILK TANKER, MILK HAULER, MILK GRADER,
CAN MILK TRUCK BODY

21--68.40(192) Definitions.

"Bulk milk tanker" means a mobile bulk container used to transport milk or fluid milk products from farm to plant or from plant to plant. This includes both the over-the-road semi tankers and the tankers that are permanently mounted on a motor vehicle.

"Bulk tank" means a bulk tank used to cool and store milk on a farm.

"Can milk truck body" means a truck body permanently mounted on a motor vehicle for the purpose of picking up milk in milk cans from dairy farms for delivery to a milk plant.

"Dairy farm" means any place where one or more cows, sheep or goats are kept for the production of milk.

"Milk" means the lacteal secretion of cows, sheep or goats, and includes dairy products.

"Milk can" means a sanitary-designed, seamless, stainless steel can, manufactured from approved material for the purpose of storing raw milk on can milk farms, to be picked up and loaded onto a can milk truck body.

"Milk grader" means a person who collects a milk sample from a bulk tank or a bulk milk tanker. This includes dairy industry field personnel and dairy industry milk intake personnel.

"Milk hauler" means any person who collects milk at a dairy farm for delivery to a milk plant.

"Milk plant" means any facility where milk is processed, received or transferred.

"Milk producer" means any person who owns or operates a dairy farm.

21--68.41(192) Bulk milk tanker license required.

68.41(1) A milk tanker shall not operate in Iowa without a valid license.

68.41(2) The license application shall include a description of the bulk milk tanker, including the make, serial number, capacity and the address at which the bulk milk tanker is customarily kept when not being used. The applicant shall also furnish any other information which the department reasonably requires for identification and licensing.

68.41(3) A license pursuant to this rule expires June 30 annually and is not transferable between tankers.

68.41(4) The department may initiate an enforcement action against a person operating a bulk milk tanker if the department determines that the person has operated without a license or has procured another person to operate without a license.

68.41(5) The cost of the bulk milk tanker license is $25 per year.

68.41(6) If the bulk milk tanker and accessories have been inspected within the last 12 months and carry a current license, the bulk tanker renewal license application and a return envelope will be mailed to the owner of the tanker in April annually by the dairy products control bureau office in Des Moines.

21--68.42(192) Bulk milk tanker construction. A bulk milk tanker, including equipment and accessories, shall be of a sanitary design and construction and shall comply with "3-A Sanitary Standards for Stainless Steel Automotive Milk and Milk Products Transportation Tanks for Bulk Delivery and/or Farm Pick-Up Service," Number 05-14 (November 1, 1989), published jointly by the International Association of Milk, Food and Environmental Sanitarians, Inc. and the Food and Drug Administration, Public Health Service, United States Department of Health and Human Services.

21--68.43(192) Bulk milk tanker cleaning and maintenance.

68.43(1) A bulk milk tanker, including equipment and accessories, shall be thoroughly cleaned immediately after each day's use and shall be kept clean and in good repair.

68.43(2) All product contact surfaces on a bulk milk tanker, including all product contact surfaces of equipment and accessories used on the tanker, shall be thoroughly cleaned.

68.43(3) External surfaces of a bulk milk tanker shall also be thoroughly cleaned.

21--68.44(192) Bulk tanker sanitization. All product contact surfaces on a bulk milk tanker, including equipment and accessories, shall be thoroughly sanitized immediately after cleaning.

21--68.45(192) Bulk milk tanker cleaning facility.

68.45(1) A bulk milk tanker shall be cleaned and sanitized in a fully enclosed facility.

68.45(2) The facility shall have an impervious drained floor and shall be equipped with adequate hot and cold water under pressure, a wash vat, sanitizing facilities and equipment storage racks.

68.45(3) A bulk milk tanker may be cleaned and sanitized in the same room where milk is being received from bulk milk tankers.

21--68.46(192) Bulk milk tanker cleaning tag.

68.46(1) When a bulk milk tanker has been thoroughly cleaned and sanitized, but is not returning to the same plant, the dairy receiving operator shall attach a tag showing all of the following:

a. The date on which the tanker was cleaned and sanitized.

b. The name and location of the facility where the tanker was cleaned and sanitized.

c. The legible signature or initials of the person who cleaned and sanitized the tanker.

d. The type or name of the chemicals used to clean and sanitize.

68.46(2) The tag shall be attached to the outlet valve or inside the pump cabinet of the tanker.

68.46(3) The tag shall not be removed until the tanker is cleaned and sanitized again.

68.46(4) All unused tags shall be maintained in a secure location so they cannot be easily used for unauthorized purposes.

21--68.47(192) Dairy plant, receiving station or transfer station records.

68.47(1) Records shall be kept at all plants where tankers are cleaned and sanitized.

68.47(2) The records shall be kept for at least 90 days.

68.47(3) The records shall include all of the following:

a. The name and address of the facility where the tanker was cleaned and sanitized.

b. The date on which the tanker was cleaned and sanitized.

c. The legible name or initials of the person who cleaned and sanitized the tanker.

21--68.48(192) Milk hauler license required.

68.48(1) A person shall not engage in the activities of being a milk hauler without a valid milk hauler license.

68.48(2) The cost of a milk hauler license is $10.

68.48(3) A milk hauler license obtained pursuant to this rule expires June 30 annually and is not transferable between persons.

68.48(4) As a condition of relicensing, a milk hauler license renewal applicant shall have had an on-the-farm evaluation of milk pickup procedures by a department inspector within two years immediately prior to relicensure and shall have attended a milk hauler school within three years immediately prior if a hauler school was made available within that three-year period.

68.48(5) If the milk hauler with a current license has had an on-the-farm evaluation within the last two years and has attended a state milk hauler training school within the last three years, a milk hauler renewal application and a return envelope will be mailed to the milk hauler in April annually by the dairy products control bureau office in Des Moines.

68.48(6) The department may take action against a person if the department determines that the person has engaged in activities requiring a milk hauler license without a valid milk hauler license or has procured another person to operate without a license.

21--68.49(192) New milk hauler license applicant.

68.49(1) The department may issue a 45-day interim license to a new applicant for a milk hauler license if the department determines that the new applicant has been trained by an industry field person who holds a milk hauler license.

68.49(2) An application for an interim license may be made by calling the dairy products control bureau office in Des Moines at (515)281-3545 and requesting the interim license and the Milk Hauler's Manual. The applicant shall give the name of the person who has provided the training and the telephone number where that person can be reached for verification. The license may be issued after verification of the training and verification of the trainer's license.

68.49(3) The cost of the interim license is $10 and will be used for the payment of the regular milk hauler license upon approval by the department.

68.49(4) An application form for the regular milk hauler license will be sent with the interim license. During the 45-day interim period, in order to receive a regular milk hauler license, the applicant shall do both of the following:

a. Obtain a written examination based upon the Milk Hauler's Manual, given by a department inspector.

b. Obtain a written, on-the-farm evaluation of milk pickup procedures by a department inspector on a "Bulk Milk Pickup Tanker, Hauler Report and Sampler Evaluation Form" that was filled out by the department inspector at the time of the evaluation. This form shall be sent to the Des Moines office with the completed application and the $10 license fee (if the fee has not been paid).

68.49(5) The department shall grant or deny a license application within the 45-day interim period.

68.49(6) The department shall not issue a milk hauler license if court action is in progress against the applicant for operating without an interim or regular license.

21--68.50(192) Supplies required for milk collection and sampling. A milk hauler who collects milk in bulk from a dairy farm shall have all of the following supplies available:

1. An adequate supply of sample containers.

2. A sample dipper.

3. A sample dipper storage container.

4. A sanitizing solution in the sample dipper storage container of 100 ppm of chlorine or equivalent.

5. An insulated carrying case with a rack to hold samples.

6. A certified thermometer, accurate to plus or minus 2 degrees F, that can be used to check the temperature of the milk in the farm bulk tank, the accuracy of the farm bulk tank thermometers and the temperature of the commingled load.

7. A marking device to identify samples collected.

8. A watch or timing device.

9. An adequate supply of forms needed for milk collection and records.

10. A writing device to write on the forms and records.

11. Access to an adequate supply of single-service paper towels.

21--68.51(192) Milk hauler sanitization.

1. A milk hauler shall wear clean clothing.

2. A milk hauler shall maintain a high degree of personal cleanliness.

3. A milk hauler shall observe good hygienic practices.

4. A milk hauler shall not measure, sample or collect milk if the hauler has a discharging or infected wound or lesion on the hauler's hands or exposed arms.

21--68.52(192) Examining milk by sight and smell.

68.52(1) Before a milk hauler receives or collects milk from a dairy farm, the hauler shall examine the milk by sight and smell and shall reject all milk that has any of the following characteristics:

1. Objectionable odor.

2. Abnormal appearance and consistency.

3. Visibly adulterated.

68.52(2) A milk hauler who rejects milk from a farm shall collect only a sample of the rejected milk.

68.52(3) If a dairy farmer disputes a milk hauler's rejection of the milk, the milk hauler shall contact the operator of the dairy plant to which the milk would ordinarily be delivered, and the plant operator or the plant field person shall examine the rejected milk to determine whether the milk was properly rejected.

21--68.53(192) Milk hauler hand washing. A milk hauler shall wash and dry hands before performing any of the following:

1. Using a thermometer.

2. Measuring the milk.

3. Collecting a milk sample.

21--68.54(192) Milk temperature.

68.54(1) Before a milk hauler collects milk at a dairy farm, the milk hauler shall record the temperature of the milk to be collected.

68.54(2) If the milk is collected more than two hours after the last milking, the milk hauler shall reject the milk if the milk temperature exceeds 45 degrees F or 7 degrees C.

68.54(3) If milk from two or more milkings is collected within two hours of the last milking, the milk hauler shall reject the milk if the milk temperature exceeds 50 degrees F or 10 degrees C.

68.54(4) If the farm bulk tank thermometer is working, at least once each month, and more often if necessary, a milk hauler shall check the accuracy of each dairy farm bulk tank thermometer by taking the temperature of the milk in the bulk tank with the milk hauler's thermometer and shall record the temperature on the milk pickup record card. This procedure shall be done at every pickup if the farm bulk tank thermometer is not working.

68.54(5) Before a milk hauler uses the milk hauler's thermometer to take the temperature of the milk in a bulk tank, the hauler shall sanitize the stem of the thermometer in 100 ppm chlorine or its equivalent for a minimum of 30 seconds.

68.54(6) A milk hauler shall immediately notify the milk producer and the dairy field person if the dairy farm bulk tank is not cooling properly or if the bulk tank thermometer is not recording the temperatures accurately.

21--68.55(192) Connecting the milk hose.

68.55(1) Before the milk hauler connects a tanker hose to a bulk tank, the hauler shall examine the fittings of the tanker hose and the bulk tank outlet and shall clean and sanitize as necessary.

68.55(2) The milk hauler shall attach the milk hose to the bulk tank outlet in a manner that does not contaminate the hose or the hose cap.

68.55(3) The hose shall be connected through the milk room hose port.

21--68.56(192) Measuring the milk in the bulk tank.

68.56(1) Before milk is transferred from a bulk tank to a bulk milk tanker, the milk hauler shall measure the amount of milk in the bulk tank.

68.56(2) The milk hauler shall measure the milk using a clean gauge rod or other measuring device that is specifically designed and calibrated to measure milk in the bulk tank.

68.56(3) Immediately before using the gauge rod or measuring device, the milk hauler shall wipe it dry with a clean, single-service disposable towel.

68.56(4) A milk hauler shall not measure the amount of milk in a dairy farm bulk tank until the milk in the tank is motionless.

68.56(5) If the milk is being agitated, the milk hauler shall turn off the agitator and wait for the milk to become completely motionless before measuring the milk.

68.56(6) After measuring the milk with a gauge rod or other device, the milk hauler shall use that measurement to calculate the weight or volume of milk in the bulk tank with the manufacturer's conversion chart.

68.56(7) The milk hauler shall record that weight or volume on a written collection record.

21--68.57(192) Milk sample for testing.

68.57(1) Before milk is transferred from a dairy farm bulk tank to a bulk milk tanker, a milk hauler shall collect a representative sample of that milk from the dairy farm bulk tank for testing. If there is more than one bulk tank, a sample from each tank shall be taken and identified.

68.57(2) The collected sample shall be filled only 3/4 full in the sample container so that the sample can be agitated in the lab.

21--68.58(192) Milk collection record.

68.58(1) Whenever a milk hauler collects a milk shipment from a dairy farm, the milk hauler shall make a written record for that shipment.

68.58(2) One copy of the collection record shall be posted in a dairy farm milk room.

68.58(3) The collection record shall be initialed by the milk hauler.

68.58(4) The record shall include all of the following:

1. The milk producer identification number.

2. The milk hauler's initials.

3. The date when the milk was sampled and collected.

4. The temperature of the milk when collected.

5. The weight or volume of milk collected as determined by the milk hauler.

21--68.59(192) Loading the milk from the bulk tank to the milk tanker.

68.59(1) After a milk hauler has sampled milk from the dairy farm bulk tank and prepared a complete collection rec-ord, the hauler may transfer the milk from that bulk tank to the milk tanker.

68.59(2) A milk hauler shall not collect milk from any other container on a dairy farm other than from a bulk tank.

68.59(3) Partial pickup of milk shall be avoided whenever possible.

68.59(4) After a milk hauler has collected all of the milk from a bulk tank, the milk hauler shall disconnect the milk hose from the bulk tank, cap the hose and return the hose to its cabinet in the bulk milk tanker.

68.59(5) The milk hauler shall inspect the dairy farm bulk tank for abnormal sediments and shall report any abnormal sediments to the dairy producer and the dairy plant field person.

68.59(6) After the milk hauler has disconnected the milk hose and inspected the empty farm bulk tank for abnormal sediments, the milk hauler shall rinse the bulk tank with cold or lukewarm water unless the bulk tank is self-cleaning and includes a pre-rinse cycle as part of the self-cleaning process.

21--68.60(192) Milk samples required for testing.

68.60(1) The milk hauler shall collect a sample of milk from each dairy farm bulk tank before that milk is transferred to a bulk tanker.

68.60(2) A milk sample collected from a dairy farm bulk tank shall not be commingled with a sample collected from any other bulk tank.

21--68.61(192) Bulk milk sampling procedures. A milk hauler shall comply with all of the following procedures when collecting a milk sample:

1. Shall collect the sample after the bulk tank milk has been thoroughly agitated.

2. Shall agitate a bulk tank of less than a 1000 gallon size, in the presence of the milk hauler, for at least five minutes before the milk sample is taken.

3. Shall agitate a bulk tank of a 1000 gallon size or larger, in the presence of the milk hauler for at least ten minutes before the milk sample is taken. If there are stamped printed instructions on the bulk tank, giving explicit agitation instructions that are different than ten minutes, the bulk tank shall then be agitated according to the written instructions.

4. Shall collect the sample using a sanitized sample dipper that is manufactured for the purpose of taking a milk sample from a bulk tank. The milk hauler shall not use the sample container to collect a milk sample.

5. Shall rinse the sanitized sample dipper in the milk, in the bulk tank, at least two times before the dipper is used to collect the sample.

6. After rinsing the sample dipper in the milk, shall pour the sample from the dipper into a sample container until the sample container is 3/4 full and shall securely close the sample container.

7. Shall not fill the sample container over the bulk tank, but shall fill the sample container off to the side of the bulk tank, over the floor of the milk room.

8. Shall handle the sample container and cap aseptically.

9. After collecting the milk sample, shall immediately place the sample on a rack or floater, on ice in the insulated sample container, and rinse the sample dipper with clean potable water.

21--68.62(192) Temperature control sample.

68.62(1) The milk hauler shall collect two milk samples at the first farm on each milk route.

68.62(2) One of the two samples collected from the first farm shall be used for a temperature control (TC) sample.

68.62(3) The temperature control (TC) sample shall remain in the rack with the other samples pertaining to that load.

68.62(4) The temperature control (TC) sample container shall be marked in a legible manner identifying the sample as the TC sample and shall also be marked with the other following information:

1. The producer identification number.

2. The initials of the milk hauler.

3. The date the sample was collected.

4. The time the sample was collected.

5. The temperature of the milk in the farm bulk tank from which the TC sample was collected.

21--68.63(192) Producer sample identification. Immediately before a milk hauler collects a milk sample, but before the milk hauler opens the sample container, the milk hauler shall, unless that sample container is prelabeled with the producer information, clearly and indelibly label the sample container with all of the following information:

1. The producer identification number.

2. The date when the sample was collected.

3. The temperature of the milk in the bulk tank.

21--68.64(192) Care and delivery of producer milk samples.

68.64(1) Immediately after a milk hauler collects a milk sample, the milk hauler shall place the sample container in a clean, refrigerated carrying case in which the temperature is kept at from 32 to 40 degrees F.

68.64(2) If the sample containers are packed in ice or cold water to keep the samples refrigerated, the ice or water shall cover no more than 3/4 of each sample container.

68.64(3) The milk hauler shall promptly deliver the samples to the place designated by the milk purchaser.

21--68.65(192) Milk sample carrying case. The carrying case shall be constructed to have all of the following characteristics:

1. Shall be constructed of ridged metal or plastic.

2. Shall be effectively insulated and refrigerated to keep the samples at the required temperature.

3. Shall have a rack or floater designed to hold samples in the upright position.

21--68.66(192) Bulk milk delivery.

68.66(1) If milk is unloaded or transferred at any location other than a licensed facility, the person having custody of the milk shall notify the department of that unloading or transfer before that milk is processed or shipped to any other location.

68.66(2) Air entering a bulk milk tanker when the tanker is unloading shall be filtered to prevent contamination of the milk.

21--68.67(192) False samples or records. The department may take enforcement action against a person doing or conspiring to do any of the following:

1. Falsely identify any milk sample.

2. Submit a false or manipulated milk sample.

3. Submit a milk sample collected in violation of this chapter.

4. Misrepresent the amount of milk collected from a dairy farm.

5. Misrepresent or falsify any record or report required under this chapter.

21--68.68(192) Violations prompting immediate suspension. A person violating any of the following shall have the person's milk hauler license suspended for the first full five weekdays following the violation. Administering the violation in this manner will allow a licensed field person to ride with a suspended milk hauler and to perform all of the bulk milk pickup procedures which the suspended milk hauler shall not perform while the license is suspended. This rule will also allow a dairy co-op or a proprietary establishment the ability to recover the cost of the field person employed by the business establishment while the employee is working with the suspended milk hauler.

1. 68.43(1) and (2). Cleaned bulk milk tanker and accessories.

2. 68.44. Sanitized bulk milk tanker and accessories.

3. 68.50. Bulk milk hauling supplies.

4. 68.56(1), (4), (5), (6), and (7). Measuring the milk in the bulk tank.

5. 68.57(1). Collecting a milk sample from a bulk tank.

6. 68.58(1), (2), (3), and (4). Milk collection record.

7. 68.59(2) and (3). Loading bulk tank milk.

8. 68.60(1) and (2). Milk samples required for testing.

9. 68.61"1" to "9." Bulk milk sampling procedures.

10. 68.63"1" to "3." Producer sample identification.

11. 68.64(1) and (2). Care of samples.

12. 68.67(1)"1" to "5." False samples or records.

21--68.69(192) Milk grader license required.

68.69(1) A person shall not be employed as a dairy field person or a milk intake person and shall not collect a raw milk sample from a farm bulk tank or collect a load sample from a bulk milk tanker in Iowa without first being evaluated by a department dairy inspector and making application for a milk grader license. A milk grader license will not be needed by a temporary milk plant intake person that is under the direct supervision of a licensed milk grader.

68.69(2) The department may take an enforcement action against a person engaged in activities of a dairy field person or milk intake person or a person collecting milk samples from a farm bulk tank or from a bulk milk tanker if the department determines that the applicant has engaged in such activities without first obtaining a valid Iowa milk grader license or a valid 45-day interim license or has procured another person to operate without a license.

68.69(3) The cost of a milk grader license is $10.

68.69(4) A milk grader license obtained pursuant to this rule expires June 30 annually and is not transferable between persons.

68.69(5) As a condition of relicensing.

a. A milk grader license renewal applicant for collecting a milk sample from a farm bulk tank shall have had an on-the-farm evaluation of milk collecting and care of milk sample procedures by a department inspector within two years immediately prior to relicensure and shall have attended a milk hauler school within three years immediately prior to relicensure, if a hauler school was made available within that three-year period.

b. A milk grader license renewal applicant for collecting a milk sample from a bulk milk tanker at a milk plant shall have had an in-the-plant evaluation of milk collecting procedures by a department inspector within the last two years prior to relicensure.

c. If the milk grader has had an evaluation within the last two years and, if required, has attended a milk hauler training school within the last three years, a milk hauler renewal application and a return envelope will be mailed annually in April to the milk grader by the dairy products control bureau office in Des Moines.

21--68.70(192) New milk grader license applicant.

68.70(1) The department may issue a 45-day interim license to a new applicant for a milk grader license if the department determines that the new applicant has been trained by a licensed milk grader.

68.70(2) An applicant for a milk grader license to collect a milk sample from a bulk tank shall follow the procedures as outlined in subrules 68.49(2) to 68.49(4).

68.70(3) An applicant for a milk grader license to collect a milk sample from a bulk milk tanker at a milk plant shall contact the dairy products control bureau office in Des Moines, telephone (515)281-3545, requesting a sampling procedure review by a department inspector and a milk grader application.

The inspector will fill out "Inspection Form Short Form 009-0293/TS" for verification of the sampling procedure review and give a signed copy to the applicant. The applicant shall mail the signed copy, the completed application and the $10 license fee to the Dairy Products Control Bureau Office for a "Restricted Milk Grader License."

21--68.71(192,194) Can milk truck body.

68.71(1) A can milk truck body used for the purpose of picking up milk in milk cans from dairy farms for delivery to a milk plant shall not operate in the state of Iowa without first being issued a valid license from the department. This rule is intended to include can milk truck bodies that are commercially licensed in Iowa.

68.71(2) The can milk truck body vehicle license applicant shall include a description of the body, the make, model, year and color of the truck, a description of the can truck body, including the make, serial number, can capacity and the address at which the can milk body truck is customarily kept when not being used. The applicant shall also furnish any other information which the department reasonably requires for identification and licensing.

68.71(3) A license pursuant to this rule expires June 30 annually and is not transferable between truck bodies.

68.71(4) The department may take enforcement action against a person operating a can milk truck body if the department determines that the person has operated without a license or a person has procured another person to operate without a license.

68.71(5) The cost of the can milk truck body license is $25 per year.

68.71(6) The applicant shall have received an annual inspection by a department inspector and shall make the vehicle available for inspection prior to receiving the license.

ARC 7672A

ENGINEERING AND LAND SURVEYING EXAMINING BOARD[193C]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 542B.6, the Engineering and Land Surveying Examining Board gives Notice of Intended Action to amend Chapter 1, "Administration," and Chapter 4, "Discipline and Professional Conduct of Licensees," Iowa Administrative Code.

These amendments develop procedures on license denial, allow for a single peer review consultant, and remove the five-year discipline period for closed cases.

Any interested person may make written or oral suggestions or comments on these proposed amendments on or before December 23, 1997. Comments should be directed to Roger Halvorson, Acting Executive Secretary, Iowa Engineering and Land Surveying Examining Board at 1918 S.E. Hulsizer Road, Ankeny, Iowa 50021, or by telephoning (515)281-5602.

These amendments are intended to implement Iowa Code sections 542B.14 and 542B.22.

The following amendments are proposed.

ITEM 1. Amend 193C--Chapter 1 by adopting new rule 193C--1.11(542B) as follows:

193C--1.11(542B) Hearing on license denial. If the board, upon receipt of a complete and proper application for initial license or licensure by comity, accompanied by the proper fee, shall deny licensure to the applicant, the executive secretary shall send written notice to the applicant by regular first-class mail identifying the basis for license denial.

1.11(1) An applicant denied licensure may request a hearing before the board within 30 days of the date the notice of license denial is mailed. A request for hearing must be in writing and is deemed made on the date of the United States Postal Service postmark or the date of personal service. The request for hearing shall specify the grounds under which the applicant contends the board erred in denying licensure. If a request for hearing is timely made, the board shall issue a notice of hearing and conduct a contested case hearing.

1.11(2) Hearings on license denial shall be open to the public. The burden of presenting evidence and information or documents to support the applicant's position shall be the responsibility of the applicant.

1.11(3) The board, after a hearing on license denial, may grant or deny the application for licensure. If denied, the board shall state the reasons for denial of the license and may state conditions under which the application for licensure could be granted, if applicable.

1.11(4) The notice of license denial, request for hearing, notice of hearing, and order are open records available for inspection and copying in accordance with Iowa Code chapter 22. Copies may be provided to the media, the National Council of Examiners for Engineering and Surveying (NCEES), and other persons or entities.

1.11(5) Judicial review of a final order denying licensure may be sought in accordance with the provisions of Iowa Code section 17A.19 which are applicable to judicial review of any agency's final decision in a contested case.

ITEM 2. Rescind and reserve subrule 4.2(6).

ITEM 3. Amend subrule 4.4(1) as follows:

4.4(1) Membership. A committee shall generally consist of three or more licensed engineers or licensed land surveyors or both, as determined by the board, who are selected for their knowledge and experience in the type of engineering or land surveying involved in the complaint. The board may appoint a two-member peer review committee or a single peer review consultant to perform the function of a peer review committee when, in the board's discretion, appointing a committee with three or more members would be impractical, unnecessary or undesirable given the nature of the expertise required, the need for prompt action or other circumstances of the complaint.

ARC 7683A

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

Notice of Public Hearing

The Iowa Ethics and Campaign Disclosure Board is contemplating policy issues and questions regarding the prohibition against corporate contributions of "money, property, labor, or thing of value, directly or indirectly, to a committee, or for the purpose of influencing the vote of an elector [in a candidate election] ...," which appears in Iowa Code section 56.15. Depending on the policy decisions made, the Board may in the future pursue necessary rule making or legislation.

To assist the Board in making these policy decisions, the Board is seeking public input and comment. A public hearing will be held on December 11, 1997, from 10 a.m. to 12 noon in Room 19 of the Iowa State Capitol Building, Des Moines, Iowa. The Board encourages interested persons to submit written comments as well as to provide oral statements. Interested persons who are unable to attend the public hearing may also submit written comments on these issues by December 11, 1997, addressed to Kay Williams, Executive Director, Iowa Ethics and Campaign Disclosure Board, 514 East Locust, Suite 104, Des Moines, Iowa 50309.

Some of the issues and questions relating to the corporate prohibition under consideration by the Board are:


* Should the Board be able to treat some types of corporations differently than others?


* Should the statute reach other types of entities which also represent aggregations of capital, but which are not incorporated, such as limited liability companies?


* Should the Board allow a candidate to make "incidental" use of corporate facilities so long as there is reimbursement from the candidate to the corporation at a fair market value?


* If reimbursement is acceptable, must the corporation also provide all candidates with equal access to the facilities a necessary element to preclude the corporation from providing a prohibited "thing of value"?


* What is the effect on candidates in various types and sizes of communities if candidates may not use a corporation's telephones for a campaign phone bank, regardless of whether there is reimbursement or whether the entity provides equal access to other candidates?


* Should for-profit corporations be able to conduct voter education efforts such as candidate forums, voter registration drives, or candidate visits and tours if there were conditions ensuring corporate neutrality as to particular candidates?

ARC 7681A

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 17A.3 and 68B.32A, the Iowa Ethics and Campaign Disclosure Board proposes to amend Chapter 2, "Iowa Election Campaign Fund," Iowa Administrative Code.

This amendment revises the distribution of unallocated funds (not designated by the taxpayer to be credited to a specific party) generated by the income tax return checkoff for the Iowa election campaign fund. This is necessitated by the recognition of the third party, the Reform Party, in February of this year. The statute, Iowa Code section 56.19, provides that if there are more than two parties recognized as having an account in the Iowa election campaign fund, a checkoff contribution which is unallocated to a specific party is to be divided among the political parties, with the division based upon the ratio of the number of registered voters for that particular party. The rule designates December 31 of the tax year in question as the date certain upon which to calculate the proportion, and demonstrates operation of the formula by virtue of providing an example.

Any interested person may make written comments on these proposed amendments on or before December 23, 1997. Written comments should be addressed to Kay Williams, Executive Director, Iowa Ethics and Campaign Disclosure Board, 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309.

This amendment was also Adopted and Filed Emergency and is published herein as ARC 7682A. The content of that submission is incorporated by reference.

This amendment is intended to implement Iowa Code sections 56.18 to 56.20 and 56.25.

ARC 7678A

HUMAN SERVICES DEPARTMENT[441]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services proposes to amend Chapter 79, "Other Policies Relating to Providers of Medical and Remedial Care," and Chapter 88, "Managed Health Care Providers," appearing in the Iowa Administrative Code.

These amendments revise Medicaid reimbursement policies for federally qualified health centers (FQHCs) and rural health clinics (RHCs).

State Medicaid programs are required to cover ambulatory services that are furnished by FQHCs and RHCs. Medicaid payments for these services must be equal to 100 percent of the facilities' reasonable costs for providing the services. If an FQHC enters into a contract with a health maintenance organization (HMO) that contracts with a state Medicaid program, the HMO must pay the FQHC 100 percent of reasonable costs and the state's capitation payment to the HMO must reflect the 100 percent rate that is due to the FQHC.

Section 4714 of the Balanced Budget Act of 1997 phases out the 100 percent requirement. Instead, states must pay at least 95 percent of reasonable costs for services furnished during federal fiscal year (FFY) 2000, at least 90 percent for FFY 2001, at least 85 percent for FFY 2002, and at least 70 percent for FFY 2003.

Section 4712 of the Act established two transitional provisions with an effective date of October 1, 1997. These amendments implement those transitional provisions.

1. In the case of services furnished by an FQHC or RHC pursuant to a contract with a managed care organization, states must make a supplemental payment to the center or clinic at least quarterly in an amount equal to the difference between the contracted amount and the cost-based amount. The first quarterly payment will be made by the Department in January, 1998.

2. In the case of a contract between an FQHC or RHC and a managed care organization, the organization shall provide payment that is not less than the amount of payment that it would make for the services if furnished by a provider other than an FQHC or RHC. This provision shall be implemented retroactively for any services furnished on or after October 1, 1997.

There are currently 5 HMOs contracting with Iowa Medicaid. There are 3 FQHCs and 126 RHCs. Up to this point in time the tendency has been for the HMOs to contract with the physicians in the FQHCs and RHCs, rather than with the FQHCs and RHCs themselves.

The substance of these amendments is also Adopted and Filed Emergency and is published herein as ARC 7679A. The purpose of this Notice is to solicit comment on that submission, the subject matter of which is incorporated by reference.

Consideration will be given to all written data, views, and arguments thereto received by the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114, on or before December 24, 1997.

These amendments are intended to implement Iowa Code section 249A.4.

ARC 7687A

INSPECTIONS AND APPEALS DEPARTMENT[481]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 135C.14, the Department of Inspections and Appeals proposes to amend Chapter 57, "Residential Care Facilities"; Chapter 58, "Intermediate Care Facilities"; Chapter 59, "Skilled Nursing Facilities"; Chapter 62, "Residential Care Facilities for Persons with Mental Illness (RCF/PMI)"; Chapter 63, "Residential Care Facilities for the Mentally Retarded"; and Chapter 65, "Intermediate Care Facilities for Persons with Mental Illness (ICF/PMI)," Iowa Administrative Code.

The amendments modify infection control rules by updating references. The amendments also eliminate descriptions of body fluids requiring universal precautions since this is no longer considered by the Centers for Disease Control (CDC) to be accurate. Additionally, the amendments eliminate some requirements for residential care facilities, as certain requirements have proven to be unnecessary.

Any interested person may make written comments or suggestions on the amendments on or before December 23, 1997. Written materials should be addressed to the Director, Department of Inspections and Appeals, Lucas State Office Building, Des Moines, Iowa 50319-0083, fax (515) 242-6863.

A public hearing will be held on December 23, 1997, at1 p.m. in the Director's Conference Room, Sixth Floor, Lucas State Office Building, East 12th and Grand Avenue, Des Moines, Iowa. Persons may present their views orally or in writing at the public hearing.

These amendments are intended to implement Iowa Code section 135C.14(8).

The following amendments are proposed.

ITEM 1. Amend paragraphs "b," "e," and "h" and subparagraph "i"(1) of subrules 58.10(8) and 59.12(11) as follows:

b. Techniques for handling of blood, body fluids, and body wastes consistent with 1987 1995 CDC Guidelines; (I, II, III)

Body fluids which require using universal precautions include blood, semen, vaginal secretions, cerebrospinal fluid (CSF), synovial fluid, peritoneal fluid, pericardial fluid, and amniotic fluid. Body fluids and wastes which do not require using universal precautions include feces, nasal secretions, sputum, sweat, tears, urine, or vomitus, unless they contain visible blood. (I, II, III)

e. Resident care procedures consistent with 1987 1995 CDC Guidelines to be used when there is an infection present; (I, II, III)

h. Techniques for use and disposal of needles, syringes, and other sharp instruments consistent with 1987 1995 CDC Guidelines and 567--subrule 100.3(2) and rule 567-- 102.14(455B) and 567--subrule 102.15(2), Iowa Administrative Code; (I, II, III)

i. Aseptic techniques when using: (I, II, III)

(1) Intravenous or central line catheter consistent with 1996 CDC Guidelines, (I, II, III)

ITEM 2. Amend the last sentence of subrules 58.11(1), paragraph "c," and 59.13(1), paragraph "c," as follows:

Refer to 1983 CDC Guidelines PN85 923401 LL for Infection Control in Hospital Personnel to determine (1), (2) and (3).

ITEM 3. Amend paragraphs "b," "c," "e," "g," and "h" of subrules 57.11(11), 62.19(4), and 63.9(10) as follows:

b. Techniques for handling of blood, body fluids, and body wastes consistent with 1987 1995 CDC Guidelines; (I, II, III)

Body fluids which require using universal precautions include blood, semen, vaginal secretions, cerebrospinal fluid (CSF), synovial fluid, peritoneal fluid, pericardial fluid, and amniotic fluid. Body fluids and wastes which do not require using universal precautions include feces, nasal secretions, sputum, sweat, tears, urine, or vomitus, unless they contain visible blood. (I, II, III)

c. Decubitus care Dressings, soaks, or packs; (I, II, III)

e. Resident care procedures consistent with 1987 1995 CDC Guidelines to be used when there is an infection present; (I, II, III)

g. Techniques for sanitary use and reuse of feeding syringes and single-resident use and reuse of urine collection bags; (I, II, III)

h. Techniques for use and disposal of needles, syringes, and other sharp instruments consistent with 1987 1995 CDC Guidelines. (I, II, III)

ITEM 4. Amend subrules 57.11(12), 62.19(5), and 63.9(11), paragraphs "a," "d," and "f," and add a new paragraph "g" as follows:

a. Intravenous or central line catheter consistent with 1996 CDC Guidelines, (I, II, III)

d. Dressings, soaks, or packs Decubitus care, (I, II, III)

f. Nasogastric or gastrostomy tubes. tubes, (I, II, III)

g. Sanitary use and reuse of feeding syringes and single-resident use and reuse of urine collection bags. (I, II, III)

ITEM 5. Amend the last sentence of subrules 57.12(1), paragraph "c"; 62.9(2), paragraph "a"; 63.11(1), paragraph "c"; and 65.9(2), paragraph "b," as follows:

Refer to 1983 CDC Guidelines PN85 923401 LL to determine (1), (2) and (3).

ITEM 6. Amend paragraphs "b," "c," "e," "g," "h," and "i" of subrule 65.21(4) as follows:

b. Techniques for handling of blood, body fluids, and body wastes consistent with 1987 1995 CDC Guidelines; (I, II, III)

Body fluids which require using universal precautions include blood, semen, vaginal secretions, cerebrospinal fluid (CSF), synovial fluid, peritoneal fluid, pericardial fluid, and amniotic fluid. Body fluids and wastes which do not require using universal precautions include feces, nasal secretions, sputum, sweat, tears, urine, and vomitus, unless they contain visible blood;

c. Decubitus care Dressings, soaks, or packs; (I, II, III)

e. Resident care procedures consistent with 1987 1995 CDC Guidelines to be used when there is an infection present; (I, II, III)

g. Techniques for sanitary use and reuse of enteral feeding bags, feeding syringes and urine collection bags; (I, II, III)

h. Techniques for use and disposal of needles, syringes, and other sharp instruments consistent with 1987 1995 CDC Guidelines and requirements set forth in environmental protection commission rules 567--100.3(2) and rule 567-- 102.14(455B) and 567--subrule 102.15(2); (I, II, III) and

i. h. Aseptic techniques when using:

(1) Intravenous or central line catheter consistent with 1996 CDC Guidelines, (I, II, III)

(2) Urinary catheter, (I, II, III)

(3) Respiratory suction, oxygen or humidification, (I, II, III)

(4) Dressings, soaks, or packs Decubitus care,(I, II, III)

(5) Tracheostomy, (I, II, III)

(6) Nasogastric or gastrostomy tubes. tubes, (I, II, III)

(7) Sanitary use and reuse of feeding syringes and single-resident use and reuse of urine collection bags. (I, II, III)

ARC 7685A

INSPECTIONS AND APPEALS DEPARTMENT[481]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 135C.14, the Department of Inspections and Appeals proposes to amend Chapter 57, "Residential Care Facilities"; Chapter 58, "Intermediate Care Facilities"; Chapter 59, "Skilled Nursing Facilities"; Chapter 62, "Residential Care Facilities for Persons with Mental Illness (RCF/PMI)"; Chapter 63, "Residential Care Facilities for the Mentally Retarded"; Chapter 64, "Intermediate Care Facilities for the Mentally Retarded"; and Chapter 65, "Intermediate Care Facilities for Persons with Mental Illness (ICF/PMI)," Iowa Administrative Code.

The Department recently adopted amendments to implement 1997 Iowa Acts, Senate File 523, which required dependent adult abuse and criminal history record checks for anyone employed in a health care facility after July 1, 1997. These amendments add violation classifications which were inadvertently omitted from the recently adopted rules pertaining to criminal and dependent adult abuse record checks.

The substance of these amendments was Adopted and Filed Emergency and is published herein as ARC 7686A. The purpose of this Notice is to solicit comment on that submission, the subject matter of which is incorporated by reference.

Interested persons may make written comments or suggestions on the amendments on or before December 23, 1997. Written materials should be addressed to the the Director, Department of Inspections and Appeals, Lucas State Office Building, Des Moines, Iowa 50319-0087; fax (515)242-6863.

A public hearing will be held on December 23, 1997, at1 p.m. in the Director's Conference Room, Sixth Floor, Lucas State Office Building, East 12th and Grand Avenue, Des Moines, Iowa. Persons may present their views orally or in writing at the public hearing.

These amendments are intended to implement Iowa Code section 135C.33 as amended by 1997 Iowa Acts, Senate File 523.

ARC 7690A

NATURAL RESOURCE COMMISSION[571]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby gives Notice of Intended Action to amend Chapter 33, "Resource Enhancement and Protection Program: County, City and Private Open Spaces Grant Programs," Iowa Administrative Code.

These rules provide for the granting of funds to private entities for the protection of open space lands in Iowa. The proposed amendments expand upon criteria for eligibility of projects and the exercise of the Department's authority to remove certain projects from consideration if they fail to meet those criteria. Specifically, the publication "Land Acquisition Program and Priorities" is cited as the Department's official statement of priorities for land acquisition. Projects submitted for grant consideration must be consistent with priorities contained in that publication.

Any interested person may make written comments on the proposed amendments on or before December 23, 1997. Such comments should be directed to the Bureau Chief, Program Administration Bureau, Parks, Recreation and Preserves Division, Iowa Department of Natural Resources, Wallace State Office Building, Des Moines, Iowa 50319-0034; fax (515)281-6794. Comments may also be given to the Bureau Chief by telephone at (515)281-5814 or by attending a public hearing on these amendments. The hearing will be held on December 23, 1997, at 10 a.m. in the Fourth Floor Conference Room of the Wallace State Office Building. At the hearing, persons speaking will be asked to give their names and addresses for the record.

Any persons who intend to attend a public hearing and have special requirements such as hearing or mobility impairments should contact the Department of Natural Resources and advise of specific needs.

These amendments are intended to implement Iowa Code chapter 455A.

The following amendments are proposed.

ITEM 1. Amend subrule 33.50(1) as follows:

33.50(1) Protection defined. Protection is defined as the purchase of all or a portion of the rights associated with ownership of real property so as to ensure that open space values associated with that property are protected in perpetuity. Protection methods, in order of preference include, but are not limited to, fee title acquisition, purchase of easements, or other mechanisms that provide long-term assurance of open space protection. Title for acquired properties shall be vested in the state of Iowa, and projects must be consistent with priorities established in the department of natural resources publication "Land Acquisition Programs and Priorities."

ITEM 2. Amend subrule 33.50(6) as follows:

33.50(6) Department rejection of applications. The director may remove from consideration by the project review and selection committee any application for funding the acquisition of property that the department determines is not in the state's best interest for the department to manage. The department's basis for determining such interest may include, but not be limited to, inaccessibility to the project area, environmental contamination and unacceptable use restrictions, management cost, and the proximity to other governmental entities which may impose use restrictions or special tax assessments on the area, or lack of conformance with priorities established in the department's "Land Acquisition Programs and Priorities" document. Examples of use restrictions can include prohibitions on hunting, trapping, timber harvest, vegetation management, and easements which affect the range of public use and activities which could otherwise be allowed.

ARC 7689A

NATURAL RESOURCE COMMISSION[571]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby gives Notice of Intended Action to amend Chapter 98, "Wild Turkey Spring Hunting," Iowa Administrative Code.

These rules govern hunting wild turkey during the spring season and include season dates, bag limits, possession limits, shooting hours, and areas open to hunting. This amendment provides consistency with resident electronic licensing options.

Any interested person may make written suggestions or comments on this proposed amendment on or before December 29, 1997. Such written materials should be directed to the Wildlife Bureau Chief, Department of Natural Resources, Wallace State Office Building, Des Moines, Iowa 50319-0034; fax (515)281-6794. Persons who wish to convey their views orally should contact the Wildlife Bureau at (515)281-6156 or at the Wildlife Bureau offices on the fourth floor of the Wallace State Office Building.

Also, there will be a public hearing on December 29, 1997, at 10 a.m. at the Wildlife Bureau office at the Wallace State Office Building, at which time persons may present their views either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the amendment.

Any persons who intend to attend a public hearing and have special requirements such as hearing or mobility impairments should contact the Department of Natural Resources and advise of specific needs.

This amendment is intended to implement Iowa Code sections 481A.38, 481A.39, 481A.48, 483A.1 and 483A.7.

The following amendment is proposed.

Amend 571--98.14(483A) as follows:

571--98.14(483A) Application procedure.

98.14(1) All applications for nonresident spring wild turkey hunting licenses must be made on forms provided by the department of natural resources and returned to the Department of Natural Resources, Wallace State Office Building, Des Moines, Iowa 50319-0034.

98.14(2) Alternate application options. The department may develop media/telecommunication options that would allow for additional methods of obtaining a turkey license. Methods and deadlines may be determined by the department as part of the alternative methods developed.

98.14(3) Applications for any of the three spring wild turkey hunting periods shall be received and accepted from the second Monday in January through the last Friday in January. If applications are received in excess of the license quota for any hunting zone or period, a drawing shall be conducted to determine which applicants shall receive licenses. If licenses are still available for any hunting zone or period, licenses will be issued as applications are received until quotas are filled or the second Friday in March, whichever occurs first. Party applications with no more than four individuals will be accepted. No person shall submit more than one application. Incomplete or improperly completed applications, applications not meeting the above conditions, or applications received prior to or after the application period shall not be considered valid applications. The nonresident license fee shall be $55.

ARC 7698A

REVENUE AND FINANCE DEPARTMENT[701]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 421.14 and 422.68, the Iowa Department of Revenue and Finance hereby gives Notice of Intended Action to amend Chapter 15, "Determination of a Sale and Sale Price," Chapter 17, "Exempt Sales," and Chapter 18, "Taxable and Exempt Sales Determined by Method of Transaction or Usage," Iowa Administrative Code.

Recent legislation has greatly expanded the exemption from sales and use tax applicable to machinery, equipment, and computers used by a manufacturer in processing and certain related exemptions as well. A few existing rules have been amended and an extensive new rule drafted which explain the major changes to these important, related exemptions.

The proposed amendments will not necessitate additional expenditures by political subdivisions or agencies and entities which contract with political subdivisions.

The Department has determined that these proposed amendments may have an impact on small business. The Department has considered the factors listed in Iowa Code section 17A.31(4). The Department will issue a regulatory flexibility analysis as provided in Iowa Code sections 17A.31 to 17A.33 if a written request is filed by delivery or by mailing postmarked no later than December 23, 1997, to the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306. The request may be made by the Administrative Rules Review Committee, the Governor, a political subdivision, at least 25 persons who qualify as a small business under Iowa Code sections 17A.31 to 17A.33, or an organization of small businesses representing at least 25 persons which is registered with this agency under Iowa Code sections 17A.31 to 17A.33.

Any interested person may make written suggestions or comments on these proposed amendments on or before December 26, 1997. Such written comments should be directed to the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306.

Persons who want to orally convey their views should contact the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, at (515)281-4250 or at the Department of Revenue and Finance offices on the fourth floor of the Hoover State Office Building.

Requests for a public hearing must be received by December 19, 1997.

These amendments are intended to implement 1997 Iowa Acts, House File 126.

The following amendments are proposed.

ITEM 1. Amend subrule 15.3(3), paragraph "a," second unnumbered paragraph, as follows:

"Fuel consumed in processing" includes fuel used in grain drying, providing heat or cooling for livestock buildings, fuel used for generating electric current, fuel consumed in implements of husbandry engaged in agricultural production, as well as fuel used in "processing" as defined in rule rules 701--18.29(422,423) and 701--18.58(422,423). See rule 701--18.29(422,423) for a general definition of "processing" and rule 701--17.2(422) for a detailed description of "fuel used in processing." See rule 701--17.3(422,423) for extensive discussion regarding electricity and steam used in processing.

ITEM 2. Amend subrule 17.3(1), introductory paragraph, as follows:

17.3(1) Services used in processing prior to July 1, 1985. Prior to July 1, 1985, electricity, Electricity, steam, or any other taxable service is used in processing only if the taxable service is used in any operation which subjects raw material to some special treatment which 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 other taxable services used in processing prior to July 1, 1985:

ITEM 3. Amend subrule 17.3(2), introductory paragraph, as follows:

17.3(2) Carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and other taxable services used in processing on and after July 1, 1985. On and after July 1, 1985, an An expanded definition of "processing" is allowed only to manufacturers of food products for human consumption using carbon dioxide in a liquid, solid, or gaseous form, electricity, steam, and other taxable services. For periods on and after July 1, 1985 the The definition of processing applicable to persons who are not manufacturers of food products but who are using taxable services is found in subrule 17.3(1).

ITEM 4. Amend subrule 17.14(2), paragraph "b," as follows:

b. The chemical, solvent, sorbent, or reagent must be directly used and consumed, dissipated, or depleted during processing as defined in rule 701--18.29(422,423).

ITEM 5. Amend subrule 18.29(7), paragraph "g," as follows:

g. 18.45(422,423) Sale or rental of computers, industrial machinery and equipment; refund of and exemption from tax paid for periods prior to July 1, 1997.

ITEM 6. Amend subrule 18.29(7) by adding new paragraph "h" and relettering paragraphs "h" to "k" as "i" to "l" as follows:

h. 18.58(422,423) Sales or rentals of machinery, equipment, and computers and sales of fuel and electricity to manufacturers and sales or rentals of computers to commercial enterprises for periods on and after July 1, 1997.

h. i. 26.2(422) Enumerated services exempt. See 701--subrule 26.2(2) for the processing exemption.

i. j. 28.2(423) Processing of property defined.

j. k. 33.3(423) Fuel consumed in creating power, heat, or steam for processing or generating electric current.

k. l. 33.7(423) Property used to manufacture certain vehicles to be leased.

ITEM 7. Amend rule 701--18.45(422,423), introductory paragraph, as follows:

701--18.45(422,423) Sale or rental of computers, industrial machinery and equipment; refund and exemption from tax paid for periods prior to July 1, 1997. The sale or rental of computers, industrial machinery and equipment, including pollution control equipment, used in manufacturing, in research and development, or in the processing or storage of data or information by an insurance company, financial institution, or commercial enterprise is, under certain circumstances, exempt from tax and under other circumstances, is subject to refund of sales or use tax paid. The sale or rental of machinery, equipment, or computers directly and primarily used in the recycling or reprocessing of waste products is also exempt from tax; see subrule 18.45(8). For purposes of the organization of this rule, items that may be exempt or subject to refund of tax are referred to as specified property unless the context of the rule indicates otherwise. See subrule 18.45(1) for definition of what constitutes specified property. See rule 18.58(422,423) for the manner in which the sale or rental of machinery, equipment, and computers to manufacturers and the sale or rental of computers to commercial enterprises are treated on and after July 1, 1997.

ITEM 8. Amend 701--Chapter 18 by adding the following new rule:

701--18.58(422,423) Exempt sales or rentals of computers, industrial machinery and equipment, and exempt sales of fuel and electricity on and after July 1, 1997. The sale or rental of machinery, equipment, or computers used by a manufacturer in processing; the sale or rental of a computer used in the processing or storage of data or information by an insurance company, financial institution, or commercial enterprise; and the sale or rental of various other types of tangible personal property are, under certain circumstances, exempt from tax as of July 1, 1997.

18.58(1) Definitions. The following terms are defined for the purposes of this rule in the manner set out below.

"Commercial enterprise" includes businesses and manufacturers conducted for profit and includes centers for data processing services to insurance companies, financial institutions, businesses, and manufacturers, but excludes professions and occupations and nonprofit organizations. A hospital that is a not-for-profit organization would not be a "commercial enterprise." The term "professions" means a vocation or employment requiring specialized knowledge and often long and intensive academic preparation. The term "occupations" means the principal business of an individual. Included within the meaning of "occupations" is the business of farming. A professional corporation which carries on any business which is a "profession" or "occupation" is not a commercial enterprise.

"Computer" means stored program processing equipment and all devices fastened to it by means of signal cables or any communication medium that serves the function of a signal cable. Nonexclusive examples of devices fastened by a signal cable or other communication medium are terminals, printers, display units, card readers, tape readers, document sorters, optical readers, and card or tape punchers. Excluded from the definition of "computer" is point-of-sale equipment. For a characterization of "point-of-sale equipment" see 701--subrule 71.1(7). Also included within the meaning of the word "computer" is any software consisting of an operating system or executive program. Such software coordinates, supervises, or monitors the basic operating procedures of a computer. An operating system or executive program is exempt from sales tax only if purchased as part of the sale of the computer for which it operates. An operating system or executive program priced separately or sold at a later time is subject to the provisions of rule 18.34(422,423). Excluded from the meaning of the word "computer" is any software consisting of an application program. For purposes of this subrule, "operating system or executive program" means a computer program which is fundamental and necessary to the functioning of a computer. The operating system or executive program software controls the operation of a computer by managing the allocation of all system resources, including the central processing unit, main and secondary storage, input/output devices, and the processing of programs. This is in contrast to application software which is a collection of one or more programs used to develop and implement the specific applications which the computer is to perform, and which calls upon the services of the operating system or executive program.

"Contract manufacturer" is any manufacturer who falls within the definition of "manufacturer" set out subsequently in this subrule except that a contract manufacturer does not sell the tangible personal property which it processes on behalf of other manufacturers.

"Directly used." 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 in question to the activity in which it is used;

2. The proximity of the time of use of the property in question to the time of use of other property used before and after it in the activity involved; and

3. The active causal relationship between the use of the property in question and the activity involved. 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.

"Financial institution" is a bank incorporated under any state or federal law; a savings and loan association incorporated under any state or federal law; a credit union organized under any state or federal law; or any corporation licensed as an industrial loan company under Iowa Code chapter 536A. Excluded from the meaning of the term are loan brokers governed by Iowa Code chapter 535C and production credit associations.

"Insurance company" means an insurer organized or operating under Iowa Code chapter 508, 514, 515, 518, 518A, 519, or 520 or authorized to do business in Iowa as an insurer or as a licensed insurance agent under Iowa Code chapter 522. Excluded from the definition of "insurance company" are fraternal and beneficial societies governed by Iowa Code chapter 512 and health maintenance organizations governed by Iowa Code chapter 514B. This list of exclusions is not intended to be exclusive.

"Machinery and equipment" means machinery and equipment used by a manufacturer. 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. The term 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. Jigs, dies, tools, and 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." See Deere Manufacturing Co. v. Zeiner, 247 Iowa 1264, 78 N.W.2d 527 (1956). Also see the definition of "replacement parts" infra. Machinery does not include buildings designed specifically to house or support machinery. Equipment is any tangible personal property used in an operation or activity. Nonexclusive examples of equipment are tables on which property is assembled on an assembly line and chairs used by assembly line workers.

"Manufacturer" means any person, firm, or corporation that purchases, receives, or holds personal property for the purpose of adding to its value by any process of manufacturing, refining, purifying, combining of different materials, or by packing of meats with an intent to sell at a gain or profit. Those who are in the business of printing, newspaper publication, bookbinding, lumber milling, and production of drugs and agricultural supplies are illustrative, nonexclusive examples of manufacturers. Construction contracting; quarrying; remanufacture or rebuilding of tangible personal property (such as automobile engines); provision of health care; farming; transportation for hire; mining; and the activities of restaurateurs, hospitals, medical doctors, and those who merely process data are illustrative, nonexclusive examples of businesses which are not manufacturers. See Associated General Contractors of Iowa v. State Tax Commission, 255 Iowa 673, 123 N.W.2d 922 (1963) and River Products Co. v. Board of Review of Washington County, 332 N.W.2d 116 (Iowa Ct. App. 1982). The term "manufacturer" includes a contract manufacturer.

"Pollution control equipment" means any disposal system or apparatus used or placed in operation primarily for the purpose of reducing, controlling, or eliminating air or water pollution. The term 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 the United States Government. Wastewater treatment facilities 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 (e.g., a gas mask).

"Processing" means a series of operations in which materials are manufactured, refined, purified, created, combined, transformed, or stored by a manufacturer, ultimately into tangible personal property. Processing encompasses all activities commencing with the receipt or producing of raw materials by the manufacturer and ending at the point products are delivered for shipment or transferred from the manufacturer. Processing includes, but is not limited to, refinement or purification of materials; treatment of materials to change their form, context, or condition; maintenance of the quality or integrity of materials, components, or products; maintenance of environmental conditions necessary for materials, components or products; quality control activities; construction of packaging and shipping devices; placement into shipping containers or any type of shipping device or medium; and the movement of materials, components, or products until shipment from the manufacturer.

"Processing or storage of data or information." All computers store and process information. However, only if the "final output" for a user or consumer is stored or processed data will the computer be eligible for exemption of tax.

"Receipt or producing of raw materials" means activities performed upon tangible personal property only. 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.

"Recycling" means any process by which waste or materials which would otherwise become waste are collected, separated, or processed and revised or returned for use in the form of raw materials or products. The term includes, but is not limited to, the composting of yard waste which has been previously separated from other waste. "Recycling" does not include any form of energy recovery.

"Replacement parts." A "replacement part" is any machinery, equipment, or computer part which is substituted for another part that has broken, has become worn out or obsolete, or is otherwise unable to perform its intended function. "Replacement parts" are those parts which materially add to the value of industrial machinery, equipment, or computers or appreciably prolong their lives or keep them in their ordinarily efficient operating condition. Excluded from the meaning of the term "replacement parts" are supplies, the use of which is necessary if machinery is to accomplish its intended function. Drill bits, grinding wheels, punches, taps, reamers, saw blades, lubricants, coolants, sanding discs, sanding belts, and air filters are nonexclusive examples of supplies. Sales of supplies remain taxable.

"Research and development" means experimental or laboratory activity which has as its ultimate goal the development of new products or processes of processing. Machinery, equipment, and computers are used "directly" in research and development only if they are used in actual experimental or laboratory activity that qualifies as research and development under this subrule.

18.58(2) Exempt sales. On and after July 1, 1997, sales or rentals of the following machinery, equipment, or computers (including replacement parts) are exempt from tax:

a. Machinery, equipment, and computers directly and primarily used in processing by a manufacturer.

b. Machinery, equipment, and computers directly and primarily used to maintain a manufactured product's integrity or to maintain any unique environmental conditions required for the product.

c. Machinery, equipment and computers directly and primarily used to maintain unique environmental conditions required for other machinery, equipment, or computers used in processing by a manufacturer.

d. Test equipment directly and primarily used by a manufacturer in processing to control the quality and specifications of a product.

e. Machinery, equipment, or computers directly and primarily used in research and development of new products or processes of processing.

f. Computers used in processing or storage of data or information by an insurance company, financial institution, or commercial enterprise.

g. Machinery, equipment, and computers directly and primarily used in recycling or reprocessing of waste products.

h. Pollution control equipment used by a manufacturer. It is not necessary that the equipment be "directly and primarily" used in any kind of processing.

i. Materials used to construct or self-construct any machinery, equipment, or computer, the sale of which is exempted by paragraphs "a" through "h" above.

j. Exempt sales of fuel and electricity. Sales of fuel or electricity consumed by machinery, equipment, or computers used in any exempt manner described in paragraphs "a," "b," "c," "d," "e," "g," and "h" of this subrule are exempt from tax. Sales of electricity consumed by computers used in the manner described in paragraph "f" remain subject to tax.

18.58(3) Examples of exempt items. Sales of the following nonexclusive types of machinery and equipment, previously taxable, are exempt on and after July 1, 1997, if that machinery or equipment is sold for direct and primary use in processing by a manufacturer: coolers which do not change the nature of materials stored in them; equipment which eliminates bacteria; palletizers; storage bins; property used to transport raw, semifinished, or finished goods; vehicle-mounted cement mixers; self-constructed machinery and equipment; packaging and bagging equipment (including conveyer systems); equipment which maintains an environment necessary to preserve a product's integrity; equipment which maintains a product's integrity directly; quality control equipment and electricity or other fuel used to power the machinery and equipment mentioned above.

18.58(4) Processing--beginning to end.

a. The beginning of processing. Processing begins with a manufacturer's receipt or production of raw material. Thus, when a manufacturer produces its own raw material it is engaged in processing. Processing also begins when raw materials are transferred to a manufacturer's possession by a manufacturer's supplier.

b. The completion of processing. Processing ends when the finished product is transferred from the manufacturer or delivered for shipment by the manufacturer. Therefore, a manufacturer'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.

c. 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.

EXAMPLE A. Company A manufactures fine furniture. Company A owns a grove of walnut trees which it uses as raw material. A's employees cut the trees, transport the logs to A's factory, offload them there, and store the logs in a warehouse (to begin the curing of their wood) before taking them to A's sawmill. The walnut trees are real property, Kennedy v. Board of Assessment and Review, 276 N.W. 205, 224 Iowa 405 (1937). Thus, no "production of raw materials" has occurred with regard to the trees until they have been severed from the soil and transformed into logs. In this example, "processing" of the logs begins when they are placed on vehicles for transport to A's factory. However, note that even though the transport vehicles are used in processing, if they are "vehicles subject to registration," their use is not exempt from tax. See 18.58(6)"d" infra.

EXAMPLE B. Company A from the previous example also buys mahogany logs from a supplier in Honduras. Company A uses its own equipment to offload the logs from railroad cars at its manufacturing facility and then transports, stores, and saws the logs as previously described in Example A. Processing begins when Company A offloads the logs from the railroad cars.

EXAMPLE C. Company C is a microbrewery. It uses a variety of kettles, vats, tanks, tubs, and other containers to mix, cook, ferment, settle, age, and store the beer which it brews. It also uses a variety of pipes and pumps to move the beer among the various containers involved in the activity of brewing. All stages of this brewing are part of processing whether those stages involve the transformation of the raw materials from one state to another, e.g., fermentation oraging, or simply involve holding the materials in an existing state, e.g., storage of hops in a bin or storage of the beer immediately prior to bottling. Also, any movement of the beer between containers is an activity which is a part of processing, whether this movement is an "integral part" of the production of the beer or not.

EXAMPLE D. After the brewing process is complete, Company C places its beer in various containers, stores it, and moves the beer to its customers by a common carrier who picks up the beer at C's brewery. C's activities of placing the beer into bottles, cans, and kegs, storing it after packaging, and moving the beer by use of a forklift to the common carrier's pickup site are activities which are part of processing.

18.58(5) Various unrelated inclusions in and exclusions from this exemption.

a. The following are nonexclusive examples of machinery which is not directly used in processing:

(1) Machinery used exclusively for the comfort of workers. Examples are air cooling, air conditioning, and ventilation systems.

(2) Machinery used in support operations, such as a machine shop, in which production machinery is assembled, maintained, or repaired.

(3) Machinery used by administrative, accounting, and personnel departments.

(4) Machinery used by plant security, fire prevention, first aid, and hospital stations.

(5) Machinery used in plant communications and safety.

b. The following is an example of property directly used in research and development. Frontier Hybrid, Inc. maintains a research and development laboratory for use in developing a corn plant which is a perennial. It purchases the following items for use in its research and development laboratory: a computer which will process data relating to the genetic structure of the various corn plants which Frontier Hybrid is testing, an electron microscope for examining the structure of corn plant genes, a "steam cleaner" for cleaning rugs in the laboratory offices, and a typewriter for use by the laboratory director's secretary. The computer and the microscope are "directly" used in the research in which the laboratory is engaged; the steam cleaner and the typewriter only indirectly used. Therefore, purchase of the computer and microscope would be exempt from tax; purchase of the steam cleaner and typewriter would be subject to tax.

c. The following is an example of computers used and not used in processing or storage of information or data. A health insurance company has four computers. Computer A is used to monitor the temperature within the insurance company's building. The computer transmits messages to the building's heating and cooling systems telling them when to raise or lower the level of heating or air conditioning as needed. Computer B is used to store patient records and will recall those records on demand. Computer C is used to tabulate statistics regarding the amount of premiums paid in and the amount of benefits paid out for various classes of insured. Computer D is used to train the insurance company's employees to perform various additional tasks or to better perform work they can already do. Computer D uses various canned programs to accomplish this. The "final output" of Computer A is neither stored nor processed information. Therefore, Computer A does not fit the definition of an exempt computer. The final output of Computer B is stored information. The final output of Computer C is processed information. The final output of Computer D is processed information consisting of the training exercises appearing on the computer monitor. The sale, lease, or use of Computers B, C, and D would qualify for exemption.

d. The following is an example of property not used in processing. A manufacturing plant located in Warren County which manufactures widgets fabricates its own patterns used in manufacturing the widgets on a metal press machine in its machine shop located in Story County. The machine shop does not sell the patterns, and the metal press machine is used for no other purpose than to fabricate the patterns. The metal press machine is not used in processing because there is no intent to sell the patterns used by the machine shop at a gain or profit.

18.58(6) Exceptions. Sales of the following machinery, equipment, or computers are not exempt:

a. Machinery, equipment, or computers assessed by the department of revenue and finance pursuant to Iowa Code chapters 428, 433, 434, and 436 to 438, inclusive. For electric, gas, water, and other companies assessed under Iowa Code chapter 428, only property owned by the company is assessed by the department. For railroad, telephone, pipeline, and electric transmission lines companies, property leased to, as well as owned by, the company is assessed by the department. See 701--Chapters 71 and 77.

b. Hand tools. These are tools which can be held in the hand or hands and which are powered by human effort.

c. Point-of-sale equipment. See 701--subrule 71.1(7).

d. Vehicles subject to registration, except vehicles subject to registration which are directly and primarily used in recycling or reprocessing of waste products.

e. Machinery and equipment purchased by a person engaged in processing who is not a manufacturer. Restaurants, retail bakeries, food stores, and blacksmith shops are nonexclusive examples of businesses which process tangible personal property but are not manufacturers as that word is defined for the purposes of this rule.

f. The fact that the acquisition cost of rented or purchased machinery, equipment, or computers can be capitalized for the purposes of Iowa or federal income tax law is not an indication that their sale or rental would be exempt from tax under this rule.

18.58(7) Lessor purchases of machinery, equipment, or computers. The analysis regarding lessor purchases of farm machinery and equipment contained in subrule 18.44(3) explains that same problem regarding machinery, equipment, and computers.

18.58(8) Designing or installing new industrial machinery or equipment. The gross receipts from the services of designing or installing new industrial machinery or equipment are exempt from tax. The enumerated services of electrical or electronic installation are included in this exemption. To qualify for the exemption, the sale or rental of the machinery or equipment must be subject to exemption under this rule. In addition, the machinery or equipment must be "new." For purposes of this subrule, "new" means never having been used or consumed by anyone. The exemption is not applicable to reconstructed, rebuilt, or repaired or previously owned machinery or equipment. The exemption is applicable to new machinery and equipment designed or installed for rental as well as for sale. The gross receipts from design or installation must be separately identified, charged separately, and reasonable in amount for the exemption to apply. A "computer" is not considered to be machinery or equipment, and its installation or design is not eligible for this exemption.

18.58(9) Property used in recycling or reprocessing of waste products. Gross receipts from the sale or rental of machinery (including vehicles subject to registration), equipment, or computers directly and primarily used in the recy-cling or reprocessing of waste products are exempt from tax. "Reprocessing" is not a subcategory of "processing." Reprocessing of waste products is an activity separate and independent from the processing of tangible personal property. Machinery or equipment used in the recycling or reprocessing of waste products includes, but is not limited to, compactors, balers, crushers, grinders, cutters, or shears directly and primarily used for this purpose. The sale of an end loader, forklift, truck, or other moving device is exempt from tax if the device is directly and primarily used in the movement of property which is an integral part of recycling or reproc-essing. The sale of a bin for storage ordinarily would not be exempt from tax; storage without more activity would not be a part of recycling or reprocessing. Certain limits for exemption placed upon industrial machinery and equipment are not applicable to machinery and equipment used in recycling or reprocessing. For example, the exemption will apply even if the machinery, equipment or computer is purchased by a person other than an insurance company, financial institution or commercial enterprise. A person engaged in a profession or occupation could purchase property for direct and primary use in recycling or reprocessing of waste products and the exemption would apply.

a. By way of nonexclusive examples, recycling or reprocessing can begin when waste or material which would otherwise become waste is collected or separated. A vehicle used directly and primarily for collecting waste which will be recycled or reprocessed could be a vehicle used for an exempt purpose under this rule. Thus, the purchaser of a garbage truck could claim this exemption if the truck were directly and primarily used in recycling and not, for instance, in hauling garbage to a landfill. Machinery or equipment used to segregate waste from material to be recycled or reprocessed or used to separate various forms of materials which will be reprocessed (e.g., glass and aluminum) can also be used at the beginning of recycling or reprocessing.

b. Machinery and equipment directly and primarily used in recycling or reprocessing. See subrule 18.58(1) for the definition of "directly used" which is applicable to this subrule. The examples of machinery not directly used in processing set out in 18.58(5)"a" should be studied for guidance in determining whether similar machinery is or is not used in recycling or reprocessing; e.g., machinery used in plant security (see 18.58(5)"a"(4)) is not machinery directly used in recycling or reprocessing.

c. Integral use in recycling or reprocessing. Ordinarily, any operation or series of operations which does not transform waste or material which would otherwise become waste into new raw materials or products would not be a part of recycling or reprocessing. However, activities which do not do this, but are an "integral part" of recycling or reprocessing, are themselves recycling or reprocessing. For example, an endless belt which moves aluminum cans from a machine where they are shredded to a machine where the shredded aluminum is crushed into blocks would be an endless belt used in recycling or reprocessing and the exemption applies. See subrule 18.29(5) for a discussion of when an activity is an integral part of "processing." Some of that discussion is applicable to this subrule.

d. The end of recycling or reprocessing. Recycling or reprocessing ends when waste or a material which would otherwise become waste is in the form of raw material or in the form of a product. For instance, a corporation purchases a machine which grinds logs, stumps, pallets, crates, and other waste wood into wood chips. After grinding, the wood chips are sold and transported to various sites where the chips are dumped and spread out over the ground for use in erosion control. The machine which grinds the wood chips is a machine used in recycling. The truck which transports the wood chips from the machine to the sites is not used in recycling because at the time the chips are placed in the truck they are in the form in which they will be used in erosion control.

This rule is intended to implement Iowa Code section 422.45(27) as amended by 1997 Iowa Acts, House File 126, and Iowa Code section 422.45(29).

ARC 7699A

REVENUE AND FINANCE DEPARTMENT[701]

Notice of Intended Action

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 421.14, 422.68, and 450.3, the Iowa Department of Revenue and Finance hereby gives Notice of Intended Action to amend Chapter 89, "Fiduciary Income Tax," Iowa Administrative Code.

Amendments to subrule 89.8(8), paragraphs "j" and "m," are made in order to clarify that effective for tax years of estates or trusts beginning after August 5, 1997, distributions made within 65 days of the close of the tax year for an estate or trust are to be treated as if the distributions were made during the taxable year of the estate or trust. In addition, these amendments are also made to eliminate the reference to the repealed federal throwback provisions found in 26 U.S.C. Sections 665 through 668, effective for tax years of estatesor trusts beginning after August 5, 1997. Both of these amendments are made to implement changes made to Internal Revenue Code provisions by virtue of the Taxpayer Relief Act of 1997.

The proposed amendments will not necessitate additional expenditures by political subdivisions or agencies and entities which contract with political subdivisions.

The Department has determined that these proposed amendments may have an impact on small business. The Department has considered the factors listed in Iowa Code section 17A.31(4). The Department will issue a regulatory flexibility analysis as provided in Iowa Code sections 17A.31 to 17A.33 if a written request is filed by delivery or by mailing postmarked no later than December 23, 1997, to the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306. The request may be made by the Administrative Rules Review Committee, the Governor, a political subdivision, at least 25 persons who qualify as a small business under Iowa Code sections 17A.31 to 17A.33, or an organization of small businesses representing at least 25 persons which is registered with this agency under Iowa Code sections 17A.31 to 17A.33.

Any interested person may make written suggestions or comments on these proposed amendments on or before December 26, 1997. Such written comments should be directed to the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306.

Persons who want to orally convey their views should contact the Policy Section, Compliance Division, Iowa Department of Revenue and Finance, at (515)281-4250 or at the Department of Revenue and Finance offices on the fourth floor of the Hoover State Office Building.

Requests for a public hearing must be received by December 19, 1997.

These amendments are intended to implement Iowa Code sections 422.5 to 422.9 and the Taxpayer Relief Act of 1997.

The following amendments are proposed.

ITEM 1. Amend subrule 89.8(8), paragraph "j," first unnumbered paragraph, as follows:

The distribution deduction allowed is limited to the distributable net income of the estate or trust for the taxable year. Estates and trusts with tax years beginning on or after August 5, 1997, may elect to treat distributions made within 65 days of the end of the tax year as having been made in the tax year of the estate or trust. If amounts in excess of distributable net income are distributed to a beneficiary of a decedent's estate, the excess does not constitute taxable income to the beneficiary. Distributions made to a beneficiary of a complex trust in excess of the distributable net income for the taxable year may or may not be includable in the beneficiary's taxable income depending on whether the excess distribution is governed by the throwback distribution rules under 26 U.S.C. Sections 665 through 668. Effective for distributions made by domestic trusts in tax years beginning after August 5, 1997, there is a repeal of the throwback rules found in 26 U.S.C. Sections 665 through 668. However, the repeal of the throwback rules does not apply to trusts created before March 1, 1984, foreign trusts, or domestic trusts that were once treated as foreign trusts, except as provided by federal regulations.

ITEM 2. Amend subrule 89.8(8), paragraph "m," as follows:

m. The Iowa throwback rule. Iowa Code section 422.6 allows a trust beneficiary receiving an accumulation distribution subject to the throwback rules under 26 U.S.C. Sections 665 through 668 a credit against the beneficiary's income tax liability for the Iowa income tax paid by the trust on the accumulated income distributed. The Iowa income tax paid by the trust on the accumulated income distributed is deemed distributed to the trust beneficiary, without interest, and is a credit for the year of distribution against the portion of the Iowa income tax liability of the beneficiary which is attributable to the accumulated distribution. The accumulated distribution must be adjusted by the beneficiary to reflect income subject to Iowa income tax. No refund is allowed the trust for the Iowa income tax deemed distributed to the beneficiary. The beneficiary is not allowed a refund if the tax distributed is in excess of the income tax liability attributable to the distribution. Effective for distributions made by domestic trusts in tax years beginning after August 5, 1997, there is a repeal of the throwback rules found in 26 U.S.C. Sections 665 through 668. However, the repeal of the throwback rules does not apply to trusts created before March 1, 1984, foreign trusts, or domestic trusts that were once treated as foreign trusts, except as provided by federal regulations.

NOTICE--USURY

In accordance with the provisions of Iowa Code section 535.2, subsection 3, paragraph "a," the Superintendent of Banking has determined that the maximum lawful rate of interest shall be:

November 1, 1996 -- November 30, 1996 8.75%

December 1, 1996 -- December 31, 1996 8.50%

January 1, 1997 -- January 31, 1997 8.25%

February 1, 1997 -- February 28, 1997 8.25%

March 1, 1997 -- March 31, 1997 8.50%

April 1, 1997 -- April 30, 1997 8.50%

May 1, 1997 -- May 31, 1997 8.75%

June 1, 1997 -- June 30, 1997 9.00%

July 1, 1997 -- July 31, 1997 8.75%

August 1, 1997 -- August 31, 1997 8.50%

September 1, 1997 -- September 30, 1997 8.25%

October 1, 1997 -- October 31, 1997 8.25%

November 1, 1997 -- November 30, 1997 8.25%

December 1, 1997 -- December 31, 1997 8.00%

FILED EMERGENCY

ARC 7682A

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code sections 17A.3 and 68B.32A, the Iowa Ethics and Campaign Disclosure Board amends Chapter 2, "Iowa Election Campaign Fund," Iowa Administrative Code.

This rule revises the distribution of unallocated funds (not designated by the taxpayer to be credited to a specific party) generated by the income tax return checkoff for the Iowa election campaign fund. This is necessitated by the recognition of the third party, the Reform Party, in February of this year. The statute, Iowa Code section 56.19, provides that if there are more than two parties recognized as having an account in the Iowa election campaign fund, a checkoff contribution which is unallocated to a specific party is to be divided among the political parties, with the division based upon the ratio of the number of registered voters for that particular party. The rule designates December 31 of the tax year in question as the date certain upon which to calculate the proportion, and demonstrates operation of the formula by virtue of providing an example.

In accordance with Iowa Code section 17A.4(2), the Board finds that a delay in implementation of the amendment for notice and public participation would be impracticable and contrary to the public interest, as the statute dictates the formula to be used, and failure to address the issue of when to calculate the proration of the distribution until after the beginning of 1998 may result in a delay in processing allocations when taxpayers begin filing their 1997 tax returns. The emergency procedure is necessary to allow the Department of Revenue and Finance to begin to immediately process any unallocated political checkoff funds which are received for the 1997 tax year. Also, the specific number of entities which will be directly affected by this rule is small (three), and each party has been directly notified of the Board's intended action.

In accordance with Iowa Code section 17A.5(2)"b"(2), the Board also finds that the usual effective date of these rules, 35 days after publication, should be waived and the rules be made effective on December 31, 1997. This effective date confers a benefit on the public by allowing the Department of Revenue and Finance to process the checkoff contributions made after January 1, 1998. Also, immediately establishing the date certain which will be used for allocation will allow the political parties at least some period of time to review and seek to increase the number of registered voters declaring affiliation for their party. The Board has notified the affected political parties and persons by directly sending a draft of this rule on November 7, 1997, to the chairpersons of the statutory political committees and by publication in the Iowa Administrative Bulletin. There will be an abbreviated period of time between the Board action on November 12, 1997, and the December 31, 1997, effective date, during which the Board could by emergency action revise the rule upon a compelling showing by an interested party.

This amendment is also published herein under Notice of Intended Action as ARC 7681A to solicit public opinion.

This amendment was approved by the Board on November 12, 1997.

This amendment is intended to implement Iowa Code sections 56.18 to 56.20 and 56.25.

This amendment will become effective on December 31, 1997.

The following amendment is adopted.

Amend rule 351--2.1(56) by adding the following new subrule and by amending the implementation clause as follows:

2.1(7) If two political parties are listed on the Iowa individual income tax return for a tax year for purposes of the checkoff to the Iowa election campaign fund and a taxpayer designates on the return that the checkoff contribution is to be divided among the political parties, the contribution shall be divided equally between the two political parties. However, if more than two political parties are listed on the income tax return for the checkoff to the Iowa election campaign fund, the contribution shall not be divided equally among the political parties. Instead, the taxpayer's contribution is to be divided among the parties in the ratio of the number of registered voters for a particular political party on December 31 of the year for the return to the total number of registered voters on December 31 of the year for the return that have declared an affiliation with any of the political parties. Therefore, if there are three political parties listed on the 1997 Iowa return and "X" political party has 40 percent of the registered voters on December 31, 1997, who have declared an affiliation with that party, 40 percent of the political checkoff contributions that are to be divided among the political parties shall be paid to "X" political party.

This rule is intended to implement 1983 Iowa Acts, chapter 176 Iowa Code sections 56.18 to 56.20 and 56.25.

[Filed Emergency 11/14/97, effective 12/31/97]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7679A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services hereby amends Chapter 79, "Other Policies Relating to Providers of Medical and Remedial Care," and Chapter 88, "Managed Health Care Providers," appearing in the Iowa Administrative Code.

These amendments revise Medicaid reimbursement policies for federally qualified health centers (FQHCs) and rural health clinics (RHCs).

State Medicaid programs are required to cover ambulatory services that are furnished by FQHCs and RHCs. Medicaid payments for these services must be equal to 100 percent of the facilities' reasonable costs for providing the services. If an FQHC enters into a contract with a health maintenance organization (HMO) that contracts with a state Medicaid program, the HMO must pay the FQHC 100 percent of reasonable costs and the state's capitation payment to the HMO must reflect the 100 percent rate that is due to the FQHC.

Section 4714 of the Balanced Budget Act of 1997 phases out the 100 percent requirement. Instead, states must pay at least 95 percent of reasonable costs for services furnished during federal fiscal year (FFY) 2000, at least 90 percent for FFY 2001, at least 85 percent for FFY 2002, and at least 70 percent for FFY 2003.

Section 4712 of the Act established two transitional provisions with an effective date of October 1, 1997. These amendments implement those transitional provisions.

1. In the case of services furnished by an FQHC or RHC pursuant to a contract with a managed care organization, states must make a supplemental payment to the center or clinic at least quarterly in an amount equal to the difference between the contracted amount and the cost-based amount. The first quarterly payment will be made by the Department in January 1998.

2. In the case of a contract between an FQHC or RHC and a managed care organization, the organization shall provide payment that is not less than the amount of payment that it would make for the services if furnished by a provider other than an FQHC or RHC. This provision shall be implemented retroactively for any services furnished on or after October 1, 1997.

There are currently five HMOs contracting with Iowa Medicaid. There are 3 FQHCs and 126 RHCs. Up to this point in time the tendency has been for the HMOs to contract with the physicians in the FQHCs and RHCs, rather than with the FQHCs and RHCs themselves.

The Department of Human Services finds that notice and public participation are unnecessary because the Department has no options but to implement these changes which are required by the Balanced Budget Act of 1997, Section 4712(b). Therefore, these amendments are filed pursuant to Iowa Code section 17A.4(2).

The Department also finds, pursuant to Iowa Code section 17A.5(2)"b"(2), that the normal effective date of these amendments should be waived and these amendments made effective November 12, 1997, the earliest possible effective date following the October 1, 1997, effective date required by the Balanced Budget Act of 1997. These amendments confer a benefit on the public by maintaining the Iowa Medicaid program's compliance with federal law.

These amendments are also published herein under Notice of Intended Action as ARC 7678A to allow for public comment.

The Council on Human Services adopted these amendments November 12, 1997.

These amendments are intended to implement Iowa Code section 249A.4.

These amendments became effective November 12, 1997.

The following amendments are adopted.

ITEM 1. Amend subrule 79.1(2), Federally qualified health centers and Rural health clinics provider categories, as follows:

Provider category

Basis of
reimbursement

Upper limit
Federally qualified health centers (FQHC)
Retrospective cost-related
1. Reasonable cost as determined by Medicare cost reimbursement principles

2. In the case of services provided pursuant to a contract between an FQHC and a managed care organization (MCO), reimbursement from the MCO shall be supplemented to achieve "1" above

Provider category

Basis of
reimbursement

Upper limit
Rural health clinics (RHC)
Retrospective cost-related
Medicare upper limits

1. Reasonable cost as determined by Medicare cost reimbursement principles

2. In the case of services provided pursuant to a contract between an RHC and a managed care organization (MCO), reimbursement from the MCO shall be supplemented to achieve "1" above

ITEM 2. Amend 441--Chapter 88, Division I, by adding the following new rule:

441--88.14(249A) Contracts with federally qualified health centers (FQHCs) and rural health clinics (RHCs). In the case of services provided pursuant to a contract between an FQHC or RHC and a managed care organization, the organization shall provide payment to the FQHC or RHC that is not less than the amount of payment that it would make for the services if furnished by a provider other than an FQHC or RHC. The payment from the managed care organization to the FQHC or RHC shall be supplemented by a direct payment from the department to the FQHC or RHC to provide reasonable cost reimbursement as determined by Medicare cost reimbursement principles.

[Filed Emergency 11/12/97, effective 11/12/97]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7686A

INSPECTIONS AND APPEALS DEPARTMENT[481]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code section 135C.14, the Department of Inspections and Appeals hereby amends Chapter 57, "Residential Care Facilities"; Chapter 58, "Intermediate Care Facilities"; Chapter 59, "Skilled Nursing Facilities"; Chapter 62, "Residential Care Facilities for Persons with Mental Illness (RCF/PMI)"; Chapter 63, "Residential Care Facilities for the Mentally Retarded"; Chapter 64, "Intermediate Care Facilities for the Mentally Retarded"; and Chapter 65, "Intermediate Care Facilities for Persons with Mental Illness (ICF/PMI)," Iowa Administrative Code.

The Department recently adopted amendments to implement 1997 Iowa Acts, Senate File 523, which required dependent adult abuse and criminal history record checks for anyone employed in a health care facility after July 1, 1997. These amendments add violation classifications which were inadvertently omitted from the recently adopted rules pertaining to criminal and dependent adult abuse record checks.

In compliance with Iowa Code section 17A.4(2), the Department finds that notice and public participation are impracticable and contrary to the public interest because the classification of violation notations is required by Iowa law and departmental rules.

The Department also finds, pursuant to Iowa Code section 17A.5(2)"b"(2), that the normal effective date of these amendments should be waived since the amendments confer a benefit to the public by enhancing compliance with required record checks.

These amendments are also published herein as a Notice of Intended Action, ARC 7685A, to solicit public comments.

The Board of Health approved the adoption of these amendments on November 12, 1997.

These amendments are intended to implement Iowa Code section 135C.33 as amended by 1997 Iowa Acts, Senate File 523.

These amendments became effective November 14, 1997.

The following amendments are adopted.

ITEM 1. Amend subrules 57.12(3), 58.11(3), 59.13(3), 62.9(5), 63.11(3), and 65.9(5) by inserting "(I, II, III)" at the end of paragraphs "a" to "e" of those subrules.

ITEM 2. Amend subrules 64.34(1) through 64.34(5) by inserting "(I, II, III)" at the end of each subrule.

[Filed Emergency 11/14/97, effective 11/14/97]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7692A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed Emergency After Notice

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby amends Chapter 94, "Nonresident Deer Hunting," Iowa Administrative Code.

These rules give the seasons for hunting deer by nonresidents and include season dates, bag limits, possession limits, season limits, shooting hours, areas open to hunting, license quotas, licensing procedures, means and method of take and transportation tag requirements.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7523A. No public comments were received during the public comment period or at the public hearing. The final adopted amendment is unchanged from the Notice of Intended Action.

Pursuant to Iowa Code section 17A.5(2)"b"(2), these amendments shall become effective upon filing, as they confer a benefit upon the public. The earlier effective date will make it possible for these amendments to be in effect for the late muzzleloader season which occurs late in December.

These amendments are intended to implement Iowa Code sections 481A.38 and 481A.48.

These amendments will become effective November 14, 1997.

The following amendments are adopted.

Amend subrules 94.7(3) and 94.7(4) as follows:

94.7(3) Special muzzleloader season. Only flintlock Flintlock or percussion cap lock muzzleloaded rifles or muskets of not less than .44 nor larger than .775 caliber, shooting single projectiles only, bows as described in 94.7(1), and handguns as described in 106.7(3), will be permitted in taking deer during the special muzzleloader seasons.

94.7(4) Prohibited weapons and devices. The use of dogs, domestic animals, salt or bait, rifles other than muzzleloaded, handguns except as provided in 94.7(3), crossbows except as otherwise provided, automobiles, aircraft, or any mechanical conveyances or device including electronic calls is prohibited except that paraplegics and single or double amputees of the legs may hunt from any stationary motor-driven land conveyance. "Bait" means grain, fruit, vegetables, nuts, hay, salt or mineral blocks or any other natural food materials, or by-products of such materials transported to or placed in an area for the intent of attracting wildlife. Bait does not include food placed during normal agricultural activities. "Paraplegic" means an individual with paralysis of the lower half of the body with involvement of both legs, usually due to disease of or injury to the spinal cord.

It shall be unlawful for a person, while hunting deer, to have on their person a handgun except as provided in 94.7(3) or rifle other than a muzzleloading rifle that meets the requirements of 571--subrule 106.7(3).

[Filed Emergency After Notice 11/14/97, effective 11/14/97]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7691A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed Emergency After Notice

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby gives Notice of Intended Action to amend Chapter 105, "Deer Population Management Areas," Iowa Administrative Code.

These rules give the regulations for hunting deer in special designated deer management units. These amendments establish Deer Management Units at Dubuque and in Polk County and give the Commission the authority to determine the time and place for hunting and other license parameters.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7522A. There are no changes from the Notice of Intended Action.

Pursuant to Iowa Code section 17A.5(2)"b"(2), these amendments shall become effective upon filing, as they confer a benefit upon the public. The requests from Dubuque and Polk County were received too late to respond under normal rule-making time frames. These amendments will provide the opportunity to hunt deer this season.

These amendments are intended to implement Iowa Code sections 481A.7, 481A.38, 481A.39, and 481A.48.

These amendments became effective November 14, 1997.

The following amendments are adopted.

ITEM 1. Amend rule 571--105.3(481A) by adding the following new subrules:

105.3(12) Dubuque Deer Management Unit.

105.3(13) Polk County Deer Management Unit.

ITEM 2. Amend rule 571--105.4(481A) by adding the following new subrules:

105.4(12) Dubuque Deer Management Unit. Deer hunting in the unit may occur only when approved by the natural resource commission according to the number, type of license, dates, area and license application procedures established by the commission.

105.4(13) Polk County Deer Management Unit. Deer hunting in the unit may occur only when approved by the natural resource commission according to the number, type of license, dates, area and license application procedures established by the commission.

[Filed Emergency After Notice 11/14/97, effective 11/14/97]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

FILED

ARC 7673A

BLIND, DEPARTMENT FOR THE[111]

Adopted and Filed

Pursuant to the authority of Iowa Code section 216B.6, the Commission for the Blind hereby adopts Chapter 2, "Personnel," Iowa Administrative Code.

Notice of Intended Action was published in the Iowa Administrative Bulletin on August 27, 1997, as ARC 7462A. No public comments were received from the Commission's constituency. However, the Commission did receive comments from one university with a rehabilitation counselor preparation program and a student from that program. The Commission also received comments specifically concerned with the certification of rehabilitation counselors. Comments noted concern about the Commission's certification of rehabilitation counselors but not about the Commission's certification of instructional staff. All comments were considered, but the opinions expressed were not compelling enough for the Commission to make any revisions in the proposed rules. The adopted chapter is identical to the one published under Notice of Intended Action.

This chapter will enable the Department to carry out its responsibilities under the Vocational Rehabilitation Act of 1973 as amended in 1992 and under Iowa Code chapter 216B. Rules are established to ensure that the Department employs and certifies qualified rehabilitation personnel. The Commission believes these rules will bring the Department into conformity with revised federal regulations.

This chapter was approved during the November 6, 1997, meeting of the Commission for the Blind.

These rules will become effective January 7, 1998.

These rules are intended to implement Iowa Code chapter 216B.

The following new chapter is adopted.

CHAPTER 2

PERSONNEL

111--2.1(216B) Qualifications of personnel.

2.1(1) State-licensed professions. Persons employed in positions for which licensure is required by the state are required to hold the appropriate license at the time of hire and maintain it throughout their term of employment even when the Iowa Code exempts individuals employed by a state agency from the licensure requirement.

2.1(2) Service specialist for the blind 2 and senior service specialist for the blind 1 (vocational rehabilitation counselor). Certification shall be required of all vocational rehab-ilitation counselors employed by the department.

a. At the time of hire into the position, an individual holding at least a bachelor's degree from an accredited college or university and one year of work experience shall be granted provisional certification. Exceptions regarding education and experience can only be made by the commission for the blind upon the recommendation of the director. Provisional certification shall be recognized for a maximum period of 18 months.

b. An individual may obtain full certification as a vocational rehabilitation counselor by demonstrating competency in the following areas.

1. Knowledge, understanding, and implementation of the department's philosophy of blindness.

2. Knowledge of the department's programs.

3. Skills in career planning and development.

4. Knowledge of placement techniques and practices.

5. Knowledge of occupational information, job site evaluation, and analysis.

6. Knowledge of and ability to develop alternative techniques of blindness.

7. Knowledge of rehabilitation technology services.

8. Disability knowledge and issues.

9. Advocacy role.

10. Case management.

c. An individual holding at least a bachelor's degree from an accredited college or university, who has been employed by the department as a service specialist for the blind 2 or senior service specialist for the blind 1 (vocational rehabilitation counselor) for a minimum of six months on the date this rule is finalized, shall be considered to be a fully certified vocational rehabilitation counselor, as long as the individual maintains unbroken employment with the department in that classification.

2.1(3) Service specialist for the blind 2 (vocational rehabilitation teacher). Certification shall be required of all vocational rehabilitation teachers employed by the department.

a. At the time of hire into the position, an individual holding at least a bachelor's degree from an accredited college or university and one year of work experience shall be granted provisional certification. Exceptions regarding education and experience can only be made by the commission for the blind upon recommendation of the director. Provisional certification shall be recognized for a maximum period of 18 months.

b. An individual may obtain full certification as a vocational rehabilitation teacher by demonstrating competency in the following areas.

1. Knowledge, understanding, and implementation of the department's philosophy of blindness.

2. Knowledge of the department's programs.

3. Assessment of consumer needs.

4. Teaching skills and practices.

5. Ability to teach and develop alternative techniques of blindness.

6. General knowledge of rehabilitation technology services.

7. Knowledge and development of community resources.

8. Disability knowledge and issues.

9. Advocacy role.

10. Case management.

c. An individual holding at least a bachelor's degree from an accredited college or university, who has been employed by the department as a service specialist for the blind 2 (vocational rehabilitation teacher) for a minimum of six months on the date this rule is finalized, shall be considered to be a fully certified vocational rehabilitation teacher, as long as the individual maintains unbroken employment with the department in that classification.

2.1(4) Senior service specialist for the blind 1 (orientation center teacher). Certification shall be required of all orientation center teachers employed by the department.

a. At the time of hire into the position, an individual holding at least a bachelor's degree from an accredited college or university and one year of paid employment in a program of rehabilitation, education of the blind, elementary or secondary education or related fields shall be granted provisional certification. Exceptions regarding education and experience can only be made by the commission for the blind upon recommendation of the director. Provisional certification shall be recognized for a maximum period of 18 months.

b. An individual may obtain full certification as an orientation center teacher by demonstrating competency in the following areas.

1. Knowledge, understanding, and implementation of the department's philosophy of blindness.

2. Knowledge of the department's programs.

3. Ability to teach and develop alternative techniques of blindness.

4. Technical knowledge of subject area(s) taught.

5. Teaching skills and practices.

6. Adjustment to blindness counseling skills.

7. Understanding of career planning and development.

8. Knowledge of rehabilitation technology services.

9. Disability knowledge and issues.

10. Advocacy role.

11. Teamwork and problem-solving skills.

c. An individual holding at least a bachelor's degree from an accredited college or university, who has been employed by the department as a senior service specialist for the blind 1 (orientation center teacher) for a minimum of six months on the date this rule is finalized, shall be considered to be a fully certified orientation center teacher, as long as the individual maintains unbroken employment with the department in that classification.

These rules are intended to implement Iowa Code chapter 216B.

[Filed 11/7/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7674A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Pursuant to the authority of Iowa Code sections 217.6; 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26; 252B.9 as amended by 1997 Iowa Acts, House File 612, section 39; 252H.4 as amended by 1997 Iowa Acts, House File 612, section 98; and 1997 Iowa Acts, House File 612, sections 35, 108, and 244, the Department of Human Services hereby amends Chapter 7, "Appeals and Hearings," Chapter 95, "Collections," Chapter 98, "Support Enforcement Services," and Chapter 99, "Support Establishment and Adjustment Services," rescinds Chapter 96, "Nonassistance Child Support Recovery Program," and adopts a new Chapter 96, "Information and Records," Iowa Administrative Code

The Council on Human Services adopted these amendments November 12, 1997. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7487A. The amendments published as ARC 7487A have been separated into two parts for adoption to allow for two different effective dates. (See ARC 7680A herein.)

These amendments implement changes in child support program policy based upon changes in federal and state law.

The federal welfare reform bill, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), provided for many changes in states' child support programs. Many of those changes required Iowa statutory amendments which were made in 1997 Iowa Acts, House File 612. Many of these amendments make the rules consistent with those comprehensive federal and state statutory changes.

The process of reviewing existing rules also highlighted other updating and technical changes including the reorganization of Chapters 95 and 96. The current Chapter 95 deals primarily with public assistance child support cases. The current Chapter 96 deals primarily with nonpublic assistance child support cases being enforced by the department. Since under state and federal law the Child Support Recovery Unit (CSRU) is generally required to provide similar services in both kinds of cases, eligibility and a description of services for all cases is placed in Chapter 95. Chapter 96 will contain rules applicable when CSRU accesses information from outside sources in the process of providing services to children and families.

Specific changes to policy are set forth below:

1. The distribution of state income tax refund offsets is changed so offsets will apply first to current support, and then to the most recent month's delinquent support still due. Under current policy, these collections were applied to delinquent support first. This change is required by federal law. The primary group affected by this change is families who were once recipients of the Family Investment Program (FIP), but whose benefits have terminated. Under the change, if the state intercepts a delinquent obligor's state income tax refund, that money is first paid to the family for any current support due, and then is paid for any delinquent support which came due since the FIP termination.

Applying state income tax offset collections to current support before delinquent support due the state will help families who formerly received FIP and who are now trying to become self-sufficient. Although the state will initially retain less in collections, families who are working to become self-sufficient and not rely on public assistance will receive more in child support collections. This will help them remain more independent. Families who have stopped receiving FIP may receive additional income from state income tax refund offsets.

2. The distribution of support collected for a family currently receiving FIP assistance is revised. Under this change the state retains any support collected up to the amount of assistance paid out since the family began receiving assistance, even if during a given month the amount of support collected is more than the FIP paid to the family in that same month. This change is proposed along with a proposed change in FIP rules (see ARC 7488A, IAB 9/10/97) to no longer use assigned support collected and retained by the Department to determine eligibility for FIP participants.

PRWORA made changes to distribution of child support collections in cases where the family is currently receiving FIP. One change allows states to choose to keep, or pay to the family, the nonfederal share of these collections. Currently, Iowa continues to do what the old federal law mandated: If CSRU collects all the child support due during the month it came due, and that is higher than the amount of FIP paid the family that month, it pays the family that "excess" or "overage" amount. FIP program staff then recalculate the FIP grant to determine the family's continued eligibility for FIP.

Under this change the "excess" or "overage" is kept by the state as reimbursement of the state debt. The FIP rule change, in turn, provides that this assigned support retained by the state does not count against FIP participants in determining their continued FIP eligibility. Instead, when CSRU informs FIP families of the support being collected in their cases, the family can choose between child support and FIP.

This change in distribution of support for FIP families is a result of consideration and recommendations of the Welfare Reform Advisory Group. The Welfare Reform Advisory Group considered whether to maintain the current practice, or exercise the state's option under federal law changes to retain assigned child support if the family is receiving FIP. The combination of changes to child support rules to retain support collected and to FIP rules to no longer consider support collected and retained by the state in determining eligibility was chosen because it provided more stability for families and better enabled them to plan their withdrawal from FIP. Also, under the old federal law, the federal government shared the costs of paying some child support to the FIP family. However, under the new federal law, the state pays the entire cost of continuing to pay child support collections in excess of the FIP grant that month to the family.

FIP clients will no longer be faced with having their FIP assistance canceled based on one month's child support collection which may not continue. In the past, if the support amount that caused FIP cancellation did not continue, it left the family without FIP and little or no child support. The combination of the child support and FIP rule changes will provide more stability for families and give them more control over their plans for self-sufficiency.

With the exception of those families still eligible for the $50 pass-through or rebate payments, FIP recipients will no longer receive some FIP and some child support. Since the state does not retain more than the amount of assistance paid, when the amount due the state has been collected, then additional child support collections will be sent to the family.

Recipients of FIP may prefer to receive child support collected in excess of the FIP grant during a given month. Other FIP recipients may agree with the change that their FIP benefits will no longer be terminated for just one month's child support collection.

The change in distribution will increase the amount of child support the state retains as reimbursement for FIP paid in the past.

3. A state procedure for the new federal administrative offset collection process is established. On July 7, 1997, the federal Department of the Treasury published regulations governing a new federal program to offset or intercept nontax payments from the federal government to obligors who owe delinquent child support. Federal nontax payments which may be subject to offset for past-due child support include travel reimbursements, legal settlement claims and federal vendor payments such as payments under contracts to wash windows on government buildings.

Current policy already provides for offset of state nontax payments. The new federal nontax administrative offset program is patterned on the federal tax refund offset program. CSRU will certify a list of delinquent obligors to the federal office of child support enforcement. Federal officials will send a preoffset notice to the obligor, and send another notice if a payment is actually intercepted.

Rules are also updated to reflect current, broader federal criteria for referring past-due support amounts for offset. This will result in an increase in past-due debts eligible for referral.

New federal rules also give states the option of adding to the original past-due debt certified at intervals throughout the year as determined by the federal government. This is still being developed on the federal level, and the department may propose additional rule changes as federal procedures become more clear.

4. An appeal procedure for both federal tax refund offsets and the new federal nontax administrative offsets is established to provide obligors with due process procedures regarding those collections. Under current policy, while state tax offsets are eligible for a 17A contested case hearing, federal tax refund offsets have not been. They have been handled through administrative reviews by CSRU staff.

Under these amendments, in addition to an opportunity for an administrative review upon receipt of a preoffset notice, obligors are also given an opportunity, if a payment is actually offset, to request a 17A contested case hearing with an administrative law judge.

Obligors whose federal income tax refunds are intercepted will have additional opportunities for administrative appeals; however, they will no longer receive repeated preoffset notices on the same past-due support debt.

Adding an opportunity for a hearing before an administrative law judge when a payment is actually offset makes state and federal offset procedures more consistent.

5. The requirement for applicants and recipients of public assistance to cooperate with child support is placed in child support rules. Federal and state laws require applicants and recipients of public assistance to cooperate with the child support program. Previous law required the public assistance staff (Income Maintenance Workers) to make the determination of whether the applicant or recipient was cooperating in obtaining support. New law requires the state child support agency to make that determination.

Under the old law, the child support staff made a recommendation to the public assistance staff on whether a recipient was not cooperating. The public assistance staff accepted the child support agency's recommendation. Therefore, this is more of a technical, internal Department change rather than a change that will impact the public.

Child support staff determine the action needed to establish paternity or establish and enforce support. Therefore, child support staff can best determine whether the public assistance recipient is cooperating with required actions.

6. A procedure is implemented for CSRU to request or administratively subpoena information from employers and other sources, and an appeal procedure is provided before imposition of the statutory fine for failure to comply. These changes are the result of federal requirements that child support agencies be able to administratively obtain information from employers and also be able to subpoena needed information. The child support agency also must be able to administratively sanction failure to comply. The statute also provides protection from liability for providing information to child support agencies.

Employers currently provide child support agencies with information on parents. Under the new law, employers and others subpoenaed, such as cable TV and utility companies, may be fined for not supplying requested wage and benefit information to CSRU. If employers do not have any information, they may return the form without requesting a conference.

The statute requires employers to "promptly" supply requested information to child support agencies. The statute did not specify a time to respond to a subpoena. However, in order to develop the fine and appeal procedure, the Department had to select a specific time frame to respond, and 15 days was selected. This will allow employers and other entities time to respond promptly without having to do it immediately. Giving longer than 15 days would delay collection of child support.

These rules also provide that if the request or subpoena was sent to the person, employer or other entity from an out-of-state child support agency, and a conference is requested, CSRU will ask that other agency for information. If it is not received within 60 days, the request or subpoena is void and no fine can be assessed. An alternative would be to leave the request or subpoena open until the other state responded. Putting a deadline in the rules will provide closure for employers, for example, who are claiming good cause for not responding.

7. A procedure is provided for an obligor to contest enforcement of an order to provide health care coverage. Based on a federal requirement, state law was modified to include a motion to quash procedure for use by an obligor contesting enforcement of a court order to provide employment-related health care coverage.

The statute requires use of the same motion to quash procedures as for income withholding. These amendments include the option for an employee or obligor to request a conference with CSRU in addition to the motion to quash procedure. Existing rules provide the same option for contesting an income withholding. Since the statute required similar motion to quash court procedures, the rules also provide similar administrative conference procedures.

Obligors who want to contest enforcement of an order to provide health care coverage will be able to request a conference based on a claim of mistake of fact without immediately having to ask for a court hearing.

The Department did not need to provide a conference procedure to an obligor contesting enforcement of health care coverage. However, this will allow obligors more options. A conference may be conducted in person or by telephone.

8. Policy is revised to allow electronic transmission of income withholding notices to employers and other payors of income. Federal and state statutes require this optional method of notifying employers and other payors of income of income withholding. It will reduce paperwork for employers who are able to accept electronic transmission.

Some employers or other income withholders prefer electronic notice of income withholding notices. This will significantly reduce paperwork that would otherwise be manually processed for large employers or agencies.

Another statutory change requires CSRU rather than the employer or income withholder to send a notice to the obligor. Therefore, the obligor will continue to receive a paper notice.

9. Criteria and procedures are established for referral of delinquent support to collection contractors, assessment of the statutory surcharge, and opportunity for the delinquent parent to contest. The law previously allowed CSRU to refer hard-to-collect cases to private collection agencies for enforcement. The Department could use a portion of the state share of collections from that contract to pay the contractor. The new law provides for assessment of a surcharge to be paid by the obligor. The contractor will collect support and the surcharge, and the surcharge will pay the contract costs.

The amount of the surcharge is based on the amount of arrears or delinquent support referred to the collection agency, and on the percent cost of the contract. For example, if a total arrears of $1,000 was referred for collection under a contract calling for a compensation rate of 14 percent of collections to the contractor, the obligor would be assessed an additional $140. The contractor will collect support and the surcharge, and the surcharge will pay the Department's contract costs.

Private collection agencies will be able to use their extensive databases to locate delinquent parents. They will also have resources such as automatic dialing equipment to monitor for nonpayment.

The criteria for arrearages subject to this referral and surcharge are that current support is no longer due and only delinquent support is owed, and that there has been no payment, except for a federal or state tax offset payment, in thepast three months. Limiting this enforcement action to"arrearage-only" cases will avoid administrative problems with a constantly changing balance. The three-month period was chosen because that cutoff would give the collection agency an adequate number of "collectible" arrears, and it was felt that establishing a one- or two-month period was too stringent for the obligor. The less likely that the contractor would be able to collect a sufficient amount of support, the more likely companies bidding for the contract would increase their bids.

The statute provides that the obligor may request a review by CSRU if the obligor wishes to contest the referral and surcharge. The statute also requires the Department to provide in rule for an "additional review" by the program administrator. The Department considered proposing that the additional review occur immediately after the requested review in order to make referrals more quickly. Instead, these proposed rules require the Department to issue the obligor a notice of decision after the first review. The obligor is then given another 20 days to request the additional review. This longer process will give obligors additional time to contest the referral or pay the delinquent support before a surcharge is assessed.

10. A procedure is established which allows state payment to private attorneys enforcing CSRU cases. State statute allows CSRU to decline private attorney enforcement with state compensation until February 15, 1998.

The statute providing for state compensation of private attorney enforcement includes detailed procedures. The attorney must use court proceedings to collect the delinquent support. The intent of the statute was to provide incentives to attorneys who had specific information in a case to use judicial proceedings to assist in the collection of support. The detailed procedure was intended to enable better coordination of the Department's and the private attorney's efforts. Because of that, the statute also specified which cases were exempt from this process and provides that the Department may, by rule, add other exemptions related to its collection and enforcement actions. These amendments establish the following additional exemptions:


* The Department has already referred the order to a private collection agency for enforcement less than nine months ago.


* The private attorney is proposing to take the same type of judicial action that the Department has already initiated.


* The case has been referred to the U.S. Attorney's office.


* The obligor has filed for bankruptcy.

Compensation for successful collection is limited to the state share of any collections received.

11. Changes are made to policy governing disestablishment of paternity and satisfaction of support, including temporary support. The legislature made several changes to the disestablishment of paternity provisions in 1997. These amendments define what the Department will do if child support was ordered and is still unpaid at the time a court determines the man is not the legal father. Unless the court enters an order under the statute which satisfies unpaid support, the Department will enter a satisfaction for all unpaid support assigned to the state. Under the new law, this policy will also be applied to temporary support orders. This practice is similar to one established in earlier policy and will continue.

An obligor who obtains a court determination that he is not the legal father of a child will have unpaid support due the state satisfied. This will not reduce support still due the obligee, since the Department cannot satisfy or waive support due the obligee.

Disestablishment proceedings are not common, so the impact on collections is not significant.

12. Orders which Iowa does not have continuing, exclusive jurisdiction to modify are exempted from the suspension and reinstatement of support process. Effective January 1, 1998, both federal and state statutes will prohibit Iowa courts from suspending child support in certain interstate cases. This rule change merely notes that limitation in the Iowa Administrative Code.

There have been recent changes in interstate child support laws to control the modification of child support orders if more than one state is involved. These laws can be complicated, but basically provide that if, for example, an Iowa court issues a child support order, and all the parties subsequently move to other states, Iowa can no longer modify that order. Additionally, they provide that if more than one state has entered a child support order for that child and obligor, Iowa must perform an analysis under the law to determine which state has authority (continuing, exclusive jurisdiction) to modify an order. An order suspending child support can be considered a modification of the order.

13. Policy regarding review and adjustment modifications, which are currently in use, is refined and streamlined. The review and adjustment process contains federally mandated time frames and strict guidelines about the frequency of holding a review of a child support order which do not apply to the administrative modification process. Periodic reviews of child support obligations are made optional. Federal and state laws were amended to delete the requirement to review orders every 36 months.

Normally the requestor of the review is the one most interested in seeing an order adjusted. If that person decides not to pursue the review and the other person does not indicate an interest in continuing the review, the review will not be continued. This will make the process more efficient and more responsive to the will of the parties.

Eight public hearings were held around the state. One person attended to voice concerns about the referral of certain arrearages to entities outside the Department for collection. The same concerns were voiced by the Child Support Advisory Committee.

The following revisions were made to the Notice of Intended Action in response to comments and following additional internal review:

Subrule 96.1(3), paragraph "a," was revised to clarify that the paragraph is limited to requests regarding employees and contractors, which is the extent of the authority in state law.

Subrule 96.1(3), paragraph "b," was revised to clarify that the paragraph is limited to only the Child Support Recovery Unit subpoena form, which is the extent of the authority in state law.

Subrule 96.1(3), paragraphs "c" and "d," were revised to correct incorrect cross references.

Subrule 98.121(1) was revised to add a new paragraph "c" to incorporate good cause reasons for exemption from referral to a collection agency. Valid exemptions will be receipt of social security, Supplemental Security Income, or Family Investment Program assistance; incarceration; and involvement in the contempt process.

Subrule 98.121(4), introductory paragraph, was revised to add a mistake in determining whether an exemption exists as a reason for contesting the referral and surcharge.

These amendments are intended to implement Iowa Code sections 96.3 as amended by 1997 Iowa Acts, House File 612, section 222; 252A.6A as amended by 1997 Iowa Acts, House File 612, section 5; 252B.1 as amended by 1997 Iowa Acts, House File 612, section 24; 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26; 252B.4 as amended by 1997 Iowa Acts, sections 27 to 29; 252B.5 as amended by 1997 Iowa Acts, House File 612, sections 30 to 33; 252B.9 as amended by 1997 Iowa Acts, House File 612, section 39; 252C.3 as amended by 1997 Iowa Acts, House File 612, sections 51 to 53; 252D.1 as amended by 1997 Iowa Acts, House File 612, section 56; 252D.17 as amended by 1997 Iowa Acts, House File 612, section 61; 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74; 252E.13 as amended by 1997 Iowa Acts, House File 612, section 76; 252E.9; 252F.3 as amended by 1997 Iowa Acts, House File 612, sections 77 to 84; 252H.9 as amended by 1997 Iowa Acts, House File 612, section 101; 252J.1 through 252J.9 as amended by 1997 Iowa Acts, House File 612, sections 112 to 121, respectively; 598.21, subsection 4A as amended by 1997 Iowa Acts, House File 612, section 189; 600B.41A as amended by 1997 Iowa Acts, House File 612, sections 212 through 216; and 1997 Iowa Acts, House File 612, sections 35, 60, 75, 129, 131, 171, and 244.

These amendments shall become effective February 1, 1998.

The following amendments are adopted.

ITEM 1. Amend rule 441--7.1(217), definition of "Aggrieved person," as follows:

Amend numbered paragraph "8" as follows:

8. Whose license, certification, approval, or accreditation has been denied or revoked.

A vendor, payee, parent of child(ren) in foster home or group care, adoptive applicant, an applicant for state community mental health and mental retardation services funds, a person who has received a preoffset notice that the department is placing a claim on their Iowa income tax refund or debtor offset, and a person who has been denied expungement for correction of child abuse registry information may be an aggrieved person in certain situations.

Further amend the definition of "Aggrieved person" by adding the following new numbered paragraph "9."

9. Who is contesting a claim, offset, or setoff as provided in 441--subrule 95.6(3), 95.7(8), or 98.81(3) by alleging a mistake of fact. Mistake of fact means a mistake in the identity of the obligor, or whether the delinquency meets the criteria for referral or submission. The issue on appeal shall be limited to a mistake of fact. Any other issue may only be determined by a court of competent jurisdiction.

ITEM 2. Amend rule 441--95.1(252B) as follows:

Amend the definitions of "Caretaker," "Dependent child," "Public assistance," and "Support," as follows:

"Caretaker" shall mean a custodial parent, relative or guardian whose needs are included in an assistance grant, paid according to Iowa Code chapter 239 1997 Iowa Acts, Senate File 516, sections 2 through 24 and 35, or who is receiving this assistance on behalf of a dependent child, or who is a recipient of nonassistance child support services according to 441--Chapter 96.

"Dependent child" shall mean a person who meets the eligibility criteria established in Iowa Code chapter 234 or 239 1997 Iowa Acts, Senate File 516, and whose support is required by Iowa Code chapter 234, 239, 252A, 252C, 252F, 252H, 598 or 675 600B, any other comparable chapter, or 1997 Iowa Acts, Senate File 516, or House File 612, division XI.

"Public assistance" shall mean assistance provided according to Iowa Code chapter 239 249A, or 1997 Iowa Acts, Senate File 516, sections 2 through 24 and 35, or the cost of foster care provided by the department according to chapter 234, or assistance provided under comparable laws of other states.

"Support" shall mean child support or medical support or both for purposes of establishing, modifying or enforcing orders, and spousal support for purposes of enforcing an order.

Add the following new definition in alphabetical order:

"Federal nontax payment" shall mean an amount payable by the federal government which is subject to administrative offset for support under the federal Debt Collection Improvement Act, Public Law 104-134.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code chapters 252B as amended by 1997 Iowa Acts, House File 612, divisions II and XVI, and section 201; 252C and 252D.

ITEM 3. Renumber rule 441--95.2(252B) as rule 441--95.24(252B), and insert the following new rule 441--95.2(252B):

441--95.2(252B) Child support recovery eligibility and services.

95.2(1) Public assistance cases. The child support recovery unit shall provide paternity establishment and supportestablishment, modification and enforcement services, as appropriate, under federal and state laws and rules for children and families referred to the unit who have applied for or are receiving public assistance. Referrals under this subrule may be made by the family investment program, the Medicaid program, the foster care program or agencies of other states providing child support services under Title IV-D of the Social Security Act for recipients of public assistance.

95.2(2) Nonpublic assistance cases. The same services provided by the child support recovery unit for public assistance cases shall also be made available to any person not otherwise eligible for public assistance. The services shall be made available to persons upon the completion and filing of an application with the child support recovery unit except that an application shall not be required to provide services to the following persons:

a. Persons not receiving public assistance for whom an agency of another state providing Title IV-D child support recovery services has requested services.

b. Persons for whom a foreign reciprocating country or a foreign country with which this state has an arrangement as provided in 42 U.S.C. SS659 has requested services.

c. Persons who are eligible for continued services upon termination of assistance under the family investment program or Medicaid.

95.2(3) Services available. Except as provided by separate rule, the child support recovery unit shall provide the same services as the unit provides for public assistance recipients to persons not otherwise eligible for services as public assistance recipients. The child support recovery unit shall determine the appropriate enforcement procedure to be used. The services are limited to the establishment of paternity, the establishment and enforcement of child support obligations and medical support obligations, and the enforcement of spousal support orders if the spouse is the custodial parent of a child for whom the department is enforcing a child support or medical support order.

95.2(4) Application for services.

a. A person who is not on public assistance requesting services under this chapter, except for those persons eligible to receive support services under paragraphs 95.2(2)"a," "b," and "c," shall complete and return Form 470-0188, Application for Nonassistance Support Services, to the child support recovery unit serving the county where the person resides. If the person does not live in the state, the application form shall be returned to the county in which the support order is entered or in which the other parent or putative father resides.

b. An individual who is required to complete Form 470-0188, Application for Nonassistance Support Services, shall be charged an application fee in the amount set by statute. The fee shall be charged at the time of initial application and any subsequent application for services. The application fee shall be paid to the local child support recovery unit by the individual prior to services being provided.

This rule is intended to implement Iowa Code sections 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26, and 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29.

ITEM 4. Amend rule 441--95.3(252B), introductory paragraph, as follows:

441--95.3(252B) Crediting of current and delinquent support. The amounts received as support from the obligor shall be credited as the required support obligation for the month in which they are collected. Any excess shall be credited as delinquent payments and shall be applied to the immediately preceding month, and then to the next immediately preceding month until all excess has been applied. Funds received as a result of federal tax offsets are credited according to rules 441--95.6(252B) and rule 441--95.7(252B).

ITEM 5. Amend rule 441--95.6(252B) as follows:

Amend the introductory paragraph as follows:

441--95.6(252B) Setoff against state income tax refund or rebate. A claim against a responsible person's state income tax refund or rebate will be made by the department when a support payment, assigned to the department, is delinquent as set forth in Iowa Code section 421.17(21). A claim against a responsible person's state income tax refund or rebate shall apply to delinquent support which the department is attempting to collect pursuant to 441--Chapter 96.

Amend subrule 95.6(2), paragraph "b," as follows:

b. The department makes claim to the responsible person's state income tax refund or rebate. The presetoff notice will inform the responsible person of the amount the department intends to claim and apply to delinquent support.

Amend subrule 95.6(7) as follows:

95.6(7) Application of setoff. Setoffs shall be applied to delinquent support only as provided in rule 441-- 95.3(252B). The department shall first apply the amount collected from a setoff action to delinquent support assigned to the department under Iowa Code chapters 239 and 234. The department shall then apply any amount remaining in equal proportions to delinquent support due individuals receiving nonassistance services.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code section sections 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26, and 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29.

ITEM 6. Amend rule 441--95.7(252B) as follows:

Amend the catchwords and subrule 95.7(1) as follows:

441--95.7(252B) Setoff Offset against federal income tax refund and federal nontax payment.

95.7(1) A claim against a responsible person's federal income tax refund or rebate federal nontax payment will be made by the department when delinquent support is owed; and.

a. The department has taken at least one action to collect the delinquency (billing, location or legal action) within the current calendar year; and

95.7(1) Amount of assigned support. If the delinquent support is assigned to the department,

b. The the amount of delinquent support is: shall be

(1) At at least $150 when no support payments have been received in the 12-month period preceding the month of certification; or

(2) At least $500 although support payments have been made in the 12-month period preceding the month of certification and the support has shall have been delinquent for three months.

Add the following new subrule 95.7(2).

95.7(2) Amount of nonassigned support. If delinquent support is not assigned to the department, the claim shall be made if the amount of delinquent support is at least $500.

a. The amount distributed to an obligee shall be the amount remaining following payment of a support delinquency assigned to the department. Prior to receipt of the amount to be distributed, the obligee shall sign Form 470-2084, Repayment Agreement for Federal Tax Refund Offset, agreeing to repay any amount of the offset the Department of the Treasury later requires the department to return. The department shall distribute to an obligee the amount collected from an offset according to subrule 95.7(9) within the following time frames:

(1) Within six months from the date the department applies an offset amount from a joint income tax refund to the child support account of the responsible person, or within 15 days of the date of resolution of an appeal under subrule 95.7(8), whichever is later, or

(2) Within 30 days from the date the department applies an offset amount from a single income tax refund to the child support account of the responsible person, or within 15 days of the date of resolution of an appeal under subrule 95.7(8), whichever is later.

(3) However, the department is not required to distribute until it has received the amount collected from an offset from the federal Department of the Treasury.

b. Federal nontax payment offset distribution. Federal nontax payment offsets shall be applied as provided in rule 441--95.3(252B).

Amend subrules 95.7(3) to 95.7(5), 95.7(8), and 95.7(9) as follows:

95.7(3) Notification to federal agency. The department shall, by October 1 of each year or at times as permitted or specified by federal regulations, submit a notification(s) of liability for delinquent support to the federal office of child support enforcement.

95.7(4) Preoffset notice and review. Each taxpayer obligor who does not have an existing support debt on record with the federal office of child support enforcement will receive a pre-setoff preoffset notice in writing, using address information available from the Internal Revenue Service Department of the Treasury, stating the amount of the delinquent support certified for setoff offset.

a. Individuals who wish to dispute the setoff amount offset must notify the department within the time period specified in the pre-setoff preoffset notice.

b. Upon receipt of a complaint disputing the setoff amount offset, the department shall investigate its validity conduct a review to determine if there is a mistake of fact and respond to the taxpayer obligor in writing within ten days. For purposes of this rule, "mistake of fact" means a mistake in the identity of the obligor or whether the delinquency meets the criteria for referral.

95.7(5) Recalculation of delinquency. When the records of the department differ with those of the individual obligor for determining the amount of the delinquent support, the individual obligor may provide and the department will accept the amount calculated and certified by the clerk of court as the official pay record for the time period involved documents verifying modifications of the order, and records of payments made pursuant to state law, and will recalculate the delinquency.

95.7(8) Offset notice, appeal, and refund. The federal Department of the Treasury will send notice that a federal income tax refund or federal nontax payment owed to the obligor has been intercepted.

a. The obligor shall have 15 days from the date of the notice to the obligor under this subrule to contest the offset by initiating an administrative appeal pursuant to 441--subrules 7.8(1) and 7.8(2). The obligor shall provide the department with a copy of the Department of the Treasury notice. Except as specifically provided in this rule, administrative appeals will be governed by 441--Chapter 7. The issue on appeal shall be limited to a mistake of fact as specified at paragraph 95.7(4)"b."

b. The department shall refund the incorrect portion of a federal income tax setoff offset or federal nontax payment offset within 30 days following verification of the setoff offset amount. Verification shall mean a listing from the federal office of child support enforcement containing the taxpayer's obligor's name and the amount of tax refund or nontax payment to which the taxpayer obligor is entitled. The date the department receives the federal listing will be the beginning day of the 30-day period in which to make a refund.

The department shall refund the amount incorrectly set off to the taxpayer obligor unless the taxpayer obligor agrees to apply the refund of the incorrect setoff offset to any other support obligation due. Prior to the receipt of the refund, the taxpayer obligor shall sign Form 470-2082, Adjustment of Federal Tax Setoff or Nontax Offset Agreement, agreeing to repay any amount of the setoff offset the Internal Revenue Service Department of the Treasury later requires the department to return.

95.7(9) Setoffs Application of offsets. Offsets of federal income tax refunds shall be applied to delinquent support only. The department shall first apply the amount collected from a setoff action an offset to delinquent support assigned to the department under Iowa Code chapters 239 and chapter 234 and 1997 Iowa Acts, Senate File 516, sections 2 through 24 and 35. The department shall then apply any amount remaining in equal proportions to delinquent support due individuals receiving nonassistance services.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code section sections 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26; 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29; and 252B.5 as amended by 1997 Iowa Acts, House File 612, sections 30, 31, 32, and 33.

ITEM 7. Amend subrule 95.8(1) as follows:

95.8(1) Withholding. The child support recovery unit shall offset job insurance benefits by initiating an assignment a withholding of income pursuant to Iowa Code chapter 252D and 441--Chapter 98, Division II, or a garnishment action pursuant to Iowa Code chapter 642. The amount to be withheld through an assignment a withholding or garnishment of unemployment benefits shall not exceed the amount specified in 15 U.S.C. 1673(b).

ITEM 8. Amend rule 441--95.14(252B) as follows:

Amend subrule 95.14(1), introductory paragraph and paragraph "g," as follows:

95.14(1) Case closure criteria. In order to be eligible for closure, the case shall meet the requirements of subrule 95.14(3) or at least one of the following criteria:

g. There has been a finding of good cause or other exception in a public assistance case as specified in 441--subrules 41.2(8) 41.22(8) through 41.2(12) 41.22(12) and 441--subrule 75.14(3), including a determination that support enforcement may not proceed without risk or harm to the child or caretaker relative.

Add the following new subrules 95.14(3) and 95.14(4):

95.14(3) Reasons for termination of services to nonpublic assistance recipients. Services to a recipient of nonpublic assistance support services may be terminated when one of the case closure criteria of paragraphs 95.14(1)"a" through "f" is met or may occur for one or more of the following reasons:

a. A written or oral request is received from the recipient to close the case when there is no assignment to the state of arrearages which accrued under a support order.

b. The child support recovery unit is unable to contact the custodial parent or caretaker within a 30-calendar-day period despite attempts by both telephone and at least one certified letter.

c. The custodial parent or caretaker has failed to cooperate with the child support recovery unit, the circumstances of the noncooperation have been documented, and an action by the custodial parent or caretaker is essential for the next step in providing services. (See rule 441--95.19(252B).)

d. The child support recovery unit has providedlocation-only services.

e. The child support recovery unit has determined that it would not be in the best interest of the child to establish paternity in a case involving incest or forcible rape, or in any case where legal proceedings for adoption are pending.

95.14(4) Notification in nonpublic assistance cases. Notification shall be provided to nonpublic assistance cases in the manner and under the conditions stated in subrule 95.14(2), except for cases terminated for the reasons listed in paragraphs 95.14(3)"a" and "d." If the case was closed because the child support recovery unit was unable to contact the custodial parent or caretaker as provided in paragraph 95.14(3)"b," the case shall be kept open if contact is reestablished with the custodial parent prior to the effective date of the closure.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code sections 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28, and 29, 252B.5 and 252B.6.

ITEM 9. Amend rule 441--95.15(73GA,ch1224), catchwords, and subrule 95.15(1) as follows:

441--95.15(73GA,ch1224 252B) Child support recovery unit attorney.

95.15(1) State's representative. An assistant attorney general, assistant county attorney, or independent contract attorney employed by or under contract with the child support recovery unit represents only the state of Iowa. The soleattorney-client relationship for the child support recovery unit attorney is between the attorney and the state of Iowa. A private attorney acting under 1997 Iowa Acts, House File 612, section 35, is not a child support recovery unit attorney, and is not a party to the action.

ITEM 10. Amend 441--Chapter 95 by adding the following new rules:

441--95.18(252B) Continued services available to canceled family investment program (FIP) or Medicaid recipients. Support services shall automatically be provided to persons who were eligible to receive support services as recipients of FIP or Medicaid and who were canceled from FIP or Medicaid. Continued support services shall not be provided to a person who has been canceled from FIP or Medicaid when a claim of good cause, as defined at 441--subrule 41.22(8) or 441--subrule 75.14(3), as appropriate, was valid at the time assistance was canceled or when one of the reasons for termination of services, listed at rule 441--95.14(252B), applies to the case.

Support services shall be provided to eligible persons without application or application fee, but subject to applicable enforcement fees.

95.18(1) Notice of services. Within 45 days from the date FIP assistance is canceled or within 15 days from the date the unit is notified of the cancellation of assistance, the department shall forward Form CS-1113, Notice of Continued Support Services, to a person's last-known address to inform the person of eligibility for and duration of the continued services.

95.18(2) Termination of services. A person may request the department to terminate support services at any time by the completion and return of the appropriate portion of Form CS-1113, Notice of Continued Support Services, or in any other form of written communication, to the child support recovery unit.

Continued support services may be terminated at any time for any of the reasons listed in rule 441--95.14(252B).

95.18(3) Reapplication for services. A person whose services were denied or terminated may reapply for services under this chapter by completing the application process and paying the application fee described in subrule 95.2(4).

This rule is intended to implement Iowa Code section 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29.

441--95.19(252B) Cooperation of public assistance recipients in establishing and obtaining support. If a person who is a recipient of FIP or Medicaid is required to cooperate with the child support recovery unit in establishing paternity; in establishing, modifying, or enforcing child or medical support; or in enforcing spousal support, the following shall apply:

95.19(1) Cooperation defined. The person shall cooperate in good faith in obtaining support for persons whose needs are included in the assistance grant or Medicaid household, except when good cause or other exception as defined in 441--subrule 41.22(8) or 75.14(8) for refusal to cooperate, is established.

a. The person shall cooperate in the following areas:

(1) Identifying and locating the parent of the child for whom assistance or Medicaid is claimed.

(2) Establishing the paternity of a child born out of wedlock for whom assistance or Medicaid is claimed.

(3) Obtaining support payments for the person and the child for whom assistance is claimed, and obtaining medical support for the person and child for whom Medicaid is claimed.

b. Cooperation is defined as including the following actions by the person if the action is requested by the child support recovery unit:

(1) Providing the name of the noncustodial parent and additional necessary information.

(2) Appearing at the child support recovery unit to provide verbal or written information or documentary evidence known to, possessed by, or reasonably obtained by the person that is relevant to achieving the objectives of the child support recovery program.

(3) Appearing at judicial or other hearings, proceedings or interviews.

(4) Providing information or attesting to the lack of information, under penalty of perjury.

(5) If the paternity of the child has not been legally established, submitting to blood or genetic tests pursuant to a judicial or administrative order. The person may be requested to sign a voluntary affidavit of paternity after being given notice of the rights and consequences of signing such an affidavit as required by the statute in Iowa Code section 252A.3A as amended by 1997 Iowa Acts, House File 612, section 2. However, the person shall not be required to sign an affidavit or otherwise relinquish the right to blood or genetic tests.

c. The person shall cooperate with the child support recovery unit to the extent of supplying all known information and documents pertaining to the location of the noncustodial parent and taking action as may be necessary to secure or enforce a support obligation or establish paternity or to secure medical support. This includes completing and signing documents determined to be necessary by the state's attorney for any relevant judicial or administrative process.

95.19(2) Failure to cooperate. The local child support recovery unit shall make the determination of whether or not a person has cooperated with the unit. The child support recovery unit shall send notice of a determination of noncooperation to the person on Form 470-3400, Notice of Noncooperation, and notify the FIP and Medicaid programs, as appropriate, of the noncooperation determination and the reason for the determination. The FIP and Medicaid programs shall take appropriate sanctioning actions as provided in statute and rules.

95.19(3) Good cause or other exception.

a. A person who is a recipient of FIP assistance may claim a good cause or other exception for not cooperating, taking into consideration the best interests of the child as provided in 441--subrules 41.22(8) through 41.22(12).

b. A person who is a recipient of Medicaid may claim a good cause or other exception for not cooperating, taking into consideration the best interests of the child as provided in 441--subrule 75.14(3).

This rule is intended to implement Iowa Code section 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26.

441--95.20(252B) Cooperation of public assistance applicants in establishing and obtaining support. If a person who is an applicant of FIP or Medicaid is required to cooperate in establishing paternity, in establishing, modifying, or enforcing child or medical support, or in enforcing spousal support, the requirements in 441--subrule 41.22(6) and rule 441--75.14(249A) shall apply. The appropriate staff in the FIP and Medicaid programs are designees of the child support recovery unit to determine noncooperation and issue notices of that determination.

This rule is intended to implement Iowa Code section 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26.

441--95.21(252B) Cooperation in establishing and obtaining support in nonpublic assistance cases.

95.21(1) Requirements. The individual receiving nonpublic assistance support services shall cooperate with the child support recovery unit by meeting all the requirements of rule 441--95.19(252B), except that the individual may not claim good cause or other exception for not cooperating.

95.21(2) Failure to cooperate. The child support recovery unit shall make the determination of whether or not the nonpublic assistance applicant or recipient of services has cooperated. Noncooperation shall result in termination of support services. An applicant or recipient may also request termination of services under subrule 95.14(3).

This rule is intended to implement Iowa Code section 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29.

441--95.22(252B) Charging pass-through fees. Pass-through fees are fees or costs incurred by the department for service of process, genetic testing and court costs if the entity providing the service charges a fee for the services. The child support recovery unit may charge pass-through fees to persons who receive continued services according to rule 441--95.18(252B) and to other persons receiving nonassistance services, except no fees may be charged an obligee residing in a foreign country or the foreign country if the unit is providing services under paragraph 95.2(2)"b."

This rule is intended to implement Iowa Code section 252B.4 as amended by 1997 Iowa Acts, House File 612, sections 27, 28 and 29.

441--95.23(252B) Reimbursing assistance with collections of assigned support. For an obligee and child who currently receive assistance under the family investment program, the full amount of any assigned support collection that the department receives shall be distributed according to rule 441--95.3(252B) and retained by the department to reimburse the family investment program assistance.

This rule is intended to implement Iowa Code section 252B.15.

ITEM 11. Rescind 441--Chapter 96 and adopt the following new chapter in lieu thereof:

CHAPTER 96

INFORMATION AND RECORDS

PREAMBLE

Title IV-D of the Social Security Act provides that state child support agencies providing services under the Act shall have access to information and records from third parties to assist in providing services. Information and records shall be provided as specified in these rules, other rules, Iowa statutes, and federal statute and regulations. These rules implement a procedure for the child support agency to request or administratively subpoena information from employers and other sources, and provide an appeal procedure before imposition of the statutory fine for failure to comply.

441--96.1(252B) Access to information and records from other sources. In addition to statutes and other rules, the following entities shall provide information and records based on the following methods of requesting the information and within the following time frame:

96.1(1) Oral or written request. All persons and entities, including all for-profit, nonprofit, and governmental employers, shall, within 15 days of receipt of a request, provide the child support recovery unit or a child support agency of another state information on the employment, compensation, and benefits of any individual employed by the person or entity as an employee or contractor if the unit or agency is providing services in relation to that individual. The request may be made orally, by letter, by form or by other written request listed in subrule 96.1(3); however, the fine and procedures described in rules 96.2(252B) to 96.6(252B) only apply if the request was by a written request listed in subrule 96.1(3).

96.1(2) Subpoena. All persons and entities shall comply with a Child Support Recovery Unit Subpoena, Form 470-3413, issued by the child support recovery unit, or an Interstate Subpoena, OMB Control # 0970-0152, or its successor, issued by a child support agency of another state, as provided in Iowa Code section 252B.9 as amended by 1997 Iowa Acts, House File 612, section 39. The child support recovery unit or a child support agency of another state may issue a subpoena regarding more than one individual. The person or entity shall provide the information and records as directed in Form 470-3413, or the Interstate Subpoena.

96.1(3) Time to reply to a written request. A person or entity who is sent any of the following shall provide the information and records requested in the manner requested to the child support recovery unit or child support agency of another state, as appropriate, within 15 days of the issuance of the request.

a. Form 470-3232, Employer Verification Request, Form 470-0177, Employment and Health Insurance Questionnaire, or other forms as specified in appropriate rules from the child support recovery unit which request information described at subrule 96.1(1).

b. Form 470-3413, Child Support Recovery Unit Subpoena, from the child support recovery unit.

c. A written request or form as provided at subrule 96.1(1) from a child support agency of another state.

d. An Interstate Subpoena, OMB Control # 0970-0152, or its successor, as provided at subrule 96.1(2) from a child support agency of another state.

441--96.2(252B) Refusal to comply.

96.2(1) Refusal to comply with written request or subpoena--general.

a. A person who is a parent or putative father in a support or paternity proceeding in which the child support recovery unit or a child support agency of another state is providing services who fails to comply with a request or subpoena as provided in subrule 96.1(3) shall be subject to license sanctioning as provided in 441--Chapter 98, Division VIII.

b. A person or entity who fails to comply with a request or subpoena as provided in subrule 96.1(3), and who is not a person as described under paragraph "a," is subject to the provisions of subrule 96.2(2).

96.2(2) Refusal to comply with written request or subpoena--person or entity not a parent or putative father. A person or entity who is issued a written request listed in subrule 96.1(3) may refuse to comply as provided in rule 441-- 96.3(252B).

441--96.3(252B) Procedure for refusal.

96.3(1) No information. A person or entity who does not have any information or records requested or subpoenaed shall respond as follows:

a. If the request or subpoena is a form from the child support recovery unit under paragraph 96.1(3)"a" or "b," the person or entity shall sign and return to the unit the appropriate portion of the form indicating the lack of information or records.

b. If the request or subpoena is one listed in paragraphs 96.1(3)"c" or "d," the person or entity shall send the child support agency of the other state a signed and dated written statement indicating the lack of information or records.

96.3(2) Good cause. The person or entity may claim good cause for refusing to comply as required in Iowa Code section 252B.9.

a. To claim good cause, the person or entity shall file a request for a conference by mailing or submitting a written request to the child support recovery unit which issued the request or subpoena within 15 days of the issuance of the request or subpoena.

b. If a child support agency of another state issued the request or subpoena, the person or entity may request a conference with the child support recovery unit or with the child support agency of the other state. The person or entity shall request a conference with the child support recovery unit by mailing or submitting a written request and a copy of the subpoena or document received from the child support agency of the other state to the Iowa Department of Human Services, Bureau of Collections, Central Registry, P.O. Box 9218, Des Moines, Iowa 50306-9218. The person or entity shall request a conference with the child support agency of the other state by following the requirements of that state's laws and regulations.

441--96.4(252B) Conference conducted.

96.4(1) Request or subpoena issued by CSRU. If the child support recovery unit issued the request or subpoena, the unit shall notify the person or entity and conduct a conference within ten days of receipt of the request for a conference. At the request of either the unit or the person or entity, the conference may be rescheduled one time. The conference may be conducted in person or by telephone.

96.4(2) Request or subpoena issued by other state. If a conference with the child support recovery unit is requested based upon a request or subpoena issued by a child support agency of another state, the bureau chief, as defined at rule 441--95.1(252B), shall request that agency send an interstate referral and appropriate information to the unit or central registry.

a. The child support recovery unit shall notify the person or entity and conduct a conference within ten days of opening a case based upon an interstate referral and appropriate information. If the child support recovery unit does not receive an interstate referral and appropriate information within 60 days of the bureau chief's request, the request or subpoena received under subrule 96.1(3) shall be void, and the child support recovery unit shall notify the person or entity it is void.

b. The voiding of a request or subpoena under this subrule shall not prevent the issuance of subsequent requests or subpoenas.

96.4(3) Submission of information. On or before the conference date, the person or entity shall submit information to the child support recovery unit which demonstrates a mistake in the identity of the person or entity, or a mistake in the identity of the individual who is the subject of the request or subpoena, or which demonstrates a specific prohibition under federal law to release of the information or records. The child support recovery unit may extend the time to conduct the conference an additional ten days to allow time for the person or entity to provide the information.

96.4(4) Notice of findings. Following the conference, the unit shall issue a notice as provided in Iowa Code section 252B.9 as amended by 1997 Iowa Acts, House File 612, section 39.

441--96.5(252B) Fine assessed.

96.5(1) Conditions resulting in fine. The child support recovery unit shall assess a fine of $100 per refusal and notify the person or entity of the fine if any one of the following applies:

a. Ten days have passed since the unit issued a notice under subrule 96.4(4) stating the unit determined there is no good cause to refuse to comply with the request or subpoena, and the information or records have not been received.

b. Fifteen days have passed since the child support recovery unit issued the request or subpoena and the information or records have not been received, nor has the person or entity filed a request for a conference.

c. Fifteen days have passed since a child support agency of another state has issued the request or subpoena, and that agency sends an interstate referral to the child support recovery unit requesting enforcement of the request or subpoena because the information or records were not received.

96.5(2) Definition of refusal. One refusal is a refusal to supply information or records based on one written request, or one subpoena regarding one or more individuals.

96.5(3) Notification of fine. If the child support recovery unit assesses a fine, it shall notify the person or entity by regular mail with proof of service completed according to Rule of Civil Procedure 82. The person or entity shall have 30 days to pay the fine.

441--96.6(252B) Objection to fine or failure to pay.

96.6(1) Objection filed. The person or entity may object to the imposition of the fine by filing an application for judicial review in district court within 30 days of issuance of the notice of the fine, and sending a copy of the application to the child support recovery unit.

96.6(2) Petition to compel. If the person or entity fails to pay the fine imposed, and does not file an application for judicial review within the time provided in this rule, the child support recovery unit may file a petition to compel the person or entity to comply with the request, subpoena or fine in district court in the county in which the underlying support order or pending matter is filed. If there is no support order or pending matter filed in district court in Iowa, then the unit may file the petition in the county in which the person resides, or the person or entity has its principal place of business.

96.6(3) Certification to court. If the person, entity, or the child support recovery unit files an action in district court, the unit shall certify a copy of the following, as appropriate, to the court prior to a hearing:

a. Proof of service of the request or subpoena.

b. Proof of service of the notice of assessment of a fine.

c. Written decision following a conference.

96.6(4) Failure to comply with court order. Failure of the person or entity to comply with an order of the district court shall be subject to enforcement through contempt of court.

This rule is intended to implement Iowa Code section 252B.9 as amended by 1997 Iowa Acts, House File 612, section 39.

ITEM 12. Amend subrule 98.3(2), paragraph "a," as follows:

a. Seek to modify or adjust an order for medical support through administrative process pursuant to rule 441-- 95.11(252C) 441--Chapter 99.

ITEM 13. Amend rule 441--98.5(252E) as follows:

441--98.5(252E) Health benefit plan information. The unit shall gather information concerning a health benefit plan.

98.5(1) Information from an employer. The unit shall gather information concerning a health benefit plan an employer may offer an obligor. as follows:

a. The unit shall send Form 470-0177, Employment and Health Insurance Questionnaire, or Form 470-2240, Employer Health Insurance Questionnaire, whenever a potential employer is identified.

b. The unit shall secure medical support information from a known employer on Form 470-2743, Employer Medical Support Information, when a copy of the court order or ex parte order has been forwarded to the employer pursuant to Iowa Code section 252E.4, as amended by 1997 Iowa Acts, House File 612, section 74, and shall provide the information: or Form 470-3272, Order/Notice to Withhold Income for Child Support, which includes a provision for health benefit plan or insurance coverage, has been forwarded to an employer pursuant to Iowa Code section 252D.30.

98.5(2) Information from an obligor. The unit may secure medical support information from an obligor on Form 470-0413, Obligor Insurance Questionnaire.

98.5(3) Disposition of information. The unit shall provide the information:

98.5(1) a. To the Medicaid agency and to the obligee when the dependent is a recipient of Medicaid.

98.5(2) b. To the custodial parent obligee when the dependent is not a recipient of Medicaid.

ITEM 14. Amend subrule 98.7(2) as follows:

98.7(2) Orders prior to July 1, 1990 Health benefit plan or insurance.

a. If an obligor was ordered to provide a health benefit plan or insurance coverage under an order entered prior to July 1, 1990, but did not comply with the order, the child support recovery unit may implement the order without further notice to the obligor by forwarding to the employer a copy of the order, an ex parte order as provided in Iowa Code section 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74, or Form 470-3272, Order/Notice to Withhold Income for Child Support, which includes a provision for health benefit plan or insurance coverage, with written notification of the requirements of Iowa Code section 252E.4. For the period during which the obligor did not comply with the order, the child support recovery unit may reduce medical support or expenditures to a dollar amount and pursue collection.

b. If the child support recovery unit implements an order under this subrule, and the unit has not notified the obligor of the order to the employer as part of the notice sent under subrule 98.42(2), the unit shall send a notice to the obligor at the last-known address of the obligor by regular mail. The notice shall contain the following information:

(1) A statement of the obligor's right to an informal conference.

(2) The process to request an informal conference.

(3) The obligor's right to file a motion to quash the order to the employer with the district court.

ITEM 15. Amend 441--Chapter 98, Division I, by adding the following new rule:

441--98.8(252E) Contesting the order. The obligor may contest the enforcement of medical support, including medical support provisions of an income withholding order or a notice of an income withholding order, by means of an informal conference with the child support recovery unit, or by filing a motion to quash.

98.8(1) Motion to quash. Procedures for filing a motion to quash the order are specified at 1997 Iowa Acts, House File 612, sections 68 and 75.

98.8(2) Informal conference.

a. The obligor may be entitled to only one informal conference for each new or amended order under Iowa Code section 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74, or income withholding order.

b. Procedures for the informal conference are as follows:

(1) The child support recovery unit shall inform the obligor in writing of the right to request an informal conference.

(2) The obligor may request an informal conference with the child support recovery unit if the obligor believes the enforcement was entered in error.

(3) The obligor shall request an informal conference in writing, within 15 calendar days from the date of the enforcement order under Iowa Code section 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74, or the income withholding order, or at any time if a mistake of fact regarding the identity of the obligor is believed to have been made.

(4) The child support recovery unit shall schedule an informal conference within 15 calendar days of the receipt of a written request from the obligor or the obligor's representative.

(5) The child support recovery unit may conduct the conference in person or by telephone.

(6) If the obligor fails to attend the conference, only one alternative time shall be scheduled by the child support recovery unit.

(7) The child support recovery unit shall issue a written decision to the obligor within ten calendar days of the conference.

c. The issues to be reviewed at the conference shall be as follows:

(1) Whether the identity of the obligor is in error.

(2) Whether the obligor is already providing health benefit plan coverage for the dependent.

(3) Whether the availability of dependent coverage under a health benefit plan is in error.

(4) Whether the obligor was ordered to provide a health benefit plan coverage under the support order.

d. The results in an informal conference shall in no way affect the right of the obligor to file a motion to quash the order under Iowa Code section 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74, an income withholding order, or Form 470-3272, Order/Notice to Withhold Income for Child Support, which includes a provision for health benefit plan or insurance coverage with the court.

Amend the implementation clause at the end of 441--Chapter 98, Division I, as follows:

These rules are intended to implement Iowa Code sections 252A.4, 252B.5, 252C.1, 252C.3, 252C.4, 252C.9, 252D.1, 252D.30, 598.1, 598.21, 598.22 and 675.25 600B.25 and Iowa Code chapter 252E as amended by 1997 Iowa Acts, House File 612, division V, and 1997 Iowa Acts, House File 612, section 68.

ITEM 16. Amend rule 441--98.21(252D) as follows:

441--98.21(252D) When applicable. When there is a delinquency in an amount equal to the support payable for one month as specified by an order for support or reimbursement order and the child support recovery unit is providing services under 441--Chapter 95, the obligor shall be ordered to assign to the clerk of the district court or the collection services center a portion of the obligor's wages, periodic earnings or trust income, or other unit shall enter an order to withhold the obligor's income not exempt by state or federal law, to require the income withheld to be paid to the collection services center to pay the support obligation. An income withholding order shall also be entered to collect the unpaid balance of a judgment for the reimbursement of a support debt when a repayment schedule is not specified in the order establishing the judgment.

ITEM 17. Amend rule 441--98.39(252D) as follows:

441--98.39(252D,252E) Provisions for medical support. An income withholding order or notice of income withholding may also include provisions for enforcement of medical support when medical support is included in the support order. The income withholding order or notice of income withholding may require implementation of dependent coverage under a health benefit plan pursuant to Iowa Code chapter 252E or the withholding of a dollar amount for medical support. Amounts withheld for medical support shall be determined in the same manner as amounts withheld for child support.

ITEM 18. Amend rule 441--98.40(252D), parenthetical implementation, as follows:

441--98.40(252D,252E) Maximum amounts to be withheld.

Further amend rule 441--98.40(252D), implementation clause, as follows:

These rules are intended to implement Iowa Code chapter chapters 252D as amended by 1997 Iowa Acts, House File 612, division IV and 252E as amended by 1997 Iowa Acts, House File 612, division V.

ITEM 19. Amend rule 441--98.42(252D) as follows:

Amend subrule 98.42(1), introductory paragraph, as follows:

98.42(1) Notice to employer. Form 470-0196, Notice Directing Income Withholding, shall be sent to the employer or other income provider The unit may send notice to the employer or other income provider by regular mail or by electronic means in accordance with Iowa Code chapter 252D. If the unit is sending notice by regular mail, it shall send Form 470-3272, Order/Notice to Withhold Income for Child Support, or a notice in the standard format prescribed by 42 U.S.C. SS666(b)(6)(A). If the unit is sending the notice by electronic means, it may include notice of more than one obligor's order and need only state once provisions which are applicable to all obligors, such as the information in paragraphs "d," "f," "g," and "i," of this subrule. The statement of provisions applicable to all obligors may be sent by regular mail or electronic means. The notice of income withholding shall contain information such as the following:

Further amend subrule 98.42(1) by rescinding paragraph "j" and inserting the following new paragraph in lieu thereof:

j. Responsibility, if any, of the income provider toenroll the obligor's dependent for coverage under a health benefit plan.

Amend subrule 98.42(2) by adding the following new paragraph "e":

e. The information provided to the employer or other income provider, or a copy of the notice sent to the employer or other income provider.

Add the following new subrule:

98.42(3) Standard format. As provided in Iowa Code section 252D.17 as amended by 1997 Iowa Acts, House File 612, section 61, an order or notice of an order for income withholding shall be in a standard format prescribed by the child support recovery unit. Form 470-3272, Order/Notice to Withhold Income for Child Support, is the standard format prescribed by the child support recovery unit, and the unit shall make a copy available to the state court administrator and the Iowa state bar association.

ITEM 20. Amend rule 441--98.43(252D) as follows:

Amend subrule 98.43(2), paragraph "b," subparagraph (2), as follows:

(2) The obligor may request an informal conference with the child support recovery unit if the obligor believes the assignment withholding was entered in error or meets the hardship criteria defined by subrule 98.24(1).

Amend subrule 98.43(2), paragraph "c," by adding the following new subparagraph (4).

(4) For income withholding orders which include implementation of an order for provisions of a health benefit plan pursuant to Iowa Code chapter 252E, the issues in paragraph 98.8(2)"c" shall be reviewed.

Add the following new subrule:

98.43(3) Income withholding order issued from another state. The child support recovery unit shall only follow procedures for a motion to quash or conduct an informal conference based on an income withholding order issued in another state if it is providing services under 441--Chapter 95.

ITEM 21. Amend rule 441--98.45(252D), introductory paragraph, as follows:

441--98.45(252D) Modification of income withholding order. The child support recovery unit may, by ex parte order, modify a previously entered income withholding order to add or amend health insurance provisions as provided in Iowa Code section 252E.4 as amended by 1997 Iowa Acts, House File 612, section 74. The child support recovery unit may, by ex parte order, also modify a previously entered income withholding order according to the guidelines established under rule 441--98.24(252D) if it is determined that:

ITEM 22. Amend rule 441--98.101(252J) as follows:

441--98.101(252J) Referral for license sanction. In the process referred to as license sanction, the child support recovery unit (CSRU) may refer an obligor individual to a licensing agency for the suspension, revocation, nonissuance, or nonrenewal of a variety of licenses including, but not limited to, motor vehicle registrations, driver's licenses, business and professional licenses, and licenses for hunting, fishing, boating, or other recreational activity. In order to be referred to a licensing agency for license sanction, an one of the following must apply:

98.101(1) Delinquent support payments. An obligor's support payments must be delinquent in an amount equal to the support payment for 90 days three months. CSRU may first refer for license sanction those obligors having the greatest number of months of support delinquency. CSRU shall not refer obligors whose support payments are being made under an income withholding order.

98.101(2) Subpoena or warrant. An individual must have failed to comply with a subpoena or warrant, as defined in Iowa Code chapter 252J, relating to a paternity or support proceeding. If a subpoena was issued, the individual must have failed to comply with either Form 470-3413, Child Support Recovery Unit Subpoena, or an Interstate Subpoena as provided in paragraph 96.2(1)"a" within 15 days of the issuance of the subpoena, and proof of service of the subpoena was completed according to Rule of Civil Procedure 82.

ITEM 23. Amend rule 441--98.102(252J), introductory paragraph and subrules 98.102(2) and 98.102(5), as follows:

441--98.102(252J) Reasons for exemption. Certain conditions shall be considered valid reasons for exemption from the license sanction process. Upon verification of these conditions, CSRU shall bypass, exempt, or withdraw the obligor's individual's name from referral to licensing agencies for the purpose of applying a license sanction. When the information to verify the exemption is not available to CSRU through on-line sources, CSRU shall request, and the obligor individual shall provide, verification of the reason for exemption. Valid reasons for exemption for failure to comply with a subpoena or warrant and acceptable verification are those listed in subrules 98.102(2), 98.102(3), 98.102(5), and 98.102(6). Valid reasons for exemption for delinquent support payments and acceptable verification are any of the following:

98.102(2) Temporary illness or disability. Temporary illness or disability of the obligor individual or illness or disability of another household member which requires the presence of the obligor individual in the home as caretaker is considered a valid reason for exemption upon receipt of a completed Form 470-3158, Physician's Statement, verifying the obligor's individual's or household member's inability to work.

98.102(5) Chemical dependency treatment. Participation in a chemical dependency treatment program that is licensed by the department of public health or the joint commission on the accreditation of hospitals (JCAH) is considered a valid reason for exemption upon receipt of written verification from the professional staff of the program that participation in the program precludes the obligor individual from working.

ITEM 24. Amend rule 441--98.103(252J) as follows:

441--98.103(252J) Notice of potential sanction of license. When an obligor individual meets the criteria for selection, CSRU may issue a notice to the obligor individual of the potential sanction of any license held by the obligor individual, using Form 470-3278, Official Notice of Potential License Sanction.

98.103(1) Delinquent support payments. CSRU shall inform the obligor that the obligor may make immediate payment of all current and past due child support, schedule a conference to review the action of CSRU, or request to enter into a payment agreement with the unit. CSRU shall follow the procedures and requirements of Iowa Code chapter 252J regarding the issuance of the notice and the holding of a conference.

98.103(2) Subpoena or warrant. CSRU shall inform the individual that the individual may comply with the subpoena or warrant, or schedule a conference to review the action of CSRU. CSRU shall follow the procedures and requirements of Iowa Code chapter 252J regarding the issuance of the notice and the holding of a conference.

98.103(3) Certificate of noncompliance. If an obligor individual fails to respond in writing to the notice within 20 days, or if the obligor individual requests a conference and fails to appear, the unit shall issue a Certificate of Noncompliance, Form 470-3274, to applicable licensing authorities in accordance with Iowa Code section 252J.3.

ITEM 25. Amend rule 441--98.104(252J) as follows:

441--98.104(252J) Conference.

98.104(1) Scheduling of conference. Upon receipt from an obligor individual of a written request for a conference, CSRU shall schedule a conference not more than 30 days in the future. At the request of either CSRU or the obligor individual, the conference may be rescheduled one time. When setting the date and time of the conference, if notice was sent to an obligor under subrule 98.103(1), CSRU shall request the completion of Form 470-0204, Financial Statement, and other financial information from both the obligor and the obligee as may be necessary to determine the obligor's ability to comply with the support obligation.

98.104(2) Payment calculation. During If notice was sent to an obligor under subrule 98.103(1) during the conference held in compliance with the provisions of Iowa Code section 252J.4, CSRU shall determine if the obligor's ability to pay varies from the current support order by applying the mandatory supreme court guidelines as contained in 441--Chapter 99, Division I, with the exception of subrules 99.4(3) and 99.5(5). If further information from the obligor is necessary for the calculation, CSRU may schedule an additional conference no less than ten days in the future in order to allow the obligor to present additional information as may be necessary to calculate the amount of the payment. If, at that time, the obligor fails to provide the required information, CSRU shall issue a Certificate of Noncompliance, Form 470-3274, to applicable licensing authorities. If the obligee fails to provide the necessary information to complete the calculation, CSRU shall use whatever information is available. If no income information is available for the obligee, CSRU shall use the state median income as the obligee's income. This calculation is for determining the amount of payment for the license sanction process only, and does not modify the amount of support obligation contained in the underlying court order.

98.104(3) Referral for review and adjustment. If the amount calculated in subrule 98.104(2) meets the criteria for review and adjustment as specified in rule 441-- 99.62(252B,252H), or administrative modification as specified in rule 441--99.82(252H) and 441--subrules 99.83(1), 99.83(2) and 99.83(6) at the time CSRU provides the payment agreement to the obligor, CSRU shall refer the case for also provide the obligor with any necessary forms to request a review and adjustment or administrative modification of the support obligation. The payment agreement remains in effect during the review and adjustment or administrative modification process.

ITEM 26. Amend rule 441--98.106(252J) as follows:

441--98.106(252J) Staying the process due to full payment of support. If the obligor, at any time, pays the total support owed, both current and past due, or an individual complies with the subpoena or warrant, CSRU shall stay the process, and any Certificate of Noncompliance, Form 470-3274, which has been issued shall be withdrawn by CSRU.

ITEM 27. Amend rule 441--98.107(252J) as follows:

441--98.107(252J) Duration of license sanction. The Certificate of Noncompliance, Form 470-3274, shall remain in effect until the obligor pays all support owed, both arrears and current; or the obligor enters into a payment agreement with CSRU; or the obligor meets one of the criteria for exemption specified at subrules 98.102(1), 98.102(2), and 98.102(4); or the individual complies with the subpoena or warrant.

ITEM 28. Amend the implementation clause following rule 441--98.107(252J) as follows:

These rules are intended to implement Iowa Code Supplement chapter 252J as amended by 1997 Iowa Acts, House File 612, division X.

ITEM 29. Amend 441--Chapter 98 by reserving rules 441--98.108 to 441--98.120 as part of Division VIII.

ITEM 30. Further amend 441--Chapter 98 by adding the following new Division IX:

DIVISION IX

EXTERNAL ENFORCEMENT

PREAMBLE

This division implements provisions of 1997 Iowa Acts, House File 612, sections 35 and 244, which provide for enforcement of child support arrearages by external sources. These sources are entities under contract to collect difficult-to-collect arrearages and private attorneys acting independently of the unit but with the unit's consent. The rules provide criteria and procedures for referral of delinquent support to collection contractors, assessment of the statutory surcharge, and opportunity for the delinquent parent to contest. The rules also provide a procedure to allow state payment to private attorneys enforcing child support recovery unit (CSRU) cases and provide criteria to exempt cases from the procedure.

441--98.121(252B) Difficult-to-collect arrearages. The child support recovery unit may refer difficult-to-collect arrearages to a collection entity under contract with the unit or with another state entity. Upon referral, a surcharge, in addition to the support, shall be due and payable by the obligor as provided in 1997 Iowa Acts, House File 612, section 244.

98.121(1) Difficult-to-collect arrearage. A difficult-to-collect arrearage is one based upon a court or administrative order which meets all the following criteria:

a. There is no order for current support and only an arrearage is owing.

b. There has been no payment, except for federal or state tax refund offset payments, in the past three months.

c. There is no valid reason for exemption from the referral and surcharge process. Valid reasons for exemption and acceptable verification are those listed in subrules 98.102(1), 98.102(3), and 98.102(6). Upon verification of those conditions, the child support recovery unit shall bypass or exempt the obligor's arrearages from the referral and surcharge proc-ess. When the information to verify the exemption is not available to the child support recovery unit through on-line sources, the child support recovery unit shall request, and the obligor shall provide, verification of the reason for exemption.

98.121(2) Notice of the possibility of referral and surcharge. The child support recovery unit shall provide notice of the possibility of a referral and surcharge to the obligor as required by 1997 Iowa Acts, House File 612, section 244. The notice shall be provided at least 15 days before the unit sends the notice of referral and surcharge to the obligor, subject to the following:

a. Notification contained in order. When the support order under which the arrearage has accrued contains language advising of statutory provisions for referral and surcharge, no other preliminary notice shall be required.

b. Notification issued by the child support recovery unit. When the support order under which the arrearage has accrued does not contain language regarding the statutory provisions for referral and surcharge, or was entered under a foreign jurisdiction and notification was not included in the support order or provided as a separate written notice, the child support recovery unit shall issue Form 470-3412, Legal Notice of Referral and Surcharge, to the obligor. The notice shall be sent by regular mail to the obligor's last-known address.

98.121(3) Notice of referral and surcharge. The child support recovery unit shall send notice of a referral and surcharge to the obligor by regular mail to the obligor's last-known address, with proof of service completed according to Rule of Civil Procedure 82. The notice shall contain all the information required by 1997 Iowa Acts, House File 612, section 244. The notice shall be sent at least 30 days before the unit refers the arrearage to the collection entity.

98.121(4) Contesting the referral and surcharge. An obligor may contest the referral and surcharge. The right to contest is limited to a mistake of fact including but not limited to a mistake in the identity of the obligor, a mistake as to whether there was a payment in the three months before the date of the notice specified in subrule 98.121(3), a mistake as to whether an exemption in paragraph 98.121(1)"c" applies, or a mistake in the amount of arrearages.

a. An obligor may contest the referral and surcharge by submitting a written request for a review to the unit within 20 days of the date on the notice of referral and surcharge specified in subrule 98.121(3). Upon receipt of a written request for review, the unit shall follow the criteria and procedures specified in 1997 Iowa Acts, House File 612, section 244, for resolving the request.

(1) If the unit determines there is a mistake in the identity of the obligor, if there was a payment, other than a federal or state income tax offset, within the three months before the date of the notice specified in subrule 98.121(3), or if there is another mistake of fact and the arrearage does not meet the criteria for referral, the unit shall issue a written notice to the contestant or obligor of the determination and not refer the arrearages. If the unit later determines an arrearage may be subject to referral, it shall issue a new notice as provided in subrule 98.121(3).

(2) If the unit determines there was a mistake in the amount of arrearages, but the corrected amount of arrearages will still be referred, or if the unit determines there is no mistake of fact, the unit shall issue a written notice of the determination of the review to the obligor by regular mail to the last-known address of the obligor. The notice shall include the amount of the arrearages that will be referred and the surcharge which will be assessed. The notice shall also include information on requesting an additional review by the bureau chief, and on requesting a judicial hearing. For purposes of this rule, bureau chief shall mean "bureau chief" as defined in rule 441--95.1(252B).

b. An obligor may contest the notice of determination of review by submitting a written request for an additional review by the bureau chief within 20 days of the date of the notice of determination of the review issued under paragraph "a." Upon receipt of the written request for additional review, the bureau chief shall review the facts of the case.

(1) If the bureau chief determines a mistake in the identity of the obligor has occurred, if there was a payment, other than a federal or state income tax offset, within the three months before the date of the notice specified in subrule 98.121(3), or if there is another mistake of fact and the arrearage does not meet the criteria for referral, the bureau chief shall issue a written notice to the contestant or obligor of the determination and the arrearages shall not be referred. If the unit later determines an arrearage may be subject to referral, it shall issue a new notice as provided in subrule 98.121(3).

(2) If the bureau chief determines that there was a mistake in the amount of the arrearage but the corrected amount of arrearages will still be referred, or if there is no mistake of fact, the bureau chief shall send a written notice of the additional review determination to the obligor by regular mail to the last-known address of the obligor. The notice shall include the amount of the arrearage that will be referred and the surcharge which will be assessed. The notice shall also include information on requesting a judicial hearing.

c. Following the issuance of a notice of determination of a review under paragraph "a," or issuance of a notice of determination of an additional review under paragraph "b," the obligor may request a district court hearing. The obligor shall make a request by sending a written request for a hearing to the unit within ten days of the date of the unit's written determination of the review, or within ten days of the date of the bureau chief's written determination of an additional review, whichever is later. Procedures for a district court hearing are specified in 1997 Iowa Acts, House File 612, section 244.

d. The unit shall not refer arrearages and assess a surcharge until after completion of any review, additional review or judicial hearing process.

98.121(5) Referral and surcharge.

a. If the obligor has not paid the arrearage, has not contested the referral, or if, following the unit's review, the bureau chief's additional review, and any judicial hearing, the unit, bureau chief, or court does not find a mistake of fact, the arrearage shall be referred to the collection entity.

b. The amount of the arrearage referred shall be the amount that is unpaid as of the date of the referral. The amount of the surcharge shall be an amount equal to the amount of the arrearage unpaid as of the date of the referral, multiplied by the percentage specified in the contract with the collection entity.

c. The child support recovery unit shall file Form 470-3411, Notice of Surcharge, with the clerk of the district court in the county in which the underlying support order is filed.

This rule is intended to implement 1997 Iowa Acts, House File 612, section 244.

441--98.122(252B) Enforcement services by private attorney entitled to state compensation. An attorney licensed to practice law in Iowa may utilize judicial proceedings to collect support, at least a portion of which is assigned support, and be entitled to compensation by the state as provided in 1997 Iowa Acts, House File 612, section 35.

98.122(1) Eligible cases. To be eligible for attorney services with compensation under this rule, a case must meet all of the following:

a. The child support recovery unit is providing services under Iowa Code chapter 252B.

b. The current support obligation is terminated and only arrearages are due under the administrative or court order.

c. There has been no payment under any order in the case for at least a 12-month period prior to the provision of the notice from the attorney to the unit under paragraph "f."

d. At least a portion of the arrearages due under any order in the case is assigned to the state because cash assistance was paid under 1997 Iowa Acts, Senate File 516, sections 2 through 24 and 35.

e. The case does not have any of the following characteristics:

(1) There has been a finding of good cause or other exception pursuant to Iowa Code section 252B.3 as amended by 1997 Iowa Acts, House File 612, section 26.

(2) A portion of the arrears is assigned to another state because of public assistance provided by that state.

(3) Another attorney has already notified the unit of the intent to initiate a judicial proceeding to collect support due under any order in the same case under this rule, and either the time to receive the collection has not expired or the unit has not received a notice from the other attorney that the judicial proceeding has concluded prior to the expiration of the time period.

(4) If the notice from the attorney under paragraph "f" specifies contempt of court as the judicial proceeding, and the unit has generated a seek employment order to the obligor under Iowa Code section 252B.21 less than nine months prior to the date on the notice from the attorney.

(5) The case or arrearages have been referred by the child support recovery unit to a collection entity under Iowa Code section 252B.5, subsection 3, as amended by 1997 Iowa Acts, House File 612, section 30, or 1997 Iowa Acts, House File 612, section 244, less than nine months prior to the date on the notice from the attorney.

(6) The obligor has filed for bankruptcy and collection activities are stayed.

(7) The notice from the attorney under paragraph "f" lists a specific judicial proceeding and the unit has already initiated the same type of proceeding in court.

(8) The case has been referred to the U.S. Attorney's office and is still pending at that office.

f. The attorney has provided written notice to the central office of the child support recovery unit in Des Moines, as specified in subrule 98.122(2), and to the last-known address of the obligee of the intent to initiate a specified judicial proceeding to collect support on any identified court or administrative order involving the obligor and obligee in the case.

g. The attorney has provided documentation of insurance to the unit as required by 1997 Iowa Acts, House File 612, section 35.

h. The collection must be received by the collection services center within 90 days of the notice from the attorney in paragraph "f," or within a subsequent 90-day extension period.

98.122(2) Procedure.

a. To begin the process under this rule, the attorney shall submit the following to the External Services Process Specialist, Bureau of Collections, Iowa Department of Human Services, Hoover Building, Fifth Floor, Des Moines, Iowa 50319-0114 at least 30 days prior to initiating the specified judicial proceeding:

(1) A dated, written statement which lists the specific judicial proceeding which the attorney intends to initiate, any court or administrative order under which the arrearages accrued identified by the order number, and the names of the obligor and obligee.

(2) Documentation that the attorney is insured as required by the statute. Documentation shall be either a copy of the attorney's policy from the insurer, or a letter from the insurer verifying insurance coverage as required by the statute.

(3) Documentation that the attorney is licensed to practice law in Iowa.

b. The unit shall mail a response to the attorney within ten days of receipt of the notice from the attorney. All of the following shall apply to the unit's response:

(1) If the case meets the requirements of this rule, the notice shall list the case number, any order numbers, the judicial proceeding specified by the attorney, the balance due the state of Iowa, the balance due an obligee, and the date that is 90 days from the date of the notice from the attorney. The notice shall also contain a statement that any compensation due the attorney as a result of application of this rule will be calculated on the amount of support credited to arrearages due the state at the time the support paid as a result of the judicial proceeding is received by the collection services center. The notice shall also contain a statement that any support collected shall be disbursed in accordance with federal requirements, and any support due the obligee shall be disbursed to the obligee prior to disbursement to the attorney as compensation.

(2) If the case does not meet the requirements of this rule, the notice shall list the case number, any order number, and the reason the case does not meet the requirements.

c. If the case is eligible under this rule, the attorney may initiate judicial proceedings after 30 days after providing the notice to child support recovery unit in paragraph "a." Section 35 of 1997 Iowa Acts, House File 612, defines "judicial proceedings."

d. The attorney may extend the time to complete the judicial proceeding or to allow for receipt of the collection by the collection services center by submitting a notice requesting a 90-day extension to the address in paragraph "a." This or any subsequent notice must be received by the unit before expiration of the current 90-day time frame. The child support recovery unit shall acknowledge receipt of the subsequent notice and list on the acknowledgment the date that is 90 days from the date of the attorney's subsequent notice.

98.122(3) Collection and payment to attorney.

a. Upon compliance with the requirements of 1997 Iowa Acts, House File 612, section 35, and this rule, the attorney shall be entitled to compensation from the state as provided for in this rule.

b. Upon receipt of a file-stamped copy of a court order which identifies the amount of support collected as a result of the judicial proceeding and which does not order the payment of attorney fees by the obligor, and the receipt of the collection by the collection services center, all the following apply:

(1) Section 35 of 1997 Iowa Acts, House File 612, specifies the formula to calculate the compensation due the attorney from the state. The child support recovery unit shall calculate the compensation due the attorney based upon the amount of support which is credited to arrearages due the state at the time the collection is received by the collection services center. After calculating the amount due the attorney, the unit shall reduce the amount due the attorney by the amount of any penalty or sanction imposed upon the state as a result of any other judicial proceeding initiated by that attorney under 1997 Iowa Acts, House File 612, section 35. The child support recovery unit shall send the attorney a notice of the amount of the compensation due from the state.

(2) The collection services center shall disburse any support due an obligee prior to payment of compensation to the attorney.

(3) The child support recovery unit shall not authorize disbursement of compensation to the attorney until the later of 30 days after receipt of the collection and the file-stamped copy of the order, or resolution of any timely appeal by the obligor or obligee.

(4) The amount of compensation due the attorney is subject to judicial review upon application to the court by the attorney.

This rule is intended to implement 1997 Iowa Acts, House File 612, section 35.

ITEM 31. Amend rule 441--99.1(234,252B), introductory paragraph, as follows:

441--99.1(234,252B,252H) Income considered. The child support recovery unit shall consider all regularly recurring income of both legal parents to determine the amount of the support award in accordance with the child support guidelines prescribed by the supreme court. These rules on child support guidelines shall not apply if the child support recovery unit is determining the support amount by a cost-of-living alteration as provided in 1997 Iowa Acts, House File 612, sections 106 through 109.

ITEM 32. Amend 441--Chapter 99, Division II, Part A, by adding the following new rule:

441--99.10(252A) Temporary support. If a court ordered a putative father to pay temporary support before entering an order making a final determination of paternity under 1997 Iowa Acts, House File 612, section 5, but then the court determines the putative father is not the legal father and the court enters an order terminating the temporary support, all the following apply.

99.10(1) Satisfaction of accrued support. Upon receipt of a file-stamped copy of the order terminating the support order, the child support recovery unit shall take the following action concerning unpaid support assigned to the department:

a. The child support recovery unit shall satisfy only unpaid support assigned to the department.

b. The child support recovery unit shall ask the obligee to sign the satisfaction acknowledging the obligee has no right to support owed the department and waive notice of hearing on a subsequent satisfaction order. If the obligee does not sign the satisfaction and waiver or notice, the child support recovery unit is not prevented from satisfying amounts due the department.

c. The child support recovery unit shall prepare the required documents to satisfy any amounts owed the department and shall file them with the appropriate district court.

99.10(2) Previously collected moneys. The child support recovery unit shall not return any moneys previously paid on the temporary support judgment.

This rule is intended to implement 1997 Iowa Acts, House File 612, section 5.

ITEM 33. Amend rule 441--99.28(252F) as follows:

441--99.28(252F) Paternity test results challenge. Either party or the unit may challenge the results of the paternity test by filing a written notice with the district court within 20 calendar days after the unit issues or mails the paternity test results to the parties, or if a court hearing was already scheduled, no later than 30 days before the scheduled hearing date. When a party challenges the paternity test results, and requests an additional paternity test, the unit shall order an additional blood or genetic test, if the party requesting the additional test pays for the additional testing in advance. If the party challenges the first paternity test results, but does not request additional tests, the unit may order additional blood or genetic tests.

ITEM 34. Amend rule 441--99.36(598,600B), definition of "Disestablishment," as follows:

"Disestablishment" means paternity which is legally overcome under the conditions specified in Iowa Code section 600B.41A as amended by 1997 Iowa Acts, House File 612, sections 212 through 216, or 598.21, subsection 4A, as amended by 1995 Iowa Acts, chapter 52, section 8 1997 Iowa Acts, House File 612, section 189.

ITEM 35. Amend rule 441--99.39(598,600B) as follows:

441--99.39(598,600B) Satisfaction of accrued support.

99.39(1) Disestablishment orders entered before May 21, 1997. Upon receipt of a file-stamped copy of the an order to disestablish paternity which was entered before May 21, 1997, the child support recovery unit shall take the following action concerning unpaid support assigned to the department.

99.39( 1) Assigned support satisfied. a. The child support recovery unit shall satisfy only unpaid support assigned to the department and only if:

a. (1) For actions under Iowa Code section 600B.41A, blood or genetic testing was done and a guardian ad litem was appointed for the child.

b. (2) For actions under Iowa Code section 598.21, the written statement was filed and a guardian ad litem was appointed for the child.

99.39(2) Signature of obligee. b. The child support recovery unit shall ask the obligee to sign the satisfaction acknowledging the obligee has no right to support owed the department and waive notice of hearing on a subsequent satisfaction order. If the obligee does not sign the satisfaction and waiver of notice, the child support recovery unit is not prevented from satisfying amounts due the department.

99.39(3) Affidavit and order of satisfaction. c. The child support recovery unit shall prepare the required documents to satisfy any amounts owed the department and shall file them with the appropriate district court. If the court later determines that paternity was incorrectly disestablished, the child support recovery unit may attempt to reinstate and enforce the prior judgment.

99.39(2) Disestablishment orders entered on or after May 21, 1997. Upon receipt of a file-stamped copy of an order disestablishing paternity which was entered on or after May 21, 1997, the child support recovery unit shall take the following action concerning unpaid support:

a. If the order also contains a provision satisfying unpaid support, the unit shall adjust its records to show unpaid support is paid.

b. If the order does not contain a provision satisfying unpaid support, the unit shall satisfy only unpaid support assigned to the department. The unit shall notify the party who petitioned the court for disestablishment that this is the only support the unit can satisfy.

(1) The child support recovery unit shall ask the obligee to sign the satisfaction acknowledging the obligee has no right to support owed the department and waive notice of hearing on a subsequent satisfaction order. If the obligee does not sign the satisfaction and waiver notice, the child support recovery unit is not prevented from satisfying amounts due the department.

(2) The child support recovery unit shall prepare the required documents to satisfy any amounts owed the department and shall file them with the appropriate court. If the court later determines that paternity was incorrectly disestablished, the child support recovery unit may attempt to reinstate and enforce the prior judgment.

99.39(3) Termination of paternity. If the court entered an order dismissing a disestablishment of paternity action on or before May 21, 1997, this subrule applies. Upon receipt of a file-stamped copy of an order terminating paternity under the requirements of 1997 Iowa Acts, House File 612, section 216, the child support recovery unit shall take the following action concerning unpaid support assigned to the department:

a. The child support recovery unit shall satisfy only unpaid support assigned to the department.

b. The child support recovery unit shall ask the obligee to sign the satisfaction acknowledging the obligee has no right to support owed the department and waive notice of hearing on a subsequent satisfaction order. If the obligee does not sign the satisfaction and waiver of notice, the child support recovery unit is not prevented from satisfying amounts due the department.

c. The child support recovery unit shall prepare the required documents to satisfy any amounts owed the department and shall file them with the appropriate district court. If the court later determines that paternity was incorrectly terminated, the child support recovery unit may attempt to reinstate and enforce the prior judgment.

99.39(4) Previously collected moneys. The child support recovery unit shall not return any moneys previously paid on the judgment.

These rules are intended to implement Iowa Code section 598.21, subsection 4A, as amended by 1995 Iowa Acts, chapter 52, section 8 1997 Iowa Acts, House File 612, section 21, and Iowa Code section 600B.41A as amended by 1997 Iowa Acts, House File 612, sections 214 through 216 and 218.

ITEM 36. Amend rule 441--99.41(252C) as follows:

Amend subrule 99.41(7), paragraph "a," as follows:

a. The request for a hearing by the responsible person shall be in writing and sent to the office of the child support recovery unit which sent the original notice of the child support debt by the latest of the following:

(1) Twenty Thirty days from the date of service of the first notice of support debt.

(2) Ten days from the date of the negotiation conference.

(3) Ten Thirty days from the date the second notice and finding of financial responsibility is issued.

(4) Ten days from the date of issuance of the conference report if the bureau chief does not issue a second notice and finding of financial responsibility after a conference was requested.

Amend subrule 99.41(9), paragraph "c," as follows:

c. The bureau chief shall send a copy of the filed order by regular mail, to the caretaker's last-known address, to the responsible person's last-known address or the caretaker's or the responsible person's attorney pursuant to the provisions of Iowa Code chapter 252C within 14 days after approval and issuance of the order by the court.

ITEM 37. Amend rule 441--99.61(252B,252H), definitions of "Best interests of the child," and "Recipient of service," as follows:

"Best interests of the child" means that an action can proceed because there has been no finding of good cause for noncooperation with the child support recovery unit pursuant to 441--subrule 41.2(8) 41.22(8) or 441--subrule 75.14(1).

"Recipient of service" means a person receiving foster care services, or a person receiving aid to dependent children recipient of family investment program assistance or Medicaid benefits whose child support or medical support is assigned, or a person who is not receiving public assistance but who is entitled to child support enforcement services pursuant to Iowa Code section 252B.4.

ITEM 38. Amend subrule 99.62(1) as follows:

99.62(1) Periodic review. A permanent child support obligation being enforced by the child support recovery unit and meeting the conditions in Iowa Code section 252H.12 shall may be reviewed by upon the initiative of the unit no later than 36 months after establishment of the order or the most recent review unless if:

a. There is an assignment of support and the state has determined a review would not be in the best interests of the child, as defined in rule 441--99.61(252B,252H), and neither parent has requested review. The right to any ongoing child support obligation is currently assigned to the state due to the receipt of public assistance.

b. There is no assignment of support and neither parent has requested review. The right to any ongoing medical support obligation is currently assigned to the state and the support order does not already contain medical provisions.

c. Rights to medical support only have been assigned, the order requires health insurance coverage, and neither parent has requested review. A review is otherwise necessary to comply with state or federal law.

ITEM 39. Amend subrule 99.70(2) as follows:

99.70(2) Consent of both parties. Except as provided by subrule 99.70(1), the child support recovery unit shall inform the nonrequesting party of the requesting party's desire to withdraw the request. Unless both parties submit written statements to the child support recovery unit clearly stating that neither wishes to continue with the review and adjustment process, the unit shall proceed to conduct the review and, if appropriate as specified in rules 441-- 99.62(252B,252H) and 441--99.65 (252B,252H), initiate procedures to have the support order modified. If the nonrequesting party wishes to continue the review, the review will continue with that party thereafter being considered the requestor. If the nonrequestor indicates a desire to stop theprocess or fails to respond within ten days to the notification of the request to withdraw, the unit shall notify all parties that the review and adjustment process has terminated.

ITEM 40. Amend rule 441--99.101(252B), definition of "Support," as follows:

"Support" shall mean the same as defined in Iowa Code section 252D.1 1997 Iowa Acts, House File 612, section 60, and shall include spousal support and support for a child.

ITEM 41. Amend rule 441--99.102(252B) as follows:

441--99.102(252B) Availability of service. The child support recovery unit shall provide the services described in this division only with respect to support orders entered or registered in this state for which the unit is providing enforcement services in accordance with Iowa Code chapter 252B to collect current or accrued support. Services described in this division shall only be provided if a court in this state would have continuing, exclusive jurisdiction to suspend and reinstate the order under 1997 Iowa Acts, House File 612, division XI.

ITEM 42. Amend subrule 99.107(4) by adding the following new paragraph "f":

f. A court in this state would not have continuing, exclusive jurisdiction to reinstate the order under 1997 Iowa Acts, House File 612, division XI.

[Filed 11/12/97, effective 2/1/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7675A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Pursuant to the authority of 1997 Iowa Acts, Senate File 516, section 5, subsection 3, the Department of Human Services hereby amends Chapter 7, "Appeals and Hearings," Chapter 9, "Public Records and Fair Information Practices," Chapter 40, "Application for Aid," Chapter 41, "Granting Assistance," Chapter 42, "Unemployed Parent," Chapter 46, "Overpayment Recovery," and Chapter 93, "PROMISE JOBS Program," appearing in the Iowa Administrative Code.

The Council on Human Services adopted these amendments November 12, 1997. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7488A. The amendments published as ARC 7488A have been separated into two parts for adoption to allow for two different effective dates.

These amendments incorporate changes in Family Investment Program (FIP) policy which have already been or will be implemented prior to the effective date of these changes due to state law changes and changes which will be implemented upon the effective date of these changes.

The following changes to policy will have been implemented prior to the effective date of these amendments to comply with state legislation:

1. The PROMISE JOBS exemptions for FIP applicants who have a child under three months of age or who work 30 or more hours per week are removed. These changes were implemented July 1, 1997, as mandated by 1997 Iowa Acts, Senate File 516. FIP participants previously exempt from PROMISE JOBS participation for one of these two reasons will be referred to PROMISE JOBS during the period of July 1, 1997, to July 1, 1998.

Persons who are employed full-time and still eligible for FIP should have the support of PROMISE JOBS services to develop strategies for achieving self-sufficiency. Also, the birth of a child should not prevent the family from accessing PROMISE JOBS services in the process of planning and preparing for self-sufficiency. Parents of newborns can develop a Family Investment Agreement that will allow for family leave, the same as is the practice in mainstream society. The new 60-month limit on TANF-funded assistance makes it imperative that FIP clients be afforded every opportunity that will enhance their marketing skills and lead them out of poverty without delay.

2. The Work Transition Period (WTP) is eliminated. Under the WTP, earnings from a new job or new self-employment were not used for determining FIP eligibility or benefit amount for the first four months of work. Persons who start a new job or new self-employment October 1, 1997, or later, will not be eligible for the WTP. However, persons who are eligible for the WTP on or before September 30, 1997, will be allowed to receive their entire four-month period.

The WTP was intended to assist clients with expenses they incur when first starting employment, such as work clothes, child care, and transportation, and to support families' efforts toward gaining self-sufficiency. However, FIP assistance received during the WTP will now count toward the 60-month limit on FIP. By eliminating the WTP, families no longer eligible for FIP will be able to conserve several months of FIP toward possible future emergencies when FIP assistance may be more critical. In addition, by separate rule making, the Department is implementing several Diversion programs using savings from eliminating the WTP. These programs will assist applicants and participants withone-time expenses needed to overcome barriers to self-sufficiency.

3. The delay in the effective date for Unemployed Parent (UP) assistance is reduced from 30 days to 7 days effective January 1, 1998. Reducing the waiting period for Unemployed Parent assistance from 30 days to 7 days allows two-parent families the same access to FIP as one-parent families. The fact that a family has two parents in the home does not automatically lessen the need for financial assistance and should not delay the family's access to assistance when needed.

The following changes to policy will be implemented when these rule changes become effective. These rules are tentatively scheduled to be effective February 1, 1998. All of the changes with the exception of change number "5" are required to comply with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Change number "5" was recommended by the Welfare Reform Advisory Group.

4. Except in the instance when a FIP participant fails to refund direct support, CSRU must make the determination of whether or not a FIP client has cooperated in child support matters. Currently, the Income Maintenance units in the Department county offices make the determination in all instances.

5. Assigned support collected and retained by the Department will no longer be used for the purpose of determining eligibility for FIP participants. FIP participants can withdraw from FIP at any time and receive their child support direct. CSRU will provide them with quarterly reports of child support collected and make available a toll-free telephone number for FIP participants who wish to check on their child support. Currently, assigned support is used to determine eligibility for FIP participants. When countable support combined with other income exceeds FIP income limits for the size family, FIP assistance is canceled.

As a result of a change in federal law, CSRU is making a change in the distribution of support collected on behalf of a FIP family. Under the change, the Department retains any support collected up to the total amount of FIP assistance paid out for the family, even if during a given month the amount of support collected is more than the family's FIP grant for the same month.

The Department is also making a corresponding change in FIP. Under the change, child support collected and retained will no longer be used to determine FIP eligibility. Instead, FIP will only be canceled upon the client's request. Clients will be able to choose between receiving FIP or child support. They will no longer be faced with having their FIP assistance canceled based on one month's child support collected by the Department. In the past, the support amount that caused FIP cancellation oftentimes did not continue, leaving the client without FIP and little or no child support. The revised rule eliminates the need for complicated anderror-prone FIP recalculations and reinstatements when child support does not continue or continues in a lesser amount. The Welfare Reform Advisory Group approved this initiative by consensus.

This change places responsibility on FIP families to track child support collections more closely and determine when it becomes beneficial to leave FIP and receive child support direct. Requiring FIP families to take personal responsibility and make choices to change their life circumstances are consistent with the philosophy of Iowa's welfare reform efforts.

6. The federal requirement that 55 percent of allPROMISE JOBS program funds be expended on certaintarget groups is eliminated with the Personal Responsi-bility and Work Opportunity Reconciliation Act of 1996(PRWORA). References to this reporting requirement have been removed from the rules. The Department continues to reserve the right to prioritize PROMISE JOBS services for specific groups in order to achieve the goals of participants and the PROMISE JOBS program.

7. Various rule references are corrected and existing rule language clarified to properly reflect FIP policies.

Eight public hearings were held around the state. No one attended and no comments were received.

The following revisions were made to the Notice of Intended Action:

Subrule 41.22(6), paragraph "e," was revised to correct a rule reference.

Subrule 42.24(1), paragraph "e," was revised to correct a rule reference.

These amendments are intended to implement 1997 Iowa Acts, Senate File 516.

These amendments shall become effective February 1, 1998.

The following amendments are adopted.

ITEM 1. Amend rule 441--7.9(217) as follows:

Amend subrule 7.9(3) as follows:

7.9(3) Recovery of excess assistance paid pending a final decision on appeal. Continued assistance is subject to recovery by the department if its action is sustained affirmed, except as specified at subrule 7.9(5).

Further amend rule 441--7.9(217) by adding the following new subrule:

7.9(5) Recovery of assistance when a new limited benefit plan is established. Assistance issued pending the final decision of the appeal is not subject to recovery when a new limited benefit plan period is established. A new limited benefit plan period shall be established when the department is affirmed in a timely appeal of the establishment of the limited benefit plan. All of the following conditions shall exist:

a. The appeal is filed within the timely notice period of the notice of decision establishing the beginning date of the LBP.

b. Assistance is continued pending the final decision of the appeal.

c. The department's action is affirmed.

ITEM 2. Amend subrule 9.10(16) as follows:

9.10(16) Fugitive felon Response to law enforcement. The address of a current recipient of aid to dependent children family investment program benefits may be released upon request to a federal, state or local law enforcement officer if the officer provides the name and social security number of the recipient, and the officer demonstrates that:

a. The recipient is a fugitive felon as defined by the Fugitive Felon Act, 18 U.S.C. 1073(1982), and who is fleeingprosecution, custody or confinement after conviction under state or federal law, or who is a probation or parole violator under state or federal law, or

b. The location or apprehension of the felon is within recipient has information that is necessary for the officer to conduct the officer's official duties, and

c. The request is made in the proper exercise of the officer's official duties. The location or apprehension of the recipient is within the officer's official duties.

ITEM 3. Amend subrule 40.27(1), paragraph "a," subparagraphs (1) and (2), as follows:

(1) The assistance unit contains any member with earned income, including earnings in kind, unless the income is disregarded exempt under 441--paragraph 41.27(2)"e" 41.27(7)"y" or the only earned income is from exempt work study, annualized self-employment, the first two months of the work transition period as described in 441--paragraph 41.27(7)"af," or Job Corps unless the participant is a parent aged 20 or older.

(2) The assistance unit contains any member with a recent work history. A recent work history means the person received earned income during either one of the two calendar months immediately preceding the budget month, unless the income was subject to the disregard in exempt under 441--paragraph 41.27(2)"e" 41.27(7)"y" or the only earned income was from exempt work study, annualized self-employment, the first two months of the work transition period as described in 441--paragraph 41.27(7)"af," or Job Corps unless the participant is a parent aged 20 or older.

ITEM 4. Amend rule 441--41.22(239) as follows:

Amend subrule 41.22(6), paragraph "a," by rescinding and reserving subparagraph (4).

Further amend subrule 41.22(6), paragraph "b," by adding the following new subparagraph (5):

(5) Providing the name of the absent parent and additional necessary information.

Further amend subrule 41.22(6), paragraph "e," as follows:

e. The In the circumstance as described at paragraph "b," subparagraph (4), the income maintenance unit in the local county office shall make the determination of whether or not the client has cooperated. In all other instances, the child support recovery unit (CSRU) shall make the determination of whether the client has cooperated. CSRU delegates the income maintenance unit in the county office to make this determination for applicants.

Amend subrule 41.22(7) by rescinding and reserving paragraph "e."

ITEM 5. Amend rule 441--41.24(239) as follows:

Amend subrule 41.24(1) by adding the following new paragraph "d":

d. Parents and specified relatives determined exempt from PROMISE JOBS participation prior to July 1, 1997, due to one of the following conditions, shall be referred to PROMISE JOBS no later than July 1, 1998:

(1) The person was caring for a child less than three months of age at the time of FIP approval.

(2) The person was employed 30 hours or more per week at the time of FIP approval.

Amend subrule 41.24(2) by rescinding and reserving paragraphs "a" and "b."

Amend subrule 41.24(3), paragraphs "a" and "b," as follows:

a. Parents aged 18 or 19 are referred to PROMISE JOBS regardless of the exemption criteria specified at 41.24(2)"a" and "b." as follows:

(1) to (3) No change.

b. Parents aged 17 or younger are referred to PROMISE JOBS regardless of the exemption criteria specified at 41.24(2)"a" and "b." as follows:

(1) and (2) No change.

Rescind and reserve subrule 41.24(11).

ITEM 6. Amend rule 441--41.27(239) as follows:

Amend the introductory paragraph as follows:

441--41.27(239 77GA,SF516) Income. All unearned and earned income, unless specifically exempted, disregarded, deducted for work expenses, or diverted as defined in these rules, shall be considered in determining initial and continuing eligibility and the amount of the family investment program grant. The determination of initial eligibility is a three-step process. Initial eligibility shall be granted only when (1) the countable gross nonexempt unearned and earned income, exclusive of the family investment program grant, received by the eligible group and available to meet the current month's needs is no more than 185 percent of the standard of need for the eligible group; (2) the countable net unearned and earned income is less than the standard of need for the eligible group; and (3) the countable net unearned and earned income, after applying allowable disregards, is less than the payment standard for the eligible group. The determination of continuing eligibility is a two-step process. Continuing eligibility shall be granted only when (1) countable gross nonexempt income, as described for initial eligibility, does not exceed 185 percent of the standard of need for the eligible group; and (2) countable net unearned and earned income is less than the payment standard for the eligible group. The amount of the family investment program grant shall be determined by subtracting countable net income from the payment standard for the eligible group. Child support assigned to the department in accordance with subrule 41.22(7) and retained by the department as described in subparagraph 41.27(1)"h"(2) shall be considered unearned as exempt income for the purpose of determining continuing eligibility, except including child support as specified in subrules paragraphs 41.22(7)"b" and 41.27(7)"q." Expenses for care of children or disabled adults, deductions, and diversions shall be allowed when verification is provided. The local county office shall return all verification to the applicant or recipient.

Amend subrule 41.27(1), paragraph "h," by rescinding subparagraph (2) and inserting the following new subparagraph in lieu thereof:

(2) Assigned support collected in a month and retained by child support recovery shall be exempt as income for determining prospective or retrospective eligibility. Participants shall have the option of withdrawing from FIP at any time and receiving their child support direct.

Further amend subrule 41.27(1), paragraph "h," by rescinding and reserving subparagraphs (3) and (4).

Amend subrule 41.27(6) by adding the following new paragraph "ac."

ac. Assigned support collected in a month and retained by child support recovery as described in subparagraph 41.27(1)"h"(2).

Amend subrule 41.27(7) by rescinding and reserving paragraphs "aa" and "af."

Amend subrule 41.27(9), paragraph "a," subparagraphs (2) and (3), as follows:

(2) When countable gross nonexempt earned and unearned income in the month of decision, or in any other month after assistance is approved, exceeds 185 percent of the standard of need for the eligible group, the application shall be rejected or the assistance grant canceled. Countable gross income means nonexempt gross income, as defined in rule 441--41.27(239), without application of any disregards, deductions, or diversions. When the countable gross nonexempt earned and unearned income in the month of decision equals or is less than 185 percent of the standard of need for the eligible group, initial eligibility under the standard of need shall then be determined. Initial eligibility under the standard of need is determined without application of the earned income disregards disregard as specified in 41.27(2)"c." and 41.27(2)"e." All other appropriate exemptions, deductions and diversions are applied. Countable income is then compared to the standard of need for the eligible group. When countable net earned and unearned income in the month of decision equals or exceeds the standard of need for the eligible group, the application shall be denied.

(3) When the countable net income in the month of the decision is less than the standard of need for the eligible group, the earned income disregards disregard in 41.27(2)"c" and 41.27(2)"e" shall be applied when there is eligibility for these disregards this disregard. When countable net earned and unearned income in the month of decision, after application of the earned income disregards disregard in 41.27(2)"c" and 41.27(2)"e" and all other appropriate exemptions, deductions, and diversions, equals or exceeds the payment standard for the eligible group, the application shall be denied.

When the countable net income in the month of decision is less than the payment standard for the eligible group, the application shall be approved. The amount of the family investment program grant shall be determined by subtracting countable net income in the month of decision from the payment standard for the eligible group, except as specified in 41.27(9)"a"(4).

ITEM 7. Amend rule 441--41.28(239) as follows:

Amend subrule 41.28(2), paragraph "a," subparagraph (8), as follows:

(8) Communications: Bus fares, telephone Telephone, newspapers, magazines.

Further amend subrule 41.28(2), paragraph "a," by adding the following new subparagraph (9):

(9) Transportation: Includes bus fares and other out-of-pocket costs of operating a privately owned vehicle.

Amend subrule 41.28(3) by rescinding and reserving paragraphs "c" and "d."

ITEM 8. Amend subrule 42.24(1) as follows:

Amend the introductory paragraph as follows:

42.24(1) Both When both parents shall be unemployed for 30 days prior to receipt of assistance except as described in paragraph "a" below are unemployed as defined, the effective date for unemployed parent assistance shall be established in accordance with rule 441--40.26(239). Assistance shall not be paid to cover any of the 30-day period.

Rescind and reserve paragraph "a."

Amend paragraph "e" as follows:

e. Notwithstanding any other provision of this subrule, while the application is pending, or while an existing eligible person group is being redetermined for eligibility under the unemployed parent program, the parent shall cooperate with the department of workforce development in actively searching for employment or training for employment unless the parent is participating in a training plan, or working at least 30 hours a week (129 hours per month), or personally providing care to a child as described at 441--paragraph 41.24(2)"a." under three months of age. Either parent who fails or refuses to cooperate with the department of workforce development without good cause, as defined in 42.24(3), shall not be considered unemployed.

ITEM 9. Amend rule 441--42.25(239) as follows:

441--42.25(239 77GA,SF516) Not considered unemployed. After assistance is approved, when either parent is no longer considered unemployed, in accordance with paragraph 42.24(1)"c" or because of failure to apply for or draw job insurance benefits, ineligibility shall result eligibility for unemployed parent assistance no longer exists for those persons whose eligibility is dependent on the unemployment of both parents, for a minimum of one month.

ITEM 10. Amend subrule 46.24(3), paragraph "b," as follows:

b. Overpayments due to failure to refund payments received from the absent parent shall be the total nonexempt support payment made for members of the eligible group at the time the support payment was received. In addition, assistance payments made to meet the needs of the recipient or eligible group may also be subject to recoupment under provisions in 441--subrules subrule 41.22(6) and 41.27(8).

ITEM 11. Amend rule 441--93.105(249C) as follows:

Amend subrule 93.105(1), introductory paragraph, as follows:

93.105(1) Federal requirements. Federal law, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), Title I--Temporary Assistance for Needy Families, Section 407, contains the following mandatory work requirements in regard to JOBS target groups and the state's JOBS participation rates expressed as participation rate requirements:

Further amend subrule 93.105(1) by rescinding and reserving paragraph "a," and amending paragraphs "b" and "c," as follows:

b. Federal law requires that a certain percentage of each state's mandatory participant population be actively participating in the JOBS program each year. The requirement begins at 7 percent in federal fiscal year 1991 and increases to 20 percent by federal fiscal year 1995. Because of criteria used to determine the participation rate for federal purposes, some PROMISE JOBS participants are excluded from the participation rate calculation, regardless of whether the participants are satisfactorily participating in the program each state shall achieve a minimum participation rate for all families as described in PRWORA, Title I, Section 407.

c. Federal law requires that a certain percentage of FIP-unemployed parent (FIP-UP) cases meet certain participation requirements in order for the state IV-A agency to receive the maximum allowable federal matching rate. The requirement begins at 40 percent of the FIP-UP cases in federal fiscal year (FFY) 1994 and increases to 50 percent for FFY 1995, 60 percent for FFY 1996, and 75 percent for FFY 1997 and beyond each state shall achieve a minimum participation rate for two-parent families as described inPRWORA, Title I, Section 407.

Amend subrule 93.105(2), introductory paragraphs, as follows:

93.105(2) Call-up. FIP participants who are referred to PROMISE JOBS after January 1, 1994, shall initiate call-up for PROMISE JOBS orientation by contacting the appropriate PROMISE JOBS office within ten calendar days of the mailing date of the notice of FIP approval or within ten calendar days of notice that exempt status has been lost and FIA responsibility has begun, as required under 441--subrule 41.24(5).

For FIP recipients who were referred to PROMISE JOBS prior to January 1, 1994, PROMISE JOBS provider agencies shall initiate the FIA process within six months unless an extension is granted by the department. The department is authorized to extend this time frame for up to six months if program funds are insufficient to convert the entire population to the FIA process during January through June 1994.

PROMISE JOBS provider agencies shall schedule FIA orientation appointments at the earliest available times for FIP participants who contact the appropriate PROMISE JOBS office within the ten days except when the department exercises administrative authority to require the following prioritization of orientation services to ensure that parents aged 21 and under are promptly served, to encourage FIP participants in entrepreneurial efforts, to move FIP participants into the family development and self-sufficiency (FaDSS) program or specific groups receive services in order to achieve self-sufficiency in the shortest possible time, to meet the federal minimum participation rate requirements and other TANF requirements described at 93.105(1). The specific groups subject to prioritization are:

Further amend subrule 93.105(2) by rescinding and reserving paragraphs "a" through "f" and amending the last three unnumbered paragraphs as follows:

The department reserves the authority to prioritize these groups orientation and other services to FIP participants in whatever order best fits the needs of participants and the PROMISE JOBS program.

FIP participants who volunteer shall first be called up to receive priority service for orientation.

Participants who are participating in the food stamp employment and training (FSET) program at the time of call-up shall be allowed to use the FSET component in which they are currently enrolled as the first step in the FIA. This does not apply to persons who drop out of the FSET component.

Amend subrule 93.105(3), introductory paragraph, as follows:

93.105(3) Waiting lists. Because of state and federal budgetary limitations, federal mandatory work requirements and minimum participation rate requirements, and other TANF requirements on the PROMISE JOBS program, persons who are not designated parents on FIP-UP cases who complete orientation and assessment shall be placed on a waiting list, when appropriate, for any further PROMISE JOBS services. Persons shall be removed from the waiting list and placed in additional components as funds and training slots become available. The the department shall have the administrative authority to determine agency and geographical breakdowns for service, to designate specific groups for priority services, or to designate specificPROMISE JOBS components or supportive service levels for a waiting list. Persons shall be removed from these waiting lists and placed in components at the discretion of state-level PROMISE JOBS administrators in order to help participants achieve self-sufficiency in the shortest possible time, meet budgetary limitations, enable participants to make maximum use of other programs, fulfill the federal minimum participation rate requirements and meet other TANF requirements. Persons who are designated parents on FIP-UP cases shall not be placed on a waiting list provided sufficient funds are available to serve them.

Further amend subrule 93.105(3) by rescinding and reserving paragraphs "a" and "b" and amending paragraph "c" as follows:

c. Persons who are participating in a component who are canceled from FIP are not eligible for PROMISE JOBS services while FIP is canceled. However, the person can regain immediate eligibility for PROMISE JOBS services and shall not be placed on a postsecondary classroom training waiting list if the period of FIP ineligibility does not exceed four consecutive months and the participant is still satisfactorily participating in approvable training at the time that FIP eligibility is regained.

[Filed 11/12/97, effective 2/1/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7676A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Pursuant to the authority of 1997 Iowa Acts, Senate File 516, section 5, subsection 3, the Department of Human Services hereby amends Chapter 40, "Application for Aid," Chapter 41, "Granting Assistance," Chapter 43, "Alternate Payees," and Chapter 46, "Overpayment Recovery," appearing in the Iowa Administrative Code.

The Council on Human Services adopted these amendments November 12, 1997. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7488A. The amendments published as ARC 7488A have been separated into two parts for adoption to allow for two different effective dates.

These amendments incorporate changes in Family Investment Program (FIP) policy scheduled to be effective March 1, 1998. All of the changes are required to comply with the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.

1. FIP participants who fail to cooperate with the Child Support Recovery Unit (CSRU) will be subject to a 25 percent sanction of their FIP grant. Currently, the needs of the parent or other caretaker relative are removed for failure to cooperate with CSRU.

Under PRWORA, states have the option of reducing the assistance for families who fail to cooperate with child support recovery by a minimum of 25 percent up to 100 percent of the FIP grant. The Department has opted for the less severe 25 percent reduction of the FIP grant. The Department is also removing the requirement that a protective payee be established since this is no longer required by federal law and is an unnecessary burden on both clients and staff.

Federal law requires that FIP benefits must be reduced by at least 25 percent when a client fails to cooperate with CSRU. Beyond this minimum amount, states have the option of establishing the amount of the penalty. The Department has chosen a penalty that is identical to the penalty that is required by 1997 Iowa Acts, House File 597, when a child is truant. This penalty is slightly lower than the penalty amount recommended by the majority of the Welfare Reform Advisory Group for noncooperation with CSRU.

There are also options related to the amount of penalty when a family is subject to multiple penalties. For example, a family is subject to two sanctions: a 25 percent reduction due to failure to cooperate with CSRU and a 25 percent reduction because a child has been found truant. The Department had two options on how to apply each penalty:

Option 1



Option 2

FIP Grant
$400

FIP Grant
$400
Sanction #1
-100

Sanction #1
-100
(25 percent of $400)


(25 percent of $400)

Remaining Grant
$300

Remaining Grant
$300
Sanction #2
-75

Sanction #2
-100
(25 percent of $300)


(25 percent of $400)

Final FIP Grant
$225

Final FIP Grant
$200

The Department chose Option 2 in order to treat the sanctions equally and to more adequately meet the intent of federal law.

2. Persons convicted in a state or federal court, or in an administrative hearing, of fraudulently representing their place of residence in order to receive public assistance simultaneously from two or more states are ineligible for FIP for ten years. The sanction applies to the particular person who commits the misrepresentation.

Federal law mandates a minimum of a ten-year penalty for fraudulent misrepresentation in order to receive benefits from more than one state. The penalty is for the individual only (loss of benefits for that person). However, the state could impose a greater than ten-year sanction. The proposed rules implement the recommendation of the Welfare Reform Advisory Group which is to limit the penalty to ten years and to add administrative hearings to the list of methods for determining whether fraudulent misrepresentation has occurred. In this way, the FIP policy matches the policy in the Food Stamp Program. Since most FIP households also receive food stamps, the Department works toward matching policies between the two programs to the extent possible.

3. Persons who are fugitive felons or who have violated a condition of probation or parole imposed under a state or federal law are not eligible for FIP.

Eight public hearings were held around the state. No one attended and no comments were received.

The following revisions were made to the Notice of Intended Action:

Rule 441--40.23(77GA,SF516) was revised to correct the definition for the date of application.

Subrule 40.27(5), not previously noticed, was revised to add a new paragraph to specify the beginning or ending date of a truancy or child support sanction.

Subrule 41.22(6), paragraph "f," was revised to clarify when a sanction must be implemented and how long the sanction remains in effect.

These amendments are intended to implement 1997 Iowa Acts, Senate File 516.

These amendments shall become effective March 1, 1998.

The following amendments are adopted.

ITEM 1. Amend rule 441--40.23(239) as follows:

441--40.23(239 77GA,SF516) Date of application. The date of application is the date an identifiable Public Assistance Application, Form PA-2207-0 or Form PA-2230-0 (Spanish), Form 470-3112, Application for Assistance, Part 1, or Form 470-3122 (Spanish), is received in any local or area office or by an income maintenance worker in any satellite office or by a designated worker who is in any disproportionate share hospital, federally qualified health center or other facility in which outstationing activities are provided. The disproportionate share hospital, federally qualified health center or other facility will forward the application to the department office which is responsible for the completion of the eligibility determination. An identifiable application is an application containing a legible name and address that has been signed.

A new application is not required when adding a person to an existing eligible group. This person is considered to be included in the application that established the existing eligible group. However, in these instances, the date of application to add a person is the date the change is reported. When it is reported that a person is anticipated to enter the home, the date of application to add the person shall be no earlier than the date of entry or the date of the report whichever is later.

In those instances where a person previously excluded from the eligible group as described at 441--subrule 41.27(11) is to be added to the eligible group, the date of application to add the person is the date the person indicated willingness to cooperate.

EXCEPTION EXCEPTIONS: When adding a person who was previously excluded from the eligible group for failing to comply with 441--subrule 41.22(13), the date of application to add the person is the date the social security number or proof of application for a social security number is provided.

When adding a person who was previously excluded from the eligible group as described at 441--subrules 41.24(8), 41.25(5), 46.28(2), and rule 441--46.29(77GA,SF516), the date of application to add the person is the day after the period of ineligibility has ended.

This rule is intended to implement Iowa Code section 239.3 1997 Iowa Acts, Senate File 516, section 3.

ITEM 2. Amend rule 441--40.26(239) as follows:

441--40.26(239 77GA,SF516) Effective date of grant. New approvals shall be effective as of the date the applicant becomes eligible for assistance, but in no case shall the effective date be earlier than seven days following the date of application. When an individual is added to an existing eligible group, the individual shall be added effective as of the date the individual becomes eligible for assistance, but in no case shall the effective date be earlier than seven days following the date the change is reported. When it is reported that a person is anticipated to enter the home, the effective date of assistance shall be no earlier than the date of entry or seven days following the date of report, whichever is later.

When the change is timely reported as described at subrule 40.27(4), a payment adjustment shall be made when indicated. When the individual's presence is not timely reported as described at subrule 40.27(4), excess assistance issued is subject to recovery.

In those instances where a person previously excluded from the eligible group as described at 441--subrule 41.27(11) is to be added to the eligible group, the effective date of eligibility shall be seven days following the date the person indicated willingness to cooperate. However, in no instance shall the person be added until cooperation has actually occurred.

EXCEPTION EXCEPTIONS: When adding a person who was previously excluded from the eligible group for failing to comply with 441--subrule 41.22(13), the effective date of eligibility shall be seven days following the date that the social security number or proof of application for a social security number is provided.

When adding a person who was previously excluded from the eligible group as described at 441--subrules 41.24(8), 41.25(5), 46.28(2), and rule 441--46.29(77GA,SF516), the effective date of eligibility shall be seven days following the date that the period of ineligibility ended.

This rule is intended to implement Iowa Code section 239.5 1997 Iowa Acts, Senate File 516, section 4.

ITEM 3. Amend subrule 40.27(5) by adding the following new paragraph "i":

i. When a sanction under paragraph 41.22(6)"f" or subrule 41.25(8) is implemented or removed, the change shall be effective the first of the next calendar month after the change has occurred or notification as described in these rules has been received.

ITEM 4. Amend subrule 41.22(6), paragraph "f," as follows:

f. Failure to cooperate shall result in the individual's need being removed from the grant and a protective payee established a sanction to the family. The sanction shall be a deduction of 25 percent from the net cash assistance grant amount payable to the family prior to any deduction for recoupment of a prior overpayment. When the income maintenance unit determines noncooperation, the sanction shall be implemented after the noncooperation has occurred. The sanction shall remain in effect until the client has cooperated. When the child support recovery unit (CSRU) makes the determination, the sanction shall be implemented upon notification from CSRU to the income maintenance unit that the client has failed to cooperate. The sanction shall remain in effect until the income maintenance unit is notified by CSRU that the client has cooperated. When the family is also subject to sanction under paragraph 41.25(8)"g," the sanction for failure to cooperate in obtaining support shall be calculated as though the sanction at paragraph 41.25(8)"g" does not exist.

ITEM 5. Amend rule 441--41.25(239) as follows:

Amend subrule 41.25(8), paragraph "g," as follows:

g. The sanction shall be a deduction of 25 percent from the net cash assistance grant amount payable to the child's family prior to any deduction for recoupment of a prior overpayment. If more than one child is deemed to be truant, the sanction shall continue to apply until the department receives written notification from the school truancy officer, as described in paragraph "f," concerning each child. When the family is also subject to sanction under paragraph 41.22(6)"f," the sanction for truancy shall be calculated as though the sanction in paragraph 41.22(6)"f" does not exist.

Further amend rule 441--41.25(239) by adding the following new subrule:

41.25(10) Fugitive felons, and probation and parole violators. Assistance shall be denied to a person who is (1) convicted of a felony under state or federal law and is fleeing to avoid prosecution, custody or confinement, or (2) violating a condition of probation or parole imposed under state or federal law. The prohibition does not apply to conduct pardoned by the President of the United States, beginning with the month after the pardon is given.

ITEM 6. Amend subrule 41.27(11) as follows:

41.27(11) Restriction on diversion of income. No income may be diverted to meet the needs of a person living in the home who has been sanctioned under subrule 41.22(6) or 41.24(8) or 41.25(5), or who has been disqualified under subrule 41.25(10) or rule 441--46.28(239) or 441--46.29 (77GA,SF516), or who is required to be included in the eligible group according to 41.28(1)"a" and has failed to cooperate. This restriction applies to 41.27(4)"a" and 41.27(8).

ITEM 7. Amend subrule 43.22(1) by rescinding and reserving paragraph "c."

ITEM 8. Amend 441--Chapter 46 by adding the following new rule:

441--46.29(77GA,SF516) Fraudulent misrepresentation of residence. A person convicted in a state or federal court, or in an administrative hearing, of having made a fraudulent statement or representation of the person's place of residence in order to receive assistance simultaneously from two or more states shall be ineligible for assistance for ten years. For the purpose of this rule, the term "assistance" means assistance under Titles IV-A or XIX of the Social Security Act, or the Food Stamp Act of 1977, or benefits in two or more states under the Supplemental Security Income program under Title XVI. The ten-year period begins on the date the person is convicted. The prohibition does not apply to a convicted person who is pardoned by the President of the United States, beginning with the month after the pardon is given.

[Filed 11/12/97, effective 3/1/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7677A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services hereby amends Chapter 77, "Conditions of Participation for Providers of Medical and Remedial Care," Chapter 78, "Amount, Duration and Scope of Medical and Remedial Services," Chapter 79, "Other Policies Relating to Providers of Medical and Remedial Care," and Chapter 83, "Medicaid Waiver Services," appearing in the Iowa Administrative Code.

The Council on Human Services adopted these amendments November 12, 1997. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7490A.

These amendments make the following changes to the Home- and Community-Based Services (HCBS) mental retardation (MR) and brain injury (BI) waivers and correct obsolete references and form names and numbers.

1. The current outcome-based accreditation process for the HCBS MR and BI waivers is revised to make all the standards for certification outcome based. The Department acknowledges that the outcomes, processes and method of certification are based on the Outcome-Based Performance Measures of the Council on Quality and Leadership in Supports for People with Disabilities, Towson, Maryland. However, adaptations and modifications have been made by the Department.

These changes are being made to match the standards developed by a focus group for a two-year pilot demonstration project applying outcome-based standards to all providers of service to persons with mental retardation and developmental disabilities in a four-county area. This process willbe used statewide for the two waivers. The premise of the outcome-based model is to base the provider certification on 19 outcomes found to be present (or not) in the lives of the consumers served and 1 organizational outcome.

Under these changes more emphasis is placed on services and supports received by the consumer rather than on the paper compliance of the provider. The changes replace the more prescriptive standards for organization, governance, and environmental standards. Interviews of consumers, legal guardians, staff, and friends will assist the reviewers in assessing the quality of services the consumers are receiving.

The interview process will generate information to establish whether or not the 18 outcomes are present. The first step in the process is to interview the consumer. During the site visit, the review team will be conducting follow-up interviews after completing the interview with the consumer. The follow-up interview must be scheduled with someone that knows the consumer well. This may include the consumer's parents, legal representatives, case manager, provider staff, or other persons from the community.

The team may also review consumer records and related documentation if information from the interviews is not sufficient to determine if the outcomes are present and to support the findings of the interviews. The team must establish whether the provider has processes in place that will allow the outcomes to be present. The following are possibilities:


* Both the processes and the outcome are present.


* The processes are not present but the outcome is present in the life of the consumer.


* The processes are present but the outcome is not present in the life of the consumer.


* Neither the processes nor the outcome is present in the life of the consumer.

Interviews shall be conducted with the chief administrative officer and other administrative staff to discuss process. Providers shall be required to submit their operating plan, program evaluation, quality assurance, insurance, annual fiscal audit, and any other requirements, if applicable, prior to the review.

During the review, the lead staff person brings together all the review team members to discuss the emerging issues and to determine whether additional discussions or observations are necessary to gain more information or to validate information obtained. The team may identify issues and observations that may need further clarification from the provider. After all aspects of the review process have taken place, the team reviews the findings and comments. It is at this point in time that team members formulate a conclusion regarding the overall quality of supports and their impact on the quality of life of the consumers served.

A specific outcome or process is present when the specific outcome or process is determined to be present for 75 percent or more of the consumers interviewed.

After the outcomes and processes have been identified, the level of certification is determined based upon the number of outcomes present, the number of processes present, and the number of both outcomes and corresponding processes present. To obtain a level of certification, a provider must meet all three requirements for that level. Providers shall receive the highest level of certification for which they are eligible.

Providers applying for their first certification by the Department may be issued an initial certification for 270 calendar days, after which a full on-site review shall be completed. Initial certification is based on the approval of the application.

Providers can receive one of four different certifications based upon reviews conducted by the Department as follows:


* Certification for three years with excellence. A provider shall be eligible for certification with excellence if the number of processes present is 18 or higher and the number of outcomes and processes present together is 12 or higher. No corrective action or follow-up monitoring is required.


* Certification for three years with corrective action. A provider shall be eligible for a three-year certification with corrective action if the number of processes present is 17 or higher and the number of outcomes and processes present together is 11 or higher, and the provider needs improvement in specified areas to increase performance level.

The provider shall develop, implement, and submit a plan of corrective action and improvement which may be monitored through written reports, improvements, and on-site reviews.


* Certification for one year. A provider shall be eligible for a one-year certification if the number of processes present is 14 or higher and the number of outcomes and processes present together is 9 or higher, or when previously required corrective actions have not been implemented or completed. The provider shall develop, implement, and submit a plan of corrective action and improvement which may be monitored through written reports, improvements, and on-site reviews.


* Probational certification. A probational 270-day certification may be issued to those providers who cannot meet requirements for a one-year certification. This time period shall be granted to the provider to establish and implement corrective actions and improvement activities. During this time period, the Department may require staff to monitor implementation of the corrective actions through on-site visits, written reports or technical assistance. Probational certifications issued for 270 calendar days shall not be renewed or extended and shall require a full on-site follow-up review to be completed. The provider shall be required to achieve at least a one-year certification status at the time of the follow-up review in order to maintain certification.

An exit conference will be held with the organization to share preliminary findings of the certification review. A review report shall be written and sent to the provider within 30 calendar days of the site review unless the parties mutually agree to extend that time frame.

During the course of the review, if a team member encounters a situation which places a person in immediate jeopardy, the team member shall immediately notify the provider, the department, and other team members. "Immediate jeopardy" refers to circumstances where the life, health, or safety of a person will be severely jeopardized if the circumstances are not immediately corrected. The situation shall be corrected by the provider within 24 to 48 hours unless otherwise indicated. If the situation is not corrected within the prescribed time frame, that portion of the provider's services which was the subject of the notification shall not be certified. Documentation of the jeopardy circumstances shall be made in the consumer's record and notice shall be made to the family or guardian of the consumer, if applicable. Consumers shall be notified of the name, address, and telephone number of Iowa Protection and Advocacy. The Department, the county of residence, and the central point of coordination shall be notified. At that time the provider shall take appropriate action to ensure the life, health, and safety of the consumers deemed to be at risk as a result of the provider's inaction.

2. Policy is revised governing how many HCBS consumers with mental retardation can live in a living unit to comply with legislative direction in 1997 Iowa Acts, House File 702, section 18. Under current policy, providers of service meeting specific requirements may seek approval to provide supported community living services to not more than four HCBS MR consumers per living unit. The legislation authorized the Department to allow a total of 20 residential care facilities for persons with mental retardation which are currently licensed by the Department of Public Health to serve no more than five persons to convert to operation as a residential program under the provisions of the HCBS MR waiver.

The Department is to allow for four conversions in each of the Department's five service regions. The Department may reallocate any unused conversion authorization to another region.

These rules provide for recommendations for conversions to be made to the Department by regional committees consisting of all of the Central Point of Coordination administrators in the region, with an advisory representative from the Department. The final decision will be made by the Division of Mental Health and Developmental Disabilities of the Department.

In addition the legislation provides that subject to federal approval, a residential program which serves not more than eight individuals and is licensed as an intermediate care facility for persons with mental retardation may surrender the facility license and continue to operate under the home- and community-based services waiver for persons with mental retardation if the department has approved timelines submitted by the residential program showing the provider will come into compliance with these rules within one year.

3. Policy is revised to allow nursing facilities, intermediate care facilities for the mentally retarded, hospitals, residential care facilities for the mentally retarded, and home health agencies certified to participate in Medicare to provide respite services under the HCBS MR and BI waivers and to allow day camps certified by the American Camping Association and adult day health services accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or the Commission on Accreditation of Rehabilitation Facilities (CARF) to provide respite services under the HCBS MR waiver. Day camps and adult day health services are already respite providers under the HCBS BI waiver.

4. The time frame for the Department or county to approve the HCBS MR waiver services and service cost or request modification of the service plan after receipt of the summary and service costs is expanded from 10 to 15 days or longer if the parties mutually agreed to extend the time frame to allow a more realistic time frame.

Eight public hearings were held around the state. Nine persons attended and one organization submitted written comments. In addition, comments on the rules were received from staff doing certification reviews. In response to those comments, the following revisions were made to the Notice of Intended Action to add additional outcomes and to make the length of certification be based more heavily on whether or not the processes are in place to help consumers obtain desired outcomes:

Subrule 77.37(1), paragraph "g," and subrule 77.39(1), paragraph "g," were revised to reflect the change in the number of outcomes.

Subrules 77.37(2) and 77.39(2) were revised to add 2 outcomes from the previous 28: (1) the consumer's desire for intimacy is respected and supported and (2) consumers have an impact on the services they receive.

Subrule 77.37(12), paragraph "b," and subrule 77.39(10), paragraph "b," were revised to reflect the change in the number of outcomes and to correct the name of the Accreditation Council. A sentence was also added to provide that since the processes are in the control of the provider and the outcomes are more in the control of the consumer, the length of certification will be based more heavily on whether or not the processes are in place to help consumers obtain desired out-comes.

Subrule 77.37(12), paragraph "c," and subrule 77.39(10), paragraph "c," were revised to reflect the change in the number of outcomes and the emphasis on processes. In addition, a provision was added to provide that one-year certification may also be given in lieu of longer certification when previously required corrective actions have not been implemented or completed.

These amendments are intended to implement Iowa Code sections 135C.6 as amended by 1997 Iowa Acts, House File 702, section 18, and 249A.4.

These amendments shall become effective February 1, 1998.

The following amendments are adopted.

ITEM 1. Amend rule 441--77.37(249A) as follows:

Amend the introductory paragraph as follows:

441--77.37(249A) HCBS MR waiver service providers. Supported community living, respite, and supported employment, and home and vehicle modification providers shall be eligible to participate as approved HCBS MR service providers in the Medicaid program provided that they meet the based on the outcome-based standards set forth below in subrules 77.37(1) to 77.37(25) and 77.37(2) evaluated according to subrules 77.37(10) to 77.37(12), the requirements of subrules 77.37(3) to 77.37(9), and the applicable subrules pertaining to the individual service. Respite providers shall meet the conditions set forth in subrules 77.37(1) and 77.37(15). Home and vehicle modification shall meet the conditions set forth in subrule 77.37(17). Personal emergency response system providers shall meet the conditions set forth in subrule 77.37(30) 77.37(18). Nursing providers shall meet the conditions set forth in subrule 77.37(31) 77.37(19). Home health aide providers shall meet the conditions set forth in subrule 77.37(32) 77.37(20). Consumer-directed attendant care providers shall meet the conditions set forth in subrule 77.37(21).

Rescind subrules 77.37(1) and 77.37(2) and insert the following new subrules in lieu thereof:

77.37(1) Organizational standards (Outcome 1). Organizational outcome-based standards for HCBS MR providers are as follows:

a. The organization demonstrates the provision and oversight of high-quality supports and services to consumers.

b. The organization demonstrates a defined mission commensurate with consumer's needs, desires, and abilities.

c. The organization establishes and maintains fiscal accountability.

d. The organization has qualified staff commensurate with the needs of the consumers they serve. These staff demonstrate competency in performing duties and in all interactions with clients.

e. The organization provides needed training and supports to its staff. This training includes at a minimum:

(1) Consumer rights.

(2) Confidentiality.

(3) Provision of consumer medication.

(4) Identification and reporting of child and dependent adult abuse.

(5) Individual consumer support needs.

f. The organization demonstrates methods of evaluation.

(1) Past performance is reviewed.

(2) Current functioning is evaluated.

(3) Plans are made for the future based on the evaluation and review.

g. Consumers and their legal representatives have the right to appeal the provider's implementation of the 20 outcomes, or staff or contractual person's action which affects the consumer. The provider shall distribute the policies for consumer appeals and procedures to consumers.

h. The provider shall have written policies and procedures and a staff training program for the identification and reporting of child and dependent adult abuse to the department pursuant to 441--Chapters 175 and 176.

i. The governing body has an active role in the administration of the agency.

j. The governing body receives and uses input from a wide range of local community interests and consumer representation and provides oversight that ensures the provision of high-quality supports and services to consumers.

77.37(2) Rights and dignity. Outcome-based standards for rights and dignity are as follows:

a. (Outcome 2) Consumers are valued.

b. (Outcome 3) Consumers live in positive environments.

c. (Outcome 4) Consumers work in positive environments.

d. (Outcome 5) Consumers exercise their rights and responsibilities.

e. (Outcome 6) Consumers have privacy.

f. (Outcome 7) When there is a need, consumers have support to exercise and safeguard their rights.

g. (Outcome 8) Consumers decide which personal information is shared and with whom.

h. (Outcome 9) Consumers make informed choices about where they work.

i. (Outcome 10) Consumers make informed choices on how they spend their free time.

j. (Outcome 11) Consumers make informed choices about where and with whom they live.

k. (Outcome 12) Consumers choose their daily routine.

l. (Outcome 13) Consumers are a part of community life and perform varied social roles.

m. (Outcome 14) Consumers have a social network and varied relationships.

n. (Outcome 15) Consumers develop and accomplish personal goals.

o. (Outcome 16) Management of consumers' money is addressed on an individualized basis.

p. (Outcome 17) Consumers maintain good health.

q. (Outcome 18) The consumer's living environment is reasonably safe in the consumer's home and community.

r. (Outcome 19) The consumer's desire for intimacy is respected and supported.

s. (Outcome 20) Consumers have an impact on the services they receive.

Rescind subrules 77.37(3) to 77.37(9) and renumber subrules 77.37(14) through 77.37(20) as 77.37(3) to 77.37(9), respectively.

Amend renumbered subrule 77.37(9), paragraph "b," as follows:

b. The provider shall ensure the rights of persons applying for services according to 77.37(11)"a."

Rescind subrules 77.37(10) to 77.37(12) and insert the following new subrules in lieu thereof:

77.37(10) Certification process. Reviews of compliance with standards for initial certification and recertification shall be conducted by the department of human services' division of mental health and developmental disabilities quality assurance staff. Certification carries no assurance that the approved provider will receive funding.

a. The provider shall request an application from CONSULTEC.

b. The provider shall submit an application to CONSULTEC using Form 470-2917, HCBS Application for Certification. The application shall be submitted to Provider Enrollment, CONSULTEC, Inc., P.O. Box 14422, Des Moines, Iowa 50306-3422.

c. The applicant shall submit the completed application to CONSULTEC at least 90 days before the planned service implementation date. CONSULTEC shall forward the application to the department for processing.

d. The department may request any information from the prospective service provider which is considered pertinent to arriving at a certification decision. This may include, but is not limited to:

(1) Current accreditations, evaluations, inspections and reviews by regulatory and licensing agencies and associations.

(2) Fiscal capacity of the prospective provider to initiate and operate the specified programs on an ongoing basis.

(3) The prospective provider's written agreement to work cooperatively with the state and central point of coordination in the counties and the state to be served by the provider.

77.37(11) Initial certification. The department shall review the application and accompanying information to see if the provider has the necessary framework to provide services in accordance with all applicable requirements and standards.

a. The department shall make a determination regarding initial certification within 60 days of receipt of the application and notify the provider in writing of the decision unless extended by mutual consent of the parties involved. Providers shall be responsible for notifying the appropriate county and the appropriate central point of coordination of the determination.

b. The decision of the department on initial certification of the providers shall be based on all relevant information, including:

(1) The application for status as an approved provider according to requirements of rules.

(2) A determination of the financial position of the prospective provider in relation to its ability to meet the stated need.

(3) The prospective provider's coordination of service design, development, and application with the applicable local county central point of coordination and other interested parties.

c. Providers applying for initial certification shall be offered technical assistance.

77.37(12) Period of certification. Provider certification shall become effective on the date identified on the certificate of approval and shall terminate in 270 calendar days, one year, or three calendar years from the month of issue. The renewal of certification shall be contingent upon demonstration of continued compliance with certification requirements.

a. Initial certification. Providers eligible for initial certification by the department shall be issued an initial certification for 270 calendar days based on documentation provided.

b. Recertification. After the initial certification, the level of certification shall be based on an on-site review unless the provider has been accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the Council on Accreditation of Rehabilitation Facilities (CARF), the Council on Quality and Leadership in Supports for People with Disabilities (The Council), or the Council on Accreditation of Services for Families and Children (COA). The on-site reviews use interviews with consumers and significant people in the consumer's life to determine whether or not the 20 individual value-based outcomes set forth in subrules 77.37(1) and 77.37(2) and corresponding processes are present for the consumer.

Once the outcomes and processes have been determined for all the consumers in the sample, a review team then determines which of the 20 outcomes and processes are present for the provider. A specific outcome is present for the provider when the specific outcome is determined to be present for 75 percent or more of the consumers interviewed. A specific process is present for the provider when the process is determined to be present for 75 percent or more of the consumers interviewed. Since the processes are in the control of the provider and the outcomes are more in the control of the consumer, length of certification will be based more heavily on whether or not the processes are in place to help consumers obtain desired outcomes.

An exit conference shall be held with the organization to share preliminary findings of the certification review. A review report shall be written and sent to the provider within 30 calendar days unless the parties mutually agree to extend that time frame.

Provider certification shall become effective on the date identified on the Certificate of Approval, Form 470-3410, and shall terminate in 270 calendar days, one year, or three calendar years from the month of issue. The renewal of certification shall be contingent upon demonstration of continued compliance with certification requirements.

c. The department may issue four categories of recertification:

(1) Three-year certification with excellence. An organization is eligible for certification with excellence if the number of processes present is 18 or higher and the number of outcomes and corresponding processes present together are 12 or higher. Both criteria need to be met to receive three-year certification with excellence. No corrective action plan or follow-up monitoring is required.

(2) Three-year certification with follow-up monitoring. An organization is eligible for this type of certification if the number of processes present is 17 or higher and the number of outcomes and corresponding processes present together are 11 or higher. Both criteria need to be met to receive three-year certification. Corrective actions are required which may be monitored through the assignment of follow-up monitoring either by written report, a plan of corrective actions and improvements, an on-site review, or the provision of technical assistance.

(3) One-year certification. An organization is eligible for this type of certification when the number of processes present is 14 or higher and the number of outcomes and processes together is 9 or higher. Both criteria need to be met to receive one-year certification. One-year certification may also be given in lieu of longer certification when previously required corrective actions have not been implemented or completed. Corrective actions are required which may be monitored through the assignment of follow-up monitoring either by written report, a plan of corrective actions and improvements, an on-site review, or the provision of technical assistance.

(4) Probational certification. A probational certification may be issued to those providers who cannot meet requirements for a one-year certification. This time period shall be granted to the provider to establish and implement corrective actions and improvement activities. During this time period the department may require monitoring of the implementation of the corrective actions through on-site visits, written reports or technical assistance. Probational certification issued for 270 calendar days shall not be renewed or extended, and shall require a full on-site follow-up review to be completed. The provider shall be required to achieve at least a one-year certification status at the time of the follow-up review in order to maintain certification.

d. During the course of the review, if a team member encounters a situation which places a consumer in immediate jeopardy, the team member shall immediately notify the provider, the department, and other team members. "Immediate jeopardy" refers to circumstances where the life, health, or safety of a consumer will be severely jeopardized if the circumstances are not immediately corrected. The situation shall be corrected by the provider within 24 to 48 hours. If the situation is not corrected within the prescribed time frame, that portion of the provider's services which were the subject of the notification shall not be certified. The department, the county of residence, and the central point of coordination shall be notified immediately to discontinue funding for that provider's service. If this action is appealed and the consumer or legal guardian wants to maintain the provider's services, funding can be reinstated. At that time the provider shall take appropriate action to ensure the life, health, and safety of the consumers deemed to be at risk as a result of the provider's inaction.

e. As a mandatory reporter, each team member shall be required to follow appropriate procedure in all cases where a condition reportable to child and adult protective services is observed.

f. The department may grant an extension to the period of approval for the following reasons:

(1) A delay in the department's approval decision which is beyond the control of the provider or department.

(2) A request for an extension from a provider to permit the provider to prepare and obtain department approval of corrective actions. The department shall establish the length of extensions on a case-by-case basis.

g. The department may revoke the provider's approval at any time for any of the following reasons:

(1) Findings of a site visit indicate that the provider has failed to implement the corrective actions submitted pursuant to paragraph 77.37(13)"e."

(2) The provider has failed to provide information requested pursuant to paragraph 77.37(13)"f."

(3) The provider refuses to allow the department to conduct a site visit pursuant to paragraph 77.37(13)"h."

(4) There are instances of noncompliance with the standards which were not identified from information submitted on the application.

h. An approved provider shall immediately notify the department, applicable county, the applicable mental health and developmental disabilities planning council, and other interested parties of a decision to withdraw from an HCBS MR waiver service.

i. Following certification, any provider may request technical assistance from the department to bring into conformity those areas found in noncompliance with HCBS requirements. If multiple deficiencies are noted during a review, the department may require that technical assistance be provided to a provider to assist in the implementation of the provider's corrective actions. Providers may be given technical assistance as needed.

j. Appeals. Any adverse action can be appealed by the provider under 441--Chapter 7.

Rescind subrules 77.37(21), 77.37(22), and 77.37(24).

Renumber subrules 77.37(25) to 77.37(33) as 77.37(13) to 77.37(21), respectively.

Amend renumbered subrule 77.37(13), paragraph "g," as follows:

g. The department may request the provider to supply subsequent reports on implementation of a corrective action plan submitted pursuant to 77.37(25)"e" 77.37(13)"e" and 77.37(25)"f." 77.37(13)"f."

Amend renumbered subrule 77.37(14) by rescinding paragraph "d" and adopting the following new paragraphs "d" and "e."

d. All supported community living providers shall meet the following requirements:

(1) The provider shall demonstrate how the provider will meet the outcomes and processes in rule 441--77.37(249A) for each of the consumers being served. The provider shall supply timelines showing how the provider will comeinto compliance with rules 441--77.37(249A), 441-- 78.41(249A), and 441--83.60(249A) to 441--83.70(249A) and 441--subrule 79.1(15) within one year of certification. These timelines shall include:

1. Implementation of necessary staff training and consumer input.

2. Implementation of provider system changes to allow for flexibility in staff duties, services based on what each individual needs, and removal of housing as part of the service.

(2) The provider shall demonstrate that systems are in place to measure outcomes and processes for individual consumers before certification can be given.

e. Living units designed to serve more than three supported community living recipients shall be approved only as follows:

(1) Living units designed to serve four recipients shall be approved subject to all of the following conditions:

1. Only existing residential facility structures owned or operated by the provider as of November 4, 1994, shall be used.

2. The provider shall provide justification of the need for the service to be provided in a four-person living unit instead of a living unit for three persons or less.

3. The requirements of Iowa Code paragraph 135C.6(8)"b" shall be met.

(2) The department shall approve a total of 20 living units for five persons or fewer which are licensed as residential care facilities for persons with mental retardation. The residential care facility shall surrender the facility license and continue to operate under the medical assistance home- and community-based services waiver for persons with mental retardation. Applications from providers for conversion shall be submitted to the Division of Mental Health and Developmental Disabilities, Hoover State Office Building, Fifth Floor, Des Moines, Iowa 50319-0114.

1. There shall be four conversions in each of the department's five service regions. The department may reallocate any unused conversion authorization to another region.

2. Recommendations for conversions will be made to the department by an advisory committee set up for each of the five regions. For each region the members shall include all of the central point of coordination administrators, with an advisory representative from the department. Each region shall submit its recommendation for the allocation of its four facilities currently licensed as residential care facilities for persons with mental retardation that will convert to home- and community-based waiver services for persons with mental retardation.

3. Approval of providers shall be made by the department's mental health and developmental disabilities division. Approval of providers shall be based on the advisory committee's recommendation, the geographical distribution of providers, and the counties' written assurance that they will request sufficient slots for the consumers to be served and agree to provide necessary funding.

(3) Subject to federal approval, a residential program which serves not more than eight individuals and is licensed as an intermediate care facility for persons with mental retardation may surrender the facility license and continue to operate under the home- and community-based services waiver for persons with mental retardation if the department has approved the timelines submitted by the residential program pursuant to subparagraph 77.37(14)"d"(1).

Amend renumbered subrule 77.37(15) as follows:

77.37(15) Respite providers.

a. The department will contract only with public or private agencies to provide respite services. The department does not recognize individuals as service providers under the respite program.

The following agencies may provide HCBS MR respite services:

b a. Providers of services meeting the definition of foster care or day care shall also be licensed according to applicable 441--Chapters 108, 109, 112, 114, 115, and 116.

c. Providers of services may employ or contract with individuals meeting the definition of foster family homes or family or group day care homes to provide respite services. These individuals shall be licensed according to applicable 441--Chapters 110, 112, and 113.

b. Nursing facilities, intermediate care facilities for the mentally retarded, and hospitals certified to participate in the Medicaid program.

c. RCF/MR facilities certified by the department of inspections and appeals.

d. Home health agencies provided they are certified to participate in the Medicare program (Title XVIII of the Social Security Act).

e. Day camps provided they are certified by the American Camping Association.

f. Adult day health services accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or the Commission on Accreditation of Rehabilitation Facilities (CARF).

ITEM 2. Amend rule 441--77.39(249A) as follows:

Amend the introductory paragraph as follows:

441--77.39(249A) HCBS brain injury waiver service providers. Adult day care, behavioral programming, case management, consumer-directed attendant care, family counseling and training, home and vehicle modification, personal assistance service, personal emergency response, prevocational service, respite, specialized medical equipment, supported community living, supported employment, and transportation providers shall be eligible to participate as approved brain injury waiver service providers in the Medicaid program based on the applicable subrules pertaining to the individual service and provided that they and each of their staff involved in direct consumer service have training regarding or experience with consumers who have a brain injury and meet the standards set forth below in subrules 77.39(1) to 77.39(31). In addition, behavioral programming, supported community living, and supported employment providers shall meet the outcome-based standards set forth below in subrules 77.39(1) and 77.39(2) evaluated according to subrules 77.39(8) to 77.39(10), and the requirements of subrules 77.39(3) to 77.39(7). Respite providers shall also meet the standards in subrule 77.39(1).

Rescind subrules 77.39(1) to 77.39(3) and insert the following new subrules in lieu thereof:

77.39(1) Organizational standards (Outcome 1). Organizational outcome-based standards for HCBS BI providers are as follows:

a. The organization demonstrates the provision and oversight of high-quality supports and services to consumers.

b. The organization demonstrates a defined mission commensurate with consumers' needs, desires, and abilities.

c. The organization establishes and maintains fiscal accountability.

d. The organization has qualified staff commensurate with the needs of the consumers they serve. These staff demonstrate competency in performing duties and in all interactions with clients.

e. The organization provides needed training and supports to its staff. This training includes at a minimum:

(1) Consumer rights.

(2) Confidentiality.

(3) Provision of consumer medication.

(4) Identification and reporting of child and dependent adult abuse.

(5) Individual consumer support needs.

f. The organization demonstrates methods of evaluation.

(1) Past performance is reviewed.

(2) Current functioning is evaluated.

(3) Plans are made for the future based on the evaluation and review.

g. Consumers and their legal representatives have the right to appeal the provider's implementation of the 20 outcomes, or staff or contractual person's action which affects the consumer. The provider shall distribute the policies for consumer appeals and procedures to consumers.

h. The provider shall have written policies and procedures and a staff training program for the identification and reporting of child and dependent adult abuse to the department pursuant to 441--Chapters 175 and 176.

i. The governing body has an active role in the administration of the agency.

j. The governing body receives and uses input from a wide range of local community interests and consumer representation and provides oversight that ensures the provision of high-quality supports and services to consumers.

77.39(2) Rights and dignity. Outcome-based standards for rights and dignity are as follows:

a. (Outcome 2) Consumers are valued.

b. (Outcome 3) Consumers live in positive environments.

c. (Outcome 4) Consumers work in positive environments.

d. (Outcome 5) Consumers exercise their rights and responsibilities.

e. (Outcome 6) Consumers have privacy.

f. (Outcome 7) When there is a need, consumers have support to exercise and safeguard their rights.

g. (Outcome 8) Consumers decide which personal information is shared and with whom.

h. (Outcome 9) Consumers make informed choices about where they work.

i. (Outcome 10) Consumers make informed choices on how they spend their free time.

j. (Outcome 11) Consumers make informed choices about where and with whom they live.

k. (Outcome 12) Consumers choose their daily routine.

l. (Outcome 13) Consumers are a part of community life and perform varied social roles.

m. (Outcome 14) Consumers have a social network and varied relationships.

n. (Outcome 15) Consumers develop and accomplish personal goals.

o. (Outcome 16) Management of consumers' money is addressed on an individualized basis.

p. (Outcome 17) Consumers maintain good health.

q. (Outcome 18) The consumer's living environment is reasonably safe in the consumer's home and community.

r. (Outcome 19) The consumer's desire for intimacy is respected and supported.

s. (Outcome 20) Consumers have an impact on the services they receive.

77.39(3) The right to appeal. Consumers and their legal representatives have the right to appeal the provider's application of policies or procedures, or any staff or contractual person's action which affects the consumer. The provider shall distribute the policies for consumer appeals and procedures to consumers.

Rescind subrules 77.39(4) to 77.39(9) and renumber subrules 77.39(10) through 77.39(13) as subrules 77.39(4) through 77.39(7), respectively.

Amend renumbered subrule 77.39(7), paragraph "b," as follows:

b. The provider shall ensure the rights of persons applying for services according to 77.39(7)"a."

Insert the following new subrules 77.39(8) to 77.39(10).

77.39(8) Certification process. Reviews of compliance with standards for initial certification and recertification shall be conducted by the department of human services' division of mental health and developmental disabilities quality assurance staff. Certification carries no assurance that the approved provider will receive funding.

a. The provider shall request an application from CONSULTEC.

b. The provider shall submit an application to CONSULTEC using Form 470-2917, HCBS Application for Certification. The application shall be submitted to Provider Enrollment, CONSULTEC, Inc., P.O. Box 14422, Des Moines, Iowa 50306-3422.

c. The applicant shall submit the completed application to CONSULTEC at least 90 days before the planned service implementation date. CONSULTEC shall forward the application to the department for processing.

d. The department may request any information from the prospective service provider which is considered pertinent to arriving at a certification decision. This may include, but is not limited to:

(1) Current accreditations, evaluations, inspections and reviews by regulatory and licensing agencies and associations.

(2) Fiscal capacity of the prospective provider to initiate and operate the specified programs on an ongoing basis.

(3) The prospective provider's written agreement to work cooperatively with the state and central point of coordination in the counties and the state to be served by the provider.

77.39(9) Initial certification. The department shall review the application and accompanying information to see if the provider has the necessary framework to provide services in accordance with all applicable requirements and standards.

a. The department shall make a determination regarding initial certification within 60 days of receipt of the application and notify the provider in writing of the decision unless extended by mutual consent of the parties involved. Providers shall be responsible for notifying the appropriate county and the appropriate central point of coordination of the determination.

b. The decision of the department on initial certification of the providers shall be based on all relevant information, including:

(1) The application for status as an approved provider according to requirements of rules.

(2) A determination of the financial position of the prospective provider in relation to its ability to meet the stated need.

(3) The prospective provider's coordination of service design, development, and application with the applicable local county central point of coordination and other interested parties.

c. Providers applying for initial certification shall be offered technical assistance.

77.39(10) Period of certification. Provider certification shall become effective on the date identified on the certificate of approval and shall terminate in 270 calendar days, one year, or three calendar years from the month of issue. The renewal of certification shall be contingent upon demonstration of continued compliance with certification requirements.

a. Initial certification. Providers eligible for initial certification by the department shall be issued an initial certification for 270 calendar days based on documentation provided.

b. Recertification. After the initial certification, the level of certification shall be based on an on-site review unless the provider has been accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), the Council on Accreditation of Rehabilitation Facilities (CARF), the Council on Quality and Leadership in Supports for People with Disabilities (The Council), or the Council on Accreditation of Services for Families and Children (COA). The on-site reviews use interviews with consumers and significant people in the consumer's life to determine whether or not the 20 individual value-based outcomes set forth in subrules 77.39(1) and 77.39(2) and corresponding processes are present for the consumer.

Once the outcomes and processes have been determined for all the consumers in the sample, a review team then determines which of the 20 outcomes and processes are present for the provider. A specific outcome is present for the provider when the specific outcome is determined to be present for 75 percent or more of the consumers interviewed. A specific process is present for the provider when the process is determined to be present for 75 percent or more of the consumers interviewed. Since the processes are in the control of the provider and the outcomes are more in the control of the consumer, length of certification will be based more heavily on whether or not the processes are in place to help consumers obtain desired outcomes.

An exit conference shall be held with the organization to share preliminary findings of the certification review. A review report shall be written and sent to the provider within 30 calendar days unless the parties mutually agree to extend that time frame.

Provider certification shall become effective on the date identified on the Certificate of Approval, Form 470-3410, and shall terminate in 270 calendar days, one year, or three calendar years from the month of issue. The renewal of certification shall be contingent upon demonstration of continued compliance with certification requirements.

c. The department may issue four categories of recertification:

(1) Three-year certification with excellence. An organization is eligible for certification with excellence if the number of processes present is 18 or higher and the number of outcomes and corresponding processes present together is 12 or higher. Both criteria need to be met to receive three-year certification with excellence. No corrective action plan or follow-up monitoring is required.

(2) Three-year certification with follow-up monitoring. An organization is eligible for this type of certification if the number of processes present is 17 or higher and the number of outcomes and corresponding processes present together is 11 or higher. Both criteria need to be met to receive three-year certification. Corrective actions are required which may be monitored through the assignment of follow-up monitoring either by written report, a plan of corrective actions and improvements, an on-site review, or the provision of technical assistance.

(3) One-year certification. An organization is eligible for this type of certification when the number of processes present is 14 or higher and the number of outcomes and processes present together is 9 or higher. Both criteria need to be met to receive one-year certification. One-year certification may also be given in lieu of longer certification when previously required corrective actions have not been implemented or completed. Corrective actions are required which may be monitored through the assignment of follow-up monitoring either by written report, a plan of corrective actions and improvements, an on-site review, or the provision of technical assistance.

(4) Probational certification. A probational certification may be issued to those providers who cannot meet requirements for a one-year certification. This time period shall be granted to the provider to establish and implement corrective actions and improvement activities. During this time period the department may require monitoring of the implementation of the corrective actions through on-site visits, written reports or technical assistance. Probational certification issued for 270 calendar days shall not be renewed or extended and shall require a full on-site follow-up review to be completed. The provider shall be required to achieve at least a one-year certification status at the time of the follow-up review in order to maintain certification.

d. During the course of the review, if a team member encounters a situation which places a consumer in immediate jeopardy, the team member shall immediately notify the provider, the department, and other team members. "Immediate jeopardy" refers to circumstances where the life, health, or safety of a consumer will be severely jeopardized if the circumstances are not immediately corrected. The situation shall be corrected by the provider within 24 to 48 hours. If the situation is not corrected within the prescribed time frame, that portion of the provider's services which were the subject of the notification shall not be certified. The department, the county of residence, and the central point of coordination shall be notified immediately to discontinue funding for that provider's service. If this action is appealed and the consumer or legal guardian wants to maintain the provider's services, funding can be reinstated. At that time the provider shall take appropriate action to ensure the life, health, and safety of the consumers deemed to be at risk as a result of the provider's inaction.

e. As a mandatory reporter, each team member shall be required to follow appropriate procedure in all cases where a condition reportable to child and adult protective services is observed.

f. The department may grant an extension to the period of approval for the following reasons:

(1) A delay in the department's approval decision which is beyond the control of the provider or department.

(2) A request for an extension from a provider to permit the provider to prepare and obtain department approval of corrective actions. The department shall establish the length of extensions on a case-by-case basis.

g. The department may revoke the provider's approval at any time for any of the following reasons:

(1) Findings of a site visit indicate that the provider has failed to implement the corrective actions submitted pursuant to paragraph 77.39(11)"d."

(2) The provider has failed to provide information requested pursuant to paragraph 77.39(11)"e."

(3) The provider refuses to allow the department to conduct a site visit pursuant to paragraph 77.39(11)"f."

(4) There are instances of noncompliance with the standards which were not identified from information submitted on the application.

h. An approved provider shall immediately notify the department, applicable county, the applicable mental health and developmental disabilities planning council, and other interested parties of a decision to withdraw from an HCBS BI waiver service.

i. Following certification, any provider may request technical assistance from the department to bring into conformity those areas found in noncompliance with HCBS requirements. If multiple deficiencies are noted during a review, the department may require that technical assistance be provided to a provider to assist in the implementation of the provider's corrective actions. Providers may be given technical assistance as needed.

j. Appeals. Any adverse action can be appealed by the provider under 441--Chapter 7.

Rescind subrules 77.39(14) to 77.39(17).

Renumber subrules 77.39(18) to 77.39(31) as 77.39(11) to 77.39(24), respectively.

Amend renumbered subrule 77.39(11), paragraph "e," as follows:

e. The department may request the provider to supply subsequent reports on implementation of a corrective action plan submitted pursuant to paragraphs 77.39(18)"c" and "d." 77.39(11)"c" and "d."

Amend renumbered subrule 77.39(13), paragraph "d," subparagraph (2), as follows:

(2) Providers of service may seek approval to provide supported community living services to not more than four HCBS brain injury waiver consumers per living unit according to subrule 77.39(14) 77.39(8) if all consumers residing in the living unit receive on-site staff supervision during the entire time period consumers are present in the living unit and if each consumer's individual comprehensive plan identifies and reflects the need for this amount of supervision.

Amend renumbered subrule 77.39(14) by adding the following new paragraphs "h" to "j."

h. Nursing facilities, intermediate care facilities for the mentally retarded, and hospitals certified to participate in the Medicaid program.

i. RCF/MR facilities certified by the department of inspections and appeals.

j. Home health agencies provided they are certified to participate in the Medicare program (Title XVIII of the Social Security Act).

ITEM 3. Amend rule 441--78.41(249A) as follows:

Amend subrule 78.41(1), introductory paragraph, as follows:

78.41(1) Supported community living services. Supported community living services are provided by the provider within the consumer's home and community, according to the individualized consumer need as identified in the individual comprehensive plan (ICP) or department case plan. Formal assessments are required to determine the necessary instruction, supervision, assistance, and support required by the consumer in meeting the consumer's safety, health, medical, and nutritional needs. The formal assessments are described further in paragraphs "f," "g," and "h."

Amend subrule 78.41(1), paragraph "c," introductory paragraph, as follows:

c. Services may be provided to a child or an adult. A maximum of three consumers receiving community-supported alternative living arrangements or HCBS MR services may reside in a living unit except providers meeting requirements set forth in 441--paragraph 77.37(26)"d" 77.37(14)"e." may provide supported community living services to four HCBS MR consumers residing in a living unit.

Further amend subrule 78.41(1) by rescinding paragraphs "e" through "j," and relettering paragraphs "k" to "o" as "e" to "i," respectively.

Amend subrule 78.41(2), introductory paragraph, as follows:

78.41(2) Respite services. Respite services are those services provided to consumers who are unable to care for themselves living with their family or legal representative persons manually providing their care. Respite is short-term relief provided in the absence of the family or legal representative normally providing the care. Respite services are not required to meet the requirements set forth at 441--subrule 77.37(13), paragraphs "c," "d," and "e." Service activities shall be documented in the consumer record.

Further amend subrule 78.41(2) by rescinding paragraphs "a" to "c" and relettering paragraphs "d" to "j" as "a" to "g," respectively.

Amend subrule 78.41(2), relettered paragraphs "d" and "e," as follows:

d. A unit of service is one hour for nonfacility care or one day for facility care. One day equals 24 hours.

e. A maximum of 576 units hours are available per 12-month period. A maximum of 336 units hours may be used in any calendar month. One unit of nonfacility care counts as one hour. One unit of facility care counts as 24 hours.

Amend subrule 78.41(4), paragraph "a," as follows:

a. Services shall be included in the consumer's individual comprehensive plan or service plan and shall exceed the Medicaid state plan services. Home and vehicle modification services are not required to meet the requirements set forth at 441--subrule 77.37(13), paragraphs "c," "d," and "e."

ITEM 4. Amend rule 441--78.43(249A) as follows:

Amend subrule 78.43(2), introductory paragraph, as follows:

78.43(2) Supported community living services. Supported community living services are provided by the provider within the consumer's home and community, according to the individualized consumer need as identified in the individual comprehensive plan (ICP) or department case plan. Formal assessments are required to determine the necessary instruction, supervision, assistance, and support required by the consumer in meeting the consumer's safety, health, medical, and nutritional needs. The formal assessments are described further in paragraphs "f," "g," and "h." Intermittent service shall be provided as defined in rule 441--83.81(249A).

Amend subrule 78.43(2), paragraph "c," introductory paragraph, as follows:

c. Services may be provided to a child or an adult. Children must first access all other services for which they are eligible and which are appropriate to meet their needs before accessing the HCBS brain injury waiver services. A maximum of three consumers receiving community-supported alternative living arrangements or HCBS brain injurywaiver services may reside in a living unit except that providers meeting requirements set forth in 441--paragraph 77.39(20)"d" 77.39(13)"d" may provide supported community living services to four HCBS brain injury waiver consumers residing in a living unit.

Further amend subrule 78.43(2) by rescinding paragraphs "e" through "j" and relettering paragraphs "k" to "n" as "e" to "h," respectively.

Amend subrule 78.43(2), relettered paragraph "e," introductory paragraph, as follows:

e. Provider budgets and billings shall reflect all staff-to-consumer ratios of greater than 1:1 whenever staffing patterns are utilized. A unit of service is:

Rescind and reserve subrule 78.43(3), paragraph "a."

Amend subrule 78.43(5), paragraph "a," as follows:

a. Services shall be included in the consumer's individual comprehensive plan or service plan and shall exceed the regular Medicaid services. Home and vehicle modification services are not required to meet the requirements set forth at 441--subrule 77.39(9), paragraphs "c," "d," and "e."

ITEM 5. Amend subrule 79.1(2) as follows:

Amend the provider category of HCBS brain injury waiver service providers, Respite providers, as follows:

Provider category

Basis of

reimbursement

Upper limit
HCBS brain injury waiver
service providers, including:


2. Respite care
providers, including:

Fee schedule
$12 per hour
Nonfacility care:
Fee schedule
$12 per hour, $104 per 4- to 8-hour day
Facility care:


Hospital or skilled nursing facility
Prospective
reimbursement

Limit for skilled nursing
facility
level of care

Nursing facility or intermediate care facility for the mentally
retarded

Prospective
reimbursement

Limit for nursing
facility
level of care

Foster group care
Prospective
reimbursement

P.O.S.
contract rate

Amend the provider category of HCBS MR waiver service providers, Respite providers, as follows:

Provider category

Basis of

reimbursement

Upper limit
HCBS MR waiver service
providers, including:


2. Respite care providers, including:
Prospective cost-related
reimbursement. See 79.1(15)

$12 per hour.
Limit 576 units, 336 per month.

Nonfacility care:
Prospective cost-related
reimbursement. See 79.1(15)

$12 per hour
Facility care:


Hospital or skilled nursing facility
Prospective
reimbursement

Limit for skilled nursing
facility
level of care

Nursing facility or intermediate care facility for the mentally
retarded

Prospective
reimbursement

Limit for nursing
facility
level of care

Foster group
care

Prospective
reimbursement

P.O.S. contract rate
ITEM 6. Amend rule 441--79.14(249A) as follows:

Amend subrule 79.14(1), introductory paragraph, as follows:

79.14(1) Application forms. All providers of medical services interested in enrolling as Medicaid providers shall begin the enrollment process by contacting the fiscal agent at Provider Enrollment, CONSULTEC, Inc., P.O. Box 14422, Des Moines, Iowa 50306-3422, to request an application, with the following exceptions: HCBS MR waiver service providers shall complete the application process set forth in 441--subrule 77.37(21); nursing facility providers shall complete the process set forth in rule 441--81.13(249A); and intermediate care facilities for the mentally retarded shall complete the process set forth in rule 441--82.3(249A). CONSULTEC shall send the provider the appropriate application forms for completion as set forth below.

Further amend subrule 79.14(1) by rescinding paragraph "e" and inserting the following new paragraph "e" in lieu thereof.

e. All HCBS waiver providers shall submit Form 470-2917, Medicaid HCBS Provider Application.

Further amend subrule 79.14(1) by rescinding and reserving paragraphs "f" and "g."

Amend subrules 79.14(2), 79.14(3), and 79.14(5) as follows:

79.14(2) Submittal of application. The provider shall submit the appropriate application forms to Paramax the fiscal agent.

79.14(3) Notification. Providers shall be notified of the decision on their application by Paramax the fiscal agent within 30 calendar days.

79.14(5) Effective date of approval. Applications shall be approved retroactive to the date requested by the provider or the date the provider meets the applicable participation criteria, whichever is later, not to exceed 12 months retroactive from the receipt of the application forms by Paramax the fiscal agent.

ITEM 7. Amend rule 441--83.60(249A) as follows:

Delete the definitions of "Deeming" and "Mental retardation."

Add the following new definitions in alphabetical order:

"Appropriate" means that the services or supports or activities provided or undertaken by the organization are relevant to the consumer's needs, situation, problems, or desires.

"Assessment" means the review of the consumer's current functioning in regard to the consumer's situation, needs, strengths, abilities, desires and goals.

"Case management services" means those services established pursuant to Iowa Code chapter 225C.

"Deemed status" means acceptance of certification or licensure of a program or service by another certifying body in place of certification based on review and evaluation.

"Department" means the Iowa department of human services.

"Direct service" means services involving face-to-face assistance to a consumer such as transporting a consumer or providing therapy.

"Fiscal accountability" means the development and maintenance of budgets and independent fiscal review.

"Immediate jeopardy" means circumstances where the life, health, or safety of a person will be severely jeopardized if the circumstances are not immediately corrected.

"Mental retardation" means a diagnosis of mental retardation under this division which shall be made only when the onset of the person's condition was prior to the age of 18 years and shall be based on an assessment of the person's intellectual functioning and level of adaptive skills. The diagnosis shall be made by a person who is a psychologist or psychiatrist who is professionally trained to administer the tests required to assess intellectual functioning and to evaluate a person's adaptive skills. A diagnosis of mental retardation shall be made in accordance with the criteria provided in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, published by the American Psychiatric Association.

"Natural supports" means services and supports identified as wanted or needed by the consumer and provider by persons not for pay (family, friends, neighbors, coworkers, and others in the community) and organizations or entities that serve the general public.

"Organization" means the entity being certified.

"Organizational outcome" means a demonstration by the organization of actions taken by the organization to provide for services or supports to consumers.

"Outcome" means an action or event that follows as a result or consequence of the provision of a service or support.

"Procedures" means the steps to be taken to implement a policy.

"Process" means service or support provided by an agency to a consumer that will allow the consumer to achieve an outcome. This can include a written, formal, consistent trackable method or an informal process that is not written but is trackable.

"Program" means a set of related resources and services directed to the accomplishment of a fixed set of goals and objectives for the population of a specified geographic area or for special target populations. It can mean an agency, organization, or unit of an agency, organization or institution.

"Staff" means a person under the direction of the organization to perform duties and responsibilities of the organization.

ITEM 8. Amend subrule 83.67(9), paragraph "b," as follows:

b. The department or county has ten 15 working days after receipt of the summary and service costs in which to approve the services and service cost or request modification of the service plan or ICP unless the parties mutually agree to extend that time frame.

ITEM 9. Amend rule 441--83.81(249A) as follows:

Delete the definition of "Deeming."

Add the following new definitions in alphabetical order:

"Appropriate" means that the services or supports or activities provided or undertaken by the organization are relevant to the consumer's needs, situation, problems, or desires.

"Assessment" means the review of the consumer's current functioning in regard to the consumer's situation, needs, strengths, abilities, desires and goals.

"Case management services" means those services established pursuant to Iowa Code chapter 225C.

"Deemed status" means acceptance of certification or licensure of a program or service by another certifying body in place of certification based on review and evaluation.

"Department" means the Iowa department of human services.

"Direct service" means services involving face-to-face assistance to a consumer such as transporting a consumer or providing therapy.

"Fiscal accountability" means the development and maintenance of budgets and independent fiscal review.

"Immediate jeopardy" means circumstances where the life, health, or safety of a person will be severely jeopardized if the circumstances are not immediately corrected.

"Natural supports" means services and supports identified as wanted or needed by the consumer and provider by persons not for pay (family, friends, neighbors, coworkers, and others in the community) and organizations or entities that serve the general public.

"Organization" means the entity being certified.

"Organizational outcome" means a demonstration by the organization of actions taken by the organization to provide for services or supports to consumers.

"Outcome" means an action or event that follows as a result or consequence of the provision of a service or support.

"Procedures" means the steps to be taken to implement a policy.

"Process" means service or support provided by an agency to a consumer that will allow the consumer to achieve an outcome. This can include a written, formal, consistent trackable method or an informal process that is not written but is trackable.

"Program" means a set of related resources and services directed to the accomplishment of a fixed set of goals and objectives for the population of a specified geographic area or for special target populations. It can mean an agency, organization, or unit of an agency, organization or institution.

"Staff" means a person under the direction of the organization to perform duties and responsibilities of the organization.

[Filed 11/12/97, effective 2/1/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7680A

HUMAN SERVICES DEPARTMENT[441]

Adopted and Filed

Pursuant to the authority of Iowa Code sections 217.6 and 252H.4 as amended by 1997 Iowa Acts, House File 612, section 98, the Department of Human Services hereby amends Chapter 99, "Support Establishment and Adjustment Services," appearing in the Iowa Administrative Code.

The Council on Human Services adopted these amendments November 12, 1997. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7487A. The amendments published as ARC 7487A have been separated into two parts for adoption to allow for two different effective dates. (See ARC 7674A herein.)

These amendments implement changes in child support program policy based upon changes in federal and state law.

The federal welfare reform bill, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), provided for many changes in states' child support programs. Many of those changes required Iowa statutory amendments which were made in 1997 Iowa Acts, House File 612.

These amendments implement procedures for administratively modifying child support obligations. Specifically, these amendments implement an expedited modification process for medical and support orders as required by Iowa Code chapter 252H as amended by 1997 Iowa Acts, House File 612, sections 93 through 109, and allow CSRU to alter an order by using a cost-of-living calculation.

The administrative modification process will enable CSRU to modify orders when the review and adjustment process, which has more steps and longer time frames, cannot be used.

The administrative modification process may be used in the following circumstances:


* There has been a substantial change in circumstances. One of the parties has experienced a change of 50 percent or more in income, the change is due to financial circumstances that have existed for a minimum period of three months, and those circumstances can reasonably be expected to exist for an additional three months.


* Additional children are born to the same parents after the original order is filed.


* The order set support at $0 or reserved the amount of support for any reason other than lack of personal jurisdiction.


* An error or omission pertaining to child support provisions was made.


* The obligor has failed to comply with educational or parenting class requirements or is no longer a minor as defined in Iowa Code section 598.21A or 598.21(4)"e."


* Both parties have agreed to request a procedure to change the support order due to changes in the cost of living.

Policy provides that a review and adjustment procedure may be used to contest a proposed cost-of-living alteration, and a conference or court hearing may be requested to contest a proposed modification due to a 50 percent change of circumstances, to add an "additional" child, to change a $0 or reserved support obligation, to raise the support amount due to noncompliance by a minor obligor, or to make a correction.

Eight public hearings were held around the state. One person attended. No comments were received at the public hearings regarding these amendments. A comment was received from the Child Support Advisory Committee questioning the effective date of the administrative modification.

The following revisions were made to the Notice of Intended Action in response to a request from the field to use the same form for administrative modification requests as is being used for review and adjustment requests:

Subrule 99.62(2), not previously included in the Notice of Intended Action, has been added and amended to change the name of the request form which will now be used for both programs.

Rule 441--99.83(252H), introductory paragraph, and subrule 99.85(1) were revised to change the form number.

These amendments are intended to implement Iowa Code chapter 252H as amended by 1997 Iowa Acts, House File 612, sections 93 through 109.

These amendments shall become effective June 1, 1998.

The following amendments are adopted.

ITEM 1. Amend subrule 99.62(2) as follows:

99.62(2) Review by request. A review shall be conducted upon the request of the child support recovery agency of another state; or upon the written request of either parent subject to the order submitted on Form 470-2749, Request for Review and Adjustment of Child Support to Modify a Child Support Order. One review may be conducted every two years when the review is being conducted at the request of either parent. The request for review may be no earlier than two years from the entry date of the support order or most recent modification, or last completed review, whichever is later.

ITEM 2. Amend 441--Chapter 99, Division V, by adding the following new preamble and rules.

DIVISION V

ADMINISTRATIVE MODIFICATION

PREAMBLE

This division implements provisions of 1997 Iowa Acts, House File 612, sections 93 through 109, which provide for administrative modification of support obligations when there is a substantial change in the financial circumstances of a party and when both parties agree to a change in an obligation through a cost-of-living alteration. These rules also provide for use of the administrative procedure to modify orders to add children, correct errors, set support which had previously been reserved or set at zero dollars, and increase support for minor obligors who do not comply with statutory educational or parenting class requirements or who are no longer minors.

441--99.81(252H) Definitions.

"Additional child" means a child who was born to the same parents as covered by a support order after the original court order establishing support provisions was filed.

"Born of a marriage" means a child was born of a woman who was married at the time of conception, birth, or at any time during the period between conception and birth of the child pursuant to Iowa Code chapter 252A as amended by 1997 Iowa Acts, House File 612, section 1, and Iowa Code section 144.13 as amended by 1997 Iowa Acts, House File 612, section 223.

"Cost-of-living alteration" means a change in an existing child support order which equals an amount which is the amount of the support obligation following application of the percentage change of the consumer price index for all urban consumers, United States city average, as published in the Federal Register by the federal Department of Labor, Bureau of Labor Statistics, pursuant to 1997 Iowa Acts, House File 612, section 94.

"Substantial change of circumstances," for the purposes of this division, means there has been a change of 50 percent or more in the income of a parent and the change is due to financial circumstances which have existed for a minimum period of three months and can reasonably be expected to exist for an additional three months, pursuant to 1997 Iowa Acts, House File 612, section 105, subsection 3.

441--99.82(252H) Availability of service. The child support recovery unit shall provide the services described in this division for a support order originally entered or a foreign order registered in the state of Iowa. The order must be one which:

1. Involves at least one child born of a marriage or one child for whom paternity has been legally established.

2. Is being enforced by the unit in accordance with Iowa Code chapter 252B.

3. Is subject to the jurisdiction of this state for the purposes of modification.

4. Is not subject to or is not appropriate for review and adjustment.

5. Provides for support of at least one child under the age of 18 or a child between the ages of 18 and 19 years who is engaged full-time in completing high school graduation or equivalency requirements in a manner which is reasonably expected to result in completion of the requirements prior to the person's reaching 19 years of age.

6. Has an obligation ending more than 12 months in the future.

7. Involves parents for whom the location of both parents is known.

441--99.83(252H) Modification of child support obligations. Permanent child support obligations meeting the criteria set forth in rule 441--99.82(252H) may be modified at the initiative of the unit, or upon written request of either parent subject to the order submitted on Form 470-2749, Request to Modify a Child Support Order. Any action shall be limited to adjustment, modification, or alteration of the child support or medical provisions of the support order. The duration of the underlying order shall not be modified. The procedures used by the child support recovery unit to determine if a modification is appropriate are as follows:

99.83(1) Substantial change of circumstances. Procedures to modify the support obligation may be initiated outside the minimum time frame described in subrule 99.62(2) if a request is received from either parent and if the parent has submitted verified documentation of a substantial change in circumstances which indicates both of the following:

a. A change of at least 50 percent in the net income of a parent as defined by guidelines. The new net income will be compared to the net income upon which the current child support obligation was based.

b. The change is due to financial circumstances which have existed for a minimum period of three months and can reasonably be expected to exist for an additional three months.

The unit shall review the request and documentation and, if appropriate, issue a notice of intent to modify as described in subrule 99.84(1).

99.83(2) Adding provisions for additional children. Procedures to modify the support obligation may be initiated if:

a. A parent requests, in writing, or the unit determines that it is appropriate to add an additional child to the support order and modify the obligation amount according to the appropriate Iowa supreme court mandatory child support guidelines pursuant to Iowa Code section 598.21(4) as amended by 1997 Iowa Acts, House File 612, section 188, and Iowa Code section 252B.7A as amended by 1997 Iowa Acts, House File 612, section 37; and

b. Paternity has been legally established.

99.83(3) Reserved or zero-dollar-amount orders. Procedures to modify the support obligation may be initiated if:

a. A parent requests a modification in writing or the unit determines that it is appropriate to include a support amount based on the Iowa supreme court mandatory child support guidelines; and

b. The original order reserved establishment of a dollar-amount support obligation giving a specific reason other than lack of personal jurisdiction over the obligor, or the amount was set at zero.

99.83(4) Corrections. Procedures to modify the support obligation may be initiated if:

a. An error or omission pertaining to child support or medical provisions was made during preparation or filing of a support order; and

b. A necessary party requests a modification or the unit determines that a modification to correct an error or omission is appropriate.

99.83(5) Noncompliance by minor obligors. Procedures to modify a support order may be initiated by the unit if:

a. A minor obligor fails to comply with the requirement to attend parenting classes pursuant to Iowa Code section 598.21A; or

b. A minor obligor fails to provide proof of compliance with education requirements described in Iowa Code section 598.21(4)"e."

c. The obligor is no longer a minor as defined in Iowa Code section 598.21A or 598.21(4)"e."

99.83(6) Cost-of-living alteration. A support order may be modified to provide a cost-of-living alteration if all the following criteria are met:

a. A parent requests a cost-of-living alteration in writing.

b. Two years have passed since the order was entered or last reviewed, modified, or altered.

c. The nonrequesting parent signs a statement agreeing to the cost-of-living alteration of the support order.

d. Each parent signs a waiver of personal service accepting service by regular mail.

e. The current support order addresses medical support for the children.

f. A copy of each affected order is provided, if the unit does not already have copies in its files.

441--99.84(252H) Notice requirements. The child support recovery unit shall provide written notification to parents affected by a permanent child support obligation being enforced by the unit as follows:

99.84(1) Notice of intent to modify. When a request for administrative modification is received or CSRU initiates an administrative modification, CSRU shall provide written notice of its intent to modify.

a. The notice shall include the legal basis and purpose for the action; a request for income or other information necessary for the application of guidelines (if applicable); an explanation of the legal rights and responsibilities of the affected parties, including time frames; and procedures for contesting the action.

b. The unit shall take the following actions to notify parents:

(1) If the modification is based on subrule 99.83(1), notice shall be provided to the other parent. The notice shall be served in accordance with the Rules of Civil Procedure.

(2) If the modification is based on subrules 99.83(2) through 99.83(5), notice shall be provided to each parent. The notice shall be served in accordance with the Rules of Civil Procedure.

(3) If the modification is based on provision of a cost-of-living alteration as established at subrule 99.83(6) and the required documentation is included, the child support recovery unit shall notify each parent of the amount of the cost-of-living alteration by regular mail to the last-known address of each parent or, if applicable, each parent's attorney. The notice shall include:

1. The method of determining the amount of the alteration pursuant to 1997 Iowa Acts, House File 612, section 106.

2. The procedure for contesting a cost-of-living alteration by making a request for review of a support order as provided in 1997 Iowa Acts, House File 612, section 109.

3. A statement that either parent may waive the 30-day notice waiting period. If both parents waive the notice waiting period, the unit may prepare an administrative order altering the support obligation.

99.84(2) Notice of decision to modify. The unit shall issue a notice of its decision to modify the support order to each parent affected by the support obligation at each parent's (or attorney's) last-known address. The notice shall contain information about whether the unit will continue or terminate the action and the procedures and time frames for contesting the action by requesting a court hearing pursuant to 441--subrule 99.86(2).

441--99.85(252H) Financial information. The child support recovery unit may attempt to obtain and verify information concerning the financial circumstances of the parents subject to the order to be modified that is necessary to conduct an analysis and determine support for circumstances involving a substantial change, the addition of a child, changing reserved or zero-dollar-amount orders, making a correction, or noncompliance by a minor obligor.

99.85(1) Financial affidavits. Parents subject to the order shall provide a financial affidavit and verification of income within ten days of a written request by the unit.

a. If the modification action is based on a substantial change of circumstances, the requesting party must provide the following documentation with Form 470-2749, Request to Modify a Child Support Order:

(1) A completed and signed financial affidavit listing current financial circumstances of the requesting party.

(2) Copies of state and federal income tax returns, W-2 statements, pay stubs, or a signed statement from an employer or other source of income or other documentation which proves the amount of change in income as well as the date the change took place.

b. If the modification action is based on addition of a child, changing reserved or zero-dollar-amount obligations, making a correction (if financial information is needed), or noncompliance by a minor obligor, the unit may require a completed and signed financial affidavit and verification of income from each parent as described in subrule 99.1(3). The child support recovery unit may also request that a parent requesting a modification provide an affidavit regarding the financial circumstances of the nonrequesting parent when the unit is otherwise unable to obtain financial information concerning the nonrequesting parent. The requesting parent shall complete the affidavit if possessing sufficient information to do so. The unit may also use the estimated state's median income when a parent has failed to return a completed financial statement when requested and when complete and accurate information is not available from other readily available sources. Self-employment income will be determined as described in subrule 99.1(5).

99.85(2) Independent sources. The child support recovery unit may use other resources to obtain or confirm information concerning the financial circumstances of the parents subject to the order to be modified as described in rule 441--99.1(234,252B).

99.85(3) Guidelines calculations. The unit shall determine the appropriate amount of the child support obligation (excluding cost-of-living alteration amounts) as described in rules 441--99.1(234,252B) through 441--99.5(234,252B) and shall determine medical support provisions as described in rules 441--98.1(252E) through 441--98.7(252E). If the modification action is due to noncompliance by a minor obligor, the unit will impute an income to the obligor equal to a 40-hour workweek at the state minimum wage, unless the parent's education, experience, or actual earnings justify a higher income.

441--99.86(252H) Challenges to the proposed modification action. For modification actions based on subrules 99.83(1) through 99.83(5), each parent shall have the right to request a conference to contest the proposed modification. Either parent, or the unit, may also request a court hearing. For requests made based on subrule 99.83(6), either parent may contest the cost-of-living alteration by making a request for a review and adjustment of the support order.

99.86(1) Conference. Either parent may contest the proposed modification based on subrules 99.83(1) through 99.83(5) by means of a conference with the office of the unit that issued the notice of intent to modify.

a. Only one conference shall be held per parent.

b. The request must be made within ten days of the date of service of the notice of intent to modify.

c. The office that issued the notice of intent to modify shall schedule a conference with the parent and advise the parent of the date, time, place, and procedural aspects of the conference.

d. Reasons for contesting the modification include, but are not limited to, mistake of fact regarding the identity of one of the parties or the amount or terms of the modification.

e. The child support recovery unit may conduct the conference in person or by telephone.

f. If the party who requested the conference fails to attend the conference, only one alternative time shall be scheduled by the child support recovery unit.

g. The results of a conference shall in no way affect the right of either party to request a court hearing pursuant to subrule 99.86(2).

h. Upon completion of the conference, the unit shall issue a notice of decision to modify as described in subrule 99.84(2).

99.86(2) Court hearing. Either parent, or the unit, may contest the proposed modification, based on subrules 99.83(1) through 99.83(5), by requesting a court hearing within the latest of any of the following time periods: 20 days from the date of successful service of the notice of intent to modify, 10 days from the date scheduled for a conference, or 10 days from the date of issuance of a notice of decision to modify. If a timely written request is received by the unit, the unit shall certify the matter to the district court as described in Iowa Code section 252H.8 as amended by 1997 Iowa Acts, House File 612, section 100. If a timely request is not received, if waiting periods have been waived, or if the notice periods have expired, the unit shall prepare an administrative order as provided in Iowa Code section 252H.9 as amended by 1997 Iowa Acts, House File 612, section 101.

99.86(3) Contesting a proposed cost-of-living alteration. Either parent may contest a cost-of-living alteration within 30 days of the date of the notice of intent to modify by making a request for a review of the support order as provided in Iowa Code section 252H.13 as amended by 1997 Iowa Acts, House File 612, section 103. If a timely written request for review is received, the unit shall terminate the cost-of-living alteration process and proceed with the review and adjustment process. If a timely request is not made, or the notice waiting period has been waived by both parties, or the notice period has expired, the unit shall prepare an administrative order as provided in 1997 Iowa Acts, House File 612, section 109.

441--99.87(252H) Voluntary reduction of income. The unit shall not modify the support order based on a substantial change of circumstances if a change in income is due to a voluntary reduction in net monthly income attributable to the actions of the party or is due to any material misrepresentation of fact concerning any financial information submitted to the child support recovery unit.

The unit may request verification that a loss of employment was not voluntary or that all facts concerning financial information are true. Verification may include, but is not limited to, a statement from the employer, a doctor, or other person with knowledge of the situation.

441--99.88(252H) Effective date of modification. The new obligation amount shall be effective on the first date that payments are due under the order being modified, after the entry of the modification order. If the modification is based on a "reserved" or "zero-dollar-amount" obligation, the new obligation amount shall be effective 20 days after generation of the administrative modification order.

441--99.89(252H) Confidentiality of financial information. Financial information provided to the child support recovery unit by either parent for the purpose of facilitating the modification process may be disclosed to the other parties to the case, or the district court, as follows:

99.89(1) Financial affidavits. The financial statement or affidavit may be disclosed to either party.

99.89(2) Other documentation. Supporting financial documentation such as state and federal income tax returns, paycheck stubs, IRS Form W-2, bank statements, and other written evidence of financial status may be disclosed to the court unless otherwise prohibited by state or federal law.

441--99.90(252H) Payment of fees. Responsibility for payment of service of process and other costs associated with the modification process is the responsibility of the party requesting modification unless the court orders otherwise or the requesting party, as a condition of eligibility for receiving public assistance benefits, has assigned the rights to child or medical support for the order to be modified.

441--99.91(252H) Denying requests. A request for modification by a parent subject to the order may be denied if the criteria in rule 441--99.82(252H) are not met or the following conditions exist:

99.91(1) Nonsupport issues. The request is based entirely on issues such as custody or visitation rights.

99.91(2) Request only for delinquent support. The request is for the sole purpose of modifying the amount of delinquent support that has accrued under a support order.

99.91(3) Temporary order. The request is for the modification of a temporary support order.

99.91(4) Two-year time frame. The request is for a cost-of-living alteration and it has been less than two years since the order was entered or last reviewed, modified, or altered.

441--99.92(252H) Withdrawing requests. If the requesting party contacts the child support recovery unit to withdraw the request, the child support recovery unit shall notify the nonrequesting party of the requesting party's desire to withdraw the modification request. If the nonrequesting party indicates, in writing, a desire to continue with the modification process, the child support recovery unit shall proceed, and if appropriate, modify the support order. If there is no response from the nonrequesting party or if the nonrequesting party also wants the process to end, the unit shall end the modification process. If the unit initiated the modification action, the unit may terminate the process if, after notifying both parents, neither parent indicates a desire to continue with the modification.

These rules are intended to implement 1997 Iowa Acts, House File 612, sections 93 through 109.

[Filed 11/12/97, effective 6/1/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7688A

INSPECTIONS AND APPEALS DEPARTMENT[481]

Adopted and Filed

Pursuant to the authority of Iowa Code section 135C.14, the Department of Inspections and Appeals hereby amends Chapter 57, "Residential Care Facilities"; Chapter 58, "Intermediate Care Facilities"; Chapter 59, "Skilled Nursing Facilities"; Chapter 62, "Residential Care Facilities for Persons with Mental Illness (RCF/PMI)"; Chapter 63, "Residential Care Facilities for the Mentally Retarded"; Chapter 64, "Intermediate Care Facilities for the Mentally Retarded"; and Chapter 65, "Intermediate Care Facilities for Persons with Mental Illness (ICF/PMI)," Iowa Administrative Code.

The amendments implement 1997 Iowa Acts, Senate File 523, which requires dependent adult abuse and criminal history record checks for anyone employed in a health care facility after July 1, 1997.

Notice of Intended Action was published in the Iowa Administrative Bulletin on August 13, 1997, as ARC 7448A. In addition, these amendments were simultaneously Adopted and Filed Emergency as ARC 7449A. These amendments are identical to those published under Notice of Intended Action and Adopted and Filed Emergency, except that language was revised in paragraph "e" under Item 1 and in subrule 64.34(5) under Item 2 in response to public comment. This change was made to clarify record-keeping requirements for facilities.

In addition, classification of violation codes has been added to these subrules under separate rule-making action initiated by the Department and is published herein under Notice of Intended Action as ARC 7685A and Adopted and Filed Emergency as ARC 7686A.

The Board of Health approved the adoption of these amendments on November 12, 1997.

These amendments shall become effective January 7, 1998.

These amendments are intended to implement Iowa Code section 135C.33 as amended by 1997 Iowa Acts, Senate File 523.

The following amendments are adopted.

ITEM 1. Rescind subrules 57.12(3), 58.11(3), 59.13(3), 62.9(5), 63.11(3), and 65.9(5) and insert in lieu thereof the following new subrules:

[Insert subrule no.] Personnel histories.

a. Each health care facility shall submit a form specified by the department of public safety to the department of public safety, and receive the results of a criminal history check and dependent adult abuse record check before any person is employed in a health care facility. The health care facility may submit a form specified by the department of human services to the department of human services to request a child abuse history check. For the purposes of this subrule, "employed in a facility" shall be defined as any individual who is paid, either by the health care facility or any other entity (i.e., temporary agency, private duty, Medicare/Medicaid or independent contractors), to provide direct or indirect treatment or services to residents in a health care facility. Direct treatment or services include those provided through person-to-person contact. Indirect treatment or services include those provided without person-to-person contact such as those provided by administration, dietary, laundry, and maintenance. Specifically excluded from the requirements of this subrule are individuals such as building contractors, repair workers or others who are in a facility for a very limited purpose, are not in the facility on a regular basis, and who do not provide any treatment or services to the residents of the health care facility.

b. A person who has a criminal record or founded dependent adult abuse report cannot be employed in a health care facility unless the department of human services has evaluated the crime or founded abuse report and concluded that the crime or founded abuse report does not merit prohibition from employment.

c. Each health care facility shall ask each person seeking employment in a facility "Do you have a record of founded child or dependent adult abuse or have you ever been convicted of crime in this state or any other state?" The person shall also be informed that a criminal history and dependent adult abuse record check will be conducted. The person shall indicate, by signature, that the person has been informed that the record checks will be conducted.

d. If a person has a record of founded child abuse in Iowa or any other state, the person shall not be employed in a health care facility unless the department of human services has evaluated the crime or founded report and concluded that the report does not merit prohibition of employment.

e. Proof of dependent adult abuse and criminal history checks may be kept in files maintained by the temporary employee agencies and contractors. Facilities may require temporary agencies and contractors to provide a copy of the results of the dependent adult abuse and criminal history checks.

ITEM 2. Rescind rule 481--64.34(135C) and insert in lieu thereof the following new rule:

481--64.34(135C) Personnel histories.

64.34(1) Each health care facility shall submit a formspecified by the department of public safety to the department of public safety, and receive the results of a criminal history check and dependent adult abuse record check before any person is employed in a health care facility. The health care facility may submit a form specified by the department of human services to the department of human services to request a child abuse history check. For the purposes of this rule, "employed in a facility" shall be defined as any individual who is paid, either by the health care facility or any other entity (i.e., temporary agency, private duty, Medicare/Medicaid or independent contractors), to provide direct or indirect treatment or services to residents in a health care facility. Direct treatment or services include those provided through person-to-person contact. Indirect treatment or services include those provided without person-to-person contact such as those provided by administration, dietary, laundry, and maintenance. Specifically excluded from the requirements of this rule are individuals such as building contractors, repair workers or others who are in a facility for a very limited purpose, are not in the facility on a regular basis, and who do not provide any treatment or services to the residents of the health care facility.

64.34(2) A person who has a criminal record or founded dependent adult abuse report cannot be employed in a health care facility unless the department of human services has evaluated the crime or founded abuse report and concluded that the crime or founded abuse report does not merit prohibition from employment.

64.34(3) Each health care facility shall ask each person seeking employment in a facility "Do you have a record of founded child or dependent adult abuse or have you ever been convicted of crime in this state or any other state?" The person shall also be informed that a criminal history and dependent adult abuse record check will be conducted. The person shall indicate, by signature, that the person has been informed that the record checks will be conducted.

64.34(4) If a person has a record of founded child abuse in Iowa or any other state, the person shall not be employed in a health care facility unless the department of human services has evaluated the crime or founded report and concluded that the report does not merit prohibition of employment.

64.34(5) Proof of dependent adult abuse and criminal history checks may be kept in files maintained by the temporary employee agencies and contractors. Facilities may require temporary agencies and contractors to provide a copy of the results of the dependent adult abuse and criminal history checks.

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7697A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed

Pursuant to the authority of Iowa Code subsection 455A.5(6), the Natural Resource Commission hereby amends Chapter 15, "General License Regulations," Iowa Administrative Code.

This amendment will clarify the course completion criteria for the mandatory Hunter Safety and Ethics Certification, as required by 1997 Iowa Acts, House File 81.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7512A. No public comments were received during the public comment period or at the public hearing. The final adopted amendment is unchanged from the Notice of Intended Action.

This amendment is intended to implement 1997 Iowa Acts, House File 81.

This amendment will become effective January 7, 1998.

The following amendment is adopted.

Amend 571--15.1(483A) by adding new subrule 15.1(2), amending existing subrule 15.1(2), introductory paragraph, as follows, and renumbering existing subrule 15.1(3) as 15.1(4) and 15.1(4) as 15.1(5).

15.1(2) General testing procedure. Upon completion of the required curriculum, each person shall score a minimum of 75 percent on the written or oral test provided by the department and demonstrate safe handling of a firearm. Based on the results of the written or oral test and demonstrated firearm safe handling techniques as prescribed by the department, the volunteer instructor shall determine the persons who shall be issued a certificate of completion.

15.1(2)(3) Procedure Special testing out provisions. Any person born after January 1, 1967, who does not complete the required ten-hour hunter safety and ethics course (as described in Iowa Code section 483A.27, subsection (1)), must meet the following requirements to be eligible to purchase an Iowa hunting license:

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7696A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed

Pursuant to the authority of Iowa Code subsection 455A.5(6), the Natural Resource Commission hereby amends Chapter 16, "Public, Commercial, Private Docks and Dock Management Areas," Iowa Administrative Code.

This amendment will eliminate the requirement of filling plastic (synthetic) dock flotation barrels with closed cell plastic foam.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7520A. Comments received during the public comment period were all favorable. The final adopted amendment is unchanged from the Notice of Intended Action.

This amendment is intended to implement Iowa Code section 462A.3.

This amendment will become effective January 7, 1998.

The following amendment is adopted.

Rescind subrule 16.5(4) and insert the following new subrule in lieu thereof:

16.5(4) Floating containers. Synthetic (such as plastic or fiberglass) or metal containers not originally manufactured as flotation devices may be used as dock flotation devices if the following conditions are met: All containers must be cleaned of any product residue; all synthetic containers must be sealed and watertight; and all metal containers must be filled with a closed cell rigid plastic foam and the container sealed and watertight.

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7693A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed

Pursuant to the authority of Iowa Code section 455A.5(6), the Natural Resource Commission hereby amends Chapter 81, "Fishing Regulations," Iowa Administrative Code.

The proposed amendment modifies Chapter 81 which establishes season dates, territories, daily catch limits, possession limits and length limits for sport fishing. The amendment provides that all black bass caught in Brown's Lake, Jackson County, be immediately released alive.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7521A. A public hearing was held on October 2, 1997. There are no changes from the Notice of Intended Action.

This amendment is intended to implement Iowa Code sections 481A.38, 481A.39, 481A.67 and 481A.76.

This amendment will become effective January 7, 1998.

The following amendment is adopted.

Amend subrule 81.2(2) as follows:

81.2(2) Black bass. A 15-inch minimum length limit shall apply on black bass in all public lakes except as otherwise posted. On federal flood control reservoirs, a 15-inch minimum length limit shall apply on black bass at Coralville, Rathbun, Saylorville and Red Rock. All black bass caught from Lake Wapello, Davis County, and Brown's Lake, Jackson County, must be immediately released alive. A 22-inch minimum length limit shall apply on black bass in Green Valley Lake, Union County. A 12-inch minimum length limit shall apply on black bass in all interior streams, river impoundments, border rivers, and chutes and backwaters of border rivers where intermittent or constant flow from the border river occurs, except that a 14-inch minimum length limit shall apply to the Mississippi River. All black bass caught from the following stream segments must be immediately released alive:

1. Middle Raccoon River, Guthrie County, extending downstream from below Lennon Mills Dam at Panora as posted to the dam at Redfield.

2. Maquoketa River, Delaware County, extending downstream from below Lake Delhi Dam as posted to the first county gravel road bridge.

3. Cedar River, Mitchell County, extending downstream from below the Otranto Dam as posted to the bridge on County Road T26 south of St. Ansgar.

4. Upper Iowa River, Winneshiek County, extending downstream from the Fifth Street bridge in Decorah as posted to the Upper Dam.

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7695A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby amends Chapter 92, "Migratory Game Birds," Iowa Administrative Code.

This rule amends the regulations for hunting migratory game birds by requiring hunters to comply with the federally mandated Harvest Information Program.

Notice of Intended Action was published in the Iowa Administrative Bulletin on September 10, 1997, as ARC 7511A. No public comments were received during the public comment period or at the public hearing. The final adopted amendment is unchanged from the Notice of Intended Action.

This amendment is intended to implement Iowa Code sections 481A.38, 481A.39, and 481A.48.

This amendment will become effective January 7, 1998.

The following amendment is adopted.

Amend 571--Chapter 92 by adding the following new rule:

571--92.7(481A) Harvest information program (HIP).

92.7(1) Beginning January 1, 1998, no persons shall hunt migratory game birds (brant, wild ducks, geese, rails, coots, snipe, woodcock or any other migratory game bird) without carrying proof that they have first registered with the HIP. Hunters must supply their name, address, and information on the number of migratory game birds taken during the previous year, or other information that may be requested.

92.7(2) The natural resource commission will develop methods for collecting information from hunters at the time they purchase their hunting license or prior to going hunting, either by written or electronic means, and develop a method for validating in the field that hunters have registered.

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7694A

NATURAL RESOURCE COMMISSION[571]

Adopted and Filed

Pursuant to the authority of Iowa Code section 455A.5, the Natural Resource Commission hereby amends Chapter 98, "Wild Turkey Spring Hunting," Iowa Administrative Code.

These rules govern hunting wild turkey during the spring season and include season dates, bag limits, possession limits, shooting hours, and areas open to hunting.

Notice of Intended Action was published in the Iowa Administrative Bulletin on October 8, 1997, as ARC 7577A. There are no changes from the Notice of Intended Action.

This amendment is intended to implement Iowa Code sections 481A.38, 481A.39 and 481A.48.

This amendment will become effective January 7, 1998.

The following amendment is adopted.

Amend rule 571--98.12(483A) as follows:

571--98.12(483A) License quotas. A limited number of wild turkey hunting licenses will be issued in each zone in each season as follows:

1. Zone 1. Closed

2. Zone 2. Closed

3. Zone 3. Closed

4. Zone 4. 200 325

5. Zone 5. 75 95

6. Zone 6. 140 200

7. Zone 7. 35 46

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7671A

PROFESSIONAL LICENSING AND REGULATION DIVISION[193]

Adopted and Filed

Pursuant to the authority of Iowa Code section 546.10, the Professional Licensing and Regulation Division hereby adopts Chapter 3, "Vendor Appeals," Iowa Administrative Code.

This chapter establishes the rules and procedures governing the appeal procedures resulting in Requests For Proposal awards.

These rules are identical to the Notice of Intended Action which was published in the October 8, 1997, Iowa Administrative Bulletin, Volume XX, No. 8, as ARC 7561A.

These rules are intended to implement a procedure for vendor appeals for the following Boards/Commission in the Division: Architectural Examining Board, Accountancy Examining Board, Engineering and Land Surveying Examining Board, Landscape Architectural Examining Board, Real Estate Commission, and Real Estate Appraiser Examining Board.

These rules shall become effective on January 7, 1998.

These rules are intended to implement Iowa Code section 546.10.

The following chapter is adopted.

Adopt new 193--Chapter 3 as follows:

CHAPTER 3

VENDOR APPEALS

193--3.1(546) Purpose. This chapter outlines a uniform process for vendor appeals for all boards in the division. The process shall be applicable only when board services are acquired through a formal bidding procedure not handled by the department of general services.

193--3.2(546) Vendor appeals. Any vendor whose bid or proposal has been timely filed and who is aggrieved by the award of the board may appeal by filing a written notice of appeal with the board within five days of the date of the award, exclusive of Saturdays, Sundays, and legal state holidays. A written notice may be filed by fax transmission to (515)281-7411. The notice of appeal must be received by the board within the time frame specified to be considered timely. The notice of appeal must state the vendor's complete legal name, street address, telephone number, fax number, and the specific grounds upon which the vendor challenges the board's award, including legal authority, if any. The notice of appeal commences a contested case.

193--3.3(546) Procedures for vendor appeals. Each board's procedures for licensee disciplinary hearings shall be applicable, except as provided in these rules.

3.3(1) Upon receipt of a notice of vendor appeal, the board shall issue a written notice of the date, time and location of the appeal hearing to the aggrieved vendor or vendors. Hearing shall be held within 60 days of the date the notice of appeal was received by the board.

3.3(2) All hearings shall be open to the public.

3.3(3) Discovery requests, if any, must be served by the parties within ten days of the filing of the notice of appeal. Discovery responses or objections are due at least seven business days prior to hearing.

3.3(4) At least three business days prior to the hearing, the parties shall exchange witness and exhibit lists. The parties shall be limited at hearing to the witnesses and exhibits timely disclosed unless the board finds good cause to allow additional witnesses or exhibits at hearing.

3.3(5) The hearing, at the option of the board or administrative law judge, may be conducted in person, by telephone, or on the Iowa communications network. When not conducted in person, all exhibits must be delivered to the board or administrative law judge no less than two business days prior to the hearing.

3.3(6) Oral proceedings shall be recorded either by mechanized means or by certified shorthand reporters. Parties requesting that the hearing be recorded by certified shorthand shall bear the costs. Copies of tapes of oral proceedings or transcripts of certified shorthand reporters shall be paid for by the requester.

3.3(7) Any party appealing the issuance of a notice of award may petition for stay of the award pending its review. The petition shall be filed with the notice of appeal and shall state the reasons justifying a stay. The filing of the petition for stay does not automatically stay the award. The board may grant a stay when it concludes that substantial legal or factual questions exist as to the propriety of the award, the party will suffer substantial and irreparable injury without the stay, and the interest of the public or licensees will not be significantly harmed. A stay may be vacated at any time upon application by any party or the board on its own motion with prior notice to all parties.

3.3(8) The record of the contested case shall include all materials specified in Iowa Code subsection 17A.12(6) and any other relevant procedural documents regardless of their form.

3.3(9) The board or administrative law judge may request the parties to submit proposed findings and conclusions or briefs.

3.3(10) Any request for continuance must be in writing, specifying the grounds, and filed no later than seven business days prior to hearing.

3.3(11) Requests for rehearing shall be made to the board within 20 days of issuing a final decision. A rehearing may be granted when new legal issues are raised, new evidence is available, an obvious mistake is corrected, or when the decision is not necessary to exhaust administrative remedies.

3.3(12) Judicial review of the board's final decision may be sought in accordance with the contested case provisions of Iowa Code section 17A.19.

193--3.4(546) Procedures for board referral to an administrative law judge. The board, in its discretion, may refer a vendor appeal to the department of inspections and appeals for hearing before a qualified administrative law judge. The hearing procedures shall be substantially the same, but the ruling of an administrative law judge acting as the sole presiding officer shall constitute a proposed decision. Board review of a proposed decision shall be according to Iowa Code subsection 17A.15(2) and this chapter. Nothing in this rule shall prevent the board from hearing a vendor appeal with the assistance of an administrative law judge. This rule merely authorizes an alternative procedure.

3.4(1) The proposed decision shall become the final decision of the board 14 days after mailing of the proposed decision, unless prior to that time a party submits an appeal of the proposed decision, or the board seeks review on its own motion.

3.4(2) Notice of an appeal for review of a proposed decision or notice of the board's own review shall be mailed to all parties by the board's executive secretary. Within 14 days after mailing of the notice of appeal or the board's review, any party may submit to the board exceptions to and a brief in support of or in opposition to the proposed decision, copies of which shall be mailed by the submitting party to all other parties to the proceeding. The board's executive secretary shall notify the parties if oral argument will be heard and shall specify whether oral argument will be heard in person, by telephone or on the Iowa communications network. The executive secretary shall schedule the board's review of the proposed decision not less than 30 days after mailing of the notice of appeal or the board's own review.

3.4(3) Failure to appeal a proposed decision will preclude judicial review unless the board reviews on its own motion.

3.4(4) Review of a proposed decision shall be based on the record and limited to the issues raised in the hearing. The issues shall be specified in the notice of appeal of a proposed decision. The party requesting the review shall be responsible for transcribing any tape of the oral proceedings or arranging for a transcript of oral proceedings reported by a certified shorthand reporter.

3.4(5) Each party shall have the opportunity to file exceptions and present briefs. The executive secretary may set deadlines for the submission of exceptions or briefs. If oral argument will be held, the executive secretary shall notify all parties of the date, time and location at least ten days in advance.

3.4(6) The board shall not receive any additional evidence, unless it grants an application to present additional evidence. Any such application must be filed by a party no less than five business days in advance of oral argument. Additional evidence shall be allowed only upon a showing that it is material to the outcome and that there were good reasons for failure to present it at hearing. If an application to present additional evidence is granted, the board shall order the conditions under which it shall be presented.

3.4(7) The board's final decision shall be in writing and it may incorporate all or part of the proposed decision.

These rules are intended to implement Iowa Code section 546.10.

[Filed 11/6/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.

ARC 7700A

REVENUE AND FINANCE DEPARTMENT[701]

Adopted and Filed

Pursuant to the authority of Iowa Code sections 421.17, 422.68, 423.23, and 422.53, the Iowa Department of Revenue and Finance hereby adopts amendments to Chapter 12, "Filing Returns, Payment of Tax, Penalty and Interest," Chapter 13, "Permits," Chapter 15, "Determination of a Sale and Sale Price," Chapter 29, "Certificates," Chapter 30, "Filing Returns, Payment of Tax, Penalty and Interest," and Chapter 107, "Local Option Sales and Service Tax," Iowa Administrative Code.

Notice of Intended Action was published in IAB, Volume XX, Number 8, on October 8, 1997, page 688, as ARC 7581A.

These amendments implement 1997 Iowa Acts, House File 266, which provides that qualified purchasers, users, or consumers may pay sales, use, or local option sales and service tax directly to the Department of Revenue and Finance subsequent to the receipt of a direct pay permit issued by the Department of Revenue and Finance.

The Iowa Taxpayers Association suggested two changes to subrule 12.3(2), and the Department agreed to these changes. A sentence was added at the end of 12.3(2)"a"(2) and part of the first sentence of 12.3(2)"f"(1) was deleted. These changes allow a direct pay permit for each business location and delete the requirement that direct pay permit holders retain copies of exemption certificates. The remainder of the amendments is identical to those published under Notice of Intended Action.

These amendments will become effective January 7, 1998, after filing with the Administrative Rules Coordinator and publication in the Iowa Administrative Bulletin.

These amendments are intended to implement Iowa Code section 422.53.

The following amendments are adopted.

ITEM 1. Amend rule 701--12.3(422) and its implementation clause as follows:

701--12.3(422) Permits. A person making retail sales in Iowa is required to obtain a sales tax permit from the department of revenue and finance. Certain qualified purchasers, users, or consumers may obtain a direct pay permit which allows qualified purchasers, users, or consumers to remit tax directly to the department rather than to the retailer at the time of purchase or use. The following provisions govern the issuance of each type of permit.

12.3(1) Sales tax permits. Sales tax permits will be required of all resident and nonresident persons making retail sales at permanent locations within the state. A permit must be held for each location except that retailers conducting business at a permanent location who also make sales at a temporary location are not required to hold a separate permit for any temporary location. All tax collected from the temporary location shall be remitted with the tax collected at the permanent location. Persons who are registered retailers pursuant to rule 701--29.1(423) relating to use tax may remit sales taxes collected at a temporary location with their quarterly retailers use tax return. Retailers conducting a seasonal business shall also obtain a regular permit. However, returns will be filed on either a quarterly or annual basis depending upon the number of quarters in which sales are made. Sales tax permits will be required of all persons, except cities and counties, who have sales activity from gambling.

12.3(2) Direct pay permits. Effective January 1, 1998, qualified purchasers, users, and consumers of tangible personal property or enumerated services pursuant to Iowa Code chapters 422, 422B, and 423 may remit tax owed directly to the department of revenue and finance instead of the tax being collected and remitted by the seller. A qualified purchaser, user, or consumer may not be granted or exercise this direct pay option except upon proper application to the department and only after issuance of the direct pay permit by the director of the department of revenue and finance.

a. Qualifications for a direct pay permit. To qualify for a direct pay permit, all of the following criteria must be met:

(1) The applicant must be a purchaser, user, or consumer of tangible personal property or enumerated services.

(2) The applicant must have an accrual of sales and use tax liability on consumed goods of more than $4,000 in a semimonthly period. A purchaser, user, or consumer may have more than one business location and can combine the sales and use tax liabilities on consumed goods of all locations to meet the requirement of $4,000 in sales and use tax liability in a semimonthly period to qualify, if the records are located in a centralized location. If a purchaser, user, or consumer is combining more than one location, only one direct pay tax return for all of the combined locations needs to be filed with the department. However, local option sales and service tax should not be included in the tax base for determining qualification for a direct pay permit. If a purchaser, user, or consumer has more than one location, but not all locations wish to remit under a direct pay permit, the purchaser, user, or consumer must indicate which locations will be utilizing the direct pay permit at the time of application.

(3) The applicant must make deposits and file returns pursuant to Iowa Code section 422.52. See subrule 12.3(2), paragraph "d," for further details.

b. Nonqualifying purchases or uses. The granting of a direct pay permit is not allowed for any of the following:

(1) Taxes imposed on the sale, furnishing, or service of gas, electricity, water, heat, pay television service, or communication service.

(2) Taxes imposed under Iowa Code section 422C.3 (sales tax on the rental receipts of qualifying rental motor vehicles), Iowa Code section 423.7 (use tax on the sale or use of motor vehicles), or Iowa Code section 423.7A (use tax on the lease price of qualifying leased motor vehicles).

c. Application and permit information. To obtain a direct pay permit, a purchaser, user, or consumer must properly complete an application form prescribed by the director of revenue and finance and provide certification that the purchaser, user, or consumer has paid sales and use tax to the department of revenue and finance or vendors over the last two years prior to application, an average of $4,000 in a semimonthly period.

Upon approval, the director will issue a direct pay permit to qualifying applicants. The permit will contain direct pay permit identifying information including a direct pay permit identification number. The direct pay permit should be retained by the permit holder. When purchasing from a vendor, a permit holder should give the vendor a certificate of exemption containing the information as set forth in rule 701--15.3(422,423).

d. Remittance and reporting. Sales, use, and local option tax that is to be reported and remitted to the department will be on a semimonthly basis. Remittance of tax due under a direct pay permit will begin with the first quarter after the direct pay permit is issued to the holder. The tax to be paid under a direct pay permit must be remitted directly to the department by electronic funds transfer (EFT) only. A permit holder need not have remitted by EFT prior to obtaining a direct pay permit to qualify for such a permit. However, a permit holder must remit taxes due by EFT for transactions entered into on or after the date the permit is issued. All local option sales and service tax due must be reported and remitted at the same time as the sales and use taxes due under the direct pay permit for the corresponding tax period. However, local option sales and service tax should not be included in the tax base for determining qualification for a direct pay permit or frequency of remittance. Reports should be filed with the department on a quarterly basis. The director may, when necessary and advisable in order to secure the collection of tax due, require an applicant for a direct pay permit or a permit holder to file with the director a qualified surety bond as set forth in Iowa Code section 422.52. A permit holder who fails to report or remit any tax when due is subject to the penalty and interest provisions set forth in Iowa Code section 422.52.

e. Permit revocation and nontransferability. A direct pay permit may be used indefinitely unless it is revoked by the director. A direct pay permit is not transferable and it may not be assigned to a third party. The director may revoke a direct pay permit at any time the permit holder fails to meet the requirements for a direct pay permit, misuses the direct pay permit, or fails to comply with the provisions in Iowa Code section 422.53. If a direct pay permit is revoked, it is the responsibility of the prior holder of the permit to inform all vendors of the revocation so the vendors may begin to collect tax at the time of purchase. A prior permit holder is responsible for any tax, penalty, and interest due for failure to notify a vendor of revocation of a direct pay permit.

f. Record-keeping requirements. The parties involved in transactions involving a direct pay permit shall have the following record-keeping duties:

(1) Permit holder. The holder of a direct pay permit must retain possession of the direct pay permit. The permit holder must keep a record of all transactions made pursuant tothe direct pay permit in compliance with rule 701-- 11.4(422,423).

(2) Vendor. A vendor must retain a valid exemption certificate under rule 701--15.3(422,423) which is received from the direct pay permit holder and retain records of all transactions engaged in with the permit holder in which tax was not collected, in compliance with rule 701-- 11.4(422,423). A vendor's liability for uncollected tax is governed by the liability provisions of a seller under an exemption certificate set forth in rule 701--15.3(422,423).

This rule is intended to implement Iowa Code sections 422.45(20) and 422.53 as amended by 1997 Iowa Acts, House File 266.

ITEM 2. Amend rule 701--13.1(422) and its implementation clause as follows:

701--13.1(422) Retail sales tax permit required. When used in this chapter or any other chapter relating to retail sales, the word "permit" shall mean "a retail sales tax permit."

A person shall not engage in any Iowa business subject to tax until the person has procured a permit except as provided in 13.5(422). There is no charge for a retail sales tax permit. If a person makes retail sales from more than one location, each location shall be required to hold a permit. Retail sales tax permits are issued to retailers for the purpose of making retail sales of tangible personal property or taxable services. Persons shall not make application for a permit for any other purpose. For details regarding direct pay permits, see rule 701--12.3(422).

This rule is intended to implement Iowa Code section 422.53 as amended by 1997 Iowa Acts, House File 266.

ITEM 3. Amend rule 701--15.3(422,423) as follows:

Amend 701--15.3(422,423), catchwords, as follows:

701--15.3(422,423) Certificates of resale, direct pay permits, processing, and fuel used in processing.

Amend subrule 15.3(1) as follows:

15.3(1) General provision. The gross receipts from the sale of tangible personal property for the purpose of resale or processing by the purchaser are not subject to tax as provided by the Iowa sales and use tax statutes. In addition, a seller of tangible personal property need not collect Iowa sales or use tax from a purchaser that possesses a valid direct pay permit issued by the department of revenue and finance. However, the following are requirements for the exemption and noncollection of tax by a seller when a direct pay permit is involved:

a. The sales tax liability for all sales of tangible personal property is upon the seller (and on and after March 13, 1986, the purchaser as well) unless the seller takes in good faith from the purchaser a valid exemption certificate stating that the purchase is for resale, or for processing, or the tax will be remitted directly to the department by the purchaser under a valid direct pay permit issued by the department. In addition to the provisions and requirements set forth in subrule 15.3(2), to be valid an exemption certificate issued by a purchaser to a seller in good faith under a direct pay permit must include the purchaser's name, direct pay permit number, and date the direct pay permit was issued by the department. A seller who has taken a valid exemption certificate under a direct pay permit must keep records of sales made in accordance with rule 701--11.4(422,423). For more information regarding direct pay permits, see rule 701-- 12.3(422). Where tangible personal property or services are purchased tax-free pursuant to a valid exemption certificate which is taken in good faith by the seller, and the tangible personal property or services are used or disposed of by the purchaser in a nonexempt manner, or the purchaser fails to pay tax to the department under a direct pay permit issued by the department, the purchaser is solely liable for the taxes and must remit the taxes directly to the department.

When a processor or fabricator purchases tangible personal property exempt from the sales or use tax and subsequently withdraws the tangible personal property from inventory for its own use or consumption, the tax shall be reported in the period when the tangible personal property was withdrawn from inventory.

b. The director is required to provide exemption certificates to assist retailers in properly accounting for nontaxable sales of tangible personal property or services to buyers for purposes of resale or for processing. Since Iowa Code section 422.47 defines a "valid exemption certificate" as one supplied by the director, the director cannot for periods commencing on or after January 1, 1979, and ending on or before June 30, 1982, recognize an exemption certificate other than the director's own. This exemption certificate must be completed as to the information required on the form in order to be valid.

Amend rule 701--15.3(422,423), implementation clause, as follows:

This rule is intended to implement Iowa Code sections 422.42(3), 422.42(13), 422.42(16), 422.47, 422.53 as amended by 1997 Iowa Acts, House File 266, and 423.1(1).

ITEM 4. Amend rule 701--29.3(423) and its implementation clause as follows:

701--29.3(423) Certificates of resale, direct pay permits, or processing. When tangible personal property or service is sold in interstate commerce for delivery in Iowa, it shall be presumed that such property or service is sold for use in Iowa. The registered seller is required to collect use tax from the purchaser. If the tangible personal property or service sold for delivery in Iowa is not sold for use in Iowa and is not subject to use tax, the seller shall be required to secure a properly written certificate from the purchaser showing the exempt use to be made of the property or service. A seller may also take a valid exemption certificate and not collect use tax from a purchaser if the purchaser pays tax on the purchase directly to the department pursuant to a valid direct pay permit issued by the department.

When the registered seller repeatedly sells the same type of property or service to the same Iowa customer for resale or processing, the seller may, at the seller's risk, accept a blanket certificate covering more than one transaction. For more information regarding exemption certificates and direct pay permits, see rules 701--12.3(422) and 15.3(422,423), respectively.

Suggested forms of certificate may be obtained from the department upon request.

These rules are intended to implement Iowa Code section 422.53 as amended by 1997 Iowa Acts, House File 266, and Iowa Code chapter 423.

ITEM 5. Amend rule 701--30.1(423) as follows:

Amend subrule 30.1(2) as follows:

30.1(2) The purchaser for use in this state shall pay tax to the seller, if the seller is registered with the department to collect use tax for the state. If the seller is not registered with the department to collect use tax for the state, the purchaser shall remit the tax directly to the department. A purchaser who possesses a valid direct pay permit issued by the department does not remit tax to the seller. Instead, the purchaser remits tax directly to the department. For further details regarding direct pay permits, see rule 701--12.3(422).

Amend rule 701--30.1(423), implementation clause, as follows:

This rule is intended to implement Iowa Code section 422.53 as amended by 1997 Iowa Acts, House File 266, and Iowa Code sections 423.6, 423.9, 423.10, and 423.14 and 1995 Iowa Acts, Senate File 431.

ITEM 6. Amend rule 701--107.8(422B), introductory paragraph, as follows:

701--107.8(422B) Contacts with county necessary to impose collection obligation upon a retailer. Before any retailer can be required to collect the local option sales or service tax, certain minimal connections must exist between the county imposing the tax and the retailer. These connections are required by the due process clause of the Fourteenth Amendment and the commerce clause of the United States Constitution. Basically, for due process purposes, the retailer must be purposefully directing its activities at the county's residents in such a way that the retailer is availing itself of an economic market in the county. Maintaining any sort of office, sending any solicitor or salesperson, whether independent contractor or employee, transporting property which the retailer sells into the county in the retailer's own vehicle, or continuous solicitation of business within a county, are nonexclusive examples of purposefully directed activities for which the obligation to collect local option sales tax can be imposed upon a retailer. See Quill Corporation v. North Dakota, 504 U.S. 298, 112 S.Ct. 1904, 119 L.Ed.2d 91 (1992). An Iowa retailer's physical presence within a county is no longer necessary to require the retailer to collect the county's local option tax. However, a retailer located outside the state of Iowa that does not have a physical presence in the county imposing the local option tax cannot be required, under the commerce clause of the United States Constitution, to collect this state's local option sales tax; Quill, supra. Such physical presence in the county exists if it occurs through the retailer's presence or by the presence of independent contractors who act on behalf of the retailer. A retailer that sells to a purchaser that possesses a valid direct pay permit issued by the department need not collect local option sales or service tax from the purchaser. Instead, the purchaser must remit tax directly to the department. However, a retailer should obtain a valid exemption certificate from the purchaser for the tax not collected. For further details regarding direct pay permits, see rule 701--12.3(422) and for further details regarding exemption certificates see rule 701--15.3(422,423).

ITEM 7. Amend rule 701--107.8(422B), implementation clause, as follows:

Rules 107.1(422B) to 107.8(422B) are intended to implement Iowa Code section 422.53 as amended by 1997 Iowa Acts, House File 266, and Iowa Code chapter 422B.

[Filed 11/14/97, effective 1/7/98]

[Published 12/3/97]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 12/3/97.


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