Text: SSB00065 Text: SSB00067 Text: SSB00000 - SSB00099 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 321.19, subsection 1, unnumbered 1 2 paragraph 2, Code 1997, is amended to read as follows: 1 3 The department shall furnish, on application, free of 1 4 charge, distinguishing plates for vehicles thus exempted, 1 5 which plates except plates on Iowa highway safety patrol 1 6 vehicles shall bear the word "official" and the department 1 7 shall keep a separate record. Registration plates issued for 1 8 Iowa highway safety patrol vehicles, except unmarked patrol 1 9 vehicles, shall bear two red stars on a yellow background, one 1 10 before and one following the registration number on the plate, 1 11 which registration number shall be the officer's badge number. 1 12 Registration plates issued for a county sheriff's patrol 1 13 vehicles shall display one seven-pointed gold star followed by 1 14 the letter "S" and the call number of the vehicle. However, 1 15 the director of general services or the director of 1 16 transportation may order the issuance of regular registration 1 17 plates for any exempted vehicle used by peace officers in the 1 18 enforcement of the law, persons enforcing chapter 124 and 1 19 other laws relating to controlled substances, persons in the 1 20 department of justice, the alcoholic beverages division of the 1 21 department of commerce,andthe department of inspections and 1 22 appeals, and the department of revenue and finance, who are 1 23 regularly assigned to conduct investigations which cannot 1 24 reasonably be conducted with a vehicle displaying "official" 1 25 state registration plates, and persons in the lottery division 1 26 of the department of revenue and finance whose regularly 1 27 assigned duties relating to security or the carrying of 1 28 lottery tickets cannot reasonably be conducted with a vehicle 1 29 displaying "official" registration plates. For purposes of 1 30 sale of exempted vehicles, the exempted governmental body, 1 31 upon the sale of the exempted vehicle, may issue for in- 1 32 transit purposes a pasteboard card bearing the words "Vehicle 1 33 in Transit", the name of the official body from which the 1 34 vehicle was purchased, together with the date of the purchase 1 35 plainly marked in at least one-inch letters, and other 2 1 information required by the department. The in-transit card 2 2 is valid for use only within forty-eight hours after the 2 3 purchase date as indicated on the bill of sale which shall be 2 4 carried by the driver. 2 5 Sec. 2. Section 421.17, subsection 21, paragraph b, 2 6 subparagraph (3), Code 1997, is amended to read as follows: 2 7 (3) The child support recovery unit, the foster care 2 8 recovery unit, and the investigations division of the 2 9 department of inspections and appeals shall, at least 2 10 annually, submit to the department of revenue and finance for 2 11 setoff the debts described in this subsection,which are at2 12least fifty dollarsconstituting a minimum amount determined 2 13 by rule of the department of revenue and finance, on a date to 2 14 be specified by the department of human services and the 2 15 department of inspections and appeals by rule. 2 16 Sec. 3. Section 421.17, subsection 23, paragraphs c, d, 2 17 and g, Code 1997, are amended to read as follows: 2 18 c. The college student aid commission shall, at least 2 19 annually, submit to the department of revenue and finance for 2 20 setoff the guaranteed student loan defaults,which are at2 21least fifty dollarsconstituting a minimum amount set by rule 2 22 of the department of revenue and finance, on a date or dates 2 23 to be specified by the college student aid commission by rule. 2 24 d. Upon submission of a claim, the department of revenue 2 25 and finance shall notify the college student aid commission 2 26 whether the defaulter is entitled to a refund or rebate ofat2 27least fifty dollarsthe minimum amount set by rule of the 2 28 department and if so entitled shall notify the commission of 2 29 the amount of the refund or rebate and of the defaulter's 2 30 address on the income tax return. Section 422.72, subsection 2 31 1, does not apply to this paragraph. 2 32 g. The department of revenue and finance shall, after 2 33 notice has been sent to the defaulter by the college student 2 34 aid commission, set off the amount of the default against the 2 35 defaulter's income tax refund or rebateif both the amount of3 1the default and the refund or rebate are at least fifty3 2dollarsconstituting a minimum amount set by rule of the 3 3 department. The department shall refund any balance of the 3 4 income tax refund or rebate to the defaulter. The department 3 5 of revenue and finance shall periodically transfer the amount 3 6 set off to the college student aid commission. If the 3 7 defaulter gives written notice of intent to contest the claim, 3 8 the commission shall hold the refund or rebate until final 3 9 disposition of the contested claim pursuant to chapter 17A or 3 10 by court judgment. The commission shall notify the defaulter 3 11 in writing upon completion of setoff. 3 12 Sec. 4. Section 421.17, subsection 25, paragraph c, Code 3 13 1997, is amended to read as follows: 3 14 c. The clerk of the district court, on the first day of 3 15 February and August of each calendar year, shall submit to the 3 16 department for setoff the debts described in this subsection, 3 17which are at least fifty dollarsconstituting a minimum amount 3 18 set by rule of the department. 3 19 Sec. 5. Section 421.17, subsection 29, paragraphs a and e, 3 20 Code 1997, are amended to read as follows: 3 21 a. For purposes of this subsection unless the context 3 22 requires otherwise: 3 23 (1) "State agency" means a board, commission, department, 3 24 including the department of revenue and finance, or other 3 25 administrative office or unit of the state of Iowa or any 3 26 other state entity reported in the Iowa comprehensive annual 3 27 financial report. The term "state agency" does not include 3 28 the general assembly, the governor, or any political 3 29 subdivision of the state, or its offices and units. 3 30 (2) "Department" means the department of revenue and 3 31 finance and any other state agency that maintains a separate 3 32 accounting system and elects to establish a debt collection 3 33 setoff procedure for collection of debts owed to the state or 3 34 its agencies. 3 35 (3) The term "person" does not include a state agency. 4 1 e. Before setoff, the amount of a person's claim on a 4 2 state agency and the amount of a person's liability to a state 4 3 agency shallbe at least fifty dollarsconstitute a minimum 4 4 amount set by rule of the department. 4 5 Sec. 6. NEW SECTION. 421.61 UNCONSTITUTIONALLY WITHHELD 4 6 TAX BENEFITS. 4 7 If a provision in the Code grants a tax benefit to 4 8 taxpayers that is unconstitutionally withheld from other 4 9 taxpayers as determined by the Iowa supreme court or expressed 4 10 in an Iowa attorney general's opinion based upon a United 4 11 States supreme court decision, the tax benefit shall also be 4 12 granted to the adversely affected taxpayers as if the 4 13 unconstitutional provision did not exist. 4 14 Sec. 7. Section 422.5, subsection 1, paragraph j, 4 15 subparagraph (2), unnumbered paragraph 1, Code 1997, is 4 16 amended to read as follows: 4 17 The tax imposed upon the taxable income of a resident 4 18 shareholder in a value-added corporation which has in effect 4 19 for the tax year an election under subchapter S of the 4 20 Internal Revenue Code and carries on business within and 4 21 without the state may be computed by reducing the amount 4 22 determined pursuant to paragraphs "a" through "i" by the 4 23 amounts of nonrefundable credits under this division and by 4 24 multiplying this resulting amount by a fraction of which the 4 25 resident's net income allocated to Iowa, as determined in 4 26 section 422.8, subsection 2, paragraph "b", is the numerator 4 27 and the resident's total net income computed under section 4 28 422.7 is the denominator. If a resident shareholder has 4 29 elected to take advantage of this subparagraph, and for the 4 30 next tax year elects not to take advantage of this 4 31 subparagraph, the resident shareholder shall not reelect to 4 32 take advantage of this subparagraph for the three tax years 4 33 immediately following the first tax year for which the 4 34 shareholder elected not to take advantage of this 4 35 subparagraph, unless the director consents to the reelection. 5 1 Thisparagraphsubparagraph also applies to individuals who 5 2 are residents of Iowa for less than the entire tax year. 5 3 Sec. 8. Section 422.7, Code 1997, is amended by adding the 5 4 following new subsection: 5 5 NEW SUBSECTION. 35. Subtract the income and expenses of 5 6 and add the cash dividend or value of a property distribution 5 7 from a financial institution as defined in section 581 of the 5 8 Internal Revenue Code where the financial institution is not 5 9 subject to income tax and the shareholders of the financial 5 10 institution are taxed on the financial institution's income 5 11 under the provisions of the Internal Revenue Code. 5 12 Sec. 9. Section 422.32, subsection 4, Code 1997, is 5 13 amended to read as follows: 5 14 4. "Corporation" includes joint stock companies, and 5 15 associations organized for pecuniary profit, andpublicly5 16tradedpartnerships and limited liability companies taxed as 5 17 corporations under the Internal Revenue Code. 5 18 Sec. 10. Section 422.45, subsection 7, unnumbered 5 19 paragraph 1, Code 1997, is amended to read as follows: 5 20 A private nonprofit educational institution in this state, 5 21 nonprofit private museum in this state, tax-certifying or tax- 5 22 levying body or governmental subdivision of the state, 5 23 including the state board of regents, state department of 5 24 human services, state department of transportation, a 5 25 municipally owned solid waste facility which sells all or part 5 26 of its processed waste as fuel to a municipally owned public 5 27 utility, and all divisions, boards, commissions, agencies, or 5 28 instrumentalities of state, federal, county, or municipal 5 29 government which do not have earnings going to the benefit of 5 30 an equity investor or stockholder, may make application to the 5 31 department for the refund of the sales, services, or use tax 5 32 upon the gross receipts of all sales of goods, wares, or 5 33 merchandise, or from services rendered, furnished, or 5 34 performed, to a contractor, used in the fulfillment of a 5 35 written contract with the state of Iowa, any political 6 1 subdivision of the state, or a division, board, commission, 6 2 agency, or instrumentality of the state or a political 6 3 subdivision, a private nonprofit educational institution in 6 4 this state, or a nonprofit private museum in this state if the 6 5 property becomes an integral part of the project under 6 6 contract and at the completion of the project becomes public 6 7 property, is devoted to educational uses, or becomes a 6 8 nonprofit private museum; except goods, wares, or merchandise, 6 9 or services rendered, furnished, or performed used in the 6 10 performance of any contract in connection with the operation 6 11 of any municipal utility engaged in selling gas, electricity, 6 12 or heat to the general public or in connection with the 6 13 operation of a municipal pay television system; and except 6 14 goods, wares, and merchandise used in the performance of a 6 15 contract for a "project" under chapter 419 as defined in that 6 16 chapter other than goods, wares, or merchandise used in the 6 17 performance of a contract for a "project" under chapter 419 6 18 for which a bond issue was approved by a municipality prior to 6 19 July 1, 1968, or for which the goods, wares, or merchandise 6 20 becomes an integral part of the project under contract and at 6 21 the completion of the project becomes public property or is 6 22 devoted to educational uses. 6 23 Sec. 11. Section 422.61, subsection 3, Code 1997, is 6 24 amended by adding the following new paragraph: 6 25 NEW PARAGRAPH. g. Where a financial institution as 6 26 defined in section 581 of the Internal Revenue Code is not 6 27 subject to income tax and the shareholders of the financial 6 28 institution are taxed on the financial institution's income 6 29 under the provisions of the Internal Revenue Code, such tax 6 30 treatment shall be disregarded and the financial institution 6 31 shall compute its net income for franchise tax purposes in the 6 32 same manner under this subsection as a financial institution 6 33 that is subject to or liable for federal income tax under the 6 34 Internal Revenue Code in effect for the applicable year. 6 35 Sec. 12. Section 422.72, Code 1997, is amended by adding 7 1 the following new subsection: 7 2 NEW SUBSECTION. 7. Notwithstanding subsection 3, the 7 3 director shall provide state tax returns and return 7 4 information in response to a subpoena issued by the court 7 5 pursuant to rule of criminal procedure 5 commanding the 7 6 appearance before the attorney general or an assistant 7 7 attorney general if the subpoena is accompanied by affidavits 7 8 from such person and from a sworn peace officer member of the 7 9 department of public safety affirming that the information is 7 10 necessary for the investigation of a felony violation of 7 11 chapter 124 or chapter 706B. The affidavits accompanying the 7 12 subpoenas and the information provided by the director shall 7 13 remain a confidential record which may be disseminated only to 7 14 a prosecutor or peace officer involved in the investigation, 7 15 or to the taxpayer who filed the information and to the court 7 16 in connection with the filing of criminal charges or 7 17 institution of a forfeiture action. A person who knowingly 7 18 files a false affidavit with the director to secure 7 19 information or who divulges information received under this 7 20 subsection in a manner prohibited by this subsection commits a 7 21 serious misdemeanor. 7 22 Sec. 13. Section 423.1, subsection 8, Code 1997, is 7 23 amended to read as follows: 7 24 8. "Retailer maintaining a place of business in this 7 25 state" or any like term includes any retailer having or 7 26 maintaining within this state, directly or by a subsidiary, an 7 27 office, distribution house, sales house, warehouse, or other 7 28 place of business, or anyagentrepresentative operating 7 29 within this state under the authority of the retailer or its 7 30 subsidiary, irrespective of whethersuchthat place of 7 31 business oragentrepresentative is located here permanently 7 32 or temporarily, or whether the retailer or subsidiary is 7 33 admitted to do business within this state pursuant to chapter 7 34 490. 7 35 Sec. 14. Section 425.7, subsection 3, Code 1997, is 8 1 amended to read as follows: 8 2 3. If the director of revenue and finance determines that 8 3 a claim for homestead credit has been allowed by the board of 8 4 supervisors which is not justifiable under the law and not 8 5 substantiated by proper facts, the director may, at any time 8 6 within thirty-six months from July 1 of the year in which the 8 7 claim is allowed, set aside the allowance. Notice of the 8 8 disallowance shall be given to the county auditor of the 8 9 county in which the claim has been improperly granted and a 8 10 written notice of the disallowance shall also be addressed to 8 11 the claimant at the claimant's last known address. The 8 12 claimant or board of supervisors may appeal to the state board 8 13 of tax review pursuant to section 421.1, subsection 4. The 8 14 claimant or the board of supervisors may seek judicial review 8 15 of the action of thedirector of revenue and financestate 8 16 board of tax review in accordance withthe Iowa administrative8 17procedure Actchapter 17A. 8 18 If a claim is disallowed by the director of revenue and 8 19 finance and not appealed to the state board of tax review or 8 20 appealed to and upheld by the state board of tax review and a 8 21 petition for judicial review is not filed with respect to the 8 22 disallowance, any amounts of credits allowed and paid from the 8 23 homestead credit fund including the penalty, if any, become a 8 24 lien upon the property on which credit was originally granted, 8 25 if still in the hands of the claimant, and not in the hands of 8 26 a bona fide purchaser, and any amount so erroneously paid 8 27 including the penalty, if any, shall be collected by the 8 28 county treasurer in the same manner as other taxes and the 8 29 collections shall be returned to the department of revenue and 8 30 finance and credited to the homestead credit fund. The 8 31 director of revenue and finance may institute legal 8 32 proceedings against a homestead credit claimant for the 8 33 collection of payments made on disallowed credits and the 8 34 penalty, if any. If a homestead credit is disallowed and the 8 35 claimant failed to give written notice to the assessor as 9 1 required by section 425.2 when the property ceased to be used 9 2 as a homestead by the claimant, a civil penalty equal to fifty 9 3 percent of the amount of the disallowed credit is assessed 9 4 against the claimant. 9 5 Sec. 15. Section 426A.6, Code 1997, is amended to read as 9 6 follows: 9 7 426A.6 SETTING ASIDE ALLOWANCE. 9 8 If the director of revenue and finance determines that a 9 9 claim for military service tax exemption has been allowed by a 9 10 board of supervisors which is not justifiable under the law 9 11 and not substantiated by proper facts, the director may, at 9 12 any time within thirty-six months from July 1 of the year in 9 13 which the claim is allowed, set aside the allowance. Notice 9 14 of the disallowance shall be given to the county auditor of 9 15 the county in which the claim has been improperly granted and 9 16 a written notice of the disallowance shall also be addressed 9 17 to the claimant at the claimant's last known address. The 9 18 claimant or the board of supervisors may appeal to the state 9 19 board of tax review pursuant to section 421.1, subsection 4. 9 20 The claimant or the board of supervisors may seek judicial 9 21 review of the action of thedirector of revenue and finance9 22 state board of tax review in accordance with chapter 17A. If 9 23 a claim is disallowed by the director of revenue and finance 9 24 and not appealed to the state board of tax review or appealed 9 25 to and upheld by the state board of tax review and a petition 9 26 for judicial review is not filed with respect to the 9 27 disallowance, the credits allowed and paid from the general 9 28 fund of the state become a lien upon the property on which the 9 29 credit was originally granted, if still in the hands of the 9 30 claimant and not in the hands of a bona fide purchaser, the 9 31 amount so erroneously paid shall be collected by the county 9 32 treasurer in the same manner as other taxes, and the 9 33 collections shall be returned to the department of revenue and 9 34 finance and credited to the general fund of the state. The 9 35 director of revenue and finance may institute legal 10 1 proceedings against a military service tax exemption claimant 10 2 for the collection of payments made on disallowed exemptions. 10 3 Sec. 16. Section 426B.1, subsection 1, Code 1997, is 10 4 amended to read as follows: 10 5 1. A property tax relief fund is created in the state 10 6 treasury under the authority of the department ofrevenue and10 7financehuman services. The fund shall be separate from the 10 8 general fund of the state and shall not be considered part of 10 9 the general fund of the state except in determining the cash 10 10 position of the state for payment of state obligations. The 10 11 moneys in the fund are not subject to the provisions of 10 12 section 8.33 and shall not be transferred, used, obligated, 10 13 appropriated, or otherwise encumbered except as provided in 10 14 this chapter. Moneys in the fund may be used for cash flow 10 15 purposes, provided that any moneys so allocated are returned 10 16 to the fund by the end of each fiscal year. However, the fund 10 17 shall be considered a special account for the purposes of 10 18 section 8.53, relating to elimination of any GAAP deficit. 10 19 For the purposes of this chapter, unless the context otherwise 10 20 requires, "property tax relief fund" means the property tax 10 21 relief fund created in this section. 10 22 Sec. 17. Section 426B.4, Code 1997, is amended to read as 10 23 follows: 10 24 426B.4 RULES. 10 25 The council on human services shall consult with the state- 10 26 county management committee created in section 331.438 and the 10 27 director ofrevenue and financehuman services in prescribing 10 28 forms and adopting rules pursuant to chapter 17A to administer 10 29 this chapter. 10 30 Sec. 18. Section 427B.19, subsection 3, unnumbered 10 31 paragraph 1, Code 1997, is amended to read as follows: 10 32 On or beforeJuly 1, 1996, and on or before JulySeptember 10 33 1 of eachsucceedingfiscal year through June 30, 2006, the 10 34 county auditor shall prepare a statement, based upon the 10 35 report received pursuant to subsections 1 and 2, listing for 11 1 each taxing district in the county: 11 2 Sec. 19. Section 427B.19, subsection 4, Code 1997, is 11 3 amended to read as follows: 11 4 4. The county auditor shall certify and forward one copy 11 5 of the statement to the department of revenue and finance not 11 6 later thanJulySeptember 1 of each year. 11 7 Sec. 20. Section 427B.19A, subsection 2, Code 1997, is 11 8 amended to read as follows: 11 9 2. If an amount appropriated for a fiscal year is 11 10 insufficient to pay all claims, the director shall prorate the 11 11 disbursements from the fund to the county treasurers and shall 11 12 notify the county auditors of the pro rata percentage on or 11 13 beforeAugust 1September 30. 11 14 Sec. 21. Section 440.1, Code 1997, is amended to read as 11 15 follows: 11 16 440.1 ASSESSMENT OF OMITTED PROPERTY. 11 17 When the director of revenue and finance is vested with 11 18 power and duty to assess property andsaidassessment has, for 11 19 any reason, been omitted, the director shall proceed to assess 11 20saidthe property for each of the omitted years, not exceeding 11 21 five years last past. Chapter 429 shall apply to assessments 11 22 of omitted property. 11 23 Sec. 22. Section 441.8, unnumbered paragraphs 6 and 7, 11 24 Code 1997, are amended to read as follows: 11 25 Upon receiving credit equal to one hundred fifty hours of 11 26 classroom instruction during the assessor's current term of 11 27 office of which at least ninety of the one hundred fifty hours 11 28 are from courses requiring an examination upon conclusion of 11 29 the course, the director of revenue and finance shall certify 11 30 to the assessor's conference board that the assessor is 11 31 eligible to be reappointed to the position. Forassessors11 32whose present terms of office expire before six years from11 33January 1, 1979, or who arepersons appointed to complete an 11 34 unexpired term, the number of credits required to be certified 11 35 as eligible for reappointment shall be prorated according to 12 1 the amount of time remaining in the present term of the 12 2 assessor. If the person was an assessor in another 12 3 jurisdiction, the assessor may carry forward any credit hours 12 4 received in the previous position in excess of the number that 12 5 would be necessary to be considered current in that position. 12 6 Within each six-year period followingJanuary 1, 1980 or12 7 the appointment of a deputy assessorappointed after January12 81, 1979, the deputy assessor shall comply with this section 12 9 except that upon the successful completion of ninety hours of 12 10 classroom instruction of which at least sixty of the ninety 12 11 hours are from courses requiring an examination upon 12 12 conclusion of the course, the deputy assessor shall be 12 13 certified by the director of revenue and finance as being 12 14 eligible to remain in the position. If a deputy assessor 12 15 fails to comply with this section, the deputy assessor shall 12 16 be removed from the position until successful completion of 12 17 the required hours of credit. If a deputy is appointed to the 12 18 office of assessor, the hours of credit obtained as deputy 12 19 pursuant to this section shall be credited to that individual 12 20 as assessor and for the individual to be reappointed at the 12 21 expiration of the term as assessor, that individual must 12 22 obtain the credits which are necessary to total the number of 12 23 hours for reappointment. 12 24 Sec. 23. Section 441.11, Code 1997, is amended to read as 12 25 follows: 12 26 441.11 INCUMBENT DEPUTY ASSESSORS. 12 27 The director of revenue and finance shall grant a 12 28 restricted certificate to any deputy assessor holding office 12 29 as of January 1, 1976. A deputy assessor possessing such a 12 30 certificate shall be considered eligible to remain in the 12 31 deputy's present position provided continuing education 12 32 requirements are met. To become eligible for another deputy 12 33 assessor position, a deputy assessor presently holding office 12 34 is required to obtain certification as provided for in section 12 35 441.5 and 441.10. The number of credit hours required for 13 1 certification as eligible for appointment as a deputy in a 13 2 jurisdiction other than where the deputy is currently serving 13 3 shall be prorated according to the completed portion of the 13 4 deputy's six-year continuing education period. 13 5 Sec. 24. Section 452A.65, unnumbered paragraph 1, Code 13 6 1997, is amended to read as follows: 13 7 In addition to the tax or additional tax, the taxpayer 13 8 shall pay a penalty as provided in section 421.27. The 13 9 taxpayer shall also pay interest on the tax or additional tax 13 10 at the rate in effect under section 421.7 counting each 13 11 fraction of a month as an entire month, computed from the date 13 12 the return was required to be filed. If the amount of the tax 13 13 as determined by the appropriate state agency is less than the 13 14 amount paid, the excess shall be refunded with interest, the 13 15 interest to begin to accrue on the first day of thethird13 16 second calendar month following the date of payment or the 13 17 date the return was due to be filed or was filed, whichever is 13 18 the latest, at the rate in effect under section 421.7 counting 13 19 each fraction of a month as an entire month under the rules 13 20 prescribed by the appropriate state agency.In lieu of a13 21refund allowed under this section, the licensee may request13 22that the department allow the refund to be held as a credit13 23for the licensee.Claims for refund filed under sections 13 24 452A.17 and 452A.21 shall accrue interest beginning with the 13 25 first day of the second calendar month following the date the 13 26 refund claim is received by the department. 13 27 Sec. 25. Sections 236.15A, 440.2, 440.3, and 440.4, Code 13 28 1997, are repealed. 13 29 Sec. 26. The sections of this Act which amend sections 13 30 422.5, 422.7, 422.32, and 422.61 apply retroactively to 13 31 January 1, 1997, for tax years beginning on or after that 13 32 date. 13 33 EXPLANATION 13 34 Code section 236.15A, the income tax checkoff for domestic 13 35 abuse services, is repealed to implement the requirement of 14 1 section 422.12E. Code section 422.12E requires that the 14 2 checkoff which collects the least amount of money over a 14 3 three-year period shall be repealed. 14 4 Code section 321.19 is amended to allow the department of 14 5 revenue and finance to request that certain vehicles be 14 6 registered with a regular registration plate rather than an 14 7 "official" plate for those persons who are regularly assigned 14 8 to conduct investigations which cannot reasonably be conducted 14 9 with a vehicle displaying "official" plates. 14 10 Code section 421.17 is amended to provide the minimum 14 11 amount for setoff to be determined by the department of 14 12 revenue and finance by rule. This will grant the department 14 13 greater flexibility by providing a means of amendment of the 14 14 minimum amount through the rulemaking process rather than 14 15 through the legislative process. 14 16 Code section 421.17(29) is amended to expand the definition 14 17 of "state agency" to include other state entities as provided 14 18 in the Iowa comprehensive annual financial report which may 14 19 not be included in the current definition. This report sets 14 20 forth the financial operations and status of the various state 14 21 funds to assure compliance and accountability. Entities 14 22 included in this definition of state agency may enter into an 14 23 agreement with the director of revenue and finance to 14 24 participate in the setoff program provided in section 421.17. 14 25 Amendment of this definition will expand collection efforts 14 26 and the base of participation in the setoff program. The 14 27 section also amends the term "department" by broadening the 14 28 definition to include other state agencies who maintain a 14 29 separate accounting system. Agencies included in this 14 30 definition may enter into an agreement with the director of 14 31 revenue and finance to participate in the setoff debt 14 32 collection program. 14 33 Code section 421.61 is created to provide that if a 14 34 provision of the Iowa law grants a tax benefit, whether in the 14 35 form of a tax exemption, deduction, credit, or otherwise, to 15 1 some taxpayers but withholds the tax benefit from other 15 2 taxpayers with the result that such withholding is 15 3 unconstitutional, the tax benefit shall be extended to the 15 4 other taxpayers in a manner which removes the 15 5 unconstitutionality. 15 6 Code section 422.5(1), the new Code provision enacted in 15 7 1996 that allows a resident shareholder of a "value added" S 15 8 corporation to elect to reduce state income tax by 15 9 apportioning income, is amended to provide that if the 15 10 taxpayer then elects not to apportion income in a later tax 15 11 year, the taxpayer could not reelect to apportion income for 15 12 four tax years without the approval of the director of revenue 15 13 and finance. The amendment is made retroactively applicable 15 14 to tax years beginning on or after January 1, 1997. 15 15 Code section 422.7 is amended to remove from the 15 16 computation of individual income tax the items of income and 15 17 expenses from a financial institution that is treated as an S 15 18 corporation for federal income tax purposes and includes in 15 19 income the cash dividend or value of a property distribution 15 20 from the financial institution. For Iowa tax purposes, the S 15 21 corporation which operates a financial institution would file 15 22 an Iowa franchise tax return. The amendment is made 15 23 retroactively applicable to tax years beginning on or after 15 24 January 1, 1997. 15 25 Code section 422.32 is amended to treat any partnership 15 26 which is taxed as a corporation for federal purposes as a 15 27 corporation for Iowa tax purposes rather than only publicly 15 28 traded partnerships as is presently provided in the current 15 29 law. The amendment is made retroactively applicable to tax 15 30 years beginning on or after January 1, 1997. 15 31 Code section 422.45(7) is amended to provide for the 15 32 additional language of "in this state" to be added after the 15 33 term "nonprofit private museum" in order to acquire uniformity 15 34 in the application of the sales tax exemption and refund 15 35 provision. It makes the exemption consistent with other 16 1 exemptions available only to entities located in this state. 16 2 Code section 422.61 is amended to disallow the federal 16 3 treatment for Iowa individual income tax purposes where a 16 4 financial institution, as defined in section 581 of the 16 5 Internal Revenue Code, is not subject to income tax and where 16 6 the shareholders of the financial institution are taxed on the 16 7 financial institution's income on the shareholder's federal 16 8 individual income tax return. This federal provision is known 16 9 as an S corporation election. This provision should prevent 16 10 any discrimination in the taxation of federal obligation 16 11 income of all financial institutions because income of 16 12 financial institutions would only be taxed under the state 16 13 franchise tax. The amendment is made retroactively applicable 16 14 to tax years beginning on or after January 1, 1997. 16 15 Code section 422.72 is amended to provide that the 16 16 department of public safety can gain access to tax records on 16 17 a restricted basis. The information would be restricted to 16 18 special highly complex drug or money laundering investigations 16 19 and would be released by court order after the request for the 16 20 information has been approved by the Iowa attorney general. 16 21 Code section 423.1(8) is amended to define "retailer 16 22 maintaining a place of business in this state" under the use 16 23 tax law to include a retailer having a representative 16 24 operating in Iowa under the retailer's authority. Present law 16 25 requires the person be an agent of the retailer. This change 16 26 would include independent contractors hired by the retailer to 16 27 act on the retailer's behalf. 16 28 Code sections 425.7(3) and 426A.6 are amended to require a 16 29 taxpayer to file a protest of a homestead property tax credit 16 30 or military service property tax exemption disallowance made 16 31 by the director with the state board of tax review prior to 16 32 proceeding in district court. This is consistent with the way 16 33 similar property tax appeals are handled. 16 34 Code sections 426B.1(1) and 426B.4 are amended to provide 16 35 that the mental health property tax relief fund that is 17 1 currently in the department of revenue and finance will be in 17 2 the department of human services because the claims are filed 17 3 with the department of human services. 17 4 Code sections 427B.19 and 427B.19A are amended to change 17 5 the date for the county auditor to file machinery and 17 6 equipment property tax replacement claims with the department 17 7 of revenue and finance from July 1 to September 1 and change 17 8 the date for the department to certify the pro rata percentage 17 9 to the county auditor from August 1 to September 30 if the 17 10 appropriation is insufficient to pay all claims. 17 11 Code section 440.1 is amended to provide for a taxpayer 17 12 hearing on an omitted assessment made by the director after 17 13 the making of the assessment rather than prior to the making 17 14 of the assessment. Code sections 440.2 through 440.4, which 17 15 contain obsolete provisions pertaining to holding hearings 17 16 prior to assessment, are repealed. 17 17 Code section 441.8 is amended to permit an assessor 17 18 changing assessment jurisdictions to carry forward continuing 17 19 education credit hours to the new position. 17 20 Code sections 441.8 and 441.11 are amended to require that 17 21 a deputy assessor complete continuing education requirements 17 22 in order to continue to serve in the capacity of a deputy. 17 23 Code section 452A.65 is amended to change the date for 17 24 interest to begin accruing on motor fuel tax refunds from the 17 25 first day of the third calendar month following payment or 17 26 filing to the first day of the second calendar month following 17 27 the date the claim for refund is received by the department of 17 28 revenue and finance. Refunds for taxes paid for nonhighway 17 29 use or in blending to produce ethanol shall accrue interest 17 30 beginning with the first day of the second calendar month 17 31 following the date the refund claim is received by the 17 32 department. 17 33 LSB 1114DP 77 17 34 mg/jw/5.1
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