Pages 930 to 961 include ARC 2204B to ARC 2209B and ARC 2211B to ARC 2219B

Administrative rules review committee 921

Schedule for rule making 919

Publication procedures 920

Administrative rules on CD–ROM 920

Agency identification numbers 928

CITATION OF ADMINISTRATIVE RULES 927

Notice, Update—forms, instructions, Web
site, 1.4 ARC 2207B 930

Notice, Types of common bond, 2.1, 2.5(1),
2.12, 2.13(1) ARC 2208B 930

Notice, Examination and supervision fees,
rescind ch 3 ARC 2209B 931

Notice, Real estate lending policy—to be
established and maintained by each credit
union, amendments to ch 9 ARC 2211B 931

Notice, Commercial paper characteristics,
17.1 ARC 2212B 934

Notice, RSVP program—responsibilities of
state committee, grant process, update of
names of participating agencies,
14.1 to 14.6 ARC 2217B 934

Notice, Food stamp benefits—change from
paper–based system to electronic benefits
transfer, 65.2, 65.4, 65.9, 65.17, 65.19,
65.36 ARC 2215B 935

Notice, Medicaid—reimbursement for
nursing facilities, 81.6(20), 81.10
ARC 2214B 937

Notice, Housing assistance fund (HAF)—
local housing trust funds, 15.6, 15.8(1)“a,”
15.8(3)“c”(1) ARC 2218B 938

Notice of availability—Report to the governor
on Iowa’s capacity development program 939

Notice of public hearing—Iowa drinking water
revolving fund intended use plan 939

Filed, Definition—unlicensed student, 3.1
ARC 2205B 961

Filed, NCLEX examination candidates—
reduction in time between authorization to
test and first possible test date, 3.4(3), 3.4(4)
ARC 2206B 961

Filed, IPERS, 21.1, 21.9(1), 21.23(2),
21.31(10) ARC 2219B 961

Notice, Cosmetology, 60.3, ch 61, 62.1
ARC 2204B 939

Summarized list 925

Notice, Help America Vote Act—use of
identifying documents by voters registering
by mail; performance and testing of voting
equipment, 21.3(3), 22.2 ARC 2216B 944

Notice—Public funds interest rates 944

Notice 945

Notice, Executive order numbers 8 and 9,
amendments to chs 16, 18, 23, 31 to 34
ARC 2213B 945

__________________________________

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.

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PLEASE NOTE:

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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

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The Administrative Rules Review Committee will hold a special meeting on Tuesday, January 8, 2003, at 9 a.m. and Wednesday,
January 8, 2003, at 9 a.m. in Room 116, State Capitol, Des Moines, Iowa. The following rules will be reviewed:

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.

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

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.

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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]

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]

ELDER AFFAIRS DEPARTMENT[321]

EXECUTIVE COUNCIL[361]

GENERAL SERVICES DEPARTMENT[401]

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 African–Americans, Division on the[434]

Status of Women Division[435]

HUMAN SERVICES DEPARTMENT[441]

INFORMATION TECHNOLOGY DEPARTMENT[471]

INSPECTIONS AND APPEALS DEPARTMENT[481]

Employment Appeal Board[486]

Foster Care Review Board[489]

Racing and Gaming Commission[491]

State Public Defender[493]

LAW ENFORCEMENT ACADEMY[501]

MANAGEMENT DEPARTMENT[541]

Appeal Board, State[543]

City Finance Committee[545]

County Finance Committee[547]

NATURAL RESOURCES DEPARTMENT[561]

Energy and Geological Resources Division[565]

Environmental Protection Commission[567]

Natural Resource Commission[571]

Preserves, State Advisory Board for[575]

PERSONNEL DEPARTMENT[581]

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]

REGENTS BOARD[681]

Archaeologist[685]

REVENUE AND FINANCE DEPARTMENT[701]

Lottery Division[705]

SECRETARY OF STATE[721]

TRANSPORTATION DEPARTMENT[761]

Railway Finance Authority[765]

TREASURER OF STATE[781]

WORKFORCE DEVELOPMENT DEPARTMENT[871]

Labor Services Division[875]

Workers’ Compensation Division[876]

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

Pursuant to the authority of Iowa Code section 533.1, the Credit Union Review Board hereby gives Notice of Intended Action to amend Chapter 1, “Description of Organization,” Iowa Administrative Code.

The rules in Chapter 1 describe the organization of the Credit Union Division, definitions of terms included in this chapter and the forms and instructions currently used. This proposed amendment is intended to update the list of forms and instructions and to add the Web site address to provide the public with options and ease to access necessary forms.

Any interested person may make written or electronic suggestions or comments on this proposed amendment on or before January 14, 2003. Such written material should be directed to James Forney, Credit Union Division, 200 East Grand, Suite 370, Des Moines, Iowa 50309; fax (515)281– 7595; E–mail James.Forney@iacudiv.state.ia.us.

There will be a public hearing on the proposed amendment at 10 a.m. on January 14, 2003, in the Credit Union Division Conference Room, 200 East Grand, Suite 370, Des Moines, Iowa, 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. Persons with special needs should contact the Credit Union Division prior to the hearing if accommodations need to be made.

This amendment is intended to implement Iowa Code section 533.1 and Executive Order Number 8.

The following amendment is proposed.

Amend rule 189—1.4(17A,533) as follows:

1.4(1) The following numbered forms and instructions of the superintendent are currently in use: Information concerning the forms and instructions of the superintendent are available at the offices of the credit union division during usual business hours, 8 a.m. to 4 p.m. daily, excluding Saturdays, Sundays and holidays. Copies of the forms and instructions are also available at the credit union division’s Web site at http://www.iacudiv.state.ia.us.

This rule is intended to implement Iowa Code section 533.51.

Pursuant to the authority of Iowa Code section 533.1, the Credit Union Review Board hereby gives Notice of Intended Action to amend Chapter 2, “Organization, Chartering and Field of Membership of a Credit Union,” Iowa Administrative Code.

Item 1 defines “multiple group.”

Item 2 adds “multiple group” to types of common bond.

Item 3 eliminates the word “small” from the phrase “small employee group application.”

Item 4 eliminates the wording that a requester pay only a $350 contested case hearing fee and the transcription costs in order to state that the requester shall pay the costs of a contested case hearing if the requester fails to prevail at the contested case hearing.

Any interested person may make written or electronic suggestions or comments on these proposed amendments on or before January 14, 2003. Such written material should be directed to James Forney, Credit Union Division, 200 East Grand, Suite 370, Des Moines, Iowa 50309; fax (515)281– 7595; E–mail James.Forney@iacudiv.state.ia.us.

There will be a public hearing on the proposed amendments at 10 a.m. on January 14, 2003, in the Credit Union Division Conference Room, 200 East Grand, Suite 370, Des Moines, Iowa, 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 amendments. Persons with special needs should contact the Credit Union Division prior to the hearing if accommodations need to be made.

These amendments are intended to implement Iowa Code section 533.1.

The following amendments are proposed.

ITEM 1. Amend rule 189—2.1(533) by adding the following new definition:

“Multiple group” means a combination of an association common bond and an occupation, industry, or employer common bond.

ITEM 2. Amend subrule 2.5(1) as follows:

2.5(1) Types of common bond. Common bonds shall include relationships based on association, occupation, industry, or employer, or residence or employment within a specified community.

a. Association common bond shall be based on common loyalties, benefits, interests and activities.

b. Occupation, industry or employer common bond shall be based on common business, employer, or corporate parent.

c d. Community common bond shall be based on residence, employment or principal place of business in a specific geographic boundary.

ITEM 3. Amend subrules 2.12(3) and 2.12(4) as follows:

2.12(3) Time of notice. The superintendent shall provide notification regarding approval or denial of an application for chartering within the time period required by Iowa Code chapter 533 and shall notify regarding approval or denial of small employee group applications within 60 days. If it is necessary for an application to be amended, whether by addition, deletion or change, the period of review shall begin anew as of the date of amendment.

2.12(4) Intervention. The period of review will be extended for 14 days if the division receives a written intervention in objection to the approval of the small employee group application. Upon the filing of an intervention, the superintendent may request additional information from the applicants.

ITEM 4. Amend subrule 2.13(1) as follows:

2.13(1) Contested case. Applicants may appeal the denial of an application by requesting a contested case hearing before the superintendent within 30 days of issuance of the decision. The costs of a contested case hearing which shall include a $350 contested case hearing fee and the costs of transcription shall be paid by the requester if the requester fails to prevail at the contested case hearing.

Pursuant to the authority of Iowa Code section 533.1, the Credit Union Review Board hereby gives Notice of Intended Action to rescind Chapter 3, “Examination and Supervision Fees,” Iowa Administrative Code.

This amendment proposes to rescind Chapter 3, which describes the fees that credit unions are required to pay to support the operation of the Credit Union Division through payment of examination and supervision fees. Any future fee structure changes will be approved and passed by public notice and hearing.

Any interested person may make written or electronic suggestions or comments on this proposed amendment on or before January 14, 2003. Such written material should be directed to James Forney, Credit Union Division, 200 East Grand, Suite 370, Des Moines, Iowa 50309; fax (515)281– 7595; E–mail James.Forney@iacudiv.state.ia.us.

There will be a public hearing on the proposed amendment at 10 a.m. on January 14, 2003, in the Credit Union Division Conference Room, 200 East Grand, Suite 370, Des Moines, Iowa, 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. Persons with special needs should contact the Credit Union Division prior to the hearing if accommodations need to be made.

This amendment is intended to implement Iowa Code section 533.67.

The following amendment is proposed.

Rescind and reserve 189—Chapter 3.

Pursuant to the authority of Iowa Code section 533.1, the Credit Union Review Board hereby gives Notice of Intended Action to amend Chapter 9, “Real Estate Lending,” Iowa Administrative Code.

Chapter 9 defines real estate lending. The purpose for the amendment is to have each credit union establish and maintain its own written real estate lending policy.

Any interested person may make written or electronic suggestions or comments on this proposed amendment on or before January 14, 2003. Such written material should be directed to James Forney, Credit Union Division, 200 East Grand, Suite 370, Des Moines, Iowa 50309; fax (515)281– 7595; E–mail James.Forney@iacudiv.state.ia.us.

There will be a public hearing on the proposed amendment at 10 a.m. on January 14, 2003, in the Credit Union Division Conference Room, 200 East Grand, Suite 370, Des Moines, Iowa, 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. Persons with special needs should contact the Credit Union Division prior to the hearing if accommodations need to be made.

This amendment is intended to implement Iowa Code sections 533.4(21) and 533.16(4)“a.”

The following amendment is proposed.

Amend 189—Chapter 9 as follows:

CHAPTER 9
REAL ESTATE LENDING

189—9.2 1(533) Real estate lending. These rules shall apply to real estate–related loans either originated by a credit union or acquired by purchase, assignment or otherwise.

9.2 1(1) The board of directors of the credit union shall formulate and maintain a written real estate lending policy that is appropriate for its size and the nature and scope of its operation. Each policy must be comprehensive and consistent with safe and sound lending practices. The standards and limits established in the policy must be reviewed and approved at least annually by the board. The real estate lending policy should reflect the level of risk that is acceptable to the board and should provide clear and measurable underwriting standards that enable the credit union’s lending staff to evaluate all relevant credit factors. The real estate lending policy, at a minimum, should:

a. Establish loan portfolio diversification standards.

b. Set appropriate terms and conditions by type of real estate loan.

c. Establish loan origination and approval procedures.

d. Establish prudent underwriting standards which include clear and measurable loan–to–value limitations.

e. Establish review and approval procedures for exempted loans.

f. Establish loan administration procedures.

g. Establish real estate appraisal and evaluation programs.

h. Monitor the portfolio and provide timely reports to the board of directors.

i. Establish conformance with secondary market investor requirements where applicable.

When formulating the real estate policy, the board should consider both internal and external factors, such as size and condition of the credit union, expertise of its lending staff, avoidance of undue concentrations of risk, compliance with all real estate–related laws and rules, and general market conditions.

Multifamily, commercial & other nonresidential 80

1–to–4 family residential 85

Owner–occupied 1–to–4 family residential, second
mortgage and home equity *

These rules are This rule is intended to implement Iowa Code sections 533.4(21) and 533.16(4)“a.”

Pursuant to the authority of Iowa Code section 533.1, the Credit Union Review Board hereby gives Notice of Intended Action to amend Chapter 17, “Investment Powers,” Iowa Administrative Code.

Rule 189—17.1(533) describes commercial paper purchased for investment by a state credit union for its own account. This proposed amendment updates the rule by eliminating outdated language.

Any interested person may make written or electronic suggestions or comments on this proposed amendment on or before January 14, 2003. Such written material should be directed to James Forney, Credit Union Division, 200 East Grand, Suite 370, Des Moines, Iowa 50309; fax (515)281– 7595; E–mail James.Forney@iacudiv.state.ia.us.

There will be a public hearing on the proposed amendment at 10 a.m. on January 14, 2003, in the Credit Union Division Conference Room, 200 East Grand, Suite 370, Des Moines, Iowa, 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 rules. Persons with special needs should contact the Credit Union Division prior to the hearing if accommodations need to be made.

This amendment is intended to implement Iowa Code section 533.4(5).

The following amendment is proposed.

Amend rule 189—17.1(533) as follows:

189—17.1(533) Commercial paper characteristics. Commercial paper purchased for investment by a state credit union for its own account as provided in 1987 Iowa Code supplement section 533.4(5) shall consist of obligations which have been publicly offered or which are of such sound value or are so well secured as to be readily salable at a fair value, with investment characteristics not distinctly or predominantly speculative. They The obligations shall fall within the two highest grades according to a reputable rating service or they shall represent unrated issues of equivalent value.

Pursuant to the authority of Iowa Code section 231.55, the Department of Elder Affairs hereby gives Notice of Intended Action to amend Chapter 14, “Retired Senior Volunteer Program (RSVP),” Iowa Administrative Code.

The proposed amendments are intended to further define the responsibilities of the State Committee, enhance the description of the grant process, and update names of participating agencies.

Consideration will be given to all written suggestions or comments on the proposed amendments on or before January 14, 2003. Comments should be addressed to Mary Ann Young, Administrative Rules Coordinator, Iowa Department of Elder Affairs, 200 Tenth Street, Suite 300, Des Moines, Iowa 50309–3609; fax (515)242–3300; telephone (515)242– 3312.

These amendments are intended to implement Iowa Code section 231.55

The following amendments are proposed.

ITEM 1. Amend 321—Chapter 14, title, as follows:

CHAPTER 14

RETIRED AND SENIOR VOLUNTEER
PROGRAM (RSVP)

ITEM 2. Amend rule 321—14.1(249D) as follows:

321—14.1(249D 231) Purpose and program description. The purpose of the retired and senior volunteer program (RSVP) is to provide a variety of opportunities for retired persons aged 60 and over to participate more fully in their communities through significant volunteer services. identify and address priority community needs through the mobilization of adult volunteers aged 55 and over, thereby recognizing and using the competence, wisdom and experience of elders for the benefit of all Iowans. The RSVP grant program will give support grants to each RSVP program project serving Iowa and provide discretionary grants on a competitive basis for RSVP program project expansion. The RSVP grant program provides two types of grants:

14.1(1) Formula RSVP grant. Each RSVP program, project which has a current memorandum of agreement to operate an RSVP program project from the ACTION office Corporation for National and Community Service (the federal domestic volunteer agency), is to be allocated an equal a share of state funds appropriated for formula distribution. Each RSVP project shall submit to the appropriate area agency on aging (AAA) a budget outlining the method by which the project will expend the grant allotted to the project, and other information requested on forms provided by the department.

14.1(2) State–developed RSVP program project grants. From state funds appropriated by the legislature, RSVP programs projects will be developed that are consistent with the goals of ACTION the Corporation for National and Community Service, RSVP and the department. After a review by the RSVP committee, grants will be awarded on a competitive basis by the department and the Corporation for National and Community Service to a local organization or group to initiate a new RSVP project.

ITEM 3. Amend rule 321—14.2(249D) as follows:

321—14.2(249D 231) Application procedures. Proce–dures specific to the grant types will be followed for the formula and state–developed grants. Appropriate forms and applications for each grant type are available from the Iowa department of elder affairs, address in subrule 2.1(2). Forms and applications may be requested from the department, ACTION or the appropriate AAA by eligible applicants. or the Corporation for National and Community Service.

ITEM 4. Amend rule 321—14.3(249D) as follows:

321—14.3(249D 231) Grant criteria. To respond to funding priorities, as funds are made available, the department and the ACTION Corporation for National and Community Service director will coordinate in establishing criteria for the award of state–developed funds. As a minimum, the criteria will contain the following:

1. Goals and objectives of the program project;

2. The qualifications of the applicant to manage funds;

3. Letters of local support verifying coordination and cooperation and need for volunteers;

4. Total program project budget;

5. Evidence of ability to submit timely and accurate reports;

6. Description and timeline of planned activities;

7. Agreement to develop for the program project an advisory council whose membership includes should include minority members, RSVP volunteers, and representatives from the area agencies on aging and public and private sectors;

8. Description of the applicant organization, including staffing pattern; and

9. Documentation of the applicant’s ability to provide the required local match.

ITEM 5. Amend rule 321—14.4(249D) as follows:

14.4(1) Applications submitted will be reviewed by the department and ACTION RSVP committee composed of up to two representatives of the Corporation for National and Community Service, the department of elder affairs, the Iowa RSVP Directors Association, and the Iowa Association of Area Agencies on Aging for completeness, appropriateness and merit of project using the criteria in rule 14.3(249D 231).

14.4(2) Procedures to request applications and award funds:

a. The department and ACTION the Corporation for National and Community Service shall issue through AAAs a request for proposals containing program project criteria and application forms for the appropriate fiscal year.

b. The applicant shall submit the completed application to the department according to the timeline identified in the request for proposals.

d c. Applicants selected for funding shall be notified by the department.

e d. A notice of grant award will be issued to the appropriate AAA which will contract with the approved applicant(s) for the appropriate fiscal year, July 1 to June 30.

ITEM 6. Amend rule 321—14.5(249D) as follows:

321—14.5(249D 231) Administration of grants. The appropriate AAA shall prepare contractual agreements for the formula and state–developed grants.

14.5(1) This agreement shall be executed by the director or designee of the appropriate AAA and the duly authorized official of the local RSVP program project.

14.5(2) The contract shall include due dates for requisition of reimbursable expenses, procedures and the process for the submission of program project reports and financial reports.

14.5(3) Reporting. All grant recipients shall submit a semiannual requisition for funds and financial report reports to the AAA, on forms provided by ACTION the department to the AAA in the reporting manual. in accordance with contract requirements.

ITEM 7. Amend 321—Chapter 14 by adding the following new rule:

321—14.6(231) Reversion of funds. Grant funds not expended by the project by June 30 shall revert to the department.

Pursuant to the authority of Iowa Code section 234.6, the Department of Human Services proposes to amend Chapter 65, “Administration,” Iowa Administrative Code.

Federal law mandates that the issuance of food stamp benefits be changed from a paper–based system to electronic benefits transfer. These amendments are necessary to implement this change. Under the electronic benefits transfer system, food stamp clients will be issued magnetic cards that allow clients to access their benefits at point–of–sale terminals located in grocery stores and other places where they buy food. The Department will issue terminals to any retailers that do at least $100 in food stamp business per month and do not wish to use their existing equipment. A paper voucher system will be used if the electronic system is down or the retailer does not qualify for a point–of–sale terminal.

Implementation of the new system is scheduled to begin in Linn County and Jones County in May 2003. Statewide roll out will occur in three phases, beginning in mid–July, mid–August, and mid–September. Statewide implementation is expected to be complete by October 17, 2003. The U.S. Department of Agriculture has approved a waiver allowing Iowa an extra year to comply with electronic issuance requirements due to problems encountered in the bidding proc–ess for implementation of the system.

The basic requirements for the issuance of food stamp benefits are contained in federal regulations, which the Department has adopted by reference. Most of these amendments are being proposed because Iowa has obtained waivers from federal regulations or is selecting an option offered in federal regulations. Rule 441—65.36(234), which pertains to the operation of the pilot electronic benefit transfer project currently operating in Linn County, is being rescinded.

These amendments do not provide for waivers in specified situations because the Department does not have the authority to waive federal requirements and cannot at this point change options negotiated in the contract for implementing the system.

Any interested person may make written comments on the proposed amendments on or before January 15, 2003. Comments should be directed to the Office of Policy Analysis, Department of Human Services, Hoover State Office Building, 1305 East Walnut Street, Des Moines, Iowa 50319– 0114. Comments may be sent by fax to (515)281–4980 or by E–mail to policyanalysis@dhs.state.ia.us.

These amendments are intended to implement Iowa Code section 234.12.

The following amendments are proposed.

ITEM 1. Amend rule 441—65.2(234), introductory paragraph and first unnumbered paragraph, as follows:

441—65.2(234) Application. Persons in need of food stamps stamp benefits may file an application at any local department office in Iowa.

An application is filed the day a food stamp office receives an application for food stamps stamp benefits on Form 470– 0306 or 470–0307 (Spanish), Application for Food Stamps, or Form 470–0462 or Form 470–0466 (Spanish), Public Assistance Application, containing the applicant’s name and address, which is signed by either a responsible member of the household or the household’s authorized representative. When an application is delivered to a closed office, it will be considered received on the first day that is not a weekend or state holiday following the day that the office was last open. A household shall complete a Public Assistance Application when any person in the household is applying for or receiving aid through the family investment program, family medical assistance program (FMAP)–related Medicaid, or the refugee resettlement assistance programs. The application is complete when a completed Form 470–0306, 470–0307, 470– 0462, or 470–0466 is submitted.

Households receiving food stamps without a change of administrative area stamp benefits in Iowa may apply for continued participation by submitting Form 470–2881, Review/Recertification Eligibility Document.

ITEM 2. Rescind rule 441—65.4(234) and adopt in lieu thereof the following new rule:

441—65.4(234) Issuance. The department shall issue food stamp benefits by electronic benefits transfer (EBT), subject to the implementation plan. Implementation will be phased in from May 2003 through October 2003. The state will complete statewide conversion of food stamp EBT by October 2003.

65.4(1) Schedule. Food stamp benefits for ongoing certifications shall be made available to the households on a staggered basis during the first ten calendar days of each month.

65.4(2) EBT cards. EBT cards shall be mailed to clients.

a. Personal identification number selection. When a client receives the EBT card, the client shall call the automated response unit to select a personal identification number. The client must provide proof of identity before selecting the personal identification number.

b. Replacement of EBT cards. EBT cards shall be replaced within five business days after the client notifies the EBT customer service help desk of the need for replacement.

65.4(3) Client training. Written client training materials may either be mailed to clients or be handed to the clients if they visit the local office. Clients will be given in–person training upon request or if they are identified as having problems using the EBT system.

65.4(4) Point–of–sale terminals. Point–of–sale terminals allow clients to access food stamp benefits and retailers to redeem food sales.

a. Redemption threshold. The department will not place point–of–sale terminals with any authorized retailer with less than $100 in monthly food stamp redemptions. Those retailers may participate through the manual voucher process.

b. Shipping. Government–supplied point–of–sale terminals may be shipped to authorized retailers along with instructions for installation of the equipment and training materials. A toll–free number is available for retailers needing assistance.

c. Replacement. The department shall ensure thatgovernment–supplied point–of–sale terminals that are not operating properly are repaired or replaced within 48 hours.

65.4(5) Emergency manual vouchers. Authorized retailers may use an emergency manual voucher if they cannot access the EBT system.

a. Form 470–2827, POS Voucher, is used to authorize a debit of the household’s EBT account when the EBT system is inaccessible. The client must sign the voucher.

b. The retailer must clear the manual transaction within 30 days.

c. If there are insufficient funds in the client’s account when the manual voucher is presented:

(1) The retailer shall receive a payment of the actual amount of the voucher, up to a maximum of $50.

(2) The client’s account shall be debited for the amount in the account. The remainder of the amount owed shall be deducted from benefits issued for subsequent months. If the next month’s allotment is less than $50, the deduction shall not exceed $10.

ITEM 3. Amend rule 441—65.9(234), first unnumbered paragraph, as follows:

Notwithstanding anything to the contrary in these rules or regulations, disabled persons as defined in 7 CFR 271.2, as amended to December 4, 1991, residing in certain group living arrangements are eligible to receive and use food stamps stamp benefits to purchase their prepared meals.

ITEM 4. Amend rule 441—65.17(234) as follows:

441—65.17(234) Involvement in a strike. An individual is not involved in a strike at the individual’s place of employment when the individual is not picketing and does not intend to picket during the course of the dispute, does not draw strike pay, and provides a signed statement that the individual is willing and ready to return to work but does not want to cross the picket line solely because of the risk of personal injury or death or trauma from harassment. The regional administrator service area manager shall determine whether such a risk to the individual’s physical or emotional well–being exists.

ITEM 5. Amend subrules 65.19(12) and 65.19(18) as follows:

65.19(12) Mailing of notices. All individual household notices of benefit amounts will be mailed separately from food stamps stamp benefits.

65.19(18) Household membership.

a. Except for applications received during a period of time when the household was not certified to receive food stamps stamp benefits, household membership shall be determined as it was or is anticipated to be on the first day of the issuance month. Changes in household membership occurring on or after the first day of the month which are reported during the month in which the change occurs, will not be considered until the following month.

b. Except for qualified residents of a shelter for battered women and children, individuals shall not be added to the household prior to their being before they are removed from another household where they were receiving food stamps stamp benefits.

ITEM 6. Rescind and reserve rule 441—65.36(234).

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services proposes to amend Chapter 81, “Nursing Facilities,” Iowa Administrative Code.

These amendments make changes to Medicaid reimbursement for nursing facilities in two areas:

• Payment for recipients who are eligible for payment both under Medicare and Medicaid (known as “crossover claims”).

• Payments to hold a bed while a recipient is absent from a facility for a visit or hospitalization (sometimes called “reserved bed days”).

Iowa’s current reimbursement policy for nursing facility crossover claims provides for Medicaid payment of the full coinsurance and deductible amounts as determined by Medicare. These amendments provide that Medicaid will reimburse nursing facilities for Medicare coinsurance and deductible amounts only to the extent that actual payments from Medicare (generally 80 percent of the Medicare rate) are less than the Medicaid–allowed amount for the services.

For example, if the Medicare charges for a service are $300 and the coinsurance is 20 percent, then Medicare would pay $240 for the claim, and a $60 crossover claim would be submitted to Medicaid. If the nursing facility’s Medicaid per diem for the nursing facility service is $100, then Medicaid would make no further payment, since the Medicare payment received by the nursing facility ($240) is already greater than what Medicaid would allow ($100). This rule change will ensure that Medicaid does not pay more than the Medicaid–allowed amount for nursing facility services.

Medicare policy generally permits coinsurance, copayment, and deductible amounts that the nursing facility cannot collect (e.g., from Medicaid) to be treated as “bad debts,” which are reimbursable by Medicare. Nursing facilities may experience a cash flow impact due to a longer wait in receiving payment for Medicare “bad debts” than for crossover claim payments, but it is expected that any adverse financial impact on nursing facilities will be minimal.

These amendments also reduce bed–hold payments for those facilities that have a high percentage of empty beds. Under these rules, Medicaid will continue to pay facilities 75 percent of their established Medicaid rate for each day that a bed is reserved if the facility’s occupancy is at or above 90 percent. For facilities with occupancy below 90 percent, the Medicaid payments for bed hold will be 25 percent of the facility’s established Medicaid rate.

The purpose of the bed–hold payment is to ensure that a Medicaid recipient does not forfeit space in the nursing facility by being absent due to a hospitalization or visit. With the current budgetary problems, the Department is no longer able to pay for reserving a bed for a Medicaid recipient when the facility has sufficient empty or unused beds that a place will remain available to the resident upon return from leave.

These amendments do not provide for waivers of the provisions on Medicare crossover claims because all nursing facilities should be subject to the same reimbursement criteria. Anticipated savings will not be achieved if waivers are provided. Facilities can avoid the limit on bed–hold payments if they provide evidence that occupancy for the period of the resident’s absence was greater than 90 percent.

Any interested person may make written comments on the proposed amendments on or before January 15, 2003. Comments should be directed to the Office of Policy Analysis, Department of Human Services, Hoover State Office Building, 1305 East Walnut Street, Des Moines, Iowa 50319– 0114. Comments may be sent by fax to (515)281–4980 or by E–mail to policyanalysis@dhs.state.ia.us.

The Department will hold a public hearing for the purpose of receiving comments on these amendments on January 15, 2003, from 8:30 to 9:30 a.m. in the First Floor Southeast Conference Room, Sides 1 and 2, Hoover State Office Building, 1305 East Walnut Street, Des Moines. Comments may be offered at the hearing either orally or in writing. Anyone who intends to attend the hearing and has special requirements, such as hearing or vision impairments, should contact the Office of Policy Analysis at (515)281–8440 and advise of the special needs.

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

The following amendments are proposed.

ITEM 1. Adopt new subrule 81.6(20) as follows:

81.6(20) Medicare crossover claims for nursing facility services.

a. Definitions. For purposes of this subrule:

“Crossover claim” means a claim for Medicaid payment for Medicare–covered nursing facility services rendered to a Medicare beneficiary who is also eligible for Medicaid. Crossover claims include claims for services rendered to beneficiaries who are eligible for Medicaid in any category including, but not limited to, qualified Medicare beneficiaries and beneficiaries who are eligible for full Medicaid coverage.

“Medicaid–allowed amount” means the Medicaid reimbursement rate for the services rendered (including any portion to be paid by the Medicaid beneficiary as client participation) multiplied by the number of Medicaid units of service included in a crossover claim, as determined under state and federal law and policies.

“Medicare payment amount” means the Medicare reimbursement rate for the services rendered multiplied by the number of Medicare units of service included in a crossover claim, excluding any Medicare coinsurance or deductible amounts to be paid by the Medicare beneficiary.

b. Crossover claims. Crossover claims for nursing facility services covered under Medicare Part A and under Medicaid are reimbursed as set out in this paragraph.

(1) If the Medicare payment amount for a crossover claim exceeds or equals the Medicaid–allowed amount for that claim, Medicaid reimbursement for the crossover claim will be zero.

(2) If the Medicaid–allowed amount for a crossover claim exceeds the Medicare payment amount for that claim, Medicaid reimbursement for the crossover claim is the lesser of:

1. The Medicaid–allowed amount minus the Medicare payment amount; or

2. The Medicare coinsurance and deductible amounts applicable to the claim.

c. Effective May 1, 2003, savings in Medicaid reimbursements attributable to the limits on nursing facility crossover claims established by this subrule shall be used to pay costs associated with development and implementation of this subrule before reversion to Medicaid.

ITEM 2. Amend subrule 81.10(4), paragraph “f,” as follows:

f. Payment for periods when residents of nursing facilities that have occupancy rates of 90 percent or greater are absent for visitation a visit or hospitalization shall be made at 75 percent of the nursing facility’s rate. Payment for periods when residents of nursing facilities that have occupancy rates of less than 90 percent are absent for a visit or hospitalization shall be made at 25 percent of the nursing facility’s rate.

ITEM 3. Amend subrule 81.10(5), paragraph “e,” subparagraph (1), as follows:

(1) The resident, the resident’s family, or friends may pay to hold the resident’s bed in cases where a resident is not discharged from the facility, and spends over 18 days on yearly visitation (or longer under 81.10(4)“d”) or spends over 10 days per calendar month on a hospital stay. When the resident is not discharged from the facility, these These supplementation payments shall not exceed 75 percent of the allowable audited costs for the facility, not to exceed the maximum reimbursement rate. the amount the department would pay to hold the bed under paragraph 81.10(4)“f.”

When the resident is discharged, the facility may handle the holding of the reserve bed in the same manner as for a private paying resident.

Pursuant to the authority of Iowa Code sections 17A.3(1)“b” and 16.5(17), the Iowa Finance Authority hereby gives Notice of Intended Action to amend Chapter 15, “Housing Assistance Fund (HAF),” Iowa Administrative Code.

The purpose of these amendments is to include local housing trust funds as eligible applicants under the Authority’s single–family construction loan program and to add rules that allow local housing trust funds to efficiently utilize the single–family construction loan program.

The Authority will receive written comments on the proposed amendments until 4 p.m. on January 14, 2003. Comments may be addressed to Donna Davis, Iowa FinanceAuthority, 100 East Grand, Suite 250, Des Moines, Iowa 50309. Comments may be faxed to Donna Davis at (515) 242–4957. Comments may be E–mailed to Donna Davis at donna.davis @ifa.state.ia.us. Persons who wish to comment orally should contact Donna Davis at (515)242–4990.

These amendments are intended to implement Iowa Code section 16.5(17).

The following amendments are proposed.

ITEM 1. Amend rule 265—15.6(16) by adding the following new definition in alphabetical order:

“Local housing trust funds” means entities created by one or more cities or counties or combination thereof to improve housing within the area covered by such housing trust fund.

ITEM 2. Amend subparagraph 15.8(1)“a”(1) as follows:

(1) Applicants eligible for funding are nonprofit 501(c)(3) affordable housing providers, for–profit affordable housing providers in enterprise zones, community housing development organizations (CHDOs), local housing trust funds and economic development corporations. This would not preclude multiple eligible applicants from filing joint applications to meet the minimum thresholds.

ITEM 3. Amend numbered paragraph 15.8(1)“a”(4)“4” as follows:

4. Minimum loan of $400,000 $50,000.

ITEM 4. Amend paragraph 15.8(1)“a” by adding the following new subparagraph (5):

(5) With respect to funds loaned to local housing trust funds:

1. Such funds may then be loaned by the local housing trust fund to developers it selects;

2. Such funds may be utilized directly by the local housing trust fund for construction or rehabilitation of single–family housing; or

3. Such funds may be used in another manner that satisfies the criteria and intent of paragraph 15.8(1)“a.” Except for 15.8(1)“a”(4)“2,” the criteria set forth in 15.8(1)“a”(4) apply to funds loaned to local housing trust funds.

ITEM 5. Amend subparagraph 15.8(3)“c”(1), introductory paragraph, as follows:

(1) Eligible applicants are nonprofits who local housing trust funds that meet the following criteria:

Pursuant to 42 United States Code Section 300g–9, the Department of Natural Resources gives Notice that it has submitted a report to the Governor on the efficacy of the capacity development strategy and progress made toward improving the technical, managerial and financial capacity of public water systems in the state of Iowa. Copies of the report can be obtained at the Iowa Department of Natural Resources, 401 SW 7th Street, Suite M, Des Moines, Iowa 50309, or by calling (515)725–0298. The report is also available electron– ically at http://www.state.ia.us/dnr/organiza/epd/wtrsuply/rof.htm.

Iowa’s drinking water state revolving fund program makes loans to drinking water systems for design and construction to ensure public health and provide safe drinking water. The Iowa Department of Natural Resources (DNR) publishes loan priorities each year in its Intended Use Plan (IUP). Scoring criteria address health risks, rule compliance, and infrastructure needs, including criteria for loan eligibility. The criteria use a point system based on Maximum Contaminant Level violations, system vulnerability, infrastructure improvement needs, population, and design deficiencies.

A public hearing on the IUP will be held at the DNR Water Supply Offices, Main Conference Room, 401 SW 7th Street, Suite M, Des Moines, Iowa, on January 8, 2003, at 9 a.m. Comments on the IUP will be accepted at that time and all written comments must be received by the Department onor before January 10, 2003. For questions or to obtain acopy of the draft IUP, contact Michael Anderson at (515) 725–0336 (E–mail: michael.anderson@dnr.state.ia.us) or Jennifer Simons at (515)725–0298 (E–mail: jennifer.simons @dnr.state.ia.us).

Pursuant to the authority of Iowa Code section 147.76, the Board of Cosmetology Arts and Sciences Examiners hereby gives Notice of Intended Action to amend Chapter 60, “Licensure of Cosmetologists, Electrologists, Estheticians, Manicurists, Nail Technologists, and Instructors of Cosmetology Arts and Sciences”; rescind Chapter 61, “Licensure of Salons and Schools of Cosmetology Arts and Sciences,” and adopt new Chapter 61 with the same title; and amend Chapter 62, “Fees,” Iowa Administrative Code.

These proposed amendments revise the rules covering cosmetology salons and schools and amend Chapter 60 by moving the course of study requirements to Chapter 61. Subrule 62.1(15) is amended and subrule 62.1(19) is rescinded because a change in name or location of a school or a salon will require submission of a new application.

The Division revised these rules according to Executive Order Number 8. The Division sent letters to schools, associations and randomly selected licensees for comment. One letter was received in return. The comments received were discussed by the Board and decisions were based on need, clarity, intent and statutory authority, cost and fairness.

Any interested person may make written comments on the proposed amendments no later than January 14, 2003, addressed to Ella Mae Baird, Professional Licensure Division, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319–0075.

A public hearing will be held on January 14, 2003, from 9 to 11 a.m. in the Fifth Floor Board Conference Room, Lucas 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 proposed amendments.

These amendments are intended to implement Iowa Code section 147.7 and chapters 157 and 272C.

The following amendments are proposed.

ITEM 1. Rescind rule 645—60.3(157) and adopt the following new rule in lieu thereof:

60.3(1) A cosmetology license is not a requirement for an electrology, esthetics, nail technology or manicurist license.

60.3(2) Core life sciences curriculum hours shall be transferable in their entirety from one practice discipline to another practice discipline.

60.3(3) Theory hours earned in each practice discipline of cosmetology arts and sciences may be used in applying for a cosmetology license.

ITEM 2. Rescind 645—Chapter 61 and adopt the following new chapter in lieu thereof:

CHAPTER 61
LICENSURE OF SALONS AND SCHOOLS
OF COSMETOLOGY ARTS AND SCIENCES

“Clinic area” means the area of the school where the paying customers will receive services.

“Dispensary” means a separate area to be used for storing and dispensing of supplies and sanitizing of all implements.

“Lapsed license” means a salon license or a school license that has not been renewed as required or the license of a salon or school that has failed to meet stated obligations for renewal within a stated time.

“Mentor” means a licensee providing guidance in a mentoring program.

“Mentoring” means a program allowing students to experience cosmetology arts and sciences in a licensed salon under the guidance of a mentor.

“Salon license” means an establishment licensed to provide cosmetology services to paying customers.

“School” means a school of cosmetology arts and sciences.

“School license” means a license issued to an establishment to instruct students in cosmetology arts and sciences.

61.2(1) The owner shall complete a board–approved application form. Application forms may be obtained from the board’s Web site (http://www.idph.state.ia.us/licensure), directly from the board office or from the cosmetology school where the student is enrolled. All applications shall be submitted to the Board of Cosmetology Arts and Sciences Examiners, Professional Licensure Division, Fifth Floor, Lucas State Office Building, Des Moines, Iowa 50319–0075.

a. The application shall be completed according to the instructions contained in the application and submitted 30 days prior to the anticipated opening day. If the application is not completed according to the instructions, the application will not be reviewed by the board.

b. Each application shall be accompanied by the appropriate fees payable by check or money order to the Board of Cosmetology Arts and Sciences Examiners. The fees are nonrefundable.

61.2(2) Each salon shall meet the requirements for sanitary conditions established in 645—Chapter 63 to be eligible for licensing. The salon shall be inspected for compliance with sanitation rules within 12 months following the issuance of the salon license.

61.2(3) Business may commence at the salon following receipt of the license.

61.2(4) Incomplete applications that have been on file in the board office for more than two years shall be considered invalid and shall be destroyed. The records will be maintained after two years only if the applicant submits a written request to the board.

61.2(5) A salon license shall be issued for a specific location. A change in location or site of a salon shall require submission of an application for a new license and payment of the fee required by 645—subrule 62.1(16). A change of address without change of actual location shall not be construed as a new site.

61.2(6) A salon license is not transferable. A change in ownership of a salon shall require the issuance of a new license.

a. A change in the name of a salon shall be reported to the board within 30 days of the name change.

b. The board may request legal proof of the ownership transfer.

A change in ownership shall be defined as any change of controlling interest in any corporation or any change of name of sole proprietorship or partnership.

61.3(1) The biennial license renewal period for a salon license shall begin on January 1 of every odd–numbered year and end on December 31 two years later.

61.3(2) A renewal of license application shall be mailed to the owner of the salon at least 60 days prior to the expiration of the license. Failure to receive the renewal application shall not relieve the owner of the obligation to pay the biennial renewal fee on or before the renewal date.

61.3(3) A salon that is issued an initial license within six months of the license renewal date will not be required to renew the license until the next renewal two years later.

61.3(4) The salon owner shall submit the completed application with the renewal fee to the board office before the license expiration date.

61.3(5) A salon shall be in full compliance with this chapter and 645—Chapter 63 to be eligible for renewal. When all requirements for license renewal are met, the salon shall be sent a license renewal card by regular mail.

61.3(6) Late renewal. If the renewal fee and renewal application are postmarked after the license expiration date, but within 30 days following the expiration date, the late fee for failure to renew before expiration shall be charged.

61.4(1) If the renewal application and fee are not postmarked within 30 days after the license expiration date, the salon license is lapsed. To reinstate a salon license, the reinstatement fee, renewal fee for each biennium the license is lapsed and the late fee shall be submitted to the board office.

61.4(2) A salon that has not renewed the salon license within the required time frame will have a lapsed license and shall not provide cosmetology services until the license is reinstated.

61.4(3) After the reinstatement of a lapsed license, the salon shall renew at the next scheduled renewal cycle.

61.5(1) Every salon shall have a sign visible outside the entrance designating the place of business.

61.5(2) A salon license and the current renewal card shall be posted and visible to the public.

61.5(3) The original license, duplicate license or temporary permit, and the current renewal shall be visibly displayed for each licensee and temporary permit holder employed by the salon.

645—61.6(157) Licensure for schools of cosmetology arts and sciences. The board shall grant approval for the issuance of an original school of cosmetology arts and sciences license to be issued by the department when the following conditions have been met:

61.6(1) An application shall be submitted to the Board of Cosmetology Arts and Sciences Examiners, Iowa Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319–0075. The following information shall be submitted with the application:

a. A complete plan of the physical facilities and an explanation detailing how the facilities will be utilized relative to classroom, clinic space and mentoring program;

b. Proof of research and a completed survey that substantiates the need for a school; and

c. A list of the names of licensed instructors for the proposed school. The number of instructors must meet the requirement outlined in Iowa Code section 157.8, with the exception of instructors for the mentoring program.

61.6(2) The application shall be completed according to the instructions contained in the application and submitted 30 days prior to the anticipated opening day. If the application is not completed according to the instructions, the application will not be reviewed by the board.

61.6(3) The school owner may be interviewed by the board before an original license is issued.

61.6(4) The school shall not accept students until the school is licensed.

61.6(5) The original license shall be granted for the location(s) identified in the school’s application.

a. A change of location shall require submission of an application for a new school license and payment of the license fee.

b. A change of address without change of actual location shall not be construed as a new site.

61.6(6) A school license is not transferable. A change in ownership of a school shall require the issuance of a new license. A change in ownership shall be defined as any change of controlling interest in any corporation or any change of name of sole proprietorship or partnership. The board may request legal proof of the ownership transfer.

61.6(7) The school shall be inspected prior to the issuance of the school license and shall meet the requirements of this chapter and 645—Chapter 63.

61.6(8) Incomplete applications that have been on file in the board office for more than two years shall be considered invalid and shall be destroyed. The records will be maintained after two years only if the applicant submits a written request to the board.

61.7(1) The annual license renewal period for a school license shall begin on July 1 and end on June 30 one year later.

61.7(2) A renewal of license application shall be mailed to the school at least 60 days prior to the expiration of the license. Failure to receive the renewal application shall not relieve the school of the obligation to pay the annual renewal fee on or before the renewal date.

a. The renewal application and renewal fee shall be submitted to the board office before the license expiration date.

b. Schools shall be in full compliance with this chapter and 645—Chapter 63 to be eligible for renewal. When all requirements for license renewal are met, the school shall be sent a license renewal card by regular mail.

61.7(3) Schools that are issued their initial licenses within six months of the license renewal date will not be required to renew their licenses until the next renewal one year later.

61.7(4) Late renewal. If the renewal fee and renewal application are postmarked after the license expiration date, but within 30 days following the expiration date, the late fee for failure to renew before expiration shall be charged.

61.8(1) If the renewal application and fee are not postmarked within 30 days after the license expiration date, the school license is lapsed. To reinstate the school license, the reinstatement fee, renewal fee for each year the license is lapsed and the late fee shall be submitted to the board.

61.8(2) A school that has not renewed the school license within the required time frame will have a lapsed license and shall not provide schooling or services until the license is reinstated.

61.8(3) After the reinstatement of a lapsed license, the school shall renew at the next scheduled renewal date.

645—61.9(157) Physical requirements for schools of cosmetology arts and sciences. The school shall meet the following physical requirements:

61.9(1) The school premises shall have a minimum floor space of 3000 square feet and, when the enrollment in a school exceeds 30 students, additional floor space of 30 square feet shall be required for each additional student enrolled in the school.

61.9(2) Each licensed school shall provide at least one clinic area where the paying public will receive services. The clinic area shall be confined to the premises occupied by the school.

61.9(3) A school shall provide a theory classroom(s) separate from the clinic area.

61.9(4) Each school shall maintain a library for students consisting of textbooks, current trade publications and business management materials.

61.9(5) The school shall have a separate area to be used as a dispensary. The dispensary shall be equipped with lavatory, shelves or drawers for storing chemicals and sanitized articles, a wet sterilizer and any other sanitation items required in 645—Chapter 63.

61.9(6) Two restrooms shall be equipped with toilets, lavatories, soap and towel dispensers.

61.9(7) A laundry room shall be separated from the clinic area by a full wall or partition.

61.9(8) A separate room shall be equipped for the practice of esthetics and electrology.

61.9(9) Each licensed school shall have an administrative office.

645—61.10(157) Minimum equipment requirement. Each school of cosmetology arts and sciences shall have the following minimum equipment:

1. Workstations equipped with chair, dresserette, closed drawer or container for sanitized articles, and mirror (maximum of two students per unit);

2. One set of textbooks for each student and instructor;

3. Shampoo bowls located in the clinic area and readily accessible for students and clients;

4. Audiovisual equipment available for each classroom;

5. Chair and table area for each student in the classroom; and

6. Labeled bottles and containers showing intended use of the contents.

645—61.11(157) Course of study requirements. A school of cosmetology arts and sciences shall not be approved by the board of cosmetology arts and sciences examiners unless it complies with the course of study requirements as provided below.

61.11(1) Requirements for hours.

61.11(2) Curriculum requirements.

a. Theory instruction shall be taught from a standard approved textbook, but may be supplemented by other related textbooks.

b. Course subjects taught in the school curriculum, including skills and business management, shall relate to the specific practice discipline.

c. Required hours for theory and applied practical hours do not have to be obtained from one school.

d. Core life sciences curriculum hours shall be transferable in their entirety from one practice discipline to another practice discipline.

e. Only hours from accredited or board–approved school programs will be accepted.

61.11(3) Core life sciences curriculum. The core life sciences curriculum shall contain the following instruction:

a. Human anatomy and physiology:

Cell, metabolism and body systems,

Human anatomy;

b. Bacteriology;

c. Infection control practices:

Universal precautions,

Sanitation,

Sterilization,

Disinfection;

d. Basic chemistry;

e. Matter;

f. Elements:

Compounds and mixtures;

g. Basic electricity;

h. Electrical measurements:

Reproduction of light rays,

Infrared rays,

Ultraviolet rays,

Visible rays/spectrum;

i. Safety;

j. Hygiene and grooming:

Personal and professional health;

k. Professional ethics;

l. Public relations; and

m. State and federal law, administrative rules and standards.

Clock hours may be converted to credit hours using a standard, recognized method of conversion.

61.11(4) The school shall maintain a copy of the curriculum plan for two years after the curriculum plan was taught by the school.

645—61.12(157) Instructors. All instructors in a school of cosmetology arts and sciences shall be licensed by the department.

61.12(1) An instructor teaching a course in electrology, esthetics or nail technology shall also hold a license in that practice or hold a cosmetology instructor’s license that shows proof of having completed training in those practices equivalent to that of a license holder in that practice.

61.12(2) The number of instructors for each school of cosmetology arts and sciences shall be based upon total enrollment, with a minimum of 2 instructors employed on a full–time basis for up to 30 students and an additional instructor for each additional 15 students. The school shall make every effort to have 2 instructors on duty during schoolhours. However, a school operated by an area community college prior to September 1, 1982, with only 1 instructor per 15 students is not subject to this subrule and may continue to operate with the ratio of 1 instructor to 15 students.

61.12(3) An instructor shall:

a. Be responsible for and in direct charge of all theory and practical classrooms and clinics at all times;

b. Familiarize students with the different standard supplies and equipment used in salons;

c. Work on patrons only when instructing or otherwise assisting students in the school; and

d. Not perform cosmetology services, with or without compensation, on the school premises except for demonstration purposes.

645—61.13(157) Student instructors. A student instructor shall be a graduate of an approved school of cosmetology arts and sciences. Each student instructor shall be under the direct supervision of a licensed instructor at all times.

61.14(1) A school of cosmetology arts and sciences shall, prior to the time a student is obligated for payment, inform the student of all provisions provided in Iowa Code section 714.25. The school shall retain a copy of the signed statement for two years following the student’s graduating or leaving the program.

61.14(2) Students shall:

a. Wear clean and neat uniforms at all times during school hours and during the mentoring program;

b. Be supervised by a licensed instructor at all times except in a mentoring program when the students shall be under the guidance of a mentor;

c. Be provided regularly scheduled breaks and a minimum of 30 minutes for lunch;

d. Attend school no more than eight hours a day. Schools may offer additional hours to students who submit a written request for additional hours;

e. Receive no compensation from the school for services performed on clients;

f. Work on the public only after completion of 10 percent of the course of study;

g. Not be called from theory class to work on the public;

h. Not be required to perform janitorial services outside the curriculum course. If a student volunteers the service, the hours shall not count toward the total course hours; and

i. Receive no credit or hours for decorating for marketing or merchandising events or for participating in demonstrations of cosmetology arts and sciences when the sole purpose of the event is to recruit students and is outside the curriculum course.

645—61.15(157) Attendance requirements. A school of cosmetology arts and sciences shall have a written, published attendance policy.

61.15(1) When determining student hours, a school may define its attendance requirements to include 100 percent attendance for the course length or may allow excused absences for not more than 10 percent of the course length for satisfactory completion.

a. Student attendance policies shall be applied uniformly and fairly.

b. Appropriate credit shall be given for all hours earned.

c. All retake tests, projects to be redone and make–up work shall be completed without benefit of additional hours earned and it shall be at the school’s discretion to schedule the time.

d. Hours or credit shall not be added to the accumulative student record as an award, or deducted from the accumulative student record as a penalty.

61.15(2) The school must maintain each student’s attendance records for two years to verify that the minimum attendance standard set by the school is being met.

61.16(1) A school may adopt an accelerated learning policy which includes the acceptance of life experience, prior knowledge learned and test–out procedures.

61.16(2) If the school has an accelerated learning policy, the policy shall be a written, published policy that clearly outlines the criteria for acceptance and hours or credit granted or for test–out procedures. The hours or credit granted for accelerated learning shall not exceed 15 percent of the student’s entire course of study and shall be documented in the participating student’s file.

a. After completion of all entrance requirements, a student may elect to sit for one or more academic written tests to evaluate the knowledge about subject matter gained from life experience or prior learning experience.

b. A student in a cosmetology arts and sciences course of study may be allowed to test out of a subject by sitting for final examinations covering the basic knowledge gained by a student who attends class sessions, or the school may accept and grant hours for prior or concurrent education and life experience.

c. A student who wishes to receive test–out credit or be granted hours for prior or concurrent education or life experience shall have maintained the academic grades and attendance policy standards set by the school.

d. The school may limit the number of times a student is allowed to sit for a test–out examination of a subject.

645—61.17(157) Mentoring program. Each cosmetology school must have a contract between the student, the school and the salon’s mentor that includes scheduling, liability insurance and purpose of the mentoring program.

61.17(1) Students shall not begin the mentoring program until they have completed a minimum of 50 percent of the total contact or credit hours and other requirements of the mentoring program established by the school.

61.17(2) Students may participate in a mentoring program for no more than 5 percent of the total contact or credit hours.

61.17(3) Students shall be under supervision of the mentor at all times. Students may perform the following: drape, shampoo, remove color and perm chemicals, remove perm rods, remove rollers, apply temporary rinses, apply reconditioners and rebuilders with the recommendation of the mentor, remove nail polish, file nails, perform hand and arm massage, remove cosmetic preparations, act as receptionist, handle retail sales, sanitize salon, consult with client (chairside manners), perform inventory, order supplies, prepare payroll and pay monthly bills, and hand equipment to the stylist.

61.17(4) The salon mentor’s responsibilities include the following: introduce the student to the salon and the client, record the time of the student’s attendance in salon, prepare evaluation, discuss performance, and allow the student to shadow.

61.17(5) A salon or school shall not compensate students when participating in the mentoring program.

61.18(1) A student shall be considered a graduate when the student has completed the required course of study and met the minimum attendance standard.

61.18(2) Students shall be given a final examination upon completion of the course of study but before graduation.

61.18(3) After passage of the final examination and completion of the entire course of study including all project sheets, students shall be issued a certificate of completion of hours required for the course of study.

61.19(1) Each school of cosmetology arts and sciences shall maintain a complete set of student records. Individual student hours shall be kept on file at the school for two years following graduation.

61.19(2) Each school shall maintain daily teaching logs for all instructors, which shall be kept on file at the school for two years.

61.20(1) The licensed school of cosmetology arts and sciences shall not be used during scheduled instruction time or work experience time for any use other than for student instruction.

61.20(2) Persons attending other educational classes may not (en masse) pass through a classroom or clinic area while in use.

61.20(3) Noise level must not be disruptive to other classes.

61.20(4) Use of classrooms shall not usurp the space available for cosmetology instruction.

61.21(1) Advertisements shall indicate that all services are performed by students under the supervision of instructors.

61.21(2) A sign shall be clearly displayed in the entrance of the school that indicates in prominent lettering that students perform all services under the supervision of instructors.

These rules are intended to implement Iowa Code chapters 272C and 157.

ITEM 3. Amend subrule 62.1(15) as follows:

62.1(15) Fee for renewal of a school license or change of location of a school teaching cosmetology arts and sciences shall be $225 annually.

ITEM 4. Rescind and reserve subrule 62.1(19).

Pursuant to the authority of Iowa Code section 47.1, the Secretary of State hereby gives Notice of Intended Action to amend Chapter 21, “Election Forms and Instructions,” and Chapter 22, “Alternative Voting Systems,” Iowa Administrative Code.

The Help America Vote Act, a new federal law, requires the use of identifying documents for voters who register by mail after January 1, 2003. Subrule 21.3(3) is amended to conform to the new federal requirements. This amendment is intended to implement Iowa Code section 49.77 and the Help America Vote Act, Section 303.

The Federal Election Commission has revised the standards for performance and testing of voting equipment. In order to keep Iowa’s voting equipment compliant with the current national standards, rule 721—22.2(52) is amended to incorporate the revised standards. This amendment is intended to implement Iowa Code section 52.5.

Any interested person may make written suggestions or comments on these proposed amendments through January 14, 2003. Written suggestions or comments should be directed to Sandy Steinbach, Director of Elections, First Floor, Lucas State Office Building, Des Moines, Iowa 50319.

Persons who wish to convey their views orally shouldcontact the Secretary of State’s office by telephone at (515) 281–5823 or in person at the Secretary of State’s office on the first floor of the Lucas State Office Building, Des Moines, Iowa. Requests for a public hearing must be received by4:30 p.m. on Tuesday, January 14, 2003.

These amendments are intended to implement Iowa Code sections 49.77 and 52.5 and the Help America Vote Act, Section 303.

The following amendments are proposed.

ITEM 1. Rescind subrule 21.3(3) and adopt the following new subrule in lieu thereof:

21.3(3) The following identification documents shall be accepted from persons voting or registering to vote:

a. Current and valid photo identification card; or

b. A copy of a current utility bill, bank statement, government check, paycheck, or other government document that shows the name and address of the voter.

ITEM 2. Amend rule 721—21.3(49), implementation sentence, as follows:

This rule is intended to implement Iowa Code section 49.77(3) and the Help America Vote Act, Section 303.

ITEM 3. Amend rule 721—22.2(52) as follows:

721—22.2(52) Voting system standards. All electronic voting systems and machines approved for use by the Board of Examiners after December 31, 1997 March 26, 2003, shall meet Performance and Test Standards for Punchcard, Marksense, and Direct Recording Electronic Systems Voting Systems Performance and Test Standards, as adopted by the Federal Election Commission January 25, 1990, and as amended April 1990 April 30, 2002. The report of an accredited independent test authority certifying that the system is in compliance with these standards shall be submitted with the application for examination.

This rule is intended to implement Iowa Code section 52.5.

In compliance with Iowa Code chapter 74A and section 12C.6, the committee composed of Treasurer of StateMichael L. Fitzgerald, Superintendent of Credit Unions James E. Forney, Superintendent of Banking Thomas B. Gronstal, and Auditor of State Richard D. Johnson haveestablished today the following rates of interest for public obligations and special assessments. The usury rate forDecember is 6.00%.

INTEREST RATES FOR PUBLIC

OBLIGATIONS AND ASSESSMENTS

74A.2 Unpaid Warrants Maximum 6.0%

74A.4 Special Assessments Maximum 9.0%

RECOMMENDED for 74A.3 and 74A.7: A rate equal to 75% of the Federal Reserve monthly published indices for U.S. Government securities of comparable maturities.

The rate of interest has been determined by a committee of the state of Iowa to be the minimum interest rate that shall be paid on public funds deposited in approved financial institutions. To be eligible to accept deposits of public funds of the state of Iowa, a financial institution shall demonstrate a commitment to serve the needs of the local community in which it is chartered to do business. These needs include credit services as well as deposit services. All such financial institutions are required to provide the committee with a written description of their commitment to provide credit services in the community. This statement is available for examination by citizens.

New official state interest rates, effective December 10, 2002, setting the minimums that may be paid by Iowa depositories on public funds are listed below.

TIME DEPOSITS

7–31 days Minimum 0.80%

32–89 days Minimum 0.90%

90–179 days Minimum 1.00%

180–364 days Minimum 1.10%

One year to 397 days Minimum 1.40%

More than 397 days Minimum 2.00%

These are minimum rates only. The one year and less are four–tenths of a percent below average rates. Public body treasurers and their depositories may negotiate a higher rate according to money market rates and conditions.

Inquiries may be sent to Michael L. Fitzgerald, Treasurer of State, State Capitol, Des Moines, Iowa 50319.

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:

December 1, 2001 — December 31, 2001 6.50%

January 1, 2002 — January 31, 2002 6.75%

February 1, 2002 — February 28, 2002 7.00%

March 1, 2002 — March 31, 2002 7.00%

April 1, 2002 — April 30, 2002 7.00%

May 1, 2002 — May 31, 2002 7.25%

June 1, 2002 — June 30, 2002 7.25%

July 1, 2002 — July 31, 2002 7.25%

August 1, 2002 — August 31, 2002 7.00%

September 1, 2002 — September 30, 2002 6.75%

October 1, 2002 — October 31, 2002 6.25%

November 1, 2002 — November 30, 2002 5.75%

December 1, 2002 — December 31, 2002 6.00%

January 1, 2003 — January 31, 2003 6.00%

Pursuant to Iowa Code sections 476.1, 476.1A, 476.1B, 476.1C, 476.2, 476.9, 476.16, 476.18, 476.71, 476.74, 476.77, and 17A.4 (2001), the Utilities Board (Board) gives notice that on December 6, 2002, the Board issued an order in Docket No. RMU–02–10, In re: Executive Orders No. 8 and 9 Revisions to Chapters 16, 18, 23, 31, 32, 33, and 34, “Order Commencing Rule Making.” The proposed revisions are the result of a review of Board rules required by Executive Orders 8 and 9 issued by Governor Vilsack on September 14, 1999. The executive orders require the Board to conduct a comprehensive review of all agency rules using the criteria of need, clarity, intent, and statutory authority, cost, and fairness, and whether the rules are consistent with the principles contained in Executive Order 9. The order also required the review of any rules routinely waived by the Board to determine if a rule can be redrafted so routine waivers are not necessary.

The procedures used in the review of the chapters listed in the caption and the reasons for the proposed changes are stated in the “Order Commencing Rule Making.” That order can be found on the Board’s Web site at www.state.ia.us/iub.

Pursuant to Iowa Code sections 17A.4(1)“a” and “b,” any interested person may file a written statement of position pertaining to the proposed amendments. The statement must be filed on or before January 31, 2003, by filing an original and ten copies in a form substantially complying with 199 IAC 2.2(2). All written statements should clearly state the author’s name and address and should make specific reference to this docket. All communications should be directed to the

Executive Secretary, Utilities Board, 350 Maple Street, Des Moines, Iowa 50319–0069.

No oral presentation is scheduled at this time. Pursuant to Iowa Code section 17A.4(1)“b,” an oral presentation may be requested or the Board on its own motion after reviewing the statements may determine that an oral presentation should be scheduled.

These amendments are intended to implement Iowa Code sections 476.1, 476.1A, 476.1B, 476.1C, 476.2, 476.9, 476.16, 476.18, 476.71, 476.74, 476.77, and 17A.4.

The following amendments are proposed.

ITEM 1. Amend rule 199—16.1(476) as follows:

16.1(1) Application of rules. These rules shall apply to any utility operating within the state of Iowa under the jurisdiction of the Iowa state utilities board and are made pursuant to Iowa Code chapter 476, subject to the following conditions:

a. If unreasonable hardship to the utility or to a customer results from the application of any rule herein prescribed, application may be made to the board for modification of the rule or the temporary or permanent exemption from its requirements. A utility may request a waiver of any of the rules in this chapter by filing a request for waiver pursuant to 199 IAC 1.3(17A,474,476,78GA,HF2206).

b. The adoption of these rules shall in no way preclude the board from altering or amending them, or from making such modifications with respect to their application as may be found necessary to meet exceptional conditions.

c. These rules shall in no way relieve any utility from any of its duties under the laws of this state.

16.1(2) No change.

ITEM 2. Amend rule 199—16.2(476) as follows:

199—16.2(476) Uniform systems of accounts—electric. The uniform systems of accounts for public utilities and licensees subject to the provisions of the Federal Power Act, parts 18 CFR Part 101 and 104 published in the Federal Energy Regulatory Commission’s rules and regulations, in effect on April 1, 1973, together with amendments thereto issued through February 2, 1977, April 1, 2000, and the January 1, 1978, January 1, 1999, uniform system systems of accounts for rural electric cooperatives prescribed for electric borrowers of the Rural Electrification Administration Rural Utilities Service, as applicable, are adopted with the following modifications:

16.2(1) Definition 7 is changed to read: “‘Commission,’ “Commission” means the Iowa state utilities board except where reference is made to the licensing authority of the Federal Energy Regulatory Commission (as in Definitions 19 and 24) (as in Definitions 22 and 27), where ‘Commission’ Commission shall mean the Federal Energy Regulatory Commission.”

16.2(2) Definition 26 29 is changed to read: “‘Public Utility,’ “Public Utility” means any natural or legal person, or other entity, defined as a public utility and made subject to the authority of the Iowa state utilities board by Iowa Code section 476.1.”

16.2(3) General instruction 1–A of the uniform systems of accounts for electric utilities is changed for Class D electric utilities to read: “Utilities having annual electric operating revenue of less than $150,000.00.”

16.2(4) No change.

16.2(5) General instruction 1–D of the uniform systems of accounts for electric utilities is modified by adding the following sentence: “It is recommended but not required that electric utilities not subject to rate regulation keep all applicable accounts as recommended for Class A, B, C, and D util–ities in accordance with the Federal Energy Regulatory Commission uniform systems of accounts 18 CFR Part 101.”

16.2(6) General instruction 2–D of the uniform systems of accounts for electric utilities is modified by adding the following sentence: “This shall not prohibit the electric utilities from using such additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders providing the board is notified of the nature, amount and purpose of such accounts in the annual report to the board and at such other times as may be requested by the board.”

16.2(7) The definitions for the uniform systems of accounts for electric utilities, when used in account 424, “Promotional Practices,” are modified to include the following definitions:

50. a. The word “affiliate” shall mean any person doing business in this State state who directly or indirectly controls or is controlled by or is under common control with, a public utility.

51. b. The words “appliance or equipment” shall mean any device, including a fixture, which consumes electric energy and any ancillary device required for its operation.

52. c. The word “consideration” shall mean any cash, donation, gift, allowance, rebate, bonds, merchandise (new or used), property (tangible or intangible), labor, service conveyance, commitment, right or other thing of value.

53. d. The word “financing” shall include acquisition of equity or debt interests, loans, guarantee of loans, advances, sale and repurchase agreements, sale and lease back agreements, sales on open account, conditional or installment sales contracts, or other investment or extensions of credit.

54. e. The word “person” shall include an individual, architect, builder, engineer, subdivider, developer, dealer, group, firm, partnership, corporation, cooperative, association, or other organization, but not including state or local political subdivisions or municipal corporations.

55. f. The words “public utility” or “utility” shall include persons defined to be public utilities in Iowa Code section 476.1.

56. g. The words “promotional practices” shall mean any consideration offered or granted by a public utility or its affiliate to any person for the purpose, express or implied, of inducing such person to select or use the service or additional service of such utility, or to select or install any appliance or equipment designed to use such utility service; provided that the words “promotional practices” shall not include the following activities:

(a)(1) Providing repairs and service to appliances or equipment of customers of a public utility in an emergency or to restore service or to prevent hazardous conditions or service interruptions.

(b)(2) Inspection and adjustment of appliances or equipment by a public utility.

(c)(3) Repairs and other maintenance to appliances or equipment by a public utility that could be performed by an independent appliance dealer or service shop if charges are at cost or above.

(d)(4) Providing service, wiring, piping, appliances, or equipment in accordance with tariffs, rules or regulations of a public utility on file with and approved by the board.

(e)(5) Providing appliances, equipment or instructional services to an educational institution for the purpose of instructing students in the use or repair of such appliances or equipment.

(f)(6) Providing discounts or financing employees of a public utility to encourage their use of the utility’s service.

(g)(7) Merchandising and related inventorying of appliances or equipment for sale at retail and making and ful–filling reasonable warranties against defects in material and workmanship in appliances or equipment existing at the time of delivery; the elimination of hazardous conditions which due to a grandfather provision would not be corrected by the customer and yet would require correction to protect the public and minimize company liability.

(h)(8) The replacement or alterations to a customer’s obsolete or inefficient system.

(i)(9) Technical, informational, or educational assistance offered to persons on the use of energy furnished by a public utility or on the use of maintenance of appliances or equipment.

(j)(10) Lunches, gifts, door prizes, etc., presented for attendance at informational meetings, conferences, etc., valued at $10 or less shall not be considered to be a promotional practice.

(k)(11) Providing appliances or equipment incidental to exhibitions, demonstrations, tests or experiments of reasonable duration.

(l)(12) Any promotional practice, or program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199 IAC 35 199-Chapter 35.

16.2(8) The uniform systems of accounts for electric utilities are modified to include the following:

424 Promotional Practices a. 424 Promotional Practices. This account shall include the cost of labor, materials used, and expenses or losses incurred by the utility or an affiliate (where such costs are charged back to the company) on promotional practices. Promotional practices, or programs which include promotional practices, and the labor, materials, and expenses related to promotional practices, which are exempted by subrule 16.7(2) need not be included in this account. The account shall include, but not be limited to, the following items:

A. (1) The financing of land or the construction of any building when same is not owned or otherwise possessed by the utility or its affiliate without Board board written approval.

B. (2) The furnishing of consideration to any person for work done or to be done on property not owned or otherwise possessed by the utility or its affiliate, except for the following: Studies to determine comparative capital or operating costs and expenses, or to show the desirability and feasibility of selecting one form of energy over another, contributions for research and development of new energy sources, etc.

C. (3) The acquisition from any person of any tangible or intangible property or service for a consideration in excess of the value thereof or the furnishing to any person of any tangible property or service for a consideration of less than the value thereof. “Value” in this instance is defined as the fair market price of the property or service under competitive market conditions and under arm’s length conditions.

D. (4) The furnishing of consideration to any person for the sale, installation, or use of appliances or equipment of one form of energy over another. Employees who are paid a commission in lieu of salary for the initial sale of appliances are exempted.

E. (5) The provision of free, or at less than cost or value, wiring, piping, appliances, or equipment to any person; provided that a utility, engaged in an appliance merchandising sales program, shall not be precluded from conducting legitimate closeouts of appliances, clearance sales, or sales of damaged or returned appliances. All items required by service rules of this Board board are exempted.

F. (6) The provision of free, or at less than cost or value, installation, operation, repair, modification or maintenance of appliances, equipment, wiring or piping to any person. This would not include services provided for the convenience and safety of customers such as gas leak testing, lighting of furnaces, etc.

G. (7) The granting of a trade–in allowance on the purchase of any appliance or equipment in excess of the reasonable value of the trade–in based on the past experience of a company or the granting of a trade–in allowance for such appliance or equipment when such allowance varies by the type of energy consumed in the trade–in.

H. (8) The financing of the acquisition of any appliance or equipment at a rate of interest or on terms significantly more favorable than those generally applicable to sales by nonutility dealers in such appliances or equipment.

I. (9) The furnishing of consideration to any person for any advertising or publicity purpose of such person, except where appropriately classified to another account.

J. (10) The guaranteeing of the maximum cost of electric utility service, except under published tariffs.

1. Salary of employees engaged directly or indirectly in promotional practices defined.

2. Clerical and stenographic work performed in relation to promotional practices.

3. Fees paid to consultants, agents, attorneys, etc., on related promotional practices.

(12) Materials and expenses related to promotional practices: Materials and Expenses: (Related to Promotional Practices)

4. 1. Amounts spent on postage, office supplies, displays, posters, exhibits, etc.

5. 2. Films, movies, photographs prepared for promotional activities.

6. 3. Expenses paid such as lodging, food, entertainment expenses.

7. 4. Transportation by company auto or plane and public transportation of any mode.

426 Miscellaneous Income Deductions b. 426 Miscellaneous Income Deductions. Immediately following the current text and item list add the following:

7. (1) Promotional advertising expenses.

8. (2) Institutional or goodwill advertising expenses.

9. (3) Rate justification advertising expenses.

426.4 Political Advertising Expenses c. 426.4 Political Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising whether on a national, regional, or local basis, which are designed to influence public opinion with respect to the election or appointment of public officials or the adoption, repeal, revocation, or modification of referenda, legislation, or ordinances. The account shall also include expenditures for influencing the decisions of public officials not including such expenditures, which are directly related to appearances before regulatory or other governmental bodies in connection with the utility’s existing or proposed operations.

B. (2) Entries relating to political advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where political advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary, which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“c.”

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting promotional motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Material and expenses related to political advertising: Materials and Expenses: (Related to Political Advertising)

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Novelties for general distribution.

10. 5. Postage on direct–mail advertising.

11. 6. Printing of booklets, dodgers, bulletins, etc.

12. 7. Supplies and expenses in preparing advertising materials.

13. 8. Office supplies and expenses.

NOTE NOTE: Franchise advertising and related expenses shall be charged to account 913.5. See paragraph 16.2(8)“l” or FERC account 302.

426.7 Promotional Advertising Expenses d. 426.7 Promotional Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising designed to promote or retain the use of utility service, except (1) advertising the sale of merchandise, (2) load factor advertising, or (3) advertising which is part of a promotional practice, or a program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199 IAC 35 199—Chapter 35.

B. (2) Entries relating to promotional advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where promotional advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“d.”

1. Direct supervision of advertising activities.

2. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Advertising matters such as posters, bulletins, booklets, and related items.

9. 3. Fees and expenses of advertising agencies and commercial artists.

10. 4. Novelties for general distribution.

11. 5. Postage on direct–mail advertising.

12. 6. Premiums distributed generally, such as recipe books, etc., when not offered as inducement to purchase appliances.

13. 7. Printing of booklets, dodgers, bulletins, etc.

14. 8. Supplies and expenses in preparing advertising materials.

15. 9. Office supplies and expenses.

NOTE A NOTE A: The cost of advertisements, which sets forth the value or advantages of utility service (without reference to specific appliances or if reference is made to appliances from dealers or refers to appliances not carried for sale by the utility), shall be considered sales promotion advertising and charged to this account. However, advertisements which are limited to specific makes of appliances sold by the utility and prices, terms, etc., thereof, without referring to the value or advantages of utility service, shall be considered as merchandise advertising, and the cost shall be charged to FERC account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work.

NOTE B NOTE B: • Advertisements which substantially mention or refer to the value or advantages of utility service, together with specific reference to makes or appliances sold by the utility and the price, terms, etc., thereof, and designed for the joint purpose of increasing the use of utility service and the sales of appliances, shall be considered as a combination advertisement, and the costs shall be distributed between this account and FERC account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work, on the basis of space, time, or other proportional factors.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising which is designed to create, enhance, or sustain the utility’s image or goodwill to the general public or its customers.

B. (2) Entries relating to institutional or goodwill advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

C. (3) Where institutional or goodwill advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“e.”

(4) Labor items related to institutional or goodwill advertising: Labor: (Related to Institutional or Goodwill Advertising)

1. Supervision of advertising activities.

2. Preparing material for newspapers, periodicals, billboards, etc., and preparing or conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Advertising matters such as posters, bulletins, booklets, and related items.

9. 3. Fees and expenses of advertising agencies and commercial artists.

10. 4. Postage on direct–mail advertising.

11. 5. Printing of booklets, dodgers, bulletins, etc.

12. 6. Supplies and expenses in preparing advertising materials.

13. 7. Office supplies and expenses.

14. 8. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Pronouncements primarily lauding the utility or the area or community it serves.

(b) • Advertising activities to inform the ratepayers of the social and economic advantages or status of the area or community it serves.

(c) • Advertising activities to inform the public of the utility’s participation in programs to improve the economic condition of the area or community it serves.

(d) • Advertising activities to inform the public of the utility’s role of good citizenship.

(e) • Information and routine data supplied by the utility to local governments, planning agencies, civic groups, businesses, and the general public which is not inclusive in account 909.3, Informational Consumer Advertising Expenses. See paragraph 16.2(8)“i.”

(f) • Advertising activities to inform the public of the utility’s consciousness of, or involvement in, health, safety, conservation, or environmental programs, except as included in accounts 909.1, 909.2, and 909.3.

426.9 Rate Justification Advertising Expenses f. 426.9 Rate Justification Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising, whether on a regional or local basis which is designed to promote public acceptance of utility rate increases or the utility’s filed rates. The account shall also include all costs incurred by the utility for advertising in opposition to the decision of the regulatory agency. However, the expenses associated with simply informing customers that new rates have been requested shall be recorded in FERC account 928, Regulatory Commission Expenses.

B. (2) Entries relating to rate justification advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

C. (3) Where advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“f.”

(4) Labor items related to rate justification advertising: Labor: (Related to Rate Justification Advertising)

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Postage on direct–mail advertising.

10. 5. Printing of booklets, dodgers, bulletins, etc.

11. 6. Supplies and expenses in preparing advertising materials.

12. 7. Office supplies and expenses.

909.1 Conservation Advertising Expenses g. 909.1 Conservation Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily inform the customer of the reasons for and methods whereby energy may be conserved and energy consumption reduced by the consumer. Include in this account advertising activity relating to the electric utility which is related directly to company’s provision of service to the customer during energy, fuel, and related shortages.

B. (2) Entries relating to conservation advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

C. (3) Where conservation advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“g.”

(4) Labor items related to conservation advertising: Labor: (Related to Conservation Advertising)

1. Direct supervision of advertising activities.

2. Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparation of booklets, bulletins, etc., used in direct mail.

4. Preparation of window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Material and expenses related to conservation advertising: Materials and Expenses: (Related to Conservation Advertising)

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Instructions in the proper use of equipment owned by the utility or the customer, which will result in less consumption of energy.

(b) • Advertising designed to convince consumers to turn down thermostats, turn off lights when not in use, and turn off appliances, television sets, etc., when not in use.

909.2 Environmental Advertising Expenses h. 909.2 Environmental Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily are designed to inform the public concerning the methods by which customers can participate with the utility in preserving and improving the environment. However, advertising which is primarily designed to laud the utility’s achievements or projects purporting to preserve or enhance the environment, shall be recorded in account 426 (subaccount 8). 426.8, paragraph 16.2(8)“e.”

B. (2) Entries relating to environmental advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

C. (3) Where environmental advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“h.”

(4) Labor items related to environmental advertising: Labor: (Related to Environmental Advertising)

1. Direct supervision of advertising activities.

2. Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparation of booklets, bulletins, etc., used in direct mail.

4. Preparation of window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Material and expenses related to environmental advertising: Materials and Expenses: (Related to Environmental Advertising)

7. 1. Advertising in newspapers, periodicals, billboards, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

909.3 Informational Consumer Advertising Expens–es i. 909.3 Informational Consumer Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily convey information as to what the utility urges or suggests customers should do in utilizing electric service to protect their health and safety, to utilize their electric equipment safely and economically.

B. (2) Entries relating to informational advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where informational advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“i.”

1. Direct supervision of advertising activities.

2. Preparing materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Instructions in the proper use of equipment owned by the utility or the customer which make use of the utility’s service.

(b) • Information as to new rates, billing practices, new inspection, or meter–reading schedules.

(c) • Notification of emergency conditions and procedures to be followed during the emergency.

(d) • Advice concerning hazards associated with the utility’s electric service.

NOTE: (6) Exclude from this account and charge to FERC account 930 930.2, Miscellaneous General Expenses, the cost of publication of stockholder reports, dividend notices, bond redemption notices, financial statements, and other notices of a general corporate character. Also, exclude all expenses of promotional, institutional, or goodwill, and political advertising. (See account 426.7, Promotional Advertising Expenses; account 426.8, Institutional or Goodwill Advertising Expenses; and account 426.4, Political Advertising Expenses. See paragraphs 16.2(8)“c,” 16.2(8)“d,” and 16.2(8)“e,” which refer to accounts 426.4, Political Advertising Expenses, 426.7, Promotional Advertising Expenses, and 426.8, Institutional or Goodwill Advertising Expenses, respectively.

Advertising expense directly related to obtaining a franchise or renewing an old franchise shall be charged to FERC account 302, Franchise and Consents. Such amounts shall be maintained in a separate subaccount for ready identification.

Advertising expense directly related to securing of new debt financing shall be charged to FERC account 181, Unamortized Debt Discount and Expense. Such amounts shall be maintained in a separate subaccount for ready identification.

Advertising expense directly related to securing of new equity financing shall be charged to FERC account 214, Capital Stock Expense. Such amounts shall be maintained in a separate subaccount for ready identification.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities designed to improve load factor so that plant and equipment already installed can be operated more efficiently and to a greater degree of capability, thereby resulting in lower overall costs to the consumer.

B. (2) This shall include advertising expenditures which are designed to further industrial and commercial development of the company’s service area.

C. (3) Entries relating to load factor advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

D. (4) Where load factor advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa electric utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.2(8)“j.”

1. Direct supervision of advertising activities.

2. Preparation of advertising materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparation of booklets, bulletins, etc., used in direct mail.

4. Preparation of window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

Below is an example of the advertising to be included in this account:

(a) • Encouragement for manufacturers to go to night operations.

913 Advertising Expenses k. Advertising Expenses— FERC Account 913. Delete the entire current text of this account FERC account 913 and add the following subaccount : 913.5, franchise advertising expenses.

A. (1) This account shall include only reasonable advertising expenditures for the purpose of obtaining approval, modification, or revocation of franchises.

B. (2) Entries relating to reasonable franchise advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising matter shall be readily available to staff, the consumer advocate or any party involved in a discovery proceeding.

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Novelties for general distribution.

10. 5. Postage on direct–mail advertising.

11. 6. Printing of booklets, bulletins, etc.

12. 7. Supplies and expenses in preparing advertising materials.

13. 8. Office supplies and expenses.

930 Miscellaneous General Expenses l. Miscellaneous General Expenses—FERC Account 930.2.

16.2(9) Accounts FERC account 421.1 or 421.2 as they are it is defined and exist exists in the uniform system systems of accounts, shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property, including land and land rights, unless otherwise authorized or required by the Board board for good cause shown.

16.2(10) Account FERC account 105 of the uniform systems of accounts Section 18 CFR Part 101 is modified in subparagraph “D” by deleting the following language: “in accounts account 411.6 or 411.7, as appropriate except when determined to be significant by the Board board. Upon such a determination, the amounts shall be transferred to account 256, Deferred Gains from Disposition of Utility Plant, or account 187, Deferred Losses from Disposition of Utility Plant, and amortized to accounts 411.6, Gains from Disposition of Utility Plant, or 411.7, Losses from Disposition of Utility Plant, as appropriate” and substituting in lieu thereof: “in accounts 421.1 or 421.2, as appropriate unless otherwise authorized or required by the board for good cause shown.”

ITEM 3. Amend rule 199—16.3(476) as follows:

199—16.3(476) Uniform systems of accounts—gas. The uniform systems of accounts for natural gas companies subject to the provisions of the Natural Gas Act, parts 18 CFR Part 201 and 204 published in the Federal Energy Regulatory Commission’s rules and regulations, in effect on May 29, 1974, together with amendments thereto issued through February 2, 1977, are April 1, 2002, is adopted with the following modifications:

16.3(1) Definition 7 is changed to read: “‘Commission,’ “Commission” means the Iowa state utilities board except where reference is made to the authority of the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act and where the Iowa state utilities board does not have the same or similar authority under Iowa Code chapter 476, where “Commission” shall mean Federal Energy Regulatory Commission.” FERC.

16.3(2) Definition 19 22 is changed to read: “‘Natural gas company,’“Natural gas company” means a person furnishing gas by piped distribution system to the public for compensation.”

16.3(3) General instruction 1–A of the uniform systems of accounts for gas utilities is changed for Class D gas utilities to read: “Utilities having annual gas operating revenues of less than $150,000.00.”

16.3(4) No change.

16.3(5) General instruction 1–D of the uniform systems of accounts for gas utilities is modified by adding the following sentence: “It is recommended but not required that gas utilities not subject to rate regulation keep all applicable accounts as recommended for Class A, B, C and D gas utilities in accordance with the FERC uniform systems of accounts 18 CFR Part 201.”

16.3(6) No change.

16.3(7) The definitions for the uniform systems of accounts for gas utilities, when used in account 424, “Promotional Practices,” are modified to include the following definitions:

50. a. The word “affiliate” shall mean any person doing business in this State state who directly or indirectly controls or is controlled by or is under common control with, a public utility.

51. b. The words “appliance or equipment” shall mean any device, including a fixture, which consumes electric energy and any ancillary device required for its operation.

52. c. The word “consideration” shall mean any cash, donation, gift, allowance, rebate, bonds, merchandise (new or used), property (tangible or intangible), labor, service conveyance, commitment, right or other thing of value.

53. d. The word “financing” shall include acquisition of equity or debt interests, loans, guarantee of loans, advances, sale and repurchase agreements, sale and lease–back agreements, sales on open account, conditional or installment sales contracts, or other investment or extensions of credit.

54. e. The word “person” shall include any individual, architect, builder, engineer, subdivider, developer, dealer, group, firm, partnership, corporation, cooperative, association, or other organization, but not including state or local political subdivisions or municipal corporations.

55. f. The words “public utility” or “utility” shall include persons defined to be public utilities in Iowa Code section 476.1.

56. g. The words “promotional practices” shall mean any consideration offered or granted by a public utility or its affiliate to any person for the purpose, express or implied, of inducing such person to select or use the service or additional service of such utility, or to select or install any appliance or equipment designed to use such utility service; provided that the words “promotional practices” shall not include the following activities:

(a)(1) Providing repairs and service to appliances or equipment of customers of a public utility in an emergency or to restore service or to prevent hazardous conditions or service interruptions.

(b)(2) Inspection and adjustment of appliances or equipment by a public utility.

(c)(3) Repairs and other maintenance to appliances or equipment by a public utility that could be performed by an independent appliance dealer or service shop if charges are at cost or above.

(d)(4) Providing service, wiring, piping, appliances, or equipment in accordance with tariffs, rules or regulations of a public utility on file with and approved by the board.

(e)(5) Providing appliances, equipment or instructional services to an educational institution for the purpose of instructing students in the use or repair of such appliances or equipment.

(f)(6) Providing discounts or financing to employees of a public utility to encourage their use of the utility’s service.

(g)(7) Merchandising and related inventory of appliances or equipment for sale at retail and making and fulfilling reasonable warranties against defects in material and workmanship in appliances or equipment existing at the time of delivery; the elimination of hazardous conditions which due to a grandfather provision would not be corrected by the customer and yet would require correction to protect the public and minimize company liability.

(h)(8) The replacement of or alterations to a customer’s obsolete or inefficient system.

(i)(9) Technical, informational, or educational assistance offered to persons on the use of energy furnished by a public utility or on the use of maintenance of appliances or equipment.

(j)(10) Lunches, gifts, door prizes, etc., presented for attendance at informational meetings, conferences, etc., valued at $10 or less shall not be considered to be a promotional practice.

(k)(11) Providing appliances or equipment incidental to exhibitions, demonstrations, tests or experiments of reasonable duration.

(l)(12) Any promotional practice, or program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency.

16.3(8) The uniform systems of accounts for gas utilities are modified to include the following:

424 Promotional practices a. 424 Promotional Practices. This account shall include the cost of labor, materials used, and expenses or losses incurred by the utility or an affiliate (where such costs are charged back to the company) on promotional practices. Promotional practices, or programs which include promotional practices, and the labor, materials, and expenses related to promotional practices, which are exempted by subrule 16.7(2) need not be included in this account. The account shall include, but not be limited to, the following items:

A. (1) The financing of land or the construction of any building when same is not owned or otherwise possessed by the utility or its affiliate without Board board written approval.

B. (2) The furnishing of consideration to any person for work done or to be done on property not owned or otherwise possessed by the utility or its affiliate, except for the following: Studies to determine comparative capital or operating costs and expenses, or to show the desirability and feasibility of selecting one form of energy over another, contributions for research and development of new energy sources, etc.

C. (3) The acquisition from any person of any tangible or intangible property or service for a consideration in excess of the value thereof or the furnishing to any person of any tangible property or service for a consideration of less than the value thereof. “Value” in this instance is defined as the fair market price of the property or service under competitive market conditions and under arm’s length conditions.

D. (4) The furnishing of consideration to any person for the sale, installation, or use of appliances or equipment of one form of energy over another. Employees who are paid a commission in lieu of salary for the initial sale of appliances are exempted.

E. (5) The provision of free, or at less than cost or value, wiring, piping, appliances, or equipment to any person; provided that a utility, engaged in an appliance merchandising sales program, shall not be precluded from conducting legitimate closeouts of appliances, clearance sales, or sales of damaged or returned appliances. All items required by service rules of this Board board are exempted.

F. (6) The provision of free, or at less than cost or value, installation, operation, repair, modification or maintenance of appliances, equipment, wiring or piping to any person. This would not include services provided for the convenience and safety of customers such as gas leak testing, lighting of furnaces, etc.

G. (7) The granting of a trade–in allowance on the purchase of any appliance or equipment in excess of the reasonable value of the trade–in based on the past experience of a company or the granting of a trade–in allowance for such appliance or equipment when such allowance varies by the type of energy consumed in the trade–in.

H. (8) The financing of the acquisition of any appliance or equipment at a rate of interest or on terms significantly more favorable than those generally applicable to sales by nonutility dealers in such appliances or equipment.

I. (9) The furnishing of consideration to any person for any advertising or publicity purpose of such person, except where appropriately classified to another account.

J. (10) The guaranteeing of the maximum cost of gas utility service, except under published tariffs.

(11) Labor items related to promotional practices: Labor: (Related to Promotional Practices)

1. Salary of employees engaged directly or indirectly in promotional practices defined.

2. Clerical and stenographic work performed in relation to promotional practices.

3. Fees paid to consultants, agents, attorneys, etc., on related promotional practices.

4. 1. Amounts spent on postage, office supplies, displays, posters, exhibits, etc.

5. 2. Films, movies, photographs prepared for promotional activities.

6. 3. Expenses paid such as lodging, food, entertainment expenses.

7. 4. Transportation by company auto or plane and public transportation of any mode.

426 Miscellaneous Income Deductions b. 426 Miscellaneous Income Deductions. Immediately following the current text and item list add the following:

7. (1) Promotional advertising expenses.

8. (2) Institutional or goodwill advertising expenses.

9. (3) Rate justification advertising expenses.

426.4 Political Advertising Expenses c. 426.4 Political Advertising Expenses.

A. (1) Account 426.4 pertains to items in subparagraph 16.3(8)“a”(12)“1” and paragraph 16.3(8)“b”listed above. This account shall include the cost of labor, materials used, and expenses incurred in advertising whether on a national, regional, or local basis, which are designed to influence public opinion with respect to the election or appointment of public officials or the adoption, repeal, revocation, or modification of referenda, legislation, or ordinances. The account shall also include expenditures for influencing the decisions of public officials not including such expenditures which are directly related to appearances before regulatory or other governmental bodies in connection with the utility’s existing or proposed operations.

B. (2) Entries relating to political advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where political advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“c.”

(4) Labor items related to political advertising: Labor: (Related to Political Advertising)

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting promotional motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Novelties for general distribution.

10. 5. Postage on direct–mail advertising.

11. 6. Printing of booklets, dodgers, bulletins, etc.

12. 7. Supplies and expenses in preparing advertising materials.

13. 8. Office supplies and expenses.

NOTE NOTE: Franchise advertising and related expenses shall be charged to account 913.5 shown in paragraph 16.3(8)“j” or FERC account 302.

426.7 Promotional Advertising Expenses d. 426.7 Promotional Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising designed to promote or retain the use of utility service, except (1) advertising the sale of merchandise, (2) load factor advertising, or (3) advertising which is part of a promotional practice, or a program which includes a promotional practice, designed to develop or implement programs that promote energy efficiency and are part of the utility’s energy efficiency plan developed pursuant to 199 IAC 35 199—Chapter 35.

B. (2) Entries relating to promotional advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where promotional advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“d.”

1. Direct supervision of advertising activities.

2. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Advertising matters such as posters, bulletins, booklets, and related items.

9. 3. Fees and expenses of advertising agencies and commercial artists.

10. 4. Novelties for general distribution.

11. 5. Postage on direct–mail advertising.

12. 6. Premiums distributed generally, such as recipe books, etc., when not offered as inducement to purchase appliances.

13. 7. Printing of booklets, dodgers, bulletins, etc.

14. 8. Supplies and expenses in preparing advertising materials.

15. 9. Office supplies and expenses.

NOTE A NOTE A: The cost of advertisements, which sets set forth the values or advantages of utility service (without reference to specific appliances or if reference is made to appliances from dealers or refers to appliances not carried for sale by the utility), shall be considered sales promotion advertising and charged to this account. However, advertisements which are limited to specific makes of appliances sold by the utility and prices, terms, etc., thereof, without referring to the value or advantages of utility service, shall be considered as merchandise advertising, and the cost shall be charged to account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work.

NOTE B NOTE B: Advertisements which substantially mention or refer to the value or advantages of utility service, together with specific reference to makes or appliances sold by the utility and the price, terms, etc., thereof, and designed for the joint purpose of increasing the use of utility service and the sales of appliances, shall be considered as a combination advertisement, and the costs shall be distributed between this account and account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work, on the basis of space, time, or other proportional factors.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising which is designed to create, enhance, or sustain the utility’s image or goodwill to the general public or its customers.

B. (2) Entries relating to institutional or goodwill advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where institutional or goodwill advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“e.”

1. Supervision of advertising activities.

2. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Advertising matters such as posters, bulletins, booklets, and related items.

9. 3. Fees and expenses of advertising agencies and commercial artists.

10. 4. Postage on direct–mail advertising.

11. 5. Printing of booklets, dodgers, bulletins, etc.

12. 6. Supplies and expenses in preparing advertising materials.

13. 7. Office supplies and expenses.

14. 8. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Pronouncements primarily lauding the utility or the area or community it serves.

(b) • Advertising activities to inform the ratepayers of the social and economic advantages or status of the area or community it the utility serves.

(c) • Advertising activities to inform the public of the utility’s participation in programs to improve the economic condition of the area or community it serves.

(d) • Advertising activities to inform the public of the utility’s role of good citizenship.

(e) • Information and routine data supplied by the utility to local governments, planning agencies, civic groups, businesses, and the general public which is are not inclusive in account 909.3, Informational Consumer Advertising Expenses. See paragraph 16.3(8)“i.”

(f) • Advertising activities to inform the public of the utility’s consciousness of, or involvement in, health, safety, conservation, or environmental programs, except as included in accounts 909.1, 909.2 and 909.3. See paragraphs 16.3(8)“g,” 16.3(8)“h,” and 16.3(8)“i,” respectively.

426.9 Rate Justification Advertising Expenses f. 426.9 Rate Justification Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising, whether on a regional or local basis, which is designed to promote public acceptance of utility rate increases or the utility’s filed rates. The account shall also include all costs incurred by the utility for advertising in opposition to the decision of the regulatory agency. However, the expenses associated with simply informing customers that new rates have been requested shall be recorded in FERC account 928, Regulatory Commission Expenses.

B. (2) Entries relating to rate justification advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in 16.3(8)“f.”

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Postage on direct–mail advertising.

10. 5. Printing of booklets, dodgers, bulletins, etc.

11. 6. Supplies and expenses in preparing advertising materials.

12. 7. Office supplies and expenses.

909.1 Conservation Advertising Expenses g. 909.1 Conservation Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily inform the customer of the reasons for and methods whereby energy may be conserved and energy consumption reduced by the consumer. Include in this account advertising activity relating to the gas utility, which is related directly to company’s provision of service to the customer during energy, fuel, and related shortages.

B. (2) Entries relating to conservation advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where conservation advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account, shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“g.”

1. Direct supervision of advertising activities.

2. Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparation of booklets, bulletins, etc., used in direct mail.

4. Preparation of window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Materials and expenses related to conservation advertising: Materials and Expenses: (Related to Conservation Advertising)

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Instructions in the proper use of equipment owned by the utility or the customer which will result in less consumption of energy.

(b) • Advertising designed to convince consumers to turn down thermostats, turn off appliances, etc., when not in use.

909.2 Environmental Advertising Expenses h. 909.2 Environmental Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily are designed to inform the public concerning the methods by which customers can participate with the utility in preserving and improving the environment. However, advertising which is primarily designed to laud the utility’s achievements or projects purporting to preserve or enhance the environment shall be recorded in account 426 (subaccount 8). 426.8, paragraph 16.2(8)“e.”

B. (2) Entries relating to environmental advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where environmental advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expenses for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“h.”

(4) Labor items related to environmental advertising: Labor: (Related to Environmental Advertising)

1. Direct supervision of advertising activities.

2. Preparation of materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparation of booklets, bulletins, etc., used in direct mail.

4. Preparation of window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Materials and expenses related to environmental advertising: Materials and Expenses: (Related to Environmental Advertising)

7. 1. Advertising in newspapers, periodicals, billboards, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

909.3 Informational Consumer Advertising Expen–ses i. 909.3 Informational Consumer Advertising Expenses.

A. (1) This account shall include the cost of labor, materials used, and expenses incurred in advertising activities which primarily convey information as to what the utility urges or suggests customers should do in utilizing gas service to protect their health and safety, and to utilize their gas equipment safely and economically.

B. (2) Entries relating to informational advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising message shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

C. (3) Where informational advertising is undertaken by an association on behalf of its members or by a holding company on behalf of its subsidiaries, the amount of expense for such advertising charged to any member or subsidiary which is an Iowa gas utility and included in this account shall be determined in accordance with the text of this account as set forth herein. in paragraph 16.3(8)“i.”

(4) Labor items related to informational consumer advertising: Labor: (Related to Informational Consumer Advertising)

1. Direct supervision of advertising activities.

2. Preparing materials for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

3. Preparing booklets, bulletins, etc., used in direct mail.

4. Preparing window and other displays.

5. Clerical and stenographic work.

6. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(5) Materials and expenses related to informational consumer advertising: Materials and Expenses: (Related to Informational Consumer Advertising)

7. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

8. 2. Fees and expenses of advertising agencies and commercial artists.

9. 3. Postage on direct–mail advertising.

10. 4. Printing of booklets, dodgers, bulletins, etc.

11. 5. Supplies and expenses in preparing advertising materials.

12. 6. Office supplies and expenses.

13. 7. Novelties for general distribution.

Below are examples of the advertising to be included in this account:

(a) • Instructions in the proper use of equipment owned by the utility or the customer which make use of the utility’s service.

(b) • Information as to new rates, billing practices, new inspection, or meter–reading schedules.

(c) • Notification of emergency conditions and procedures to be followed during the emergency.

(d) • Advice concerning hazards associated with the utility’s gas service.

NOTE: (6) Exclude from this account and charge to FERC account 930 930.2, Miscellaneous General Expenses, the cost of publication of stockholder reports, dividend notices, bond redemption notices, financial statements, and other notices of a general corporate character. Also, exclude all expenses of promotional, institutional, or goodwill, and poli–tical advertising. (See account 426.7, Promotional Advertising Expenses; account 426.8, Institutional or Goodwill Advertising Expenses; and account 426.4, Political Advertising Expenses. See paragraphs 16.3(8)“c,” 16.3(8)“d,” and 16.3(8)“e,” which refer to accounts 426.4, Political Advertising Expenses, 426.7, Promotional Advertising Expenses, and 426.8, Institutional or Goodwill Advertising Expenses, respectively.

Advertising expense directly related to obtaining a franchise or renewing an old franchise shall be charged to FERC account 302, Franchise and Consents. Such amounts shall be maintained in a separate subaccount for ready identification.

Advertising expense directly related to securing of new debt financing shall be charged to FERC account 181, Unamortized Debt Discount and Expense. Such amounts shall be maintained in a separate subaccount for ready identification.

Advertising expense directly related to securing of new equity financing shall be charged to FERC account 214, Capital Stock Expense. Such amounts shall be maintained in a separate subaccount for ready identification.

A. (1) This account shall include only reasonable advertising expenditures for the purpose of obtaining approval, modification, or revocation of franchises.

B. (2) Entries relating to reasonable franchise advertising included in this account shall contain or refer to supporting documents which identify the specific advertising message. If references are used, copies or scripts of the advertising matter shall be readily available to staff, the consumer advocate, or any party involved in a discovery proceeding.

(3) Labor items related to franchise advertising: Labor: (Related to Franchise Advertising)

1. Preparing material for newspapers, periodicals, billboards, etc., and preparing and conducting motion pictures, radio, and television programs.

2. Preparing booklets, bulletins, etc., used in direct mail.

3. Preparing window and other displays.

4. Clerical and stenographic work.

5. Investigating advertising agencies and media and conducting negotiations in connection with the placement and subject matter of advertising.

(4) Materials and expenses related to franchise advertising: Materials and Expenses: (Related to Franchise Advertising)

6. 1. Advertising in newspapers, periodicals, billboards, radio, etc.

7. 2. Advertising matters such as posters, bulletins, booklets, and related items.

8. 3. Fees and expenses of advertising agencies and commercial artists.

9. 4. Novelties for general distribution.

10. 5. Postage on direct–mail advertising.

11. 6. Printing of booklets, bulletins, etc.

12. 7. Supplies and expenses in preparing advertising materials.

13. 8. Office supplies and expenses.

16.3(9) Accounts FERC account 421.1 or 421.2 as they are it is defined and exist exists in the uniform system systems of accounts, shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property, including land and land rights, unless otherwise authorized or required by the board for good cause shown.

16.3(10) Accounts Accounts 105 and 105.1 of the uniform system systems of accounts Section 18 CFR Part 201 are modified in subparagraph “D” by deleting the following language: “in FERC account 411.6 or 411.7, as appropriate except when determined to be significant by the Board board. Upon such a determination, the amounts shall be transferred to FERC account 256, Deferred Gains from Disposition of Utility Plant, or FERC account 187, Deferred Losses from Disposition of Utility Plant, and amortized to accounts FERC account 411.6, Gains from Disposition of Utility Plant, or FERC account 411.7, Losses from Disposition of Utility Plant, as appropriate” and substituting in lieu thereof: “in accounts FERC account 421.1 or 421.2, as appropriate, unless otherwise authorized or required by the board for good cause shown.”

ITEM 4. Amend rule 199—16.4(476) as follows:

199—16.4(476) Uniform systems of accounts—water. The 1973 1996 uniform systems of accounts for Class A, B, C, and D A, B, and C water utilities published by the National Association of Regulatory Utility Commissioners (NARUC) uniform systems of accounts are adopted with the following modifications:

16.4(1) General instruction 2–D of the Accounting instruction 2–D of the NARUC uniform systems of accounts for water utilities is modified by adding the sentence: “This shall not prohibit water utilities from using such additional accounts as they are required or permitted to keep for their reporting to other regulatory authorities or to their stockholders, providing the board is notified of the nature, amount and purpose of such accounts in the annual report to the board and at such other times as may be requested by the board.”

16.4(2) Account 422 414, as defined and existing in the NARUC uniform system systems of accounts 414.A, shall be used to account for the gain or loss on the sale, conveyance, exchange, or transfer of utility or other property to another, unless otherwise authorized or required by the board for good cause shown.

ITEM 5. Amend rule 199—18.1(476) as follows:

199—18.1(476) Definitions. The following words and terms, when used in these rules this chapter, shall have the meaning meanings shown below:

a. “FPC FERC rules” are the rules and regulations of the Federal Energy Regulatory Commission under the Federal Power Act and Natural Gas Act as published in the Code of Federal Regulations (CFR).

b. “FCC rules” are the rules and regulations of the Federal Communications Commission under the Communications Act of 1934 as published in the Code of Federal Regulations (CFR) CFR.

c. “NARUC rules” are the rules and regulations published by the National Association of Regulatory Utility Commissioners.

d. “REA RUS rules” are the rules and regulations of the Rural Electrification Administration Utilities Service (RUS) 7 CFR Part 1767 of the United States Department of Agriculture applicable to electric and telephone borrowers of the REA RUS under the terms of their mortgage mortgages to the REA RUS.

ITEM 6. Amend rule 199—18.2(476) as follows:

199—18.2(476) Location of records. All records required by any rules of the board, or necessary for the administration thereof, shall be kept within this state unless otherwise authorized by the board. Any transfer of records from a location outside this state to another location outside this state shall also require prior board authorization, but a transfer from outside this state to a locale within this state may be made with only prior notification to the board.

Each rate–regulated gas utility and electric utility is to notify the board on or before April 1, 1997, of the address, telephone number, and business hours of its principal office for Iowa operations maintained within the state of Iowa. The board is to be notified by each rate–regulated gas utility and electric utility within 30 days of any change in the address, telephone number, or business hours of the utility’s principal office for Iowa operations. A utility providing gas and electric service may designate one principal office for both types of utility operations or a separate principal office for each type of utility operation. Notwithstanding any other provisions provision of these rules, the following books, accounts, papers, and records, or current copies thereof, are required to be maintained at the utility’s principal office for Iowa operations:

1. 18.2(1) The utility’s tariffs.

2. 18.2(2) A record of the number and business location of the utility’s administrative, technical, and operating personnel within the state.

3. 18.2(3) The most recent inspection report.

5. 18.2(4) The most recent rate case filing.

6. 18.2(5) Annual reports for the past five years.

7. 18.2(6) Shareholder’s reports for the past five years.

8. 18.2(7) Form IG–1 (gas utilities).

9. 18.2(8) Form IE–1 (electric utilities).

10. 18.2(9) Information regarding the location of other books, records, and accounts required to be maintained by the board pursuant to statute or rule.

ITEM 7. Amend rule 199—18.4(476) as follows:

18.4(1) Units of property. Electric utilities subject to rate regulations shall adopt, in addition to the requirements of 199 IAC Chapter 16, Part 116 of the FPC rules, 18 CFR 116, maintain an accounting system for Units of Property for Use in Accounting for Additions and Retirements of Electric Plant as issued April 1, 1977 in accordance with 199- 16.2(476), which adopts the 2000 FERC rules, 18 CFR Part 101, Electric Plant Instructions.

18.4(2) Preservation of records. All electric utilities subject to regulation by the board shall preserve the records of their operations in accordance with the provisions of Part 125 of the FPC FERC rules, 18 CFR Part 125, Preservation of Records of Public Utilities and Licensees, as issued on April 1, 1977 2000. Rate–regulated companies shall further ensure the preservation of records of associated companies, whether or not the associated companies are themselves utilities, as necessary to support the cost of services rendered to the utility by the associated companies.

ITEM 8. Amend rule 199—18.5(476) as follows:

18.5(1) Units of property. Rural electric cooperatives (RECs) subject to rate regulation by the board shall adopt the REA RUS rules contained in REA Bulletin 181–2, Standard List of Retirement Units, issued May 1968 and revised by pen and ink changes as of July 1974 RUS 7 CFR Part 1767 issued January 1, 1999. The REC shall maintain sufficient records to support additions to plant, retirement units, and replacements of electric plant, in accordance with 7 CFR Part 1767.10, Definitions, 7 CFR Part 1767.15, General Instructions, 7 CFR Part 1767.16, Electric Plant Instructions, and 7 CFR Part 1767.20, Plant Accounts.

18.5(2) Preservation of records. Rural electric cooperatives subject to rate regulation by the board shall preserve the records of their operations in accordance with the provisions of the REA rules contained in REA Bulletin 180–2, Manual for Preservation of Borrowers Records (Electric) issued June 6, 1972. FERC rules, 18 CFR Part 125, Preservation of Rec–ords of Electric Utility Companies, issued April 1, 2000.

ITEM 9. Amend rule 199—18.6(476) as follows:

18.6(1) Units of property. Gas utilities subject to rate regulation shall adopt, in addition to the requirements of 199 IAC Chapter 16, Part 216 of the FPC rules, 18 CFR 216, maintain an accounting system for Units of Property for Use in Accounting for Additions and Retirements of Gas Plant as issued April 1, 1977 in accordance with 199-16.3(476), which adopts the 2000 FERC rules, 18 CFR Part 201, Gas Plant Instructions.

18.6(2) Preservation of records. All gas utilities subject to regulation by the board shall preserve the records of their operations in accordance with the provisions of Part 225 of the FPC FERC rules, 18 CFR Part 225, Preservation of Records of Natural Gas Companies, as issued April 1, 1977 2000. Rate–regulated companies shall further ensure the preservation of records of associated companies, whether or not the associated companies are themselves utilities, as necessary to support the cost of services rendered to the utility by the associated companies.

ITEM 10. Amend rule 199—18.7(476) as follows:

18.7(1) Units of property. Water utilities subject to rate regulation shall adopt, in addition to the requirements of 199 IAC Chapter 16, the NARUC “List of Retirement Units of Property for Water Utilities” effective January 1, 1972. maintain an accounting system for Units of Property in Accounting for Additions and Retirements of Water Plant in accordance with 199-16.4(476), which adopts the 1996 NARUC uniform systems of accounts for Class A, B, and C water utilities.

18.7(2) Preservation of records. All water utilities subject to regulation by the board shall preserve the records of their operations in accordance with the provisions of the NARUC rules: Regulations to Govern the Preservation of Records of Electric, Gas and Water Utilities, April 1972 revised May 1985 edition. They shall further ensure the preservation of records of associated companies, whether or not the associated companies are themselves utilities, as necessary to support the cost of services rendered to the utility by associated companies.

ITEM 11. Amend rule 199—23.1(476) as follows:

23.1(1) Every public utility is required to keep and render its books, accounts, papers and records accurately and faithfully in the manner and form prescribed by the board and to comply with all directions of the board relating to such books, accounts, papers and records.

23.1(2) Each public utility subject to Iowa Code chapter 476 shall file with this board, on or before April 1 of each year, an annual report as described in these rules this chapter and covering operations during the immediately preceding calendar year. Pursuant to Iowa Code chapter 476, this information will be used to apportion the costs of the utilities division. If a utility ceases operations through merger or sale of its plant during the calendar year, each utility involved in the transaction shall separately file, within 90 days after the merger or sale, an annual report covering the portion of the calendar year operations to the date of sale or merger.

23.1(3) All pages of the report must be completed and submitted to the board. The words “none” or “not applicable” may be used to complete a schedule when they accurately and fully state the facts. The board shall be notified of the nature, amount and purpose of any accounts used in addition to those prescribed in utilities division 199-Chapter 16. ,“Accounting.” A copy shall be retained in the respondent’s file. All reports are to be prepared for and certified to the Iowa utilities board.

23.1(4) Annual report requirements specified in “Regulations Governing Service Supplied by Gas, Electric, Telephone, or Water Utilities,” utilities division, 199—Chapters 19, 20, 21, and 22, shall be included with the annual reports set forth in the following paragraphs. The reporting utility should use their its own format in preparing such reports.

ITEM 12. Amend rule 199—23.2(476) as follows:

199—23.2(476) Annual report requirements-rate–regulated utilities. Two copies each of the following report forms must be completed and filed with the board.

23.2(1) Electric utilities.

a. Class A & B Major electric utilities-Form IE–1, Annual Report-Rate–Regulated Electric Utilities electric utilities (including FPC FERC Annual Report Form No. 1). A “major” electric utility is defined as a utility that had, in each of the last three consecutive years, sales or transmission service that exceeded any one or more of the following: (1) 1 million megawatt hours of total sales; (2) 100 megawatt hours of sales for resale; (3) 500 megawatt hours of power exchanges delivered; or (4) 500 megawatt hours of wheeling for others (deliveries plus losses). Title 18 CFR Part 101, General Instructions 1.A.(1).

b. Class C & D Nonmajor electric utilities-Form IE–1, Annual Report-Rate–Regulated Electric Utilities electric utilities (including FPC FERC Annual Report Form No. 1F). A “nonmajor” electric utility is defined as a utility that is not classified as major and had total sales in each of the last three consecutive years of 10,000 megawatt hours or more. Title 18 CFR Part 101, General Instructions 1.A.(2).

23.2(2) Gas utilities.

a. Class A & B Major gas utilities-Form IG–1, Annual Report-Rate–Regulated Gas Utilities gas utilities (including FPC FERC Annual Report Form No. 2). A “major” gas utility is defined as a gas utility whose combined gas sold for resale and gas transported or stored for a fee exceeds 50 million Mcf at 14.73 psi (60_ F) in each of the three previous calendar years. Title 18 CFR Part 201, General Instructions 1.

b. Class C & D Nonmajor gas utilities-Form IG–1, Annual Report-Rate–Regulated Gas Utilities gas utilities (including FPC FERC Annual Report Form No. 2A). A “nonmajor” gas utility is defined as a utility (1) that is not classified as a major gas utility and (2) that had total gas sales volume transactions exceeding 200,000 Mcf at 14.73 psi (60_ F) in each of the three previous calendar years. Title 18 CFR Part 201, General Instructions 1.

23.2(3) to 23.2(9) No change.

ITEM 13. Amend rule 199—31.3(476) as follows:

31.3(1) On or before June 30 of each year, all public utilities shall file with the board the following information:

1. b. Verified copies of all contracts, arrangements, or other similar transactions between the public utility and an affiliate made or entered into on or after July 1, 1989, and verified copies or a verified summary of all contracts, arrangements, or other similar transactions between the public utility and an affiliate made or entered into prior to July 1, 1989, but in force and effect after July 1, 1989. shall be provided to the board upon request. This includes all contracts or arrangements, or other similar transactions as required by Iowa Code subsections 476.74(1) to 476.74(4).

2. 31.3(2) Contracts, arrangements, or other similar transactions with an affiliate where the consideration is not in excess of $50,000 or 5 percent of the capital equity of the utility, whichever is smaller, are exempt from this filing requirement. In lieu of the filing requirement, the public utility shall file on or before June 30 of each year a report of the total amount of each contract, arrangement, or other similar transactions with affiliates qualifying under this exemption. Each affiliate shall be identified separately.

31.3(1)(3) After an initial filing under rule 31.3(476), a public utility shall file only new contracts or arrangements or other similar transactions and modifications or amendments to existing contracts or arrangements, or other similar transactions on an annual basis. If there have been no new contracts or arrangements or other similar transactions, the public utility shall file a statement to that effect.

31.3(2)(4) If a new affiliate is created, if an existing affiliate is dissolved or merged, if a contractual arrangement or other similar transactional relationship between the public utility and an affiliate is created, or if a contractual arrangement or other similar transactional relationship is terminated between the public utility or an affiliate, the public utility shall notify the board in writing within 30 days of the date of the event. This subrule does not apply if a proposal for reorganization pursuant to 199—Chapter 32 is to be filed with the board.

ITEM 14. Amend rule 199—32.1(476) as follows:

1. 32.1(1) This chapter applies to any person who intends to acquire, sell, lease, or otherwise dispose indirectly or directly of the whole or any substantial part of a public utility’s assets; or purchase, acquire, sell, or otherwise dispose of the controlling capital stock of any public utility, either directly or indirectly. Either individually or on a joint basis, a proposal for reorganization shall be filed by the person(s) to whom this chapter applies. All terms used in this chapter not otherwise defined shall be defined as the terms are defined in Iowa Code Supplement section 476.72. “Proposal for reorganization” means the application for approval of a reorganization including the supporting testimony, evidence and filing requirements identified in rule 32.4(476).

2. 32.1(2) This chapter does not apply to transfers or removals of a public utility’s assets which are made specifically pursuant to a board deregulation order, as long as those transfers or removals occur within 12 months of the board’s approval of an accounting separation plan.

ITEM 15. Amend subrule 32.2(1) as follows:

32.2(1) Unless an application pursuant to Iowa Code section 476.77 and this chapter has been filed or a waiver obtained pursuant to rule 32.8(476) 199 IAC 1.3(17A,474,476, 78GA,HF2206), no public utility shall acquire or lease assets, directly or indirectly, with a value in excess of 3 percent of the utility’s Iowa jurisdictional utility revenue during the immediately preceding calendar year or $5 million, whichever is greater. For purposes of this subrule and subrule 32.2(2), “value” means the greater of market or book value.

ITEM 16. Amend rule 199—32.4(476) as follows:

Amend subrule 32.4(3) by adopting new paragraphs “f” to “h” as follows:

f. Stockholder quarterly reports for the two quarters just prior to the date of the filing and any subsequent reports as they become available during the proceeding, for all affected companies.

g. The major credit rating agencies’ reports for two years preceding the filing date of the merger and updates as they become available during the proceeding, for all affected companies.

h. Any proxy statement to the stockholders regarding the proposed reorganization. If such is not available at time of filing, a draft statement shall be filed followed by the final statement when available.

Adopt the following new subrule:

32.4(6) Effect on service and reliability.

a. Report on quality of service and reliability levels of utility services for each of the five years prior to year of filing, for all affected companies.

b. Detailed statement on how the proposed reorganized entity will maintain or enhance service and reliability. Provide any investment or operational plans for this purpose that are available.

ITEM 17. Amend rule 199—33.5(476) as follows:

Amend the introductory paragraph as follows:

199—33.5(476) Cost allocation manuals. Every rate–regulated gas or electric public utility equaling or exceeding the filing threshold in 1993 or any calendar year thereafter shall file with the board a cost allocation manual on or before September 1 of the following year. If the utility has not changed its cost allocation manual since the last filing on September 1, the utility shall file a letter with the board to that effect. Refer to subrule 33.5(3) for information on updating cost allocation manuals.

Amend subrule 33.5(2), paragraph “a,” as follows:

a. Filing. Utilities meeting the filing threshold as of December 31, 1993, shall file manuals on or before September 1, 1994. Utilities subsequently meeting the filing threshold requirements shall file manuals on or before September 1 of the year following the year the threshold requirement was first met.

ITEM 18. Amend rule 199—34.6(476) as follows:

1. 34.6(1) When a person meeting the requirements of rule 34.4(476) uses the billing and collection system of a public utility, the public utility shall promptly remit to that person all funds collected by the public utility on behalf of the person.

2. 34.6(2) Where a customer makes a partial payment and owes both a public utility and a person(s) meeting the requirements of rule 34.4(476) for services or goods provided, the payment received shall be allocated first to the regulated utility bill plus tax, unless otherwise allocated by the customer. Any balance remaining after payment of the utility bill plus tax shall be allocated between the public utility for any unpaid nonutility services, if any, and any other person(s) utilizing the utility’s billing system according to the ratio of the amount billed by each unless otherwise allocated by the customer. A public utility shall not disconnect a customer’s utility service for nonpayment of a bill for nonutility services.

A person cannot use a public utility’s billing and collection systems only to target customers who are problem payers.

Pursuant to the authority of Iowa Code sections 17A.3 and 147.76, the Board of Nursing hereby amends Chapter 3, “Licensure to Practice—Registered Nurse/Licensed Practical Nurse,” Iowa Administrative Code.

This amendment adds a definition of “unlicensed student” to the rules.

This amendment was published in the Iowa Administrative Bulletin on October 2, 2002, as ARC 2006B. This amendment is identical to that published under Notice.

This amendment will become effective January 29, 2003.

This amendment is intended to implement Iowa Code section 152.1.

The following amendment is adopted.

Amend rule 655—3.1(17A,147,152,272C) by adopting the following new definition in alphabetical order:

“Unlicensed student” means a person enrolled in a nursing education program who has never been licensed as a registered nurse or licensed practical/vocational nurse in any U.S. jurisdiction.

[Filed 12/6/02, effective 1/29/03]

[Published 12/25/02]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 12/25/02.

Pursuant to the authority of Iowa Code sections 17A.3 and 147.76, the Board of Nursing hereby amends Chapter 3, “Licensure to Practice—Registered Nurse/Licensed Practical Nurse,” Iowa Administrative Code.

These amendments reduce the time between the authorization of NCLEX® examination candidates to test and the first possible test date.

These amendments were published in the Iowa Administrative Bulletin on October 2, 2002, as ARC 2005B. These amendments are identical to those published under Notice.

These amendments will become effective January 29, 2003.

These amendments are intended to implement Iowa Code chapters 147 and 152.

The following amendments are adopted.

ITEM 1. Amend subrule 3.4(3), paragraph “b,” subparagraph (6), to read as follows:

(6) Self–schedule the examination at an approved testing center. Applicants who do not test within 95 91 days of authorization are required to submit a new application and fee to the board.

ITEM 2. Amend subrule 3.4(4), paragraph “b,” subparagraph (10), to read as follows:

(10) Self–schedule the examination at an approved testing center. Applicants who do not test within 95 91 days of authorization are required to submit a new application and fee to the board.

[Filed 12/6/02, effective 1/29/03]

[Published 12/25/02]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 12/25/02.

Pursuant to the authority of Iowa Code section 97B.15, the Department of Personnel hereby amends Chapter 21, “Iowa Public Employees’ Retirement System,” appearing in the Iowa Administrative Code.

The amendments are intended to modify references to the governance structure of IPERS pursuant to 2001 Iowa Acts, chapter 68. Sections 7, 8, 9, 11,12, and 24 of 2001 Iowa Acts, chapter 68, implement new definitions, designate the chief executive officer as the IPERS administrator, and establish the beginning date for the IPERS Investment Board to become the trustee for the fund. Other amendments clean up outdated references to IPERS’ change of address, define the availability of records of IPERS members, pursuant to 2002 Iowa Acts, House File 2532, section 13, and clarify information to be provided to IPERS regarding appeals of initial disability determinations.

Notice of Intended Action was published in the Iowa Administrative Bulletin on October 30, 2002, as ARC 2082B. In addition, these amendments were previously Adopted and Filed Emergency and published in the October 30, 2002, Iowa Administrative Bulletin as ARC 2068B. A public hearing was held on November 19, 2002, at 9 a.m. in the IPERS Building, 7401 Register Drive, Des Moines, Iowa. No parties attended the public hearing, and no written comments were received prior to the hearing.

These amendments were prepared after consultation with the IPERS legal, accounting and benefits units.

There are no waiver provisions included in the amendments because the amendments confer benefits, prevent abuse, or are required by statute. The amendments required by statute are intended to implement Iowa Code chapter 97B as amended by 2001 Iowa Acts, chapter 68, sections 7, 8, 9, 11, 12, and 24, and 2002 Iowa Acts, House File 2532, section 13.

These amendments will become effective January 29, 2003, at which time the Adopted and Filed Emergency amendments are hereby rescinded.

EDITOR’S NOTE: Pursuant to recommendation of the Administrative Rules Review Committee published in the Iowa Administrative Bulletin, September 10, 1986, the text of these amendments [amendments to Ch 21] is being omitted. These amendments are identical to those published under Notice as ARC 2082B and Adopted and Filed Emergency as ARC 2068B, IAB 10/30/02.

[Filed 12/6/02, effective 1/29/03]
[Published 12/25/02]

[For replacement pages for IAC, see IAC Supplement 12/25/02.]