Text: HF00691 Text: HF00693 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 HOUSE FILE 692 1 2 1 3 AN ACT 1 4 CONCERNING REGULATORY, TAXATION, AND STATUTORY REQUIREMENTS 1 5 AFFECTING INDIVIDUALS AND BUSINESS RELATING TO TAXATION OF 1 6 PROPERTY, INCOME AND UTILITIES, LIABILITY REFORM, WORKERS' 1 7 COMPENSATION, FINANCIAL SERVICES, UNEMPLOYMENT COMPENSATION 1 8 EMPLOYER SURCHARGES, ECONOMIC DEVELOPMENT, AND INCLUDING 1 9 EFFECTIVE DATE, APPLICABILITY, AND RETROACTIVE APPLICABILITY 1 10 PROVISIONS. 1 11 1 12 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 13 1 14 DIVISION I 1 15 PROPERTY TAXATION 1 16 Section 1. Section 441.19, subsections 1 and 2, Code 2003, 1 17 are amended to read as follows: 1 18 1. Supplemental and optional to the procedure for the 1 19 assessment of property by the assessor as provided in this 1 20 chapter, the assessor may require from all persons required to 1 21 list their property for taxation as provided by sections 428.1 1 22 and 428.2, a supplemental return to be prescribed by the 1 23 director of revenue and finance upon which the person shall 1 24 list the person's property and any additions or modifications 1 25 completed in the prior year to a structure located on the 1 26 property. The supplemental return shall be in substantially 1 27 the same form as now prescribed by law for the assessment 1 28 rolls used in the listing of property by the assessors. Every 1 29 person required to list property for taxation shall make a 1 30 complete listing of the property upon supplemental forms and 1 31 return the listing to the assessoras promptly as possible1 32 within thirty days of receiving the assessment notice in 1 33 section 441.23. The return shall be verified over the 1 34 signature of the person making the return and section 441.25 1 35 applies to any person making such a return. The assessor 2 1 shall make supplemental return forms available as soon as 2 2 practicable after the first day of January of each year. The 2 3 assessor shall make supplemental return forms available to the 2 4 taxpayer by mail, or at a designated place within the taxing 2 5 district. 2 6 2. Upon receipt of such supplemental return from any 2 7 person the assessor shall prepare a roll assessing such person 2 8 as hereinafter provided. In the preparation of such 2 9 assessment roll the assessor shall be guided not only by the 2 10 information contained in such supplemental roll, but by any 2 11 other information the assessor may have or which may be 2 12 obtained by the assessor as prescribed by the law relating to 2 13 the assessment of property. The assessor shall not be bound 2 14 by any values or square footage determinations or purchase 2 15 prices as listed in such supplemental return, and may include 2 16 in the assessment roll any property omitted from the 2 17 supplemental return which in the knowledge and belief of the 2 18 assessor should be listed as required by law by the person 2 19 making the supplemental return. Upon completion of such roll 2 20 the assessor shall deliver to the person submitting such 2 21 supplemental return a copy of the assessment roll, either 2 22 personally or by mail. 2 23 Sec. 2. NEW SECTION. 441.20 LEGISLATIVE INTENT. 2 24 It is the intent of the general assembly that there be 2 25 transparency in the property tax system. It is further the 2 26 intent of the general assembly that property assessments for 2 27 purposes of property taxation be equal and uniform within 2 28 classes of property. It is further the intent of the general 2 29 assembly to minimize the impact that maintenance and upkeep by 2 30 the owner of property has on the assessment of that property 2 31 and that there be predictability in increases of property 2 32 assessments and that such predictability be based primarily on 2 33 the actions of the property owner. It is further the intent 2 34 of the general assembly to minimize the impact that increases 2 35 in assessed value of property will have on property taxes paid 3 1 and that any increases will be primarily the result of direct 3 2 action taken by the local taxing authority in setting budget 3 3 amounts rather than by increases in market value of property. 3 4 Sec. 3. Section 441.21, Code 2003, is amended by striking 3 5 the section and inserting in lieu thereof the following: 3 6 441.21 ASSESSMENT OF STRUCTURES. 3 7 1. All real property, except land, subject to taxation 3 8 shall be assessed on a value per square foot basis according 3 9 to the provisions of this section. 3 10 2. a. Subject to paragraph "b", for valuations 3 11 established as of January 1, 2006, and for subsequent 3 12 assessment years, the assessed value per square foot of a 3 13 residential structure shall be an amount equal to the 3 14 valuation of the structure as determined for the assessment 3 15 year beginning January 1, 2005, prior to application of the 3 16 assessment limitation for that year, divided by the total 3 17 number of square feet of the structure as of January 1, 2005. 3 18 b. (1) The assessed value per square foot of an existing 3 19 residential structure purchased after January 1, 2005, shall 3 20 be the purchase price of the structure divided by the 3 21 cumulative inflation factor established for the assessment 3 22 year following the year of purchase, divided by the total 3 23 number of square feet of the structure as of January 1 of the 3 24 assessment year. The assessed value per square foot of a 3 25 residential structure newly constructed after January 1, 2005, 3 26 shall be the market value of the structure, as determined by 3 27 the assessor, divided by the cumulative inflation factor 3 28 established for the assessment year following the year 3 29 construction was completed, divided by the total number of 3 30 square feet of the structure as of January 1 of the assessment 3 31 year. However, when valuing an addition that substantially 3 32 increases the square footage of a structure, only that portion 3 33 of the structure comprising the addition shall be valued by 3 34 the assessor under this subparagraph. 3 35 (2) If additions or modifications to an existing structure 4 1 do not constitute a newly constructed structure, the valuation 4 2 of the structure shall only increase if the square footage of 4 3 the structure increases. The increased valuation, if any, 4 4 equals the amount of increased square feet times the value per 4 5 square foot of the structure prior to the additions or 4 6 modifications. 4 7 3. a. Subject to paragraph "b" for valuations established 4 8 as of January 1, 2006, and for subsequent assessment years, 4 9 the assessed value per square foot of a commercial or 4 10 industrial structure shall be an amount equal to the valuation 4 11 of the structure as determined for the assessment year 4 12 beginning January 1, 2005, prior to application of the 4 13 assessment limitation for that year, divided by the total 4 14 number of square feet of the structure as of January 1, 2005. 4 15 b. (1) The assessed value per square foot of an existing 4 16 commercial or industrial structure purchased after January 1, 4 17 2005, shall be the purchase price of the structure divided by 4 18 the cumulative inflation factor established for the assessment 4 19 year following the year of purchase, divided by the total 4 20 number of square feet of the structure as of January 1 of the 4 21 assessment year. The assessed value per square foot of a 4 22 commercial or industrial structure newly constructed after 4 23 January 1, 2005, shall be the market value of the structure, 4 24 as determined by the assessor, divided by the cumulative 4 25 inflation factor established for the assessment year following 4 26 the year construction was completed, divided by the total 4 27 number of square feet of the structure as of January 1 of the 4 28 assessment year. However, when valuing an addition that 4 29 substantially increases the square footage of a structure, 4 30 only that portion of the structure comprising the addition 4 31 shall be valued by the assessor under this subparagraph. 4 32 (2) If additions or modifications to an existing structure 4 33 do not constitute a newly constructed structure, the valuation 4 34 of the structure shall only increase if the square footage of 4 35 the structure increases. The increased valuation, if any, 5 1 equals the amount of increased square feet times the value per 5 2 square foot of the structure prior to the additions or 5 3 modifications. 5 4 4. a. Subject to paragraph "b" for valuations established 5 5 as of January 1, 2006, and for subsequent assessment years, 5 6 the assessed value per square foot of an agricultural 5 7 structure that is not an agricultural dwelling shall be an 5 8 amount equal to the valuation of the structure as determined 5 9 for the assessment year beginning January 1, 2005, prior to 5 10 application of the assessment limitation for that year, 5 11 divided by the total number of square feet of the structure as 5 12 of January 1, 2005. 5 13 b. (1) The assessed value per square foot of an existing 5 14 agricultural structure purchased after January 1, 2005, shall 5 15 be the productivity value of the structure divided by the 5 16 cumulative inflation factor established for the assessment 5 17 year following the year of purchase, divided by the total 5 18 number of square feet of the structure as of January 1 of the 5 19 assessment year. The assessed value per square foot of an 5 20 agricultural structure newly constructed after January 1, 5 21 2005, shall be the productivity value of the structure for the 5 22 assessment year following the year construction was completed, 5 23 as determined by the assessor, divided by the cumulative 5 24 inflation factor established for the assessment year following 5 25 the year construction was completed, divided by the total 5 26 number of square feet of the structure as of January 1 of the 5 27 assessment year. However, when valuing an addition that 5 28 substantially increases the square footage of a structure, 5 29 only that portion of the structure comprising the addition 5 30 shall be valued by the assessor under this subparagraph. 5 31 (2) If additions or modifications to an existing structure 5 32 do not constitute a newly constructed structure, the valuation 5 33 of the structure shall only increase if the square footage of 5 34 the structure increases. The increased valuation, if any, 5 35 equals the amount of increased square feet times the value per 6 1 square foot of the structure prior to the additions or 6 2 modifications. 6 3 5. a. In determining the market value of newly 6 4 constructed property, except agricultural structures, the 6 5 assessor may determine the value of the property using uniform 6 6 and recognized appraisal methods including its productive and 6 7 earning capacity, if any, industrial conditions, its cost, 6 8 physical and functional depreciation and obsolescence and 6 9 replacement cost, and all other factors which would assist in 6 10 determining the fair and reasonable market value of the 6 11 property but the actual value shall not be determined by use 6 12 of only one such factor. The following shall not be taken 6 13 into consideration: special value or use value of the 6 14 property to its present owner, and the goodwill or value of a 6 15 business that uses the property as distinguished from the 6 16 value of the property as property. However, in assessing 6 17 property that is rented or leased to low-income individuals 6 18 and families as authorized by section 42 of the Internal 6 19 Revenue Code, as amended, and which section limits the amount 6 20 that the individual or family pays for the rental or lease of 6 21 units in the property, the assessor shall use the productive 6 22 and earning capacity from the actual rents received as a 6 23 method of appraisal and shall take into account the extent to 6 24 which that use and limitation reduces the market value of the 6 25 property. The assessor shall not consider any tax credit 6 26 equity or other subsidized financing as income provided to the 6 27 property in determining the market value. Upon adoption of 6 28 uniform rules by the department of revenue and finance 6 29 covering assessments and valuations of such properties, the 6 30 valuation on such properties shall be determined in accordance 6 31 with such values for assessment purposes to assure uniformity, 6 32 but such rules shall not be inconsistent with or change the 6 33 foregoing means of determining the market value. 6 34 b. The actual value of special purpose tooling, which is 6 35 subject to assessment and taxation as real property under 7 1 section 427A.1, subsection 1, paragraph "e", but which can be 7 2 used only to manufacture property which is protected by one or 7 3 more United States or foreign patents, shall not exceed the 7 4 fair and reasonable exchange value between a willing buyer and 7 5 a willing seller, assuming that the willing buyer is 7 6 purchasing only the special purpose tooling and not the patent 7 7 covering the property which the special purpose tooling is 7 8 designed to manufacture nor the rights to manufacture the 7 9 patented property. For purposes of this paragraph, special 7 10 purpose tooling includes dies, jigs, fixtures, molds, 7 11 patterns, and similar property. The assessor shall not take 7 12 into consideration the special value or use value to the 7 13 present owner of the special purpose tooling which is designed 7 14 and intended solely for the manufacture of property protected 7 15 by a patent in arriving at the actual value of the special 7 16 purpose tooling. 7 17 c. In determining the purchase price of a structure, the 7 18 assessor shall consider whether the sale was a fair and 7 19 reasonable exchange in the year in which the property was 7 20 listed and valued between a willing buyer and a willing 7 21 seller, neither being under any compulsion to buy or sell and 7 22 each being familiar with all the facts relating to the 7 23 particular property. Sale prices of the property or 7 24 comparable property in normal transactions reflecting market 7 25 value, and the probable availability or unavailability of 7 26 persons interested in purchasing the property, shall be taken 7 27 into consideration in determining purchase price. In 7 28 determining purchase price, sale prices of property in 7 29 abnormal transactions not reflecting market value shall not be 7 30 taken into account, or shall be adjusted to eliminate the 7 31 effect of factors which distort market value, including but 7 32 not limited to sales to immediate family of the seller, 7 33 foreclosure or other forced sales, contract sales, or 7 34 discounted purchase transactions. 7 35 d. If a county enters into a contract before May 1, 2003, 8 1 for a comprehensive revaluation by a private appraiser and 8 2 such revaluation is for the assessment year beginning January 8 3 1, 2006, the valuations determined under the comprehensive 8 4 revaluation for that assessment year shall be divided by the 8 5 cumulative inflation factor for the assessment year beginning 8 6 January 1, 2006, and that quotient shall be considered the 8 7 valuation of the property for the assessment year beginning 8 8 January 1, 2005. 8 9 6. Notwithstanding any other provision of this section, 8 10 the assessed value per square foot of a structure times the 8 11 total number of square feet of the structure shall not exceed 8 12 its fair and reasonable market value for the assessment year, 8 13 except for agricultural structures which shall be valued 8 14 exclusively as provided in subsection 4. 8 15 7. For purposes of this section: 8 16 a. "Annual inflation factor" means an index, expressed as 8 17 a percentage, determined by the department by January 15 of 8 18 the assessment year for which the factor is determined, which 8 19 reflects the purchasing power of the dollar as a result of 8 20 inflation during the twelve-month period ending September 30 8 21 of the calendar year preceding the assessment year for which 8 22 the factor is determined. In determining the annual inflation 8 23 factor, the department shall use the annual percent change, 8 24 but not less than zero percent, in the gross domestic product 8 25 price deflator computed for the calendar year by the bureau of 8 26 economic analysis of the United States department of commerce 8 27 and shall add all of that percent change to one hundred 8 28 percent. The annual inflation factor and the cumulative 8 29 inflation factor shall each be expressed as a percentage 8 30 rounded to the nearest one-tenth of one percent. The annual 8 31 inflation factor shall not be less than one hundred percent. 8 32 The annual inflation factor for the 2005 calendar year is one 8 33 hundred percent. 8 34 b. "Cumulative inflation factor" means the product of the 8 35 annual inflation factor for the 2005 calendar year and all 9 1 annual inflation factors for subsequent calendar years as 9 2 determined pursuant to this subsection. The cumulative 9 3 inflation factor applies to the assessment year beginning on 9 4 January 1 of the calendar year for which the latest annual 9 5 inflation factor has been determined. 9 6 c. "Newly constructed" includes, but is not limited to, 9 7 structural replacement, additions that substantially increase 9 8 the square footage, conversion into another class of property, 9 9 and conversion from exempt property under section 427.1 to 9 10 taxable property. For commercial and industrial property, 9 11 "newly constructed" also includes an addition or removal to a 9 12 structure of personal property taxed as real estate under 9 13 chapter 427A. 9 14 d. "Structure" means any part of that which is built or 9 15 constructed, an edifice or building of any kind, or any piece 9 16 of work artificially built up or composed of parts joined 9 17 together in some definite manner. For residential structures, 9 18 structure includes only those parts of the structure, 9 19 including basements and attics, that are or could be used as 9 20 living space. "Structure" does not include the land beneath, 9 21 or horizontal improvements relating to the structure, such as 9 22 sidewalks, sewers, or retaining walls. 9 23 8. For the purpose of computing the debt limitations for 9 24 municipalities, political subdivisions, and school districts, 9 25 the term "actual value" means the "actual value" as determined 9 26 under this section without application of any percentage 9 27 reduction and entered opposite each item, and as listed on the 9 28 tax list as provided in section 443.2, as "actual value". 9 29 Whenever any board of review or other tribunal changes the 9 30 assessed value of property, all applicable records of 9 31 assessment shall be adjusted to reflect such change in both 9 32 assessed value and actual value of such property. 9 33 9. The provisions of this chapter and chapters 443, 443A, 9 34 and 444 shall be subject to legislative review at least once 9 35 every five years. The review shall be based upon a property 10 1 tax status report containing the recommendations of a property 10 2 tax implementation committee appointed to conduct a review of 10 3 the land tax, square footage tax, the baseline assessment for 10 4 the square footage tax, and other related provisions, to be 10 5 prepared with the assistance of the departments of management 10 6 and revenue and finance. The report shall include 10 7 recommendations for changes or revisions based upon 10 8 demographic changes and property tax valuation fluctuations 10 9 observed during the preceding five-year interval, and a 10 10 summary of issues that have arisen since the previous review 10 11 and potential approaches for their resolution. The first such 10 12 report shall be submitted to the general assembly no later 10 13 than January 1, 2010, with subsequent reports developed and 10 14 submitted by January 1 at least every fifth year thereafter. 10 15 Sec. 4. NEW SECTION. 441.21A PROPERTY CLASSIFICATIONS. 10 16 1. a. Agricultural land shall be valued at its 10 17 productivity value. The productivity value of agricultural 10 18 land shall be determined on the basis of productivity and net 10 19 earning capacity of the land determined on the basis of its 10 20 use for agricultural purposes capitalized at a rate of seven 10 21 percent and applied uniformly among counties and among classes 10 22 of property. Any formula or method employed to determine 10 23 productivity and net earning capacity of land shall be adopted 10 24 in full by rule. 10 25 b. In counties or townships in which field work on a 10 26 modern soil survey has been completed since January 1, 1949, 10 27 the assessor shall place emphasis upon the results of the 10 28 survey in spreading the valuation among individual parcels of 10 29 such agricultural land. 10 30 c. "Agricultural land" includes the land of a vineyard. 10 31 2. a. "Residential property" includes all lands and 10 32 buildings which are primarily used or intended for human 10 33 habitation, including those buildings located on agricultural 10 34 land. Buildings used primarily or intended for human 10 35 habitation shall include the dwelling as well as structures 11 1 and improvements used primarily as a part of, or in 11 2 conjunction with, the dwelling. This includes but is not 11 3 limited to garages, whether attached or detached, tennis 11 4 courts, swimming pools, guest cottages, and storage sheds for 11 5 household goods. Residential property located on agricultural 11 6 land shall include only buildings. 11 7 b. "Residential property" includes all land and buildings 11 8 of multiple housing cooperatives organized under chapter 499A 11 9 and includes land and buildings used primarily for human 11 10 habitation which land and buildings are owned and operated by 11 11 organizations that have received tax-exempt status under 11 12 section 501(c)(3) of the Internal Revenue Code and rental 11 13 income from the property is not taxed as unrelated business 11 14 income under section 422.33, subsection 1A. 11 15 c. "Residential property" includes an apartment in a 11 16 horizontal property regime referred to in chapter 499B which 11 17 is used or intended for use for human habitation regardless of 11 18 who occupies the apartment. Existing structures shall not be 11 19 converted to a horizontal property regime unless applicable 11 20 building code requirements have been met. 11 21 d. Buildings for human habitation that are used as 11 22 commercial ventures, including but not limited to hotels, 11 23 motels, rest homes, and structures containing three or more 11 24 separate living quarters shall not be considered residential 11 25 property. 11 26 Sec. 5. Section 441.23, Code 2003, is amended to read as 11 27 follows: 11 28 441.23 NOTICE OF VALUATION. 11 29 If there has been an increase or decrease in the valuation 11 30 of the property, or upon the written request of the person 11 31 assessed, the assessor shall, at the time of making the 11 32 assessment, inform the person assessed, in writing, of the 11 33 valuation put upon the taxpayer's property, and notify the 11 34 person, if the person feels aggrieved, to appear before the 11 35 board of review and show why the assessment should be changed. 12 1 However, if the valuation ofa class ofagricultural property 12 2 is uniformly decreased, the assessor may notify the affected 12 3 property owners by publication in the official newspapers of 12 4 the county. The owners of real property shall be notified not 12 5 later than April 15 of any adjustment of the real property 12 6 assessment. The notification shall include a supplemental 12 7 return form for the person to list the person's property and 12 8 any additions or modifications completed in the prior year to 12 9 a structure located on the property, as required in section 12 10 441.19. 12 11 Sec. 6. Section 441.24, Code 2003, is amended to read as 12 12 follows: 12 13 441.24 REFUSAL TO FURNISH STATEMENT. 12 14 1. If a person refuses to furnish the verified statements 12 15 required in connection with the assessment of property by the 12 16 assessor, or to list the corporation's or person's property, 12 17 the director of revenue and finance, or assessor, as the case 12 18 may be, shall proceed to list and assess the property 12 19 according to the best information obtainable, and shall add to 12 20 thetaxableagricultural land and square footage valuation one 12 21 hundred percent thereof, which valuation and penalty shall be 12 22 separately shown, and shall constitute the assessment; and if 12 23 the agricultural land or square footage valuation of the 12 24 property is changed by a board of review, or on appeal from a 12 25 board of review, a like penalty shall be added to the 12 26 valuation thus fixed. 12 27 2. However, all or part of the penalty imposed under this 12 28 section may be waived by the board of review upon application 12 29 to the board by the assessor or the property owner. The 12 30 waiver or reduction in the penalty shall be allowed only on 12 31 the agricultural land or the square footage valuation ofreal12 32propertythe structure against which the penalty has been 12 33 imposed. 12 34 Sec. 7. Section 441.26, unnumbered paragraph 3, Code 2003, 12 35 is amended to read as follows: 13 1 The notice in19812007 and each odd-numbered year 13 2 thereafter shall contain a statement thattheagricultural 13 3 property assessments and property assessed pursuant to section 13 4 441.21, subsection 2, paragraph "b", subparagraph (1), and 13 5 subsection 3, paragraph "b", subparagraph (1), are subject to 13 6 equalization pursuant to an order issued by the director of 13 7 revenue and finance, that the county auditor shall give notice 13 8 on or before October 15 by publication in an official 13 9 newspaper of general circulation to anyclass ofagricultural 13 10 property affected by the equalization order, and that the 13 11 board of review shall be in session from October 15 to 13 12 November 15 to hear protests of affected property owners or 13 13 taxpayers whose valuations have been adjusted by the 13 14 equalization order. 13 15 Sec. 8. Section 441.26, unnumbered paragraphs 4 and 5, 13 16 Code 2003, are amended to read as follows: 13 17 The assessment rolls shall be used in listing the property, 13 18 the number of structures, and the total square footage of the 13 19 structures by class of property, and showing the values 13 20 affixed to agricultural land and the assessed value per square 13 21 foot affixed tothe propertythe structures by class of 13 22 property of all persons assessed. The rolls shall be made in 13 23 duplicate. The duplicate roll shall be signed by the 13 24 assessor, detached from the original and delivered to the 13 25 person assessed if there has been an increase or decrease in 13 26 the valuation of the property. If there has been no change in 13 27 the evaluation, the information on the roll may be printed on 13 28 computer stock paper and preserved as required by this 13 29 chapter. If the person assessed requests in writing a copy of 13 30 the roll, the copy shall be provided to the person. The pages 13 31 of the assessor's assessment book shall contain columns ruled 13 32 and headed for the information required by this chapter and 13 33 that which the director of revenue and finance deems essential 13 34 in the equalization work of the director. The assessor shall 13 35 return all assessment rolls and schedules to the county 14 1 auditor, along with the completed assessment book, as provided 14 2 in this chapter, and the county auditor shall carefully keep 14 3 and preserve the rolls, schedules and book for a period of 14 4 five years from the time of its filing in the county auditor's 14 5 office. 14 6 Beginning with valuations for January 1,19772006, and 14 7 each succeeding year, for each parcel of agricultural property 14 8 and for each structure entered in the assessment book, the 14 9 assessor shall list the classification of the property. 14 10 Sec. 9. Section 441.35, subsection 1, Code 2003, is 14 11 amended by striking the subsection. 14 12 Sec. 10. Section 441.35, unnumbered paragraph 2, Code 14 13 2003, is amended by striking the unnumbered paragraph. 14 14 Sec. 11. Section 441.36, Code 2003, is amended to read as 14 15 follows: 14 16 441.36 CHANGE OF ASSESSMENT – NOTICE. 14 17 All changes in assessments authorized by the board of 14 18 review, and reasons therefor, shall be entered in the minute 14 19 book kept bysaidthe board and on the assessment roll.Said14 20 The minute book shall be filed with the assessor after the 14 21 adjournment of the board of review and shall at all times be 14 22 open to public inspection. In case the value of any specific 14 23 property or structure or the entire assessment of any person, 14 24 partnership, or association is increased, or new property or a 14 25 new structure is added by the board, the clerk shall give 14 26 immediate notice thereof by mail to each at the post-office 14 27 address shown on the assessment rolls, and at the conclusion 14 28 of the action of the board therein the clerk shall post an 14 29 alphabetical list of those whose assessments are thus raised 14 30 and added, in a conspicuous place in the office or place of 14 31 meeting of the board, and enter upon the records a statement 14 32 that such posting has been made, which entry shall be 14 33 conclusive evidence of the giving of the notice required. The 14 34 board shall hold an adjourned meeting, with at least five days 14 35 intervening after the posting ofsaidthe notices, before 15 1 final action with reference to the raising of assessments or 15 2 the adding of property or structures to the rolls is taken, 15 3 and the posted notices shall state the time and place of 15 4 holding such adjourned meeting, which time and place shall 15 5 also be stated in the proceedings of the board. 15 6 Sec. 12. Section 441.37, subsection 1, paragraphs a and b, 15 7 Code 2003, are amended to read as follows: 15 8 a. Thatsaidthe assessment is not equitable as compared 15 9 with assessments of other like property or structures in the 15 10 taxing district. When this ground is relied upon as the basis 15 11 of a protest the legal description and assessments of a 15 12 representative number of comparablepropertiesstructures, as 15 13 described by the aggrieved taxpayer shall be listed on the 15 14 protest, otherwisesaidthe protest shall not be considered on 15 15 this ground. 15 16 b. That the property or structure is assessed for more 15 17 than the value authorized by law, stating the specific amount 15 18 which the protesting party believes the property or structure 15 19 to be overassessed, and the amount which the party considers 15 20 to be its actual value and the amount the party considers a 15 21 fair assessment. 15 22 Sec. 13. Section 441.39, Code 2003, is amended to read as 15 23 follows: 15 24 441.39 TRIAL ON APPEAL. 15 25 The court shall hear the appeal in equity and determine 15 26 anew all questions arising before the board which relate to 15 27 the liability of the property or structure to assessment or 15 28 the amount thereof. The court shall consider all of the 15 29 evidence and there shall be no presumption as to the 15 30 correctness of thevaluation ofassessment appealed from. Its 15 31 decision shall be certified by the clerk of the court to the 15 32 county auditor, and the assessor, who shall correct the 15 33 assessment books accordingly. 15 34 Sec. 14. Section 441.42, Code 2003, is amended to read as 15 35 follows: 16 1 441.42 APPEAL ON BEHALF OF PUBLIC. 16 2 Any officer of a county, city, township, drainage district, 16 3 levee district, or school district interested or a taxpayer 16 4 thereof may in like manner make complaint beforesaidthe 16 5 board of review in respect to the assessment of any property 16 6 or structure in the township, drainage district, levee 16 7 district or city and an appeal from the action of the board of 16 8 review in fixing the amount of assessment on any property or 16 9 structure concerning which such complaint is made, may be 16 10 taken by any of such aforementioned officers. 16 11 Such appeal is in addition to the appeal allowed to the 16 12 person whose property or structure is assessed and shall be 16 13 taken in the name of the county, city, township, drainage 16 14 district, levee district, or school district interested, and 16 15 tried in the same manner, except that the notice of appeal 16 16 shall also be served upon the owner of the property or 16 17 structure concerning which the complaint is made and affected 16 18 thereby or person required to return said property or 16 19 structure for assessment. 16 20 Sec. 15. Section 441.43, Code 2003, is amended to read as 16 21 follows: 16 22 441.43 POWER OF COURT. 16 23 Upon trial of any appeal from the action of the board of 16 24 review fixing the amount of assessment upon any property or 16 25 structure concerning which complaint is made, the court may 16 26 increase, decrease, or affirm the amount of the assessment 16 27 appealed from. 16 28 Sec. 16. Section 441.45, subsections 1 and 2, Code 2003, 16 29 are amended to read as follows: 16 30 1. The number of acres of land and the aggregate taxable 16 31 values of the agricultural land,exclusive of city lots,16 32 returned by the assessors, as corrected by the board of 16 33 review. 16 34 2. The aggregate values of structures and the taxable 16 35 square footage values ofreal estatestructures by class in 17 1 each township and city in the county and the aggregate value 17 2 of agricultural land in each township and city in the county, 17 3 returned as corrected by the board of review. 17 4 Sec. 17. Section 441.47, Code 2003, is amended by adding 17 5 the following new unnumbered paragraph: 17 6 NEW UNNUMBERED PARAGRAPH. For the assessment year 17 7 beginning January 1, 2007, and for all subsequent assessment 17 8 years, only property classified as agricultural property and 17 9 property assessed pursuant to section 441.21, subsection 2, 17 10 paragraph "b", subparagraph (1), and subsection 3, paragraph 17 11 "b", subparagraph (1), shall be subject to equalization by the 17 12 director of revenue and finance under this section and 17 13 sections 441.48 and 441.49. 17 14 Sec. 18. NEW SECTION. 441.47A EQUALIZATION OF INFLATION 17 15 FACTORS. 17 16 The director of revenue and finance on or about August 15, 17 17 2007, and every two years thereafter, shall order the 17 18 equalization of the assessed value per square foot resulting 17 19 from the application of the cumulative inflation factor in the 17 20 several assessing jurisdictions in each case as may be 17 21 necessary to bring such values as fixed by the assessor in 17 22 cases of purchases of property and newly constructed property 17 23 to the values determined for the assessment year beginning 17 24 January 1, 2005. In equalizing the effects of the application 17 25 of the cumulative inflation factor, the department shall make 17 26 use of reports issued by Iowa state university of science and 17 27 technology which reports shall more precisely indicate, on a 17 28 county-by-county basis, annual and cumulative inflation 17 29 factors for each county. If the cumulative inflation factor 17 30 for an assessing jurisdiction as reported by Iowa state 17 31 university of science and technology is five percent above or 17 32 below the cumulative inflation factor as defined in section 17 33 441.21, subsection 7, the director shall notify the assessor 17 34 by mail of the equalization of the effects of the cumulative 17 35 inflation factor for the assessing jurisdiction. The assessor 18 1 shall recompute the assessments made pursuant to section 18 2 441.21, subsection 2, paragraph "b", subparagraph (1), 18 3 subsection 3, paragraph "b", subparagraph (1), and subsection 18 4 4, paragraph "b", subparagraph (1), by applying the equalized 18 5 inflation factor. The assessor shall send notice of the 18 6 equalized assessments to all affected property owners. 18 7 Sec. 19. Section 441.50, Code 2003, is amended to read as 18 8 follows: 18 9 441.50 APPRAISERS EMPLOYED. 18 10 The conference board shall have power to employ appraisers 18 11 or other technical or expert help to assist in thevaluation18 12 assessment of property as provided in section 441.21, the cost 18 13 thereof to be paid in the same manner as other expenses of the 18 14 assessor's office. The conference board may certify for levy 18 15 annually an amount not to exceed forty and one-half cents per 18 16 thousand dollars of assessed value of taxable property for the 18 17 purpose of establishing a special appraiser's fund, to be used 18 18 only for such purposes. From time to time the conference 18 19 board may direct the transfer of any unexpended balance in the 18 20 special appraiser's fund to the assessment expense fund. 18 21 Sec. 20. Section 443.1, Code 2003, is amended to read as 18 22 follows: 18 23 443.1 CONSOLIDATED TAX. 18 24 All square footage taxes which are uniform throughout any 18 25 township or school district shall be formed into a single tax 18 26 and entered upon the tax list in a single column, to be known 18 27 as a consolidated tax, and each receipt shall show the 18 28 percentage levied for each separate fund. The land tax shall 18 29 be separately stated and each receipt shall show the 18 30 percentage levied for each separate fund. 18 31 Sec. 21. Section 443.2, Code 2003, is amended to read as 18 32 follows: 18 33 443.2 TAX LIST. 18 34 Before the first day of July in each year, the county 18 35 auditor shall transcribe the assessments of the townships and 19 1 cities into a book or record, to be known as the tax list, 19 2 properly ruled and headed, with separate columns, in which 19 3 shall be entered the names of the taxpayers, descriptions of 19 4 lands, number of acres and value, numbers of city lots, their 19 5 size in acres, and value, and each description of the square 19 6 footage tax and the land tax, with a column for polls and one 19 7 for payments, and shall complete it by entering the amount due 19 8 on each installment, separately, and carrying out the total of 19 9 both installments. The total of all columns of each page of 19 10 each book or other record shall balance with the tax totals. 19 11 After computing the amount of land tax and square footage tax 19 12 due and payable on each property, the county auditor shall 19 13 round the total amount oftaxtaxes due and payable on the 19 14 property to the nearest even whole dollar. 19 15 The county auditor shall list the aggregate actual value 19 16 and the aggregate taxable value of all taxable property within 19 17 the county and each political subdivision including property 19 18 subject to the statewide property tax imposed under section 19 19 437A.18 on the tax list in order that the actual value of the 19 20 taxable property within the county or a political subdivision 19 21 may be ascertained and shown by the tax list for the purpose 19 22 of computing the debt-incurring capacity of the county or 19 23 political subdivision. As used in this section, "actual 19 24 value" is the value determined under section 441.21, 19 25 subsections 1 to 3, Code 2005, prior to the reduction to a 19 26 percentage of actual value as otherwise provided in section 19 27 441.21, Code 2005. "Actual value" of property subject to 19 28 statewide property tax is the assessed value under section 19 29 437A.18. 19 30 Sec. 22. Section 443.3, Code 2003, is amended to read as 19 31 follows: 19 32 443.3 CORRECTION – TAX APPORTIONED. 19 33 At the time of transcribingsaidthe assessments into the 19 34 tax list, the county auditor shall correct all transfers up to 19 35 date and place the legal descriptions of all real estate in 20 1 the name of the owner atsaidthat date as shown by the 20 2 transfer book in the auditor's office. At the end of the list 20 3 for each township or city the auditor shall make an abstract 20 4 thereof, and apportion the consolidated tax among the 20 5 respective funds to which it belongs, according to the amounts 20 6 levied for each. The auditor shall apportion the land tax as 20 7 prescribed in section 443A.2. 20 8 Sec. 23. Section 443.6, Code 2003, is amended to read as 20 9 follows: 20 10 443.6 CORRECTIONS BY AUDITOR. 20 11 The auditor may correct any error in the assessment or tax 20 12 list, and the assessor or auditor may list for taxation any 20 13 omitted land and may assess and list for taxation any omitted 20 14propertystructure. 20 15 Sec. 24. Section 443.7, Code 2003, is amended to read as 20 16 follows: 20 17 443.7 NOTICE. 20 18 Before listing for taxation any omitted land and before 20 19 assessing and listing for taxation any omittedproperty20 20 structure, the assessor or auditor shall notify by mail the 20 21 person in whose name thepropertyland or structure is taxed, 20 22 to appear before the assessor or auditor at the assessor's or 20 23 auditor's office within ten days from the date of the notice 20 24 and show cause, if any, why the correction or assessment 20 25 should not be made. 20 26 Sec. 25. Section 443.9, Code 2003, is amended to read as 20 27 follows: 20 28 443.9 ADJUSTMENT OF ACCOUNTS. 20 29 If such correction or assessment is made after the books or 20 30 other records approved by thestateauditor of state have 20 31 passed into the hands of the treasurer, the treasurer shall be 20 32 charged or credited therefor as the case may be. In the event 20 33 such listing of omitted land or listing and assessment of 20 34 omittedpropertystructure is made by the assessor after the 20 35 tax records have passed into the hands of the auditor or 21 1 treasurer, such correction or assessment shall be entered on 21 2 the records by the auditor or treasurer. 21 3 Sec. 26. Section 443.12, Code 2003, is amended to read as 21 4 follows: 21 5 443.12 CORRECTIONS BY TREASURER. 21 6 Whenpropertyland or a structure subject to taxation is 21 7 withheld, overlooked, or from any other cause is not listed, 21 8 or is not listed and assessed, the county treasurer shall, 21 9 when apprised thereof, at any time within two years from the 21 10 date at which such listing and assessment should have been 21 11 made, demand of the person, firm, corporation, or other party 21 12 by whom the same should have been listed, or to whom it should 21 13 have been listed and assessed, or of the administrator 21 14 thereof, the amount thepropertyland or structure should have 21 15 been taxed in each year the same was so withheld or overlooked 21 16 and not listed or not listed and assessed, together with six 21 17 percent interest thereon from the time the taxes would have 21 18 become due and payable had suchpropertyland been listed or 21 19 such structure been listed and assessed. 21 20 Sec. 27. Section 443.13, Code 2003, is amended to read as 21 21 follows: 21 22 443.13 ACTION BY TREASURER – APPORTIONMENT. 21 23 Upon failure to pay such sum within thirty days, with all 21 24 accrued interest, the treasurer shall cause an action to be 21 25 brought in the name of the treasurer for the use of the proper 21 26 county, to be prosecuted by the county attorney, or such other 21 27 person as the board of supervisors may appoint, and when such 21 28propertyland has been fraudulently withheld from listing or 21 29 such structure fraudulently withheld from listing and 21 30 assessment, there shall be added to the sum found to be due a 21 31 penalty of fifty percent upon the amount, which shall be 21 32 included in the judgment. The amount thus recovered shall be 21 33 by the treasurer apportioned ratably as the taxes would have 21 34 been if they had been paid according to law. 21 35 Sec. 28. Section 443.14, Code 2003, is amended to read as 22 1 follows: 22 2 443.14 DUTY OF TREASURER. 22 3 The treasurer shall assess anyreal propertystructure and 22 4 shall list the acreage of any land subject to taxation which 22 5 may have been omitted by the assessor, board of review, or 22 6 county auditor, and collect taxes thereon, and in such cases 22 7 shall note, opposite the tract or lot assessed, the words "by 22 8 treasurer". 22 9 Sec. 29. Section 443.15, Code 2003, is amended to read as 22 10 follows: 22 11 443.15 TIME LIMIT. 22 12 The assessment shall be made within two years after the tax 22 13 list shall have been delivered to the treasurer for 22 14 collection, and not afterwards, if thepropertyland or 22 15 structure is then owned by the person who should have paid the 22 16 tax. 22 17 Sec. 30. Section 443.17, Code 2003, is amended to read as 22 18 follows: 22 19 443.17 PRESUMPTION OF TWO-YEAR OWNERSHIP. 22 20 In any action or proceeding, now pending or hereafter 22 21 brought, to recover taxes uponpropertyland not listed or 22 22 agricultural land or a structure not listed and assessed for 22 23 taxation during the lifetime of any decedent, it shall be 22 24 presumed that any property, any evidence of ownership of 22 25 property, and any evidence of a promise to pay, owned by a 22 26 decedent at the date of the decedent's death, had been 22 27 acquired and owned by such decedent more than two years before 22 28 the date of the decedent's death; and the burden of proving 22 29 that any such property had been acquired by such decedent less 22 30 than two years before the date of the decedent's death shall 22 31 be upon the heirs, legatees, and legal representatives of any 22 32 such decedent. 22 33 Sec. 31. Section 443.18, Code 2003, is amended to read as 22 34 follows: 22 35 443.18 REAL ESTATE – DUTY OF OWNER. 23 1 In all cases wherereal estateland subject to taxation has 23 2 not been listed or agricultural land or a structure subject to 23 3 taxation has not been listed and assessed, the owner, or an 23 4 agent of the owner, shall have the same done by the treasurer, 23 5 and pay the taxes thereon; and if the owner fails to do so the 23 6 treasurer shall list or list and assess the same and collect 23 7 the tax assessed as the treasurer does other taxes. 23 8 Sec. 32. Section 443.19, Code 2003, is amended to read as 23 9 follows: 23 10 443.19 IRREGULARITIES, ERRORS AND OMISSIONS – EFFECT. 23 11NoA failure of the owner to have suchpropertyland listed 23 12 or agricultural land or structure listed and assessed or to 23 13 have the errors in the listing or assessment corrected, andno23 14 an irregularity, error or omission in the listing of such land 23 15 or listing and assessment of suchpropertyagricultural land 23 16 or structure, shall not affect in any manner the legality of 23 17 the taxes levied thereon, or affect any right or title to such 23 18real estateproperty which would have accrued to any party 23 19 claiming or holding under and by virtue of a deed executed by 23 20 the treasurer as provided by this title, had the listing and 23 21 assessment of such property been in all respects regular and 23 22 valid. 23 23 Sec. 33. Section 443.21, Code 2003, is amended to read as 23 24 follows: 23 25 443.21 ASSESSMENTS CERTIFIED TO COUNTY AUDITOR. 23 26 All assessors and assessing bodies, including the 23 27 department of revenue and finance having authority over the 23 28 listing of land or listing and assessment ofproperty23 29 agricultural land and structures for tax purposes shall 23 30 certify to the county auditor of each county the number of 23 31 acres of land and the assessed values of agricultural land and 23 32 structures for all the taxable property in such county as 23 33 finallyequalized anddetermined, and the same shall be 23 34 transcribed onto the tax lists as required by section 443.2. 23 35 Sec. 34. Section 443.22, Code 2003, is amended to read as 24 1 follows: 24 2 443.22 UNIFORM ASSESSMENTS MANDATORY. 24 3 All assessors and assessing bodies, including the 24 4 department of revenue and finance having authority over the 24 5 listing of land and listing and assessment ofproperty24 6 agricultural land and structures for tax purposes, shall 24 7 comply with sections 428.4, 428.29, 434.15, 438.13, 441.21, 24 8 and 441.45. The department of revenue and finance, having 24 9 authority over the listing and assessments, shall exercise its 24 10 powers and perform its duties under section 421.17 and other 24 11 applicable laws so as to require the uniform and consistent 24 12 application ofsaidthat section. 24 13 Sec. 35. NEW SECTION. 443A.1 LAND TAX. 24 14 Effective for the fiscal year beginning July 1, 2007, and 24 15 all subsequent fiscal years, a land tax shall be imposed 24 16 against each acre or portion of an acre of land in a county. 24 17 Sec. 36. NEW SECTION. 443A.2 APPORTIONMENT OF LAND TAX. 24 18 1. The land tax for each county shall be apportioned as 24 19 follows: 24 20 In the unincorporated area of the county, the land tax 24 21 shall be distributed to the county, the school district 24 22 located in the unincorporated area of the county, and other 24 23 taxing entities located in the unincorporated area of the 24 24 county in the same proportion that property taxes levied in 24 25 the unincorporated area of the county for the fiscal year 24 26 beginning July 1, 2006, were allocated to those entities. 24 27 In the incorporated areas of the county, the land tax shall 24 28 be distributed to the city, the county, each school district 24 29 located within the city, and other taxing entities located 24 30 within the city in the same proportion that property taxes 24 31 levied in the city for the fiscal year beginning July 1, 2006, 24 32 were allocated to those entities. 24 33 2. The city finance committee and the county finance 24 34 committee shall jointly determine the adjustments to be made 24 35 to the allocation of the land tax in the case of boundary 25 1 adjustments made to a taxing district on or after January 1, 25 2 2006. 25 3 3. After the auditor has computed the amount of land tax 25 4 to be distributed to each taxing district, the auditor shall 25 5 compute the rate of tax to be levied upon the square footage 25 6 valuation of structures pursuant to chapter 444. 25 7 Sec. 37. Section 444.1, Code 2003, is amended to read as 25 8 follows: 25 9 444.1 BASIS FOR AMOUNT OF TAX. 25 10 In all taxing districts in the state, including townships, 25 11 school districts, cities and counties, when by law then 25 12 existing the people are authorized to determine by vote, or 25 13 officers are authorized to estimate or determine, a rate of 25 14 taxation required for any public purpose, such rate shall in 25 15 all cases be estimated and based upon the amount of land tax 25 16 available to the district and the adjusted taxable square 25 17 footage valuation of such taxing district for the preceding 25 18 calendar year. 25 19 Sec. 38. Section 444.2, Code 2003, is amended to read as 25 20 follows: 25 21 444.2 AMOUNTS CERTIFIED IN DOLLARS. 25 22 When an authorized square footage tax rate within a taxing 25 23 district, including townships, school districts, cities and 25 24 counties, has been thus determined as provided by law, the 25 25 officer or officers charged with the duty of certifying the 25 26 authorized rate to the county auditor or board of supervisors 25 27 shall, before certifying the rate, compute upon the adjusted 25 28 taxable square footage valuation of the taxing district for 25 29 the preceding fiscal year, the amount of tax the rate will 25 30 raise, stated in dollars, and shall certify the computed 25 31 amount in dollars and not by rate, to the county auditor and 25 32 board of supervisors and shall further certify the percentage 25 33 of such amount to be levied against each class of property. 25 34 Sec. 39. Section 444.3, Code 2003, is amended to read as 25 35 follows: 26 1 444.3 COMPUTATION OF SQUARE FOOTAGE RATE. 26 2 When the square footage valuations for the several taxing 26 3 districts shall have been adjusted by the several boards for 26 4 the current year, and the amount of land tax to be distributed 26 5 to each taxing district has been deducted from the dollar 26 6 amounts certified in section 444.2 for each taxing district, 26 7 the county auditor shall thereupon apply such a rate, not26 8exceeding the rate authorized by law,or rates as will raise 26 9 the amount required for such taxing district, and when 26 10 combined with the land tax amount will raise an amount not 26 11 exceeding the dollar amount authorized by law for the taxing 26 12 district, andnowill not raise a larger amount. For purposes 26 13 of computing the square footage rate under this section, the 26 14 adjusted taxable square footage valuation of the property of a 26 15 taxing district does not include the valuation of property of 26 16 a railway corporation or its trustee which corporation has 26 17 been declared bankrupt or is in bankruptcy proceedings. 26 18 Nothing in the preceding sentence exempts the property of such 26 19 railway corporation or its trustee from taxation and the rate 26 20 computed under this section shall be levied on the taxable 26 21 property of such railway corporation or its trustee. 26 22 The square footage tax rate shall be expressed in dollars 26 23 and cents per one hundred dollars of valuation per square 26 24 foot. 26 25 Sec. 40. NEW SECTION. 444.9 COMPUTATION OF TAX. 26 26 The amount of tax imposed on any taxable property is the 26 27 sum of the amounts computed in subsections 1 and 2. 26 28 1. LAND TAX. The product of the land tax rate times the 26 29 number of acres or portion of an acre of the taxable property. 26 30 2. SQUARE FOOTAGE TAX. The product of the square footage 26 31 tax rate times the valuation per square foot of the taxable 26 32 structure times the number of square feet of the taxable 26 33 structure. The square footage tax shall be computed 26 34 separately for each structure located on the land. 26 35 Sec. 41. PROPERTY TAX IMPLEMENTATION COMMITTEE. 27 1 1. On or before July 1, 2003, the department of revenue 27 2 and finance, in consultation with the department of 27 3 management, shall initiate and coordinate the establishment of 27 4 a property tax implementation committee and provide staffing 27 5 assistance to the committee. The property tax implementation 27 6 committee shall include four members of the general assembly, 27 7 one each appointed by the majority leader of the senate, the 27 8 speaker of the house of representatives, the minority leader 27 9 of the senate, and the minority leader of the house of 27 10 representatives. The committee shall also include members 27 11 appointed by the department of revenue and finance 27 12 representing the department of revenue and finance, the 27 13 department of management, counties, cities, school districts, 27 14 local assessors, commercial property taxpayers, industrial 27 15 property taxpayers, residential property taxpayers, and 27 16 agricultural property taxpayers, and other appropriate 27 17 stakeholders. The department may consider participation on 27 18 the committee of former state officials with expertise in 27 19 budget and tax policy. The chairpersons of the committee 27 20 shall be those members of the general assembly appointed by 27 21 the majority leader of the senate and the speaker of the house 27 22 of representatives. 27 23 2. The committee shall study and make recommendations 27 24 relating to the land tax, square footage tax, the baseline 27 25 assessment for the square footage tax, and other related 27 26 provisions. The committee shall also study and make 27 27 recommendations on issues relating to implementation of a land 27 28 tax and square footage tax, including, but not limited to, 27 29 whether or not maximum square footage rates and land tax rates 27 30 should be imposed and, if such rates are recommended, the 27 31 imposition of rates that have a revenue neutral impact on 27 32 classes of property, the property tax financing portion of the 27 33 school funding formula, treatment of current property tax 27 34 credits and exemptions under a land tax and square footage tax 27 35 and continued state reimbursement of any credits or 28 1 exemptions, implementation of urban revitalization and urban 28 2 renewal programs under the land tax and square footage tax, 28 3 implementation of a payment in lieu of taxes program for local 28 4 government services, and maintenance of equity among classes 28 5 of taxpayers and among taxpayers within the same class. The 28 6 property tax implementation committee shall also study the 28 7 role of property taxes in funding local government services 28 8 and the types of services currently funded by property taxes. 28 9 3. The property tax implementation committee shall direct 28 10 three counties and cities within those counties to submit data 28 11 as prescribed by the committee. The department of revenue and 28 12 finance, in consultation with the department of management, 28 13 shall select the three counties and the cities within those 28 14 counties that will be required to provide data to the 28 15 committee. The committee shall devise a system for testing 28 16 the data, including the necessary computer hardware and 28 17 software to allow the selected counties and cities to prepare 28 18 projected budgets, to determine the rates for the land tax and 28 19 the square footage tax for those projected budgets, and to 28 20 provide a sampling of the effect on the various classes of 28 21 property in those jurisdictions. The committee shall use the 28 22 data and the results of the projections to resolve, and make 28 23 recommendations relating to, the issues described in 28 24 subsection 2, and related issues, in a revenue neutral manner 28 25 that will not result in a shift of property tax burden between 28 26 classes of property. The committee shall submit to the 28 27 general assembly by October 31, 2003, October 31, 2004, and 28 28 October 31, 2005, a report for each of those years resolving 28 29 the issues in subsection 2 and other related issues for 28 30 implementation of this Act. The reports shall include 28 31 detailed estimates of the cost to the counties and cities of 28 32 providing the data and an estimate of the cost of statewide 28 33 implementation of this Act. 28 34 Sec. 42. EFFECTIVE AND APPLICABILITY DATES. 28 35 1. The section of this division of this Act establishing 29 1 the property tax implementation committee, being deemed of 29 2 immediate importance, takes effect upon enactment. 29 3 2. The remainder of this division of this Act takes effect 29 4 July 1, 2005, and applies to assessment years beginning on or 29 5 after January 1, 2006, and applies to tax collections for 29 6 fiscal years beginning on or after July 1, 2007. 29 7 Sec. 43. FUTURE REPEAL. This division of this Act is 29 8 repealed effective June 30, 2005. 29 9 DIVISION II 29 10 INDIVIDUAL INCOME TAX 29 11 2004-2006 TAX YEARS 29 12 Sec. 44. Section 422.5, subsection 1, paragraphs a through 29 13 i, Code 2003, are amended to read as follows: 29 14 For tax years beginning 29 15 in the calendar year: 29 16 2004 2005 2006 29 17 a. On all taxable income from 29 18 zero through one thousand dollars,29 19thirty-six hundredths of one29 20percent.: ............................. .35% .34% .32% 29 21 b. On all taxable income exceeding 29 22 one thousand dollars but not 29 23 exceeding two thousand dollars,29 24seventy-two hundredths of one29 25percent.: ............................. .70% .68% .65% 29 26 c. On all taxable income exceeding 29 27 two thousand dollars but not 29 28 exceeding four thousand dollars,29 29two and forty-three hundredths29 30percent.: ............................ 2.36% 2.30% 2.19% 29 31 d. On all taxable income exceeding 29 32 four thousand dollars but not 29 33 exceeding nine thousand dollars,29 34four and one-half percent.: .......... 4.37% 4.27% 4.05% 29 35 e. On all taxable income exceeding 30 1 nine thousand dollars but not 30 2 exceeding fifteen thousand 30 3 dollars, six and twelve hundredths30 4percent.: ............................ 5.94% 5.80% 5.51% 30 5 f. On all taxable income exceeding 30 6 fifteen thousand dollars but not 30 7 exceeding twenty thousand 30 8 dollars, six and forty-eight hundredths30 9percent.: ............................ 6.29% 6.14% 5.84% 30 10 g. On all taxable income exceeding 30 11 twenty thousand dollars but not 30 12 exceeding thirty thousand 30 13 dollars, six and eight-tenths30 14percent.: ............................ 6.60% 6.45% 6.13% 30 15 h. On all taxable income exceeding 30 16 thirty thousand dollars but not 30 17 exceeding forty-five thousand 30 18 dollars, seven and ninety-two hundredths30 19percent.: ............................ 7.68% 7.51% 7.14% 30 20 i. On all taxable income exceeding 30 21 forty-five thousand dollars, eight30 22and ninety-eight hundredths30 23percent.: ............................ 8.71% 8.51% 8.09% 30 24 Sec. 45. EFFECTIVE AND APPLICABILITY DATE PROVISIONS. 30 25 This division of this Act takes effect January 1, 2004, for 30 26 tax years beginning on or after January 1, 2004, but before 30 27 January 1, 2007. 30 28 DIVISION III 30 29 INDIVIDUAL INCOME TAX 30 30 2007 AND SUBSEQUENT TAX YEARS 30 31 Sec. 46. Section 422.5, subsection 1, paragraphs a through 30 32 i, Code 2003, are amended to read as follows: 30 33 For tax years beginning 30 34 in the calendar year: 30 35 2007 and subsequent 31 1 calendar years 31 2 a. On all taxable income from 31 3 zero through one thousand dollars,31 4thirty-six hundredths of one31 5percent.: ............................. .31% 31 6 b. On all taxable income exceeding 31 7 one thousand dollars but not 31 8 exceeding two thousand dollars,31 9seventy-two hundredths of one31 10percent.: ............................. .62% 31 11 c. On all taxable income exceeding 31 12 two thousand dollars but not 31 13 exceeding four thousand dollars,31 14two and forty-three hundredths31 15percent.: ............................ 2.09% 31 16 d. On all taxable income exceeding 31 17 four thousand dollars but not 31 18 exceeding nine thousand dollars,31 19four and one-half percent.: .......... 3.87% 31 20 e. On all taxable income exceeding 31 21 nine thousand dollars but not 31 22 exceeding fifteen thousand 31 23 dollars, six and twelve hundredths31 24percent.: ............................ 5.26% 31 25 f. On all taxable income exceeding 31 26 fifteen thousand dollars but not 31 27 exceeding twenty thousand 31 28 dollars, six and forty-eight hundredths31 29percent.: ............................ 5.57% 31 30 g. On all taxable income exceeding 31 31 twenty thousand dollars but not 31 32 exceeding thirty thousand 31 33 dollars, six and eight-tenths31 34percent.: ............................ 5.84% 31 35 h. On all taxable income exceeding 32 1 thirty thousand dollars but not 32 2 exceeding forty-five thousand 32 3 dollars, seven and ninety-two hundredths32 4percent.: ............................ 6.80% 32 5 i. On all taxable income exceeding 32 6 forty-five thousand dollars, eight32 7and ninety-eight hundredths32 8percent.: ............................ 7.71% 32 9 Sec. 47. EFFECTIVE AND APPLICABILITY DATE PROVISIONS. 32 10 This division of this Act takes effect January 1, 2007, for 32 11 tax years beginning on or after January 1, 2007. 32 12 DIVISION IV 32 13 INDIVIDUAL INCOME TAX 32 14 2007 AND SUBSEQUENT TAX YEARS 32 15 Sec. 48. Section 422.4, subsection 1, paragraphs b and c, 32 16 Code 2003, are amended to read as follows: 32 17 b. "Cumulative inflation factor" means the product of the 32 18 annual inflation factor for the19882007 calendar year and 32 19 all annual inflation factors for subsequent calendar years as 32 20 determined pursuant to this subsection. The cumulative 32 21 inflation factor applies to all tax years beginning on or 32 22 after January 1 of the calendar year for which the latest 32 23 annual inflation factor has been determined. 32 24 c. The annual inflation factor for the19882007 calendar 32 25 year is one hundred percent. 32 26 Sec. 49. Section 422.4, subsection 16, Code 2003, is 32 27 amended to read as follows: 32 28 16.The words "taxable"Taxable income"meanmeans the net 32 29 income as defined in section 422.7 minus the deductions 32 30 allowed by section 422.9, in the case of individuals; in. In 32 31 the case of estates or trusts,the words"taxable income"mean32 32 means the taxable income,(without a deduction for personal 32 33 exemption), as computed for federal income tax purposes under 32 34 the Internal Revenue Code, but with the adjustments specified 32 35 in section 422.7plus the Iowa income tax deducted in33 1computing the federal taxable income and minus federal income33 2taxes as provided in section 422.9. 33 3 Sec. 50. Section 422.5, subsection 1, Code 2003, as 33 4 amended by 2003 Iowa Acts, Senate File 442, section 4, is 33 5 amended by striking the subsection and inserting in lieu 33 6 thereof the following: 33 7 1. a. A tax is imposed upon every resident and 33 8 nonresident of the state which tax shall be levied, collected, 33 9 and paid annually upon and with respect to the entire taxable 33 10 income at rates as follows: 33 11 (1) On all taxable income from zero through eight thousand 33 12 dollars, one and eighty-five hundredths percent. 33 13 (2) On all taxable income exceeding eight thousand dollars 33 14 but not exceeding one hundred thousand dollars, four and 33 15 seventy-five hundredths percent. 33 16 (3) On all taxable income exceeding one hundred thousand 33 17 dollars, four and ninety-nine hundredths percent. 33 18 b. (1) The tax imposed upon the taxable income of a 33 19 nonresident shall be computed by reducing the amount 33 20 determined pursuant to paragraph "a" by the amounts of 33 21 nonrefundable credits under this division and by multiplying 33 22 this resulting amount by a fraction of which the nonresident's 33 23 net income allocated to Iowa, as determined in section 422.8, 33 24 subsection 2, paragraph "a", is the numerator and the 33 25 nonresident's total net income computed under section 422.7 is 33 26 the denominator. This provision also applies to individuals 33 27 who are residents of Iowa for less than the entire tax year. 33 28 (2) The tax imposed upon the taxable income of a resident 33 29 shareholder in an S corporation which has in effect for the 33 30 tax year an election under subchapter S of the Internal 33 31 Revenue Code and carries on business within and without the 33 32 state may be computed by reducing the amount determined 33 33 pursuant to paragraph "a" by the amounts of nonrefundable 33 34 credits under this division and by multiplying this resulting 33 35 amount by a fraction of which the resident's net income 34 1 allocated to Iowa, as determined in section 422.8, subsection 34 2 2, paragraph "b", is the numerator and the resident's total 34 3 net income computed under section 422.7 is the denominator. 34 4 If a resident shareholder has elected to take advantage of 34 5 this subparagraph, and for the next tax year elects not to 34 6 take advantage of this subparagraph, the resident shareholder 34 7 shall not reelect to take advantage of this subparagraph for 34 8 the three tax years immediately following the first tax year 34 9 for which the shareholder elected not to take advantage of 34 10 this subparagraph, unless the director consents to the 34 11 reelection. This subparagraph also applies to individuals who 34 12 are residents of Iowa for less than the entire tax year. 34 13 Sec. 51. Section 422.5, subsection 2, Code 2003, is 34 14 amended by striking the subsection and inserting in lieu 34 15 thereof the following: 34 16 2. a. However, if the married persons' filing jointly or 34 17 separately on a combined return, unmarried head of 34 18 household's, or surviving spouse's net income exceeds thirteen 34 19 thousand five hundred dollars or nine thousand dollars in the 34 20 case of all other persons, the regular tax imposed under this 34 21 division shall be the lesser of the product of eight percent 34 22 times the portion of the net income in excess of thirteen 34 23 thousand five hundred dollars or nine thousand dollars, as 34 24 applicable, or the regular tax liability computed without 34 25 regard to this paragraph. 34 26 b. Paragraph "a" does not apply to estates and trusts. 34 27 Married taxpayers electing to file separately shall compute 34 28 the alternate tax described in paragraph "a" using the total 34 29 net income of the husband and wife. The alternate tax 34 30 described in paragraph "a" does not apply if one spouse elects 34 31 to carry back or carry forward the loss as provided in section 34 32 422.9, subsection 3. A person who is claimed as a dependent 34 33 by another person as defined in section 422.12 shall not 34 34 receive the benefit of paragraph "a" if the person claiming 34 35 the dependent has net income exceeding thirteen thousand five 35 1 hundred dollars or nine thousand dollars as applicable or the 35 2 person claiming the dependent and the person's spouse have 35 3 combined net income exceeding thirteen thousand five hundred 35 4 dollars or nine thousand dollars as applicable. 35 5 Sec. 52. Section 422.5, subsection 5, Code 2003, is 35 6 amended to read as follows: 35 7 5. Upon determination of the latest cumulative inflation 35 8 factor, the director shall multiply each dollar amount set 35 9 forth in subsection 1,paragraphs "a" through "i" of this35 10sectionparagraph "a", by this cumulative inflation factor, 35 11 shall round off the resulting product to the nearest one 35 12 dollar, and shall incorporate the result into the income tax 35 13 forms and instructions for each tax year. 35 14 Sec. 53. Section 422.5, subsection 7, Code 2003, is 35 15 amended by striking the subsection. 35 16 Sec. 54. Section 422.7, Code 2003, as amended by 2003 Iowa 35 17 Acts, Senate File 442, section 5, and House File 674, sections 35 18 5 and 6, is amended by striking the section and inserting in 35 19 lieu thereof the following: 35 20 422.7 "NET INCOME" – HOW COMPUTED. 35 21 The term "net income" means the adjusted gross income 35 22 before the net operating loss deduction as properly computed 35 23 for federal income tax purposes under the Internal Revenue 35 24 Code, with the following adjustments: 35 25 1. The adjusted gross income is adjusted by adding the sum 35 26 of the following: 35 27 a. Add the amount of federal income tax refunds received 35 28 in a tax year beginning on or after January 1, 2007, but 35 29 before January 1, 2010, to the extent that the federal income 35 30 tax was deducted on an Iowa individual income tax return for a 35 31 tax year beginning prior to January 1, 2007. 35 32 b. Add interest and dividends from foreign securities and 35 33 from securities of state and other political subdivisions 35 34 exempt from federal income tax under the Internal Revenue 35 35 Code. 36 1 c. Add interest and dividends from regulated investment 36 2 companies exempt from federal income tax under the Internal 36 3 Revenue Code. 36 4 d. Add, to the extent not already included, income from 36 5 the sale of obligations of the state and its political 36 6 subdivisions. Income from the sale of these obligations is 36 7 exempt from the taxes imposed by this division only if the law 36 8 authorizing these obligations specifically exempts the income 36 9 from the sale from the state individual income tax. 36 10 e. Add the amount resulting from the cancellation of a 36 11 participation agreement refunded to the taxpayer as a 36 12 participant in the Iowa educational savings plan trust under 36 13 chapter 12D to the extent previously deducted as a 36 14 contribution to the trust. 36 15 2. The adjusted gross income is adjusted by subtracting 36 16 the sum of the following: 36 17 a. Subtract the amount of federal income taxes paid or 36 18 accrued, as the case may be, in a tax year beginning on or 36 19 after January 1, 2007, but before January 1, 2010, to the 36 20 extent the federal tax payment is for a tax year beginning 36 21 prior to January 1, 2007. 36 22 b. Subtract interest and dividends from federal 36 23 securities. 36 24 c. Subtract the loss on the sale or exchange of a share of 36 25 a regulated investment company held for six months or less to 36 26 the extent the loss was disallowed under section 852(b)(4)(B) 36 27 of the Internal Revenue Code. 36 28 d. (1) Subtract, to the extent included, the amount of 36 29 additional social security benefits taxable under the Internal 36 30 Revenue Code for tax years beginning on or after January 1, 36 31 1994. The amount of social security benefits taxable as 36 32 provided in section 86 of the Internal Revenue Code, as 36 33 amended up to and including January 1, 1993, continues to 36 34 apply for state income tax purposes for tax years beginning on 36 35 or after January 1, 1994. 37 1 (2) Married taxpayers, who file a joint federal income tax 37 2 return and who elect to file separate returns or who elect 37 3 separate filing on a combined return for state income tax 37 4 purposes, shall allocate between the spouses the amount of 37 5 benefits subtracted under subparagraph (1) from net income in 37 6 the ratio of the social security benefits received by each 37 7 spouse to the total of these benefits received by both 37 8 spouses. 37 9 e. (1) For a person who is disabled, or is fifty-five 37 10 years of age or older, or is the surviving spouse of an 37 11 individual or a survivor having an insurable interest in an 37 12 individual who would have qualified for the exemption under 37 13 this paragraph for the tax year, subtract, to the extent 37 14 included, the total amount of a governmental or other pension 37 15 or retirement pay, including, but not limited to, defined 37 16 benefit or defined contribution plans, annuities, individual 37 17 retirement accounts, plans maintained or contributed to by an 37 18 employer, or maintained or contributed to by a self-employed 37 19 person as an employer, and deferred compensation plans or any 37 20 earnings attributable to the deferred compensation plans, up 37 21 to a maximum of six thousand dollars for a person, other than 37 22 a husband or wife, who files a separate state income tax 37 23 return and up to a maximum of twelve thousand dollars for a 37 24 husband and wife who file a joint state income tax return. 37 25 (2) However, a surviving spouse who is not disabled or 37 26 fifty-five years of age or older can only exclude the amount 37 27 of pension or retirement pay received as a result of the death 37 28 of the other spouse. A husband and wife filing separate state 37 29 income tax returns or separately on a combined return are 37 30 allowed a combined maximum exclusion under this paragraph "e" 37 31 of up to the amount allowed for a husband and wife who file a 37 32 joint state income tax return. The exclusion shall be 37 33 allocated to the husband or wife in the proportion that each 37 34 spouse's respective pension and retirement pay received bears 37 35 to total combined pension and retirement pay received. 38 1 f. Notwithstanding the method for computing income from an 38 2 installment sale under section 453 of the Internal Revenue 38 3 Code, as defined in section 422.3, the method to be used in 38 4 computing income from an installment sale shall be the method 38 5 under section 453 of the Internal Revenue Code, as amended up 38 6 to and including January 1, 2000. A taxpayer affected by this 38 7 paragraph shall make adjustments in the adjusted gross income 38 8 pursuant to rules adopted by the director. 38 9 The adjustment to net income provided in this paragraph "f" 38 10 is repealed for tax years beginning on or after January 1, 38 11 2002. However, to the extent that a taxpayer using the 38 12 accrual method of accounting reported the entire capital gain 38 13 from the sale or exchange of property on the Iowa return for 38 14 the tax year beginning in the 2001 calendar year and the 38 15 capital gain was reported on the installment method on the 38 16 federal income tax return, any additional installment from the 38 17 capital gain reported for federal income tax purposes is not 38 18 to be included in net income in tax years beginning on or 38 19 after January 1, 2002. 38 20 g. Subtract, if the taxpayer is the owner of an individual 38 21 development account certified under chapter 541A at any time 38 22 during the tax year, all of the following: 38 23 (1) Contributions made to the account by persons and 38 24 entities, other than the taxpayer, as authorized in chapter 38 25 541A. 38 26 (2) The amount of any savings refund authorized under 38 27 section 541A.3, subsection 1. 38 28 (3) Earnings from the account. 38 29 h. (1) Subtract the maximum contribution that may be 38 30 deducted for income tax purposes as a participant in the Iowa 38 31 educational savings plan trust pursuant to section 12D.3, 38 32 subsection 1, paragraph "a". 38 33 (2) Subtract, to the extent included, income from interest 38 34 and earnings received from the Iowa educational savings plan 38 35 trust created in chapter 12D. 39 1 (3) Subtract, to the extent not deducted for federal 39 2 income tax purposes, the amount of any gift, grant, or 39 3 donation made to the Iowa educational savings plan trust for 39 4 deposit in the endowment fund of that trust. 39 5 i. Subtract, to the extent included, active duty pay 39 6 received by a person in the national guard or armed forces 39 7 military reserve for services performed on or after August 2, 39 8 1990, pursuant to military orders related to the Persian Gulf 39 9 Conflict. 39 10 j. Subtract, to the extent included, active duty pay 39 11 received by a person in the national guard or armed forces 39 12 military reserve for service performed on or after November 39 13 21, 1995, pursuant to military orders related to peacekeeping 39 14 in Bosnia-Herzegovina. 39 15 k. Subtract, to the extent included, the following: 39 16 (1) Payments made to the taxpayer because of the 39 17 taxpayer's status as a victim of persecution for racial, 39 18 ethnic, or religious reasons by Nazi Germany or any other Axis 39 19 regime or as an heir of such victim. 39 20 (2) Items of income attributable to, derived from, or in 39 21 any way related to assets stolen from, hidden from, or 39 22 otherwise lost to a victim of persecution for racial, ethnic, 39 23 or religious reasons by Nazi Germany or any other Axis regime 39 24 immediately prior to, during, and immediately after World War 39 25 II, including, but not limited to, interest on the proceeds 39 26 receivable as insurance under policies issued to a victim of 39 27 persecution for racial, ethnic, or religious reasons by Nazi 39 28 Germany or any other Axis regime by European insurance 39 29 companies immediately prior to and during World War II. 39 30 However, income from assets acquired with such assets or with 39 31 the proceeds from the sale of such assets shall not be 39 32 subtracted. This subparagraph shall only apply to a taxpayer 39 33 who was the first recipient of such assets after recovery of 39 34 the assets and who is a victim of persecution for racial, 39 35 ethnic, or religious reasons by Nazi Germany or any other Axis 40 1 regime or is an heir of such victim. 40 2 l. Subtract, to the extent included, active duty pay 40 3 received by a person in the national guard or armed forces 40 4 military reserve for service performed on or after January 1, 40 5 2003, pursuant to military orders related to Operation Iraqi 40 6 Freedom, Operation Noble Eagle, and Operation Enduring 40 7 Freedom. 40 8 m. Subtract, not to exceed one thousand five hundred 40 9 dollars, the overnight transportation, meals, and lodging 40 10 expenses, to the extent not reimbursed, incurred by the 40 11 taxpayer for travel away from home of more than one hundred 40 12 miles for the performance of services by the taxpayer as a 40 13 member of the national guard or armed forces military reserve. 40 14 n. Subtract, to the extent included, military student loan 40 15 repayments received by the taxpayer serving on active duty in 40 16 the national guard or armed forces military reserve or on 40 17 active duty status in the armed forces. 40 18 o. Subtract, to the extent not otherwise excluded, the 40 19 amount of the death gratuity payable under 10 U.S.C. } 1475- 40 20 1491 for deaths occurring after September 10, 2001. 40 21 3. a. In determining the amount of federal income tax 40 22 refunds or taxes paid or accrued under subsection 1 or 2, for 40 23 tax years beginning in the 2001 calendar year, the amount 40 24 shall not be adjusted by the amount received during the tax 40 25 year of the advanced refund of the rate reduction tax credit 40 26 provided pursuant to the federal Economic Growth and Tax 40 27 Relief Reconciliation Act of 2001, Pub. L. No. 107-16, and the 40 28 advanced refund of such credit shall not be subject to 40 29 taxation under this division. 40 30 b. In determining the amount of federal income tax refunds 40 31 or taxes paid or accrued under subsection 1 or 2, for tax 40 32 years beginning in the 2002 calendar year, the amount shall 40 33 not be adjusted by the amount of the rate reduction credit 40 34 received during the tax year to the extent that the credit is 40 35 attributable to the rate reduction credit provided pursuant to 41 1 the federal Economic Growth and Tax Relief Reconciliation Act 41 2 of 2001, Pub. L. No. 107-16, and the amount of such credit 41 3 shall not be taxable under this division. 41 4 4. The additional first-year depreciation allowance 41 5 authorized in section 168(k) of the Internal Revenue Code, as 41 6 enacted by Pub. L. No. 107-147, section 101, does not apply in 41 7 computing net income for state tax purposes. If the taxpayer 41 8 has taken such deduction in computing federal adjusted gross 41 9 income, the following adjustments shall be made: 41 10 a. Add the total amount of depreciation taken on all 41 11 property for which the election under section 168(k) of the 41 12 Internal Revenue Code was made for the tax year. 41 13 b. Subtract an amount equal to depreciation taken on such 41 14 property for the tax year using the modified accelerated cost 41 15 recovery system depreciation method applicable under section 41 16 168 of the Internal Revenue Code without regard to section 41 17 168(k). 41 18 c. Any other adjustments to gains or losses to reflect the 41 19 adjustments made in paragraphs "a" and "b" pursuant to rules 41 20 adopted by the director. 41 21 Sec. 55. Section 422.8, subsection 2, paragraph a, Code 41 22 2003, is amended to read as follows: 41 23 a. Nonresident's net income allocated to Iowa is the net 41 24 income, or portion of net income, which is derived from a 41 25 business, trade, profession, or occupation carried on within 41 26 this state or income from any property, trust, estate, or 41 27 other source within Iowa. However, income derived from a 41 28 business, trade, profession, or occupation carried on within 41 29 this state and income from any property, trust, estate, or 41 30 other source within Iowa shall not include distributions from 41 31 pensions, including defined benefit or defined contribution 41 32 plans, annuities, individual retirement accounts, and deferred 41 33 compensation plans or any earnings attributable thereto so 41 34 long as the distribution is directly related to an 41 35 individual's documented retirement and received while the 42 1 individual is a nonresident of this state. If a business, 42 2 trade, profession, or occupation is carried on partly within 42 3 and partly without the state, only the portion of the net 42 4 income which is fairly and equitably attributable to that part 42 5 of the business, trade, profession, or occupation carried on 42 6 within the state is allocated to Iowa for purposes of section 42 7 422.5, subsection 1, paragraph"j""b", and section 422.13 and 42 8 income from any property, trust, estate, or other source 42 9 partly within and partly without the state is allocated to 42 10 Iowa in the same manner, except that annuities, interest on 42 11 bank deposits and interest-bearing obligations, and dividends 42 12 are allocated to Iowa only to the extent to which they are 42 13 derived from a business, trade, profession, or occupation 42 14 carried on within the state. 42 15 Sec. 56. Section 422.8, subsection 4, Code 2003, is 42 16 amended by striking the subsection. 42 17 Sec. 57. Section 422.9, subsection 1, Code 2003, is 42 18 amended to read as follows: 42 19 1. An optional standard deduction, after deduction of42 20federal income tax,equal to one thousand two hundred thirty 42 21 dollars for a married person who files separately or a single 42 22 person or equal to three thousand thirty dollars for a husband 42 23 and wife who file a joint return, a surviving spouse, or an 42 24 unmarried head of household.The optional standard deduction42 25shall not exceed the amount remaining after deduction of the42 26federal income tax.42 27 Sec. 58. Section 422.9, subsection 2, paragraph b, Code 42 28 2003, is amended by striking the paragraph. 42 29 Sec. 59. Section 422.9, subsections 6 and 7, Code 2003, 42 30 are amended by striking the subsections. 42 31 Sec. 60. Section 422.11B, subsection 1, Code 2003, is 42 32 amended to read as follows: 42 33 1. There is allowed as a credit against the tax determined 42 34 in section 422.5, subsection 1, paragraphs "a" through "j" for 42 35 a tax year an amount equal to the minimum tax credit for that 43 1 tax year. 43 2 The minimum tax credit for a tax year is the excess, if 43 3 any, of the adjusted net minimum tax imposed for all prior tax 43 4 years beginning on or after January 1, 1987, but before 43 5 January 1, 2007, over the amount allowable as a credit under 43 6 this section for those prior tax years. 43 7 If a minimum tax credit is available to a tax period 43 8 beginning on or after January 1, 2007, the credit can be 43 9 carried over to tax years beginning on or after January 1, 43 10 2007, but before January 1, 2010. The minimum tax credit is 43 11 limited to the tax determined in section 422.5, subsection 1, 43 12 paragraphs "a" and "b". 43 13 Sec. 61. Section 422.13, subsection 1, paragraph c, and 43 14 subsection 1A, Code 2003, are amended to read as follows: 43 15 c. However, if that part of the net income of a 43 16 nonresident which is allocated to Iowa pursuant to section 43 17 422.8, subsection 2, is less than one thousand dollars the 43 18 nonresident is not required to make and sign a returnexcept43 19when the nonresident is subject to the state alternative43 20minimum tax imposed pursuant to section 422.5, subsection 1,43 21paragraph "k". 43 22 1A. Notwithstanding any other provision in this section, a 43 23 resident of this state is not required to make and file a 43 24 return if the person's net income is equal to or less than the 43 25 appropriate dollar amount listed in section 422.5, subsection 43 26 2, upon which tax is not imposed. A nonresident of this state 43 27 is not required to make and file a return if the person's 43 28 total net income in section 422.5, subsection 1, paragraph 43 29"j","b", is equal to or less than the appropriate dollar 43 30 amount provided in section 422.5, subsection 2, upon which tax 43 31 is not imposed. For purposes of this subsection, the amount 43 32 of a lump sum distribution subject to separate federal tax 43 33 shall be included in net income for purposes of determining if 43 34 a resident is required to file a return and the portion of the 43 35 lump sum distribution that is allocable to Iowa is included in 44 1 total net income for purposes of determining if a nonresident 44 2 is required to make and file a return. 44 3 Sec. 62. Section 422.21, unnumbered paragraph 5, Code 44 4 2003, is amended to read as follows: 44 5 The director shall determine for the19892008 and each 44 6 subsequent calendar year the annual and cumulative inflation 44 7 factors for each calendar year to be applied to tax years 44 8 beginning on or after January 1 of that calendar year. The 44 9 director shall compute the new dollar amounts as specified to 44 10 be adjusted in section 422.5 by the latest cumulative 44 11 inflation factor and round off the result to the nearest one 44 12 dollar. The annual and cumulative inflation factors 44 13 determined by the director are not rules as defined in section 44 14 17A.2, subsection 11. The director shall determine for the 44 15 1990 calendar year and each subsequent calendar year the 44 16 annual and cumulative standard deduction factors to be applied 44 17 to tax years beginning on or after January 1 of that calendar 44 18 year. The director shall compute the new dollar amounts of 44 19 the standard deductions specified in section 422.9, subsection 44 20 1, by the latest cumulative standard deduction factor and 44 21 round off the result to the nearest ten dollars. The annual 44 22 and cumulative standard deduction factors determined by the 44 23 director are not rules as defined in section 17A.2, subsection 44 24 11. 44 25 Sec. 63. Section 422.11B, Code 2003, is repealed. 44 26 COORDINATING AMENDMENTS 44 27 Sec. 64. Section 12D.9, subsection 2, Code 2003, is 44 28 amended to read as follows: 44 29 2. State income tax treatment of the Iowa educational 44 30 savings plan trust shall be as provided in section 422.7, 44 31subsections 32, 33, and 34subsection 1, paragraph "e", and 44 32 subsection 2, paragraph "h", and section 422.35, subsection 44 33 14. 44 34 Sec. 65. Section 217.39, Code 2003, is amended to read as 44 35 follows: 45 1 217.39 PERSECUTED VICTIMS OF WORLD WAR II – REPARATIONS 45 2 – HEIRS. 45 3 Notwithstanding any other law of this state, payments paid 45 4 to and income from lost property of a victim of persecution 45 5 for racial, ethnic, or religious reasons by Nazi Germany or 45 6 any other Axis regime or as an heir of such victim which is 45 7 exempt from state income tax as provided in section 422.7, 45 8 subsection352, paragraph "k", shall not be considered as 45 9 income or an asset for determining the eligibility for state 45 10 or local government benefit or entitlement programs. The 45 11 proceeds are not subject to recoupment for the receipt of 45 12 governmental benefits or entitlements, and liens, except liens 45 13 for child support, are not enforceable against these sums for 45 14 any reason. 45 15 Sec. 66. Section 422.120, subsection 1, paragraph b, 45 16 subparagraph (3), Code 2003, is amended to read as follows: 45 17 (3) The annual index factor for the 1997 calendar year is 45 18 one hundred percent. Foreach subsequentthe 1998 through 45 19 2006 calendaryearyears, the annual index factor equals the 45 20 annual inflation factor for that calendar year as computed in 45 21 section 422.4 for purposes of the individual income tax. For 45 22 the 2007 calendar year and each subsequent calendar year the 45 23 annual index factor shall be determined by the department by 45 24 October 15 of the calendar year preceding the calendar year 45 25 for which the factor is determined, which reflects the 45 26 purchasing power of the dollar as a result of inflation during 45 27 the fiscal year ending in the calendar year preceding the 45 28 calendar year for which the factor is determined. In 45 29 determining the annual index factor, the department shall use 45 30 the annual percent change, but not less than zero percent, in 45 31 the gross domestic product price deflator computed for the 45 32 second quarter of the calendar year by the bureau of economic 45 33 analysis of the United States department of commerce and shall 45 34 add all of that percent change to one hundred percent. The 45 35 annual index factor and the cumulative index factor shall each 46 1 be expressed as a percentage rounded to the nearest one-tenth 46 2 of one percent. The annual index factor shall not be less 46 3 than one hundred percent. 46 4 Sec. 67. Section 425.23, subsection 4, paragraph b, Code 46 5 2003, is amended to read as follows: 46 6 b. The annual adjustment factor for the 1998 base year is 46 7 one hundred percent. Foreach subsequentthe 1999 through 46 8 2006 baseyearyears, the annual adjustment factor equals the 46 9 annual inflation factor for the calendar year, in which the 46 10 base year begins, as computed in section 422.4 for purposes of 46 11 the individual income tax. For the 2007 base year and each 46 12 subsequent base year, the annual adjustment factor equals the 46 13 annual index factor, in which the base year begins, as 46 14 computed in section 422.120, subsection 1, for purposes of the 46 15 livestock production tax credit. 46 16 Sec. 68. Section 450.4, subsection 8, Code 2003, is 46 17 amended to read as follows: 46 18 8. On the value of that portion of any lump sum or 46 19 installment payments which are received by a beneficiary under 46 20 an annuity which was purchased under an employee's pension or 46 21 retirement plan which was excluded from net incomeas set46 22forth inunder section 422.7, subsection 31. 46 23 Sec. 69. Section 541A.2, subsection 7, unnumbered 46 24 paragraph 1, Code 2003, is amended to read as follows: 46 25 An individual development account closed in accordance with 46 26 this subsection is not subject to the limitations and benefits 46 27 provided by this chapter but is subject to state tax in 46 28 accordance with the provisions of section 422.7, subsection2846 29 2, paragraph "g", and section 450.4, subsection 6. An 46 30 individual development account may be closed for any of the 46 31 following reasons: 46 32 Sec. 70. Section 541A.3, subsection 2, Code 2003, is 46 33 amended to read as follows: 46 34 2. Income earned by an individual development account is 46 35 not subject to state tax, in accordance with the provisions of 47 1 section 422.7, subsection282, paragraph "g". 47 2 Sec. 71. Division III of this Act is repealed. 47 3 CONTINGENT EFFECTIVE AND APPLICABILITY DATE PROVISION 47 4 Sec. 72. 47 5 1. This division of this Act takes effect upon 47 6 ratification prior to January 1, 2007, of an amendment to the 47 7 Constitution of the State of Iowa requiring a three-fifths 47 8 majority vote of each house of the general assembly in order 47 9 to pass a bill that amends the state individual income tax by 47 10 raising the rate or rates of the individual income tax or of 47 11 an amendment to the Constitution of the State of Iowa 47 12 requiring a statewide referendum in order to approve a bill 47 13 that amends the state individual income tax by raising the 47 14 rate or rates of the individual income tax. 47 15 2. If this division of this Act takes effect as provided 47 16 in subsection 1, this division of this Act, except as provided 47 17 in subsection 3, applies to tax years beginning on or after 47 18 January 1, 2007. 47 19 3. The section of this division of this Act repealing 47 20 section 422.11B applies to tax years beginning on or after 47 21 January 1, 2010. 47 22 DIVISION V 47 23 SALES AND USE TAX STUDIES 47 24 Sec. 73. INDUSTRIAL PROCESSING EXEMPTION STUDY COMMITTEE. 47 25 On or before July 1, 2003, the department of revenue and 47 26 finance shall initiate and coordinate the establishment of an 47 27 industrial processing exemption study committee and provide 47 28 staffing assistance to the committee. It is the intent of the 47 29 general assembly that the committee shall include 47 30 representatives of the department of revenue and finance, 47 31 department of management, industrial producers including 47 32 manufacturers, fabricators, printers and publishers, and an 47 33 association that specifically represents business tax issues, 47 34 and other stakeholders. 47 35 The industrial processing exemption under the sales and use 48 1 tax is a significant exemption for business. The committee 48 2 shall study and make legislative and administrative 48 3 recommendations relating to Iowa's processing exemption to 48 4 ensure maximum utilization by Iowa's industries. 48 5 The committee shall study and make recommendations 48 6 regarding all of the following: 48 7 1. The current sales and use tax industrial processing 48 8 exemption. 48 9 2. The corresponding administrative rules, including a 48 10 review and recommendation of an administrative rules process 48 11 relating to the industrial processing exemption prior to 48 12 filing with the administrative rules review committee. 48 13 3. Other states' industrial processing exemptions. 48 14 4. Recommendations for change for issues including 48 15 effectiveness and competitiveness. 48 16 5. Development of additional publications to improve 48 17 compliance. 48 18 The committee shall annually report to the general assembly 48 19 by January 1 of each year through January 1, 2013. 48 20 Sec. 74. IOWA SALES, SERVICES, AND USE TAX STUDY 48 21 COMMITTEE. On or before July 1, 2003, the department of 48 22 revenue and finance shall initiate and coordinate the 48 23 establishment of a state sales, services, and use tax study 48 24 committee and provide staffing assistance to the committee. 48 25 It is the intent of the general assembly that the committee 48 26 shall include representatives of the department of revenue and 48 27 finance, department of management, an association of Iowa 48 28 farmers and other agricultural interests, retail associations, 48 29 contractors, taxpayers, an association that specifically 48 30 represents business tax issues, and other stakeholders, two 48 31 members of the general assembly, and a representative of the 48 32 governor's office. 48 33 The committee shall study the current sales, services, and 48 34 use tax law. Programs funded through special features of the 48 35 tax code often escape regular review. It is intended that the 49 1 study committee shall review the current sales, services, and 49 2 use tax exemptions to improve government accountability. 49 3 The committee shall study and make recommendations 49 4 regarding all of the following: 49 5 1. Retaining or eliminating current sales, services, and 49 6 use tax exemptions or providing new exemptions. Such 49 7 decisions shall be based at least partially on the issues of 49 8 effectiveness and competitiveness and their impact on economic 49 9 behavior. 49 10 2. Tax simplification and consistency issues in applying 49 11 the tax, including recordkeeping burdens on retailers and 49 12 application by the department of revenue and finance. 49 13 3. Streamlining sales tax implementation in Iowa. 49 14 4. The tax rate. 49 15 5. Comparison of Iowa sales, services, and use tax 49 16 structure with other states. 49 17 The committee shall report to the general assembly by 49 18 January 1, 2004. The report shall provide rationale for each 49 19 decision made by the study committee. 49 20 Sec. 75. EFFECTIVE DATE. This division of this Act, being 49 21 deemed of immediate importance, takes effect July 1, 2003. 49 22 DIVISION VI 49 23 GROW IOWA VALUES BOARD AND FUND 49 24 Sec. 76. Section 15.108, subsection 9, Code 2003, is 49 25 amended by adding the following new paragraph: 49 26 NEW PARAGRAPH. g. Administer the marketing strategy 49 27 selected pursuant to section 15G.108. 49 28 Sec. 77. NEW SECTION. 15G.101 DEFINITIONS. 49 29 As used in this chapter, unless the context otherwise 49 30 requires: 49 31 1. "Board" means the grow Iowa values board established in 49 32 section 15G.102. 49 33 2. "Department" means the Iowa department of economic 49 34 development created in section 15.105. 49 35 3. "Director" means the director of the department of 50 1 economic development. 50 2 4. "Fund" means the grow Iowa values fund created in 50 3 section 15G.107. 50 4 5. "Grow Iowa values geographic regions" means the 50 5 geographic regions defined in section 15G.105. 50 6 Sec. 78. NEW SECTION. 15G.102 GROW IOWA VALUES BOARD. 50 7 1. The grow Iowa values board is established consisting of 50 8 eleven voting members and four ex officio, nonvoting members. 50 9 The grow Iowa values board shall be located for administrative 50 10 purposes within the department and the director shall provide 50 11 office space, staff assistance, and necessary supplies and 50 12 equipment for the board. The director shall budget moneys to 50 13 pay the compensation and expenses of the board. In performing 50 14 its functions, the board is performing a public function on 50 15 behalf of the state and is a public instrumentality of the 50 16 state. 50 17 2. a. The eleven voting members of the board shall be 50 18 appointed by the governor, subject to confirmation by the 50 19 senate. 50 20 b. The four ex officio, nonvoting members shall be 50 21 appointed as follows: 50 22 (1) One member appointed by the president of the senate. 50 23 (2) One member appointed by the minority leader of the 50 24 senate. 50 25 (3) One member appointed by the speaker of the house of 50 26 representatives. 50 27 (4) One member appointed by the minority leader of the 50 28 house of representatives. 50 29 c. All appointments shall comply with sections 69.16 and 50 30 69.16A. 50 31 d. At least one member of the board shall be from each 50 32 grow Iowa values geographic region. 50 33 e. Each of the following areas of expertise shall be 50 34 represented by at least one member of the board who has 50 35 professional experience in that area of expertise: 51 1 (1) Finance and investment banking. 51 2 (2) Advanced manufacturing. 51 3 (3) Statewide agriculture. 51 4 (4) Life sciences. 51 5 (5) Small business development. 51 6 (6) Information technology. 51 7 (7) Economics. 51 8 (8) Labor. 51 9 (9) Marketing. 51 10 (10) Entrepreneurship. 51 11 f. At least nine voting members of the board shall be 51 12 actively employed in the private, for-profit sector of the 51 13 economy. 51 14 g. The board membership shall be balanced between 51 15 representation by employers with less than two hundred 51 16 employees and employers with two hundred or more employees. 51 17 3. The chairperson and vice chairperson shall be elected 51 18 by the voting members of the board from the membership of the 51 19 board. In the case of the absence or disability of the 51 20 chairperson and vice chairperson, the voting members of the 51 21 board shall elect a temporary chairperson by a majority vote 51 22 of those voting members who are present and voting, provided a 51 23 quorum is present. 51 24 4. The members of the board shall be appointed to three- 51 25 year staggered terms and the terms shall commence and end as 51 26 provided in section 69.19. If a vacancy occurs, a successor 51 27 shall be appointed in the same manner and subject to the same 51 28 qualifications as the original appointment to serve the 51 29 unexpired term. 51 30 5. A majority of the voting members of the board 51 31 constitutes a quorum. 51 32 6. A member of the board shall abstain from voting on the 51 33 provision of financial assistance to a project which is 51 34 located in the county in which the member of the board 51 35 resides. 52 1 7. The members of the board are entitled to receive 52 2 reimbursement for actual expenses incurred while engaged in 52 3 the performance of official duties. A board member may also 52 4 be eligible to receive compensation as provided in section 52 5 7E.6. 52 6 Sec. 79. NEW SECTION. 15G.103 BOARD DUTIES. 52 7 The board shall do all of the following: 52 8 1. Organize. 52 9 2. Receive advice and recommendations from the due 52 10 diligence committee, the economic development marketing board, 52 11 and the grow Iowa values review commission. 52 12 3. Assist the department in implementing programs and 52 13 activities in a manner designed to achieve the goals set out 52 14 in section 15G.106. 52 15 4. By December 15 of each year, submit a written report to 52 16 the general assembly reviewing the activities of the board 52 17 during the calendar year. The report shall include 52 18 information necessary for the review of the goals and 52 19 performance measures set out in section 15G.106. State 52 20 agencies and other entities receiving moneys from the fund 52 21 shall cooperate with and assist the board in compilation of 52 22 the report. 52 23 5. Adopt administrative rules pursuant to chapter 17A 52 24 necessary to administer this chapter. This delegation shall 52 25 be construed narrowly. 52 26 6. Adopt a strategic plan pursuant to section 8E.204 by 52 27 July 1, 2004. 52 28 Sec. 80. NEW SECTION. 15G.104 DUE DILIGENCE COMMITTEE. 52 29 1. A due diligence committee is established consisting of 52 30 five members and is located for administrative purposes within 52 31 the department. The director of the department shall provide 52 32 office space, staff assistance, and necessary supplies and 52 33 equipment for the committee. The director shall budget moneys 52 34 to pay the compensation and expenses of the committee. In 52 35 performing its functions, the committee is performing a public 53 1 function on behalf of the state and is a public 53 2 instrumentality of the state. 53 3 2. a. Membership of the due diligence committee shall 53 4 consist of five voting members of the grow Iowa values board 53 5 elected annually by the voting members of the board. 53 6 Committee members shall have expertise in the areas of banking 53 7 and entrepreneurship. 53 8 b. The chairperson and vice chairperson of the committee 53 9 shall be elected by and from the committee members. The terms 53 10 of the members shall commence and end as provided by section 53 11 69.19. If a vacancy occurs, a successor shall be appointed in 53 12 the same manner and subject to the same qualifications as the 53 13 original appointment to serve the unexpired term. A majority 53 14 of the committee constitutes a quorum. 53 15 3. The committee, after a thorough review, shall determine 53 16 whether a proposed project using moneys from the grow Iowa 53 17 values fund is practical and shall provide recommendations to 53 18 the grow Iowa values board regarding any moneys proposed to be 53 19 expended from the grow Iowa values fund, with the exception of 53 20 moneys appropriated for purposes of the loan and credit 53 21 guarantee program and regarding whether a proposed project is 53 22 practical. The recommendations shall be based on whether the 53 23 expenditure would make the achievement of the goals in 53 24 accordance with the performance measures set out in section 53 25 15G.106 more likely. The recommendations may include 53 26 conditions or that a proposed expenditure be rejected. 53 27 4. The members of the committee are entitled to receive 53 28 reimbursement for actual expenses incurred while engaged in 53 29 the performance of official duties. A committee member may 53 30 also be eligible to receive compensation as provided in 53 31 section 7E.6. 53 32 Sec. 81. NEW SECTION. 15G.104A GROW IOWA VALUES REVIEW 53 33 COMMISSION. 53 34 1. A grow Iowa values review commission is established 53 35 consisting of three members and is located for administrative 54 1 purposes within the office of the auditor of state. The 54 2 auditor of state shall provide office space, staff assistance, 54 3 and necessary supplies and equipment for the review 54 4 commission. The auditor of state shall budget moneys to pay 54 5 the compensation and expenses of the commission, including the 54 6 actual expenses of the auditor of state incurred while engaged 54 7 in the performance of official commission duties. In 54 8 performing its functions, the review commission is performing 54 9 a public function on behalf of the state and is a public 54 10 instrumentality of the state. 54 11 2. Membership of the review commission shall include the 54 12 auditor of state, one member appointed by the governor subject 54 13 to confirmation by the senate, and one member appointed by the 54 14 legislative council. The members appointed by the governor 54 15 and the legislative council shall possess experience and 54 16 expertise in the field of economics. The appointments shall 54 17 comply with sections 69.16 and 69.16A. The chairperson of the 54 18 review commission shall be the auditor of state. The members 54 19 shall be appointed to three-year staggered terms and the terms 54 20 shall commence and end as provided by section 69.19. If a 54 21 vacancy occurs, a successor shall be appointed in the same 54 22 manner and subject to the same qualifications as the original 54 23 appointment to serve the unexpired term. A majority of the 54 24 review commission constitutes a quorum. 54 25 3. The review commission shall analyze all annual reports 54 26 of the grow Iowa values board for purposes of determining if 54 27 the goals and performance measures set out in section 15G.106 54 28 have been met. By January 1, 2007, the review commission 54 29 shall submit a report to the grow Iowa values board, the 54 30 department, and the general assembly. The report shall 54 31 include findings, itemized by grow Iowa values geographic 54 32 regions, regarding whether the goals and performance measures 54 33 were met. The report shall also include recommendations 54 34 regarding the continuation, elimination, or modification of 54 35 any programs receiving moneys from the grow Iowa values fund 55 1 and whether moneys should continue to be appropriated to and 55 2 from the grow Iowa values fund. The recommendations shall be 55 3 based on whether the goals in accordance with the performance 55 4 measures are being achieved. 55 5 4. The members of the commission, including the auditor of 55 6 state, are entitled to receive reimbursement for actual 55 7 expenses incurred while engaged in the performance of official 55 8 duties. A commission member may also be eligible to receive 55 9 compensation as provided in section 7E.6. 55 10 Sec. 82. NEW SECTION. 15G.105 GROW IOWA VALUES 55 11 GEOGRAPHIC REGIONS. 55 12 For purposes of applying the goals and performance 55 13 measurements, the state shall be divided into five grow Iowa 55 14 values geographic regions. The regions shall be the 55 15 following: 55 16 1. The northwest region shall include the counties of 55 17 Lyon, Osceola, Dickinson, Emmet, Kossuth, Winnebago, Sioux, 55 18 O'Brien, Clay, Palo Alto, Hancock, Plymouth, Cherokee, Buena 55 19 Vista, Pocahontas, Humboldt, Wright, Woodbury, Ida, Sac, 55 20 Calhoun, Webster, and Hamilton. 55 21 2. The northeast region shall include the counties of 55 22 Worth, Mitchell, Howard, Winneshiek, Allamakee, Cerro Gordo, 55 23 Floyd, Chickasaw, Fayette, Clayton, Franklin, Butler, Bremer, 55 24 Hardin, Grundy, Black Hawk, Buchanan, Delaware, Dubuque, Tama, 55 25 Benton, Linn, Jones, and Jackson. 55 26 3. The southeast region shall include the counties of 55 27 Poweshiek, Iowa, Johnson, Cedar, Clinton, Scott, Muscatine, 55 28 Mahaska, Keokuk, Washington, Louisa, Monroe, Wapello, 55 29 Jefferson, Henry, Des Moines, Appanoose, Davis, Van Buren, and 55 30 Lee. 55 31 4. The southwest region shall include the counties of 55 32 Monona, Crawford, Carroll, Greene, Harrison, Shelby, Audubon, 55 33 Guthrie, Pottawattamie, Cass, Adair, Mills, Montgomery, Adams, 55 34 Union, Clarke, Lucas, Fremont, Page, Taylor, Ringgold, 55 35 Decatur, and Wayne. 56 1 5. The central region shall include the counties of Boone, 56 2 Story, Marshall, Dallas, Polk, Jasper, Madison, Warren, and 56 3 Marion. 56 4 Sec. 83. NEW SECTION. 15G.106 GOALS – PERFORMANCE 56 5 MEASURES. 56 6 1. In performing the duties provided in this chapter, 56 7 chapter 15, and chapter 15E, the grow Iowa values board, the 56 8 due diligence committee, the economic development marketing 56 9 board, the grow Iowa values review commission, and the 56 10 department shall achieve the goals of expanding and 56 11 stimulating the state economy, increasing the wealth of 56 12 Iowans, and increasing the population of the state. For 56 13 purposes of this section, "upper midwest region" includes the 56 14 states of Iowa, Kansas, Minnesota, Missouri, Nebraska, North 56 15 Dakota, and South Dakota. 56 16 2. Goal achievement shall be examined on a regional basis 56 17 using the grow Iowa values geographic regions on a statewide 56 18 basis. Family farm performance indicators shall be calculated 56 19 separately. The performance of the grow Iowa values 56 20 geographic regions shall be compared to the performance of the 56 21 state, the upper midwest region, and the United States. The 56 22 baseline year shall be the calendar year 2002. In each grow 56 23 Iowa values geographic region, the goal shall be to increase 56 24 the baseline performance measure of Iowa's gross state product 56 25 at a rate equal to or greater than the national economy. 56 26 3. a. In determining whether the goal of expanding and 56 27 stimulating the state economy has been met, and using the 56 28 calendar year 2002 as a baseline, performance measures shall 56 29 be considered, including but not limited to the following, on 56 30 a statewide basis or of those businesses that receive moneys 56 31 originating from the grow Iowa values fund, as appropriate: 56 32 (1) A net increase in a business's supplier network. 56 33 (2) A net increase in business start-ups. 56 34 (3) A net increase in business expansion. 56 35 (4) A net increase in business modernization. 57 1 (5) A net increase in attracting new businesses to the 57 2 state. 57 3 (6) A net increase in business retention. 57 4 (7) A net increase in job creation and retention. 57 5 (8) A decrease in Iowa of the ratio of the government 57 6 employment as a percentage share of the total employment in 57 7 Iowa at a rate at least equal to the ratio of the upper 57 8 midwest region. 57 9 b. By December 15 of each year, the department shall 57 10 submit a report to the grow Iowa values review commission and 57 11 the grow Iowa values board that identifies information 57 12 pertinent to the performance measures in paragraph "a", 57 13 subparagraphs (3), (4), and (6), that the department gains 57 14 through interviews with businesses in the state that close all 57 15 or a portion of operations in the state. By December 15 of 57 16 each year, based on the same interviews, the department shall 57 17 submit a report to the general assembly providing suggested 57 18 amendments to the Code of Iowa and the Iowa administrative 57 19 code designed to stimulate and expand the state's economy. 57 20 c. By December 15 of each year the department shall submit 57 21 a report to the grow Iowa values review commission and the 57 22 grow Iowa values board that identifies prospective lost 57 23 business development opportunities information pertinent to 57 24 the performance measures in paragraph "a", subparagraphs (2) 57 25 and (5), which indicate that the state has not been successful 57 26 in the performance measures in paragraph "a", subparagraphs 57 27 (2) and (5). 57 28 d. For purposes of the performance measure in paragraph 57 29 "a", subparagraph (7), the department of economic development, 57 30 in consultation with the department of workforce development 57 31 and the auditor of state, shall determine average annual job 57 32 creation and retention rates based on the ten years prior to 57 33 2003, for the state and the upper midwest region. During the 57 34 fiscal years beginning July 1, 2003, July 1, 2004, and July 1, 57 35 2005, the department of economic development shall report the 58 1 job creation and retention rate of those businesses that 58 2 receive moneys originating from the grow Iowa values fund and 58 3 the job creation and retention rate of those businesses that 58 4 do not receive moneys originating from the grow Iowa values 58 5 fund. The ten-year average annual job creation and retention 58 6 rate shall be compared to the job creation and retention rates 58 7 determined under this paragraph for the fiscal years beginning 58 8 July 1, 2003, July 1, 2004, and July 1, 2005. The department 58 9 of economic development shall assist the department of 58 10 workforce development in maintaining detailed employment 58 11 statistics on businesses that receive moneys originating from 58 12 the grow Iowa values fund, on businesses that do not receive 58 13 moneys originating from the grow Iowa values fund, and on 58 14 industries in Iowa that those businesses represent. The 58 15 auditor of state shall audit the reliability and validity of 58 16 the statistics compiled pursuant to this paragraph. 58 17 4. In determining whether the goal of increasing the 58 18 wealth of Iowans has been met, the following earning 58 19 performance measures shall be considered: 58 20 a. The per capita personal income in Iowa shall equal or 58 21 exceed the average per capita personal income for the upper 58 22 midwest region. 58 23 b. The average earnings per job in Iowa shall equal or 58 24 exceed the average earnings per job in the upper midwest 58 25 region. 58 26 c. The average manufacturing earnings per employee in Iowa 58 27 shall equal or exceed the average manufacturing earnings per 58 28 employee in the upper midwest region. 58 29 d. The average service earnings per employee in Iowa shall 58 30 equal or exceed the average service earnings per employee in 58 31 the upper midwest region. 58 32 e. The average earnings per employee in the financial, 58 33 insurance, and real estate industries in Iowa shall equal or 58 34 exceed the average earnings per employee in the financial, 58 35 insurance, and real estate industries in the upper midwest 59 1 region. 59 2 5. In determining whether the goal of increasing the 59 3 population of the state has been met, the following 59 4 performance measures shall be considered: 59 5 a. Using the calendar year 2002 as a baseline year, a net 59 6 increase in the retention of Iowa high school graduates that 59 7 are employed in the Iowa workforce following a higher 59 8 education degree. 59 9 b. The increase in higher education graduates. 59 10 Sec. 84. NEW SECTION. 15G.107 GROW IOWA VALUES FUND. 59 11 A grow Iowa values fund is created in the state treasury 59 12 under the control of the grow Iowa values board consisting of 59 13 moneys appropriated to the grow Iowa values board. Moneys in 59 14 the fund are not subject to section 8.33. Notwithstanding 59 15 section 12C.7, interest or earnings on moneys in the fund 59 16 shall be credited to the fund. The fund shall be administered 59 17 by the grow Iowa values board, which shall make expenditures 59 18 from the fund consistent with this chapter and pertinent Acts 59 19 of the general assembly. Any financial assistance provided 59 20 using moneys from the fund may be provided over a period of 59 21 time of more than one year. Payments of interest, repayments 59 22 of moneys loaned pursuant to this chapter, and recaptures of 59 23 grants or loans shall be deposited in the fund. 59 24 Sec. 85. NEW SECTION. 15G.108 ECONOMIC DEVELOPMENT 59 25 MARKETING BOARD – MARKETING STRATEGIES. 59 26 1. a. An economic development marketing board is 59 27 established consisting of seven members and is located for 59 28 administrative purposes within the department. The director 59 29 of the department shall provide office space, staff 59 30 assistance, and necessary supplies and equipment for the 59 31 board. The director shall budget moneys to pay the 59 32 compensation and expenses of the board. In performing its 59 33 functions, the board is performing a public function on behalf 59 34 of the state and is a public instrumentality of the state. 59 35 b. The membership of the board shall consist of seven 60 1 members appointed by the governor, subject to confirmation by 60 2 the senate. Five of the members shall have significant 60 3 demonstrated experience in marketing or advertising. Two 60 4 members of the board shall also be members of the grow Iowa 60 5 values board. 60 6 c. The appointments shall comply with sections 69.16 and 60 7 69.16A. 60 8 d. The chairperson and vice chairperson of the board shall 60 9 be elected by and from the board members. In case of the 60 10 absence or disability of the chairperson and vice chairperson, 60 11 the members of the board shall elect a temporary chairperson 60 12 by a majority vote of those members who are present and 60 13 voting. 60 14 e. The members shall be appointed to three-year staggered 60 15 terms and the terms shall commence and end as provided by 60 16 section 69.19. If a vacancy occurs, a successor shall be 60 17 appointed to serve the unexpired term. A successor shall be 60 18 appointed in the same manner and subject to the same 60 19 qualifications as the original appointment to serve the 60 20 unexpired term. 60 21 f. A majority of the board constitutes a quorum. 60 22 2. The board shall administer and implement the approval 60 23 process for marketing strategies provided in subsection 3. 60 24 3. The economic development marketing board shall accept 60 25 proposals for marketing strategies for purposes of selecting a 60 26 strategy for the department to administer. The marketing 60 27 strategies shall be designed to market Iowa as a lifestyle, 60 28 increase the population of the state, increase the wealth of 60 29 Iowans, and expand and stimulate the state economy. The 60 30 economic development marketing board shall submit a 60 31 recommendation regarding the proposal to the grow Iowa values 60 32 board. In selecting a marketing strategy for recommendation, 60 33 the economic development marketing board shall base the 60 34 selection on the goals and performance measures provided in 60 35 section 15G.106. The grow Iowa values board shall either 61 1 approve or deny the recommendation. 61 2 4. The department shall implement and administer the 61 3 marketing strategy approved by the grow Iowa values board as 61 4 provided in subsection 3. The department shall provide the 61 5 economic development marketing board with assistance in 61 6 implementing administrative functions of the board and provide 61 7 technical assistance to the board. 61 8 5. The members of the board are entitled to receive 61 9 reimbursement for actual expenses incurred while engaged in 61 10 the performance of official duties. A board member may also 61 11 be eligible to receive compensation as provided in section 61 12 7E.6. 61 13 Sec. 86. NEW SECTION. 15G.109 FUTURE CONSIDERATION. 61 14 Not later than February 1, 2007, the legislative services 61 15 agency shall prepare and deliver to the secretary of the 61 16 senate and the chief clerk of the house of representatives 61 17 identical bills that repeal the provisions of this chapter. 61 18 It is the intent of this section that the general assembly 61 19 shall bring the bill to a vote in either the senate or the 61 20 house of representatives expeditiously. It is further the 61 21 intent of this chapter that if the bill is approved by the 61 22 first house in which it is considered, it shall expeditiously 61 23 be brought to a vote in the second house. 61 24 DIVISION VII 61 25 VALUE-ADDED AGRICULTURAL PRODUCTS AND PROCESSES 61 26 FINANCIAL ASSISTANCE PROGRAM 61 27 Sec. 87. Section 15E.111, subsection 1, Code 2003, is 61 28 amended to read as follows: 61 29 1. a. The department shall establish a value-added 61 30 agricultural products and processes financial assistance 61 31 program. The department shall consult withthe Iowa corn61 32growers association and the Iowa soybean associationIowa 61 33 commodity groups. The purpose of the program is to encourage 61 34 the increased utilization of agricultural commodities produced 61 35 in this state. The program shall assist in efforts to 62 1 revitalize rural regions of this state, by committing 62 2 resources to provide financial assistance to new or existing 62 3 value-added production facilities. The department of economic 62 4 development may consult with other state agencies regarding 62 5 any possible future environmental, health, or safety issues 62 6 linked to technology related to the biotechnology industry. 62 7 In awarding financial assistance, the department shall prefer 62 8 producer-owned, value-added businesses and public and private 62 9 joint ventures involving an institution of higher learning 62 10 under the control of the state board of regents or a private 62 11 college or university acquiring assets, research facilities, 62 12 and leveraging moneys in a manner that meets the goals of the 62 13 grow Iowa values fund and shall commit resources to assist the 62 14 following: 62 15a.(1) Facilities which are involved in the development of 62 16 new innovative products and processes related to agriculture. 62 17 The facility must do either of the following: produce a good 62 18 derived from an agricultural commodity, if the good is not 62 19 commonly produced from an agricultural commodity; or use a 62 20 process to produce a good derived from an agricultural 62 21 process, if the process is not commonly used to produce the 62 22 good. 62 23b.(2) Renewable fuel production facilities. As used in 62 24 this section, "renewable fuel" means an energy source which is 62 25 derived from an organic compound capable of powering 62 26 machinery, including an engine or power plant. 62 27 (3) Agricultural business facilities in the agricultural 62 28 biotechnology industry, agricultural biomass industry, and 62 29 alternative energy industry. For purposes of this subsection: 62 30 (a) "Agricultural biomass industry" means businesses that 62 31 utilize agricultural commodity crops, agricultural by- 62 32 products, or animal feedstock in the production of chemicals, 62 33 protein products, or other high-value products. 62 34 (b) "Agricultural biotechnology industry" means businesses 62 35 that utilize scientifically enhanced plants or animals that 63 1 can be raised by producers and used in the production of high- 63 2 value products. 63 3 (c) "Alternative energy industry" includes businesses 63 4 involved in the production of ethanol, including gasoline with 63 5 a mixture of seventy percent or more ethanol, biodiesel, 63 6 biomass, hydrogen, or in the production of wind energy. 63 7 (4) Facilities that add value to Iowa agricultural 63 8 commodities through further processing and development of 63 9 organic products and emerging markets. 63 10 (5) Producer-owned, value-added businesses, education of 63 11 producers and management boards in value-added businesses, and 63 12 other activities that would support the infrastructure in the 63 13 development of value-added agriculture. Public and private 63 14 joint ventures involving an institution of higher learning 63 15 under the control of the state board of regents or a private 63 16 college or university to acquire assets, research facilities, 63 17 and leverage moneys in a manner that meets the goals of the 63 18 grow Iowa values fund. For purposes of this subsection, 63 19 "producer-owned, valued-added business" means a person who 63 20 holds an equity interest in the agricultural business and is 63 21 personally involved in the production of crops or livestock on 63 22 a regular, continuous, and substantial basis. 63 23 b. Financial assistance awarded under this section may be 63 24 in the form of a loan, loan guarantee, grant, production 63 25 incentive payment, or a combination of financial assistance. 63 26 The department shall not award more than twenty-five percent 63 27 of the amount allocated to the value-added agricultural 63 28 products and processes financial assistance fund during any 63 29 fiscal year to support a single person. The department may 63 30 finance any size of facility. However, the departmentshall63 31 may reserve up to fifty percent of the total amount allocated 63 32 to the fund, for purposes of assisting persons requiringone63 33 five hundred thousand dollars or less in financial assistance. 63 34 The amount shall be reserved until the end of the third 63 35 quarter of the fiscal year. The department shall not provide 64 1 financial assistance to support a value-added production 64 2 facility if the facility or a person owning a controlling 64 3 interest in the facility has demonstrated a continuous and 64 4 flagrant disregard for the health and safety of its employees 64 5 or the quality of the environment. Evidence of such disregard 64 6 shall include a history of serious or uncorrected violations 64 7 of state or federal law protecting occupational health and 64 8 safety or the environment, including but not limited to 64 9 serious or uncorrected violations of occupational safety and 64 10 health standards enforced by the division of labor services of 64 11 the department of workforce development pursuant to chapter 64 12 84A, or rules enforced by the department of natural resources 64 13 pursuant to chapter 455B or 459, subchapters II and III. 64 14 DIVISION VIII 64 15 ENDOW IOWA GRANTS 64 16 Sec. 88. NEW SECTION. 15E.301 SHORT TITLE. 64 17 This division shall be known as and may be cited as the 64 18 "Endow Iowa Program Act". 64 19 Sec. 89. NEW SECTION. 15E.302 PURPOSE. 64 20 The purpose of this division is to enhance the quality of 64 21 life for citizens of this state through increased 64 22 philanthropic activity by providing capital to new and 64 23 existing citizen groups of this state organized to establish 64 24 endowment funds that will address community needs. The 64 25 purpose of this division is also to encourage individuals, 64 26 businesses, and organizations to invest in community 64 27 foundations. 64 28 Sec. 90. NEW SECTION. 15E.303 DEFINITIONS. 64 29 As used in this division, unless the context otherwise 64 30 requires: 64 31 1. "Board" means the governing board of the lead 64 32 philanthropic entity identified by the department pursuant to 64 33 section 15E.304. 64 34 2. "Business" means a business operating within the state 64 35 and includes individuals operating a sole proprietorship or 65 1 having rental, royalty, or farm income in this state and 65 2 includes a consortium of businesses. 65 3 3. "Community affiliate organization" means a group of 65 4 five or more community leaders or advocates organized for the 65 5 purpose of increasing philanthropic activity in an identified 65 6 community or geographic area in this state with the intention 65 7 of establishing a community affiliate endowment fund. 65 8 4. "Endowment gift" means an irrevocable contribution to a 65 9 permanent endowment held by a qualified community foundation. 65 10 5. "Lead philanthropic entity" means the entity identified 65 11 by the department pursuant to section 15E.304. 65 12 6. "Qualified community foundation" means a community 65 13 foundation organized or operating in this state that meets or 65 14 exceeds the national standards established by the national 65 15 council on foundations. 65 16 Sec. 91. NEW SECTION. 15E.304 ENDOW IOWA GRANTS. 65 17 1. The department shall identify a lead philanthropic 65 18 entity for purposes of encouraging the development of 65 19 qualified community foundations in this state. A lead 65 20 philanthropic entity shall meet all of the following 65 21 qualifications: 65 22 a. The entity shall be a nonprofit entity which is exempt 65 23 from federal income taxation pursuant to section 501(c)(3) of 65 24 the Internal Revenue Code. 65 25 b. The entity shall be a statewide organization with 65 26 membership consisting of organizations, such as community, 65 27 corporate, and private foundations, whose principal function 65 28 is the making of grants within the state of Iowa. 65 29 c. The entity shall have a minimum of forty members and 65 30 that membership shall include qualified community foundations. 65 31 2. A lead philanthropic entity may receive a grant from 65 32 the department. The board shall use the grant moneys to award 65 33 endow Iowa grants to new and existing qualified community 65 34 foundations and to community affiliate organizations that do 65 35 all of the following: 66 1 a. Provide the board with all information required by the 66 2 board. 66 3 b. Demonstrate a dollar-for-dollar funding match in a form 66 4 approved by the board. 66 5 c. Identify a qualified community foundation to hold all 66 6 funds. A qualified community foundation shall not be required 66 7 to meet this requirement. 66 8 d. Provide a plan to the board demonstrating the method 66 9 for distributing grant moneys received from the board to 66 10 organizations within the community or geographic area as 66 11 defined by the qualified community foundation or the community 66 12 affiliate organization. 66 13 3. Endow Iowa grants awarded to new and existing qualified 66 14 community foundations and to community affiliate organizations 66 15 shall not exceed twenty-five thousand dollars per foundation 66 16 or organization unless a foundation or organization 66 17 demonstrates a multiple county or regional approach. Endow 66 18 Iowa grants may be awarded on an annual basis with not more 66 19 than three grants going to one county in a fiscal year. 66 20 4. In ranking applications for grants, the board shall 66 21 consider a variety of factors including the following: 66 22 a. The demonstrated need for financial assistance. 66 23 b. The potential for future philanthropic activity in the 66 24 area represented by or being considered for assistance. 66 25 c. The proportion of the funding match being provided. 66 26 d. For community affiliate organizations, the demonstrated 66 27 need for the creation of a community affiliate endowment fund 66 28 in the applicant's geographic area. 66 29 e. The identification of community needs and the manner in 66 30 which additional funding will address those needs. 66 31 f. The geographic diversity of awards. 66 32 5. Of any moneys received by a lead philanthropic entity 66 33 from the state, not more than five percent of such moneys 66 34 shall be used by the entity for administrative purposes. 66 35 Sec. 92. NEW SECTION. 15E.306 REPORTS – AUDITS. 67 1 By January 31 of each year, the lead philanthropic entity, 67 2 in cooperation with the department, shall publish an annual 67 3 report of the activities conducted pursuant to this division 67 4 during the previous calendar year and shall submit the report 67 5 to the governor and the general assembly. The annual report 67 6 shall include a listing of endowment funds and the amount of 67 7 tax credits authorized by the department. 67 8 Sec. 93. EFFECTIVE AND RETROACTIVE APPLICABILITY DATES. 67 9 This division of this Act, being deemed of immediate 67 10 importance, takes effect upon enactment and is retroactively 67 11 applicable to January 1, 2003, for tax years beginning on or 67 12 after that date. 67 13 DIVISION IX 67 14 COMMERCIALIZATION OF RESEARCH ISSUES 67 15 Sec. 94. Section 262.9, Code 2003, is amended by adding 67 16 the following new subsection: 67 17 NEW SUBSECTION. 29. By January 15 of each year, submit a 67 18 report to the governor, through the director of technology in 67 19 the office of the governor, and the general assembly 67 20 containing information from the previous calendar year 67 21 regarding all of the following: 67 22 a. Patents secured or applied for by each university under 67 23 the control of the board delineated by university and by 67 24 faculty member and staff member responsible for the research 67 25 or activity that resulted in the patent. In the initial 67 26 report filed by January 15, 2004, the board shall include an 67 27 inventory of patent portfolios with details concerning which 67 28 patents are creating financial benefit and the amount of 67 29 financial benefit and which patents are not creating financial 67 30 benefit and the amount invested in those patents. 67 31 b. Research grants secured by each university under the 67 32 control of the board from both public and private sources 67 33 delineated by university and by faculty member and staff 67 34 member. The board shall also include the same information for 67 35 grant applications that are denied. 68 1 c. The number of faculty members and staff members at each 68 2 university under the control of the board involved in a start- 68 3 up company. 68 4 d. The number of grant applications for research received 68 5 by each university under the control of the board for start-up 68 6 companies, the number of applications approved, and the number 68 7 of applications denied. 68 8 e. The number of agreements entered into by faculty 68 9 members and staff members at each university under the control 68 10 of the board with foundations affiliated with the universities 68 11 relating to business start-ups. 68 12 f. An accounting of the financial gain received by each 68 13 university under the control of the board relating to patents 68 14 sold, royalties received, licensing fees, and any other 68 15 remuneration received by the university related to technology 68 16 transfer. 68 17 g. The number of professional employees at each university 68 18 under the control of the board who assist in the transfer of 68 19 technology and research to commercial application. 68 20 Sec. 95. Section 262B.1, Code 2003, is amended to read as 68 21 follows: 68 22 262B.1 TITLE. 68 23 This chapter shall be known and may be cited as the 68 24"University-Based Research and Economic Development68 25 "Commercialization of Research for Iowa Act". 68 26 Sec. 96. Section 262B.2, Code 2003, is amended by striking 68 27 the section and inserting in lieu thereof the following: 68 28 262B.2 LEGISLATIVE INTENT. 68 29 It is the intent of the general assembly that the three 68 30 universities under the control of the state board of regents 68 31 have as part of their mission the use of their universities' 68 32 expertise to expand and stimulate economic growth across the 68 33 state. This activity may be accomplished through a wide 68 34 variety of partnerships, public and private joint ventures, 68 35 and cooperative endeavors, primarily in the area of high 69 1 technology, and may result in investments by the private 69 2 sector for commercialization of the technology. It is 69 3 imperative that the investments and job creation be in Iowa, 69 4 but need not be in the proximity of the universities. The 69 5 purpose is to expand and stimulate Iowa's economy, increase 69 6 the wealth of Iowans, and increase the population of Iowa, 69 7 which may be accomplished through research conducted within 69 8 the state that will competitively position Iowa on an economic 69 9 basis with other states and create high-wage, high-growth 69 10 employers and jobs. It is also the intent of the general 69 11 assembly that real or virtual research parks will be 69 12 established and maintained by the universities in close enough 69 13 proximity to the ventures that cooperation between the 69 14 academic, research, and commercialization phases will be 69 15 encouraged. It is the intent of the general assembly that 69 16 satellites of the research parks will expand and stimulate 69 17 economic growth in other areas of the state. 69 18 Sec. 97. Section 262B.3, Code 2003, is amended to read as 69 19 follows: 69 20 262B.3ESTABLISHMENT OF CONSORTIUMDUTIES AND 69 21 RESPONSIBILITIES. 69 22 1. The state board of regentsor the universities under69 23its jurisdiction, as part of its mission and strategic plan, 69 24 shall establishconsortiumsmechanisms for the purpose of 69 25 carrying out the intent of this chapter.The majority of69 26consortium members shall be from the university community and69 27the balance of members shall be from private industry. The69 28members of the consortium shall be appointed by the president69 29of the convening university and will serve at the pleasure of69 30the president.In addition to other board initiatives, the 69 31 board shall work with the department of economic development, 69 32 other state agencies, and the private sector to facilitate the 69 33 commercialization of research. 69 34 2. Activities to implement this chapter may include: 69 35 a. Developing strategies to market university research for 70 1 commercialization in Iowa. 70 2 b. Matching university resources with the needs of 70 3 existing Iowa firms or start-up opportunities. 70 4 c. Evaluating university research for commercialization 70 5 potential, where relevant. 70 6 d. Developing a plan to improve private sector access to 70 7 the university licenses and patent information and the 70 8 transfer of technology from the university to the private 70 9 sector. 70 10 e. Disseminating information on research activities of the 70 11 university. 70 12 f. Identifying research needs of existing Iowa businesses 70 13 and recommending ways in which the universities can meet these 70 14 needs. 70 15 g. Linking research and instruction activities to economic 70 16 development. 70 17 h. Reviewing and monitoring activities related to 70 18 technology transfer. 70 19 i. Coordinating activities to facilitate a focus on 70 20 research in the state's targeted industry clusters. 70 21 j. Surveying of similar activities in other states and at 70 22 other universities. 70 23 k. Establishing a single point of contact to facilitate 70 24 commercialization of research. 70 25 Sec. 98. Section 262B.5, Code 2003, is amended to read as 70 26 follows: 70 27 262B.5REGENTS AND DEPARTMENT OF ECONOMIC DEVELOPMENT70 28 REPORTING. 70 29The state board of regents and the Iowa department of70 30economic development shall enter into an agreement under70 31chapter 28E to coordinate and facilitate the activities of the70 32consortiums.The state board of regentsandwith input from 70 33 the Iowa department of economic development shall report 70 34 annually to the governor and the general assembly concerning 70 35 the activitiesof the consortiumsconducted pursuant to this 71 1 chapter. 71 2 Sec. 99. NEW SECTION. 262B.6 DIRECTOR OF TECHNOLOGY – 71 3 TECHNOLOGY TRANSFER AGENTS. 71 4 1. The governor shall appoint a director of technology to 71 5 serve within the office of the governor. A position is 71 6 created for a deputy director of technology within the office 71 7 of the governor. The director and the deputy director shall 71 8 be responsible for advancing technology transfer and 71 9 commercialization issues in the state and shall coordinate the 71 10 related activities at the institutions of higher learning 71 11 under the control of the state board of regents. The director 71 12 shall have demonstrated expertise and experience in the areas 71 13 of business, industry, and academics. 71 14 2. Each institution of higher learning under the control 71 15 of the state board of regents shall designate an employee to 71 16 serve as a technology transfer agent to coordinate the 71 17 activities of the institution with the director of technology 71 18 within the office of the governor. 71 19 3. By December 1, 2004, the director shall conduct a study 71 20 and develop recommendations for the advancement of technology 71 21 transfer and commercialization issues. The director shall 71 22 compile and submit the recommendations in written form to the 71 23 general assembly by December 1, 2004. The recommendations 71 24 shall include specific and detailed proposed amendments to the 71 25 Code of Iowa necessary to advance the proposed 71 26 recommendations. 71 27 Sec. 100. Section 262B.4, Code 2003, is repealed. 71 28 DIVISION X 71 29 IOWA ECONOMIC DEVELOPMENT 71 30 LOAN AND CREDIT GUARANTEE FUND 71 31 Sec. 101. NEW SECTION. 15E.221 SHORT TITLE. 71 32 This division shall be known and may be cited as the "Iowa 71 33 Economic Development Loan and Credit Guarantee Fund Act". 71 34 Sec. 102. NEW SECTION. 15E.222 LEGISLATIVE FINDING – 71 35 PURPOSES. 72 1 1. The general assembly finds all of the following: 72 2 a. That small and medium-sized businesses, in general, and 72 3 certain targeted industry businesses and other qualified 72 4 businesses, in particular, may not qualify for conventional 72 5 financing. 72 6 b. That the limited availability of credit for export 72 7 transactions limits the ability of small and medium-sized 72 8 businesses in this state to compete in international markets. 72 9 c. That, to enhance competitiveness and foster economic 72 10 development, this state must focus on growth in certain 72 11 specific targeted industry businesses and other qualified 72 12 businesses, especially during a time of war. 72 13 d. That the challenge for the public economic sector is to 72 14 create an atmosphere conducive to economic growth, in 72 15 conjunction with financial institutions in the private sector, 72 16 which fill the gaps in credit availability and export finance, 72 17 and that allow the private sector to identify the lending 72 18 opportunities and foster decision making at the local level. 72 19 2. The general assembly declares the purposes of this 72 20 division to be all of the following: 72 21 a. To create incentives and assistance to increase the 72 22 flow of private capital to targeted industry businesses and 72 23 other qualified businesses. 72 24 b. To promote industrial modernization and technology 72 25 adoption. 72 26 c. To encourage the retention and creation of jobs. 72 27 d. To encourage the export of goods and services sold by 72 28 Iowa businesses in national and international markets. 72 29 Sec. 103. NEW SECTION. 15E.223 DEFINITIONS. 72 30 As used in this division, unless the context otherwise 72 31 requires: 72 32 1. "Financial institution" means an institution listed in 72 33 section 422.61, subsection 1, or such other financial 72 34 institution as defined by the department for purposes of this 72 35 division. 73 1 2. "Program" means the loan and credit guarantee program 73 2 established in this division. 73 3 3. "Qualified business" means an existing or proposed 73 4 business entity with an annual average number of employees not 73 5 exceeding two hundred employees. "Qualified business" does 73 6 not include businesses engaged primarily in retail sales, real 73 7 estate, or the provision of health care or other professional 73 8 services. "Qualified business" includes professional services 73 9 businesses that provide services to targeted industry 73 10 businesses or other entities. 73 11 4. "Targeted industry business" means an existing or 73 12 proposed business entity, including an emerging small business 73 13 or qualified business which is operated for profit and which 73 14 has a primary business purpose of doing business in at least 73 15 one of the targeted industries designated by the department 73 16 which include life sciences, software and information 73 17 technology, advanced manufacturing, value-added agriculture, 73 18 and any other industry designated as a targeted industry by 73 19 the loan and credit guarantee advisory board. 73 20 Sec. 104. NEW SECTION. 15E.224 LOAN AND CREDIT GUARANTEE 73 21 PROGRAM. 73 22 1. The department shall, with the advice of the loan and 73 23 credit guarantee advisory board, establish and administer a 73 24 loan and credit guarantee program. The department, pursuant 73 25 to agreements with financial institutions, shall provide loan 73 26 and credit guarantees, or other forms of credit guarantees for 73 27 qualified businesses and targeted industry businesses for 73 28 eligible project costs. A loan or credit guarantee provided 73 29 under the program may stand alone or may be used in 73 30 conjunction with or to enhance other loans or credit 73 31 guarantees, offered by private, state, or federal entities. 73 32 The department may purchase insurance to cover defaulted loans 73 33 meeting the requirements of the program. However, the 73 34 department shall not in any manner directly or indirectly 73 35 pledge the credit of the state. Eligible project costs 74 1 include expenditures for productive equipment and machinery, 74 2 working capital for operations and export transactions, 74 3 research and development, marketing, and such other costs as 74 4 the department may so designate. 74 5 2. A loan or credit guarantee or other form of credit 74 6 guarantee provided under the program to a participating 74 7 financial institution for a single qualified business or 74 8 targeted industry business shall not exceed one million 74 9 dollars in value. Loan or credit guarantees or other forms of 74 10 credit guarantees provided under the program to more than one 74 11 participating financial institution for a single qualified 74 12 business or targeted industry business shall not exceed ten 74 13 million dollars in value. 74 14 3. In administering the program, the department shall 74 15 consult and cooperate with financial institutions in this 74 16 state and with the loan and credit guarantee advisory board. 74 17 Administrative procedures and application procedures, as 74 18 practicable, shall be responsive to the needs of qualified 74 19 businesses, targeted industry businesses, and financial 74 20 institutions, and shall be consistent with prudent investment 74 21 and lending practices and criteria. 74 22 4. Each participating financial institution shall identify 74 23 and underwrite potential lending opportunities with qualified 74 24 businesses and targeted industry businesses. Upon a 74 25 determination by a participating financial institution that a 74 26 qualified business or targeted industry business meets the 74 27 underwriting standards of the financial institution, subject 74 28 to the approval of a loan or credit guarantee, the financial 74 29 institution shall submit the underwriting information and a 74 30 loan or credit guarantee application to the department. 74 31 5. The department, with the advice of the loan and credit 74 32 guarantee advisory board, shall adopt a loan or credit 74 33 guarantee application procedure for a financial institution on 74 34 behalf of a qualified business or targeted industry business. 74 35 6. Upon approval of a loan or credit guarantee, the 75 1 department shall enter into a loan or credit guarantee 75 2 agreement with the participating financial institution. The 75 3 agreement shall specify all of the following: 75 4 a. The fee to be charged to the financial institution. 75 5 b. The evidence of debt assurance of, and security for, 75 6 the loan or credit guarantee. 75 7 c. A loan or credit guarantee that does not exceed fifteen 75 8 years. 75 9 d. Any other terms and conditions considered necessary or 75 10 desirable by the department. 75 11 7. The department, with the advice of the loan and credit 75 12 guarantee advisory board, may adopt loan and credit guarantee 75 13 application procedures that allow a qualified business or 75 14 targeted industry business to apply directly to the department 75 15 for a preliminary guarantee commitment. A preliminary 75 16 guarantee commitment may be issued by the department subject 75 17 to the qualified business or targeted industry business 75 18 securing a commitment for financing from a financial 75 19 institution. The application procedures shall specify the 75 20 process by which a financial institution may obtain a final 75 21 loan and credit guarantee. 75 22 Sec. 105. NEW SECTION. 15E.225 TERMS – FEES. 75 23 1. When entering into a loan or credit guarantee 75 24 agreement, the department, with the advice of the loan and 75 25 credit guarantee advisory board, shall establish fees and 75 26 other terms for participation in the program by qualified 75 27 businesses and targeted industry businesses. 75 28 2. The department, with due regard for the possibility of 75 29 losses and administrative costs and with the advice of the 75 30 loan and credit guarantee advisory board, shall set fees and 75 31 other terms at levels sufficient to assure that the program is 75 32 self-financing. 75 33 3. For a preliminary guarantee commitment, the department 75 34 may charge a qualified business or targeted industry business 75 35 a preliminary guarantee commitment fee. The application fee 76 1 shall be in addition to any other fees charged by the 76 2 department under this section and shall not exceed one 76 3 thousand dollars for an application. 76 4 Sec. 106. NEW SECTION. 15E.226 LOAN AND CREDIT GUARANTEE 76 5 ADVISORY BOARD. 76 6 A loan and credit guarantee advisory board is established 76 7 consisting of seven members appointed by the governor, subject 76 8 to confirmation by the senate. The advisory board shall 76 9 provide the department with technical advice regarding the 76 10 administration of the program, including the adoption of 76 11 administrative rules pursuant to chapter 17A. The advisory 76 12 board shall review and provide recommendations regarding all 76 13 applications under the program. Members of the advisory board 76 14 are entitled to receive reimbursement for actual expenses 76 15 incurred while engaged in the performance of official duties. 76 16 Advisory board members may also be eligible to receive 76 17 compensation as provided in section 7E.6. The director of the 76 18 department shall budget moneys to pay the compensation and 76 19 expenses of the advisory board. The provisions of this 76 20 section relating to the adoption of administrative rules shall 76 21 be construed narrowly. 76 22 DIVISION XI 76 23 ECONOMIC DEVELOPMENT ASSISTANCE AND DATA COLLECTION 76 24 Sec. 107. NEW SECTION. 15E.118 BUSINESS START-UP 76 25 INFORMATION – INTERNET WEB SITE. 76 26 The department shall provide information through an 76 27 internet web site and a toll-free telephone service to assist 76 28 persons interested in establishing a commercial facility or 76 29 engaging in a commercial activity. The information shall 76 30 include all of the following: 76 31 1. Assistance, information, and guidance for start-up 76 32 businesses. 76 33 2. Information gathered by the department pursuant to 76 34 section 15E.17, subsection 2. 76 35 3. Personal and corporate income tax information. 77 1 4. Information regarding financial assistance and 77 2 incentives available to businesses. 77 3 5. Workforce availability in the state presented in a 77 4 regional format. 77 5 Sec. 108. NEW SECTION. 15E.119 ECONOMIC DEVELOPMENT- 77 6 RELATED DATA COLLECTION. 77 7 1. The department shall interview any business that 77 8 considered locating in Iowa but decided to locate elsewhere. 77 9 The department shall attempt to determine factors that 77 10 affected the location decision of the business. 77 11 2. The department shall interview any business that closes 77 12 major operations in the state or dissolves the business's 77 13 corporate status in an effort to identify factors that led to 77 14 the closure or dissolution. 77 15 3. By January 15 of each year, the department shall submit 77 16 a written report to the general assembly that summarizes the 77 17 information collected pursuant to this section and provides 77 18 suggested amendments to the Code of Iowa and the Iowa 77 19 administrative code designed to stimulate and expand the 77 20 state's economy. 77 21 Sec. 109. INTERNET WEB SITE DEVELOPMENT. In developing 77 22 the internet web site required in section 15E.118, the 77 23 department of economic development shall examine similar 77 24 efforts in other states and incorporate the best practices. 77 25 DIVISION XII 77 26 CULTURAL AND ENTERTAINMENT DISTRICTS 77 27 Sec. 110. NEW SECTION. 303.3B CULTURAL AND ENTERTAINMENT 77 28 DISTRICTS. 77 29 1. The department of cultural affairs shall establish and 77 30 administer a cultural and entertainment district certification 77 31 program. The program shall encourage the growth of 77 32 communities through the development of areas within a city or 77 33 county for public and private uses related to cultural and 77 34 entertainment purposes. 77 35 2. A city or county may create and designate a cultural 78 1 and entertainment district subject to certification by the 78 2 department of cultural affairs, in consultation with the 78 3 department of economic development. A cultural and 78 4 entertainment district shall consist of a geographic area not 78 5 exceeding one square mile in size. A cultural and 78 6 entertainment district certification shall remain in effect 78 7 for ten years following the date of certification. Two or 78 8 more cities or counties may apply jointly for certification of 78 9 a district that extends across a common boundary. Through the 78 10 adoption of administrative rules, the department of cultural 78 11 affairs shall develop a certification application for use in 78 12 the certification process. The provisions of this subsection 78 13 relating to the adoption of administrative rules shall be 78 14 construed narrowly. 78 15 3. The department of cultural affairs shall encourage 78 16 development projects and activities located in certified 78 17 cultural and entertainment districts through incentives under 78 18 cultural grant programs pursuant to section 303.3, chapter 78 19 303A, and any other grant programs. 78 20 DIVISION XIII 78 21 UNIVERSITY-BASED RESEARCH UTILIZATION PROGRAM 78 22 Sec. 111. NEW SECTION. 262B.11 UNIVERSITY-BASED RESEARCH 78 23 UTILIZATION PROGRAM. 78 24 1. The department of economic development shall establish 78 25 and administer a university-based research utilization program 78 26 for purposes of encouraging the utilization of university- 78 27 based research, primarily in the area of high technology, in 78 28 new or existing businesses. The program shall include the 78 29 three universities under the control of the state board of 78 30 regents and all accredited private universities located in the 78 31 state. 78 32 2. A new or existing business that utilizes a technology 78 33 developed by an employee at a university under the control of 78 34 the state board of regents may apply to the department of 78 35 economic development for approval to participate in the 79 1 university-based research utilization program. The department 79 2 shall approve an applicant if the applicant meets all of the 79 3 following criteria: 79 4 a. The applicant utilizes a technology developed by an 79 5 employee at a university under the control of the state board 79 6 of regents, provided that the technology has received a patent 79 7 after the effective date of this Act. If the applicant has 79 8 been in existence more than one year prior to applying, the 79 9 applicant shall organize a separate company to utilize the 79 10 technology. For purposes of this section, the separate 79 11 company shall be considered the applicant and, if approved, 79 12 the approved business. 79 13 b. The applicant develops a five-year business plan 79 14 approved by the department. The plan shall include 79 15 information concerning the applicant's Iowa employment goals 79 16 and projected impact on the Iowa economy. The department 79 17 shall only approve plans showing sufficient potential impact 79 18 on Iowa employment and economic development. 79 19 c. The applicant meets a minimum-size business standard 79 20 determined by the department. 79 21 d. The applicant provides annual reports to the department 79 22 that include employment statistics for the applicant and the 79 23 total taxable wages paid to Iowa employees and reported to the 79 24 department of revenue and finance pursuant to section 422.16. 79 25 3. A business approved under the program and the 79 26 university employee responsible for the development of the 79 27 technology utilized by the approved business shall be eligible 79 28 for a tax credit. The credit shall be allowed against the 79 29 taxes imposed in chapter 422, divisions II and III. An 79 30 individual may claim a tax credit under this section of a 79 31 partnership, limited liability company, S corporation, estate, 79 32 or trust electing to have income taxed directly to the 79 33 individual. The amount claimed by the individual shall be 79 34 based upon the pro rata share of the individual's earnings 79 35 from the partnership, limited liability company, S 80 1 corporation, estate, or trust. A tax credit shall not be 80 2 claimed under this subsection unless a tax credit certificate 80 3 issued by the department of economic development is attached 80 4 to the taxpayer's tax return for the tax year for which the 80 5 tax credit is claimed. The amount of a tax credit allowed 80 6 under this subsection shall equal the amount listed on a tax 80 7 credit certificate issued by the department of economic 80 8 development pursuant to subsection 4. A tax credit 80 9 certificate shall not be transferable. Any tax credit in 80 10 excess of the taxpayer's liability for the tax year may be 80 11 credited to the taxpayer's tax liability for the following 80 12 five years or until depleted, whichever occurs first. A tax 80 13 credit shall not be carried back to a tax year prior to the 80 14 tax year in which the taxpayer redeems the tax credit. 80 15 4. For the five tax years following the tax year in which 80 16 a business is approved under the program, the department of 80 17 revenue and finance shall provide the department of economic 80 18 development with information required by the department of 80 19 economic development from each tax return filed by the 80 20 approved business. Upon receiving the tax return-related 80 21 information, the department of economic development shall do 80 22 all of the following: 80 23 a. Review the information provided by the department of 80 24 revenue and finance pursuant to this subsection and the annual 80 25 report submitted by the applicant pursuant to subsection 2, 80 26 paragraph "d". If the department determines that the business 80 27 activities of the applicant are not providing the benefits to 80 28 Iowa employment and economic development projected in the 80 29 applicant's approved five-year business plan, the department 80 30 shall not issue tax credit certificates for that year to the 80 31 applicant or university employee and shall determine any 80 32 related university share to be equal to zero for that year. 80 33 b. Effective for the fiscal year beginning July 1, 2004, 80 34 and for subsequent fiscal years, issue a tax credit 80 35 certificate to the approved business and the university 81 1 employee responsible for the development of the technology 81 2 utilized by the approved business in an amount determined 81 3 pursuant to subsection 5. A tax credit certificate shall 81 4 contain the taxpayer's name, address, tax identification 81 5 number, the amount of the tax credit, and other information 81 6 required by the department of revenue and finance. 81 7 c. (1) Determine the university share which is equal to 81 8 the value of thirty percent of the tax liability of the 81 9 approved business for purposes of making an appropriation 81 10 pursuant to section 262B.12, if enacted by 2003 Iowa Acts, 81 11 House File 683 or another Act, to the university where the 81 12 technology utilized by the approved business was developed. A 81 13 university share shall not exceed two hundred twenty-five 81 14 thousand dollars per year per technology utilized. For each 81 15 technology utilized, the aggregate university share over a 81 16 five-year period shall not exceed six hundred thousand 81 17 dollars. 81 18 (2) The department shall maintain records for each 81 19 university during each fiscal year regarding the university 81 20 share each university is entitled to receive through the 81 21 appropriation in section 262B.12, if enacted by 2003 Iowa 81 22 Acts, House File 683 or another Act. A university shall be 81 23 entitled to receive the total university share for that 81 24 particular university during the previous fiscal year. 81 25 d. For the fiscal year beginning July 1, 2004, not more 81 26 than two million dollars worth of certificates shall be issued 81 27 pursuant to paragraph "b". For the fiscal year beginning July 81 28 1, 2005, and every fiscal year thereafter, not more than ten 81 29 million dollars worth of certificates shall be issued pursuant 81 30 to paragraph "b". 81 31 5. The tax credit certificates issued by the department 81 32 for each of the five years following the tax year in which the 81 33 business is approved under the program shall be for the 81 34 following amounts: 81 35 a. For the approved business, the value of the tax credit 82 1 certificate shall equal thirty percent of the tax liability of 82 2 the approved business. The value of a certificate issued to 82 3 an approved business shall not exceed two hundred twenty-five 82 4 thousand dollars. The total aggregate value of certificates 82 5 issued over a five-year period to an approved business shall 82 6 not exceed six hundred thousand dollars. 82 7 b. For the university employee responsible for the 82 8 development of the technology utilized by the approved 82 9 business, the value of the tax credit certificate shall equal 82 10 ten percent of the tax liability of the approved business. If 82 11 more than one employee is responsible for the development of 82 12 the technology, the value equal to ten percent of the tax 82 13 liability of the approved business shall be divided equally 82 14 and individual tax credit certificates shall be issued to each 82 15 employee responsible for the development of the technology. 82 16 Each year, the total value of a certificate or certificates 82 17 issued for a utilized technology shall not exceed seventy-five 82 18 thousand dollars. For each technology utilized, the total 82 19 aggregate value of certificates issued over a five-year period 82 20 to the university employee responsible for the development of 82 21 the technology shall not exceed two hundred thousand dollars. 82 22 6. The department of economic development shall notify the 82 23 department of revenue and finance when a tax credit 82 24 certificate is issued pursuant to subsection 4. The 82 25 notification shall include the name and tax identification 82 26 number appearing on any tax credit certificate. 82 27 Sec. 112. NEW SECTION. 422.11H UNIVERSITY-BASED RESEARCH 82 28 UTILIZATION PROGRAM TAX CREDIT. 82 29 The taxes imposed under this division, less the credits 82 30 allowed under sections 422.12 and 422.12B, shall be reduced by 82 31 a university-based research utilization program tax credit 82 32 authorized pursuant to section 262B.11. 82 33 Sec. 113. Section 422.33, Code 2003, is amended by adding 82 34 the following new subsection: 82 35 NEW SUBSECTION. 14. The taxes imposed under this division 83 1 shall be reduced by a university-based research utilization 83 2 program tax credit authorized pursuant to section 262B.11. 83 3 DIVISION XIV 83 4 FUTURE REPEAL 83 5 Sec. 114. The divisions of this Act designated the grow 83 6 Iowa board and fund, the value-added agricultural products and 83 7 processes financial assistance program, the endow Iowa grants, 83 8 the technology transfer advisors, the Iowa economic 83 9 development loan and credit guarantee fund, the economic 83 10 development assistance and data collection, the cultural and 83 11 entertainment districts, the workforce issues, and the 83 12 university-based research utilization program, are repealed 83 13 effective June 30, 2010. 83 14 DIVISION XV 83 15 LIABILITY REFORM 83 16 Sec. 115. Section 625A.9, Code 2003, is amended to read as 83 17 follows: 83 18 625A.9 EXECUTION ON UNSTAYED PART OF JUDGMENT – 83 19 SUPERSEDEAS BOND WAIVED. 83 20 1. The taking of the appeal from part of a judgment or 83 21 order, and the filing of a bondas above directed, does not 83 22 stay execution as to that part of the judgment or order not 83 23 appealed from. 83 24 2. If the judgment or order appealed from is for money, 83 25 such bond shall not exceed one hundred ten percent of the 83 26 amount of the money judgment. 83 27 3. Upon motion and for good cause shown, the district 83 28 court may stay all proceedings under the order or judgment 83 29 being appealed and permit the state or any of its political 83 30 subdivisions to appeal a judgment or order to the supreme 83 31 court without the filing of a supersedeas bond. 83 32 Sec. 116. Section 668.12, Code 2003, is amended to read as 83 33 follows: 83 34 668.12 LIABILITY FOR PRODUCTS –STATE OF THE ART DEFENSE83 35 DEFENSES. 84 1 1. In any action brought pursuant to this chapter against 84 2 an assembler, designer, supplier of specifications, 84 3 distributor, manufacturer, or seller for damages arising from 84 4 an alleged defect in the design, testing, manufacturing, 84 5 formulation, packaging, warning, or labeling of a product, a 84 6 percentage of fault shall not be assigned to such persons if 84 7 they plead and prove that the product conformed to the state 84 8 of the art in existence at the time the product was designed, 84 9 tested, manufactured, formulated, packaged, provided with a 84 10 warning, or labeled. 84 11 2. Nothing contained inthis sectionsubsection 1 shall 84 12 diminish the duty of an assembler, designer, supplier of 84 13 specifications, distributor, manufacturer or seller to warn 84 14 concerning subsequently acquired knowledge of a defect or 84 15 dangerous condition that would render the product unreasonably 84 16 dangerous for its foreseeable use or diminish the liability 84 17 for failure to so warn. 84 18 3. An assembler, designer, supplier of specifications, 84 19 distributor, manufacturer, or seller shall not be subject to 84 20 liability under a theory of civil conspiracy unless the person 84 21 knowingly and voluntarily entered into an agreement, express 84 22 or implied, to participate in a common plan with the intent to 84 23 commit a tortious act upon another. Mere membership in a 84 24 trade or industrial association or group is not, in and of 84 25 itself, evidence of such an agreement. 84 26 Sec. 117. Section 668A.1, subsection 1, Code 2003, is 84 27 amended to read as follows: 84 28 1. In a trial of a claim involving the request for 84 29 punitive or exemplary damages, the court shall instruct the 84 30 jury to answer special interrogatories or, if there is no 84 31 jury, shall make findings, indicating all of the following: 84 32 a.Whether, by a preponderance of clear, convincing, and84 33satisfactory evidence, the conduct of the defendant from which84 34the claim arose constituted willful and wanton disregard for84 35the rights or safety of another.85 1b.Whether the conduct of the defendant was directed 85 2 specifically at the claimant, or at the person from which the 85 3 claimant's claim is derived. 85 4 b. Whether, by a preponderance of clear and convincing 85 5 evidence, the conduct of the defendant from which the claim 85 6 arose constituted actual malice. 85 7 Sec. 118. NEW SECTION. 668A.2 DEFINITIONS. 85 8 As used in this chapter, the following terms shall have the 85 9 following meanings: 85 10 1. "Clear and convincing evidence" means evidence which 85 11 leaves no serious or substantial doubt about the correctness 85 12 of the conclusions drawn from the evidence. It is more than a 85 13 preponderance of evidence, but less than beyond a reasonable 85 14 doubt. 85 15 2. "Malice" means either conduct which is specifically 85 16 intended by the defendant to cause tangible or intangible 85 17 serious injury to the plaintiff or conduct that is carried out 85 18 by the defendant both with a flagrant indifference to the 85 19 rights of the plaintiff and with a subjective awareness that 85 20 such conduct will result in tangible serious injury. 85 21 Sec. 119. NEW SECTION. 668A.3 AWARD OF PUNITIVE OR 85 22 EXEMPLARY DAMAGES – PROOF – STANDARD. 85 23 Punitive or exemplary damages shall only be awarded where 85 24 the plaintiff proves by clear and convincing evidence that the 85 25 plaintiff's harm was the result of actual malice. This burden 85 26 of proof shall not be satisfied by proof of any degree of 85 27 negligence, including gross negligence. 85 28 Sec. 120. APPLICABILITY. This division of this Act, 85 29 relating to liability reform, applies to cases filed on or 85 30 after July 1, 2003. 85 31 DIVISION XVI 85 32 WORKERS' COMPENSATION 85 33 Sec. 121. Section 85.34, subsection 2, paragraph u, Code 85 34 2003, is amended by adding the following new unnumbered 85 35 paragraph after unnumbered paragraph 2: 86 1 NEW UNNUMBERED PARAGRAPH. When an employee makes a claim 86 2 for benefits under this subsection, the employer is not liable 86 3 for that portion of the employee's present disability caused 86 4 by a prior work-related injury or illness that was sustained 86 5 by the employee while the employee was employed by a different 86 6 employer. When an employee's present disability includes 86 7 disability caused by a prior work-related injury or illness 86 8 that was sustained by the employee while in the employ of the 86 9 same employer, the employer is liable for compensating all of 86 10 the employee's work-related disability sustained by the 86 11 employee while in the employ of the employer, except that any 86 12 portion of the disability that was previously compensated by 86 13 the employer shall be deducted from the employer's obligation 86 14 to pay benefits for the employee's present disability. If an 86 15 employee's present disability is reduced by a portion of 86 16 disability sustained from prior work-related injuries or 86 17 illnesses for which the employee has already been compensated 86 18 by the same employer, then the employee shall receive 86 19 compensation for the remaining disability caused by the 86 20 present work-related injury or illness plus an additional ten 86 21 percent of the amount of the increase in disability. 86 22 Sec. 122. Section 86.12, Code 2003, is amended to read as 86 23 follows: 86 24 86.12 FAILURE TO REPORT. 86 25 The workers' compensation commissioner may require any 86 26 employer to supply the information required by section 86.10 86 27 or to file a report required by section 86.11 or 86.13 or by 86 28 agency rule, by written demand sent to the employer's last 86 29 known address. Upon failure to supply such information or 86 30 file such report withintwentythirty days, the employer may 86 31 be ordered to appear and show cause why the employer should 86 32 not be subject tocivil penaltyassessment of onehundred86 33 thousand dollars for each occurrence. Upon such hearing, the 86 34 workers' compensation commissioner shall enter a finding of 86 35 fact and may enter an order requiring suchpenaltyassessment 87 1 to be paid into the second injury fund created by sections 87 2 85.63 to 85.69. In the event thecivil penalty assessed87 3 assessment is not voluntarily paid within thirty days the 87 4 workers' compensation commissioner may file a certified copy 87 5 of such finding and order with the clerk of the court for the 87 6 district in which the employer maintains a place of business. 87 7 If the employer maintains no place of business in this state 87 8 service shall be made as provided in chapter 85 for 87 9 nonresident employers. In such case the finding and order may 87 10 be filed in any court of competent jurisdiction within this 87 11 state. 87 12 The workers' compensation commissioner may thereafter 87 13 petition the court for entry of judgment upon such order, 87 14 serving notice of such petition on the employer and any other 87 15 person in default. If the court finds the order valid, the 87 16 court shall enter judgment against the person or persons in 87 17 default for the amount due under the order. No fees shall be 87 18 required for the filing of the order or for the petition for 87 19 judgment, or for the entry of judgment or for any enforcement 87 20 procedure thereupon. No supersedeas shall be granted by any 87 21 court to a judgment entered under this section. 87 22 When a report is required under section 86.11 or 86.13 or 87 23 by agency rule, andthat report has been submitted tothe 87 24 employer's insurance carrierand no report of injury has been87 25filed with the workers' compensation commissionerpossesses 87 26 the information necessary to file the report, the insurance 87 27 carrier shall be responsible for filing the reportof injury87 28 in the same manner and to the same extent as an employer under 87 29 this section. 87 30 Sec. 123. NEW SECTION. 86.13A COMPLIANCE MONITORING AND 87 31 ENFORCEMENT. 87 32 The workers' compensation commissioner shall monitor the 87 33 rate of compliance of each employer and each insurer with the 87 34 requirement to commence benefit payments within the time 87 35 specified in section 85.30. The commissioner shall determine 88 1 the percentage of reported injuries where the statutory 88 2 standard was met and the average number of days that 88 3 commencement of voluntary benefits was delayed for each 88 4 employer and each insurer individually, and for all employers 88 5 and all insurers as separate groups. 88 6 If during any fiscal year commencing after June 30, 2005, 88 7 the general business practices of an employer or insurer 88 8 result in the delay of the commencement of voluntary weekly 88 9 compensation payments after the date specified in section 88 10 85.30 more frequently and for a longer number of days than the 88 11 average number of days for the entire group of employers or 88 12 insurers, the commissioner may impose an assessment on the 88 13 employer or insurer payable to the second injury fund created 88 14 in section 85.66. The amount of the assessment shall be ten 88 15 dollars, multiplied by the average number of days that weekly 88 16 compensation payments were delayed after the date specified in 88 17 section 85.30, and multiplied by the number of injuries the 88 18 employer or insurer reported during the fiscal year. 88 19 Notwithstanding the foregoing, an assessment shall not be 88 20 imposed if the employer or insurer commenced voluntary weekly 88 21 compensation benefits within the time specified in section 88 22 85.30 for more than seventy-five percent of the injuries 88 23 reported by the employer or insurer. 88 24 The commissioner may waive or reduce an assessment under 88 25 this section if an employer or insurer demonstrates to the 88 26 commissioner that atypical events during the fiscal year, 88 27 including but not limited to a small number of cases, made the 88 28 statistical data for that employer or insurer unrepresentative 88 29 of the actual payout practices of the employer or insurer for 88 30 that year. 88 31 Sec. 124. APPLICABILITY. This division of this Act, 88 32 relating to workers' compensation, applies to an injury 88 33 occurring on or after July 1, 2003. 88 34 DIVISION XVII 88 35 FINANCIAL SERVICES 89 1 Sec. 125. Section 537.2502, subsections 3 and 6, Code 89 2 2003, are amended to read as follows: 89 3 3. A delinquency charge shall not be collected under 89 4 subsection 1, paragraph "a", on an installmentwhichthat is 89 5 paid in full within ten days after its scheduled or deferred 89 6 installment due date even though an earlier maturing 89 7 installment or a delinquency or deferral charge on an earlier 89 8 installment may not have been paid in full. For purposes of 89 9 this subsection, payments associated with a precomputed 89 10 transaction are applied first to current installments and then 89 11 to delinquent installments. 89 12 6. A delinquency charge shall not be collected under 89 13 subsection 4 on a paymentwhichassociated with a precomputed 89 14 transaction that is paid in full on or before its scheduled or 89 15 deferred due date even though an earlier maturing payment or a 89 16 delinquency or deferred charge on an earlier payment has not 89 17 been paid in full. For purposes of this subsection, payments 89 18 are applied first to amounts due for the current billing cycle 89 19 and then to delinquent payments. 89 20 Sec. 126. Section 537.2601, subsection 1, Code 2003, is 89 21 amended to read as follows: 89 22 1.Except as provided in subsection 2, withWith respect 89 23 to a credit transaction other than a consumer credit 89 24 transaction, the parties may contract for the payment by the 89 25 debtor of any finance or other charge as permitted by law. 89 26Except with respect to debt obligations issued by a89 27government, governmental agency or instrumentality, in89 28calculating any finance charge contracted for, any month may89 29be counted as one-twelfth of a year, but a day is to be89 30counted as one three-hundred sixty-fifth of a year.89 31 DIVISION XVIII 89 32 UNEMPLOYMENT COMPENSATION SURCHARGE 89 33 Sec. 127. Section 96.7, subsection 12, paragraph a, Code 89 34 2003, is amended to read as follows: 89 35 a. An employer other than a governmental entity or a 90 1 nonprofit organization, subject to this chapter, shall pay an 90 2 administrative contribution surcharge equal in amount to one- 90 3 tenth of one percent of federal taxable wages, as defined in 90 4 section 96.19, subsection 37, paragraph "b", subject to the 90 5 surcharge formula to be developed by the department under this 90 6 paragraph. The department shall develop a surcharge formula 90 7 that provides a target revenue level of no greater than six 90 8 million five hundred twenty-five thousand dollarsannuallyfor 90 9 calendar years 2003, 2004, and 2005 and a target revenue level 90 10 of no greater than three million two hundred sixty-two 90 11 thousand five hundred dollars for calendar year 2006 and each 90 12 subsequent calendar year. The department shall reduce the 90 13 administrative contribution surcharge established for any 90 14 calendar year proportionate to any federal government funding 90 15 that provides an increased allocation of moneys for workforce 90 16 development offices, under the federal employment services 90 17 financing reform legislation. Any administrative contribution 90 18 surcharge revenue that is collected in calendar year200290 19 2003, 2004, or 2005 in excess of six million five hundred 90 20 twenty-five thousand dollars or in calendar year 2006 or a 90 21 subsequent calendar year in excess of three million two 90 22 hundred sixty-two thousand five hundred dollars shall be 90 23 deducted from the amount to be collected in the subsequent 90 24 calendar year 2003 before the department establishes the 90 25 administrative contribution surcharge. The department shall 90 26 recompute the amount as a percentage of taxable wages, as 90 27 defined in section 96.19, subsection 37, and shall add the 90 28 percentage surcharge to the employer's contribution rate 90 29 determined under this section. The percentage surcharge shall 90 30 be capped at a maximum of seven dollars per employee. The 90 31 department shall adopt rules prescribing the manner in which 90 32 the surcharge will be collected. Interest shall accrue on all 90 33 unpaid surcharges under this subsection at the same rate as on 90 34 regular contributions and shall be collectible in the same 90 35 manner. Interest accrued and collected under this paragraph 91 1 and interest earned and credited to the fund under paragraph 91 2 "b" shall be used by the department only for the purposes set 91 3 forth in paragraph "c". 91 4 Sec. 128. Section 96.7, subsection 12, paragraph d, Code 91 5 2003, is amended to read as follows: 91 6 d. This subsection is repealed July 1,20032006, and the 91 7 repeal is applicable to contribution rates for calendar year 91 820042007 and subsequent calendar years. 91 9 Sec. 129. EFFECTIVE DATE. This division of this Act, 91 10 concerning the unemployment compensation surcharge, being 91 11 deemed of immediate importance, takes effect upon enactment. 91 12 DIVISION XIX 91 13 ECONOMIC DEVELOPMENT 91 14 Sec. 130. NEW SECTION. 15E.18 CITIES, COUNTIES, AND 91 15 REGIONS – SITE PREPARATION FOR TARGETED ECONOMIC DEVELOPMENT. 91 16 1. For purposes of this section, "region" means a group of 91 17 two or more contiguous counties that establishes a single, 91 18 focused economic development effort. 91 19 2. A city, county, or region, subject to the approval of 91 20 the property owner, may designate an area within the 91 21 boundaries of the city, county, or region for a specific type 91 22 of targeted economic development. The specific type of 91 23 targeted economic development shall be one of the following: 91 24 a. Manufacturing. 91 25 b. Light industrial. 91 26 c. Warehouse and distribution. 91 27 d. Office parks. 91 28 e. Business and commerce parks. 91 29 f. Research and development. 91 30 3. A city, county, or region that designates an area for a 91 31 specific type of targeted economic development may apply to 91 32 the department for purposes of certifying the area as a 91 33 preapproved development site. The department shall develop 91 34 criteria for the certification process. 91 35 4. Prior to a specific project being developed, a city, 92 1 county, or region designating the area for targeted economic 92 2 development pursuant to this section may apply for and obtain 92 3 appropriate licenses, permits, and approvals for the type of 92 4 targeted economic development project desired for the area. 92 5 Sec. 131. NEW SECTION. 15E.19 REGULATORY ASSISTANCE. 92 6 1. The department of economic development shall coordinate 92 7 all regulatory assistance for the state of Iowa. Each state 92 8 agency with regulatory programs for business shall maintain a 92 9 coordinator within the office of the director or the 92 10 administrative division of the state agency. Each coordinator 92 11 shall do all of the following: 92 12 a. Serve as the department of economic development's 92 13 primary contact for regulatory affairs. 92 14 b. Provide regulatory requirements to businesses and 92 15 represent the agency in the private sector. 92 16 c. Monitor permit applications and provide timely permit 92 17 status information to the department of economic development. 92 18 d. Have the ability to require regulatory staff 92 19 participation in negotiations and discussions with businesses. 92 20 e. Notify the department of economic development regarding 92 21 proposed rulemaking activities that impact a regulatory 92 22 program and any subsequent changes to a regulatory program. 92 23 2. The department of economic development shall, in 92 24 consultation with the coordinators described in this section, 92 25 examine, and to the extent permissible, assist in the 92 26 implementation of methods, including the possible 92 27 establishment of an electronic database, to streamline the 92 28 process for issuing permits to business. 92 29 3. By January 15 of each year, the department of economic 92 30 development shall submit a written report to the general 92 31 assembly regarding the provision of regulatory assistance by 92 32 state agencies, including the department's efforts, and its 92 33 recommendations and proposed solutions, to streamline the 92 34 process of issuing permits to business. 92 35 DIVISION XX 93 1 UTILITY SALES TAX EXEMPTION 93 2 Sec. 132. Section 422.45, subsection 61, paragraph b, 93 3 subparagraphs (2), (3), (4), and (5), Code 2003, are amended 93 4 to read as follows: 93 5 (2) If the date of the utility billing or meter reading 93 6 cycle of the residential customer for the sale, furnishing, or 93 7 service of metered gas and electricity is on or after January 93 8 1, 2003, throughDecember 31, 2003June 30, 2008, or if the 93 9 sale, furnishing, or service of fuel for purposes of 93 10 residential energy and the delivery of the fuel occurs on or 93 11 after January 1, 2003, throughDecember 31, 2003June 30, 93 12 2008, the rate of tax is three percent of the gross receipts. 93 13 (3) If the date of the utility billing or meter reading 93 14 cycle of the residential customer for the sale, furnishing, or 93 15 service of metered gas and electricity is on or afterJanuary93 161, 2004July 1, 2008, throughDecember 31, 2004June 30, 2009, 93 17 or if the sale, furnishing, or service of fuel for purposes of 93 18 residential energy and the delivery of the fuel occurs on or 93 19 afterJanuary 1, 2004July 1, 2008, throughDecember 31, 200493 20 June 30, 2009, the rate of tax is two percent of the gross 93 21 receipts. 93 22 (4) If the date of the utility billing or meter reading 93 23 cycle of the residential customer for the sale, furnishing, or 93 24 service of metered gas and electricity is on or afterJanuary93 251, 2005July 1, 2009, throughDecember 31, 2005June 30, 2010, 93 26 or if the sale, furnishing, or service of fuel for purposes of 93 27 residential energy and the delivery of the fuel occurs on or 93 28 afterJanuary 1, 2005July 1, 2009, throughDecember 31, 200593 29 June 30, 2010, the rate of tax is one percent of the gross 93 30 receipts. 93 31 (5) If the date of the utility billing or meter reading 93 32 cycle of the residential customer for the sale, furnishing, or 93 33 service of metered gas and electricity is on or afterJanuary93 341, 2006July 1, 2010, or if the sale, furnishing, or service 93 35 of fuel for purposes of residential energy and the delivery of 94 1 the fuel occurs on or afterJanuary 1, 2006July 1, 2010, the 94 2 rate of tax is zero percent of the gross receipts. 94 3 DIVISION XXI 94 4 EFFECTIVE DATE 94 5 Sec. 133. EFFECTIVE DATE. Unless otherwise provided in 94 6 this Act, this Act takes effect July 1, 2003. 94 7 94 8 94 9 94 10 CHRISTOPHER C. RANTS 94 11 Speaker of the House 94 12 94 13 94 14 94 15 MARY E. KRAMER 94 16 President of the Senate 94 17 94 18 I hereby certify that this bill originated in the House and 94 19 is known as House File 692, Eightieth General Assembly. 94 20 94 21 94 22 94 23 MARGARET THOMSON 94 24 Chief Clerk of the House 94 25 Approved , 2003 94 26 94 27 94 28 94 29 THOMAS J. VILSACK 94 30 Governor
Text: HF00691 Text: HF00693 Text: HF00600 - HF00699 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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