Text: HF02555 Text: HF02557 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 DIVISION I 1 2 STATE PERCENT OF GROWTH 1 3 Section 1. Section 257.8, subsection 1, Code Supplement 1 4 2003, is amended to read as follows: 1 5 1. STATE PERCENT OF GROWTH. The state percent of growth 1 6 for the budget year beginning July 1, 2003, is two percent. 1 7 The state percent of growth for the budget year beginning July 1 8 1, 2004, istwosix percent. The state percent of growth for 1 9 each subsequent budget year shall be established by statute 1 10 which shall be enacted within thirty days of the submission in 1 11 the year preceding the base year of the governor's budget 1 12 under section 8.21. The establishment of the state percent of 1 13 growth for a budget year shall be the only subject matter of 1 14 the bill which enacts the state percent of growth for a budget 1 15 year. 1 16 Sec. 2. APPLICABILITY DATE. This division shall be 1 17 applicable for computing state aid under the state school 1 18 foundation program for the school budget year beginning July 1 19 1, 2004. 1 20 Sec. 3. EFFECTIVE DATE. This division, being deemed of 1 21 immediate importance, takes effect upon enactment. 1 22 DIVISION II 1 23 COMMUNITY COLLEGES 1 24 Sec. 4. There is appropriated from the general fund of the 1 25 state to the department of education for the fiscal year 1 26 beginning July 1, 2004, and ending June 30, 2005, the 1 27 following amount, or so much thereof as may be necessary, to 1 28 be used for the purposes designated: 1 29 For general state financial aid to merged areas as defined 1 30 in section 260C.2, for vocational education programs in 1 31 accordance with chapters 258 and 260C: 1 32 .................................................. $147,582,047 1 33 The funds appropriated in this subsection shall be 1 34 allocated as follows: 1 35 a. Merged Area I ............................. $ 7,193,209 2 1 b. Merged Area II ............................ $ 8,136,366 2 2 c. Merged Area III ........................... $ 7,600,107 2 3 d. Merged Area IV ............................ $ 3,670,204 2 4 e. Merged Area V ............................. $ 8,015,816 2 5 f. Merged Area VI ............................ $ 7,142,277 2 6 g. Merged Area VII ........................... $ 10,530,666 2 7 h. Merged Area IX ............................ $ 13,020,106 2 8 i. Merged Area X ............................. $ 20,883,389 2 9 j. Merged Area XI ............................ $ 21,903,444 2 10 k. Merged Area XII ........................... $ 8,609,947 2 11 l. Merged Area XIII .......................... $ 8,743,547 2 12 m. Merged Area XIV ........................... $ 3,744,512 2 13 n. Merged Area XV ............................ $ 11,726,862 2 14 o. Merged Area XVI ........................... $ 6,661,595 2 15 DIVISION III 2 16 PROGRAMS FOR AT-RISK CHILDREN 2 17 Sec. 5. Section 279.51, subsection 1, unnumbered paragraph 2 18 1, Code 2003, is amended to read as follows: 2 19 There is appropriated from the general fund of the state to 2 20 the department of education for the fiscal year beginning July 2 21 1, 2000, and each succeeding fiscal year, the sum oftwelve2 22 fourteen million five hundred sixty thousand dollars. 2 23 Sec. 6. Section 279.51, subsection 1, paragraph b, Code 2 24 2003, is amended to read as follows: 2 25 b. For the fiscal year beginning July 1, 1998, and for 2 26 each succeeding fiscal year,eightten million five hundred 2 27 ten thousand dollars of the funds appropriated shall be 2 28 allocated to the child development coordinating council 2 29 established in chapter 256A for the purposes set out in 2 30 subsection 2 of this section and section 256A.3. 2 31 DIVISION IV 2 32 STATE BOARD OF REGENTS 2 33 Sec. 7. There is appropriated from the general fund of the 2 34 state to the state board of regents for the fiscal year 2 35 beginning July 1, 2004, and ending June 30, 2005, the 3 1 following amounts, or so much thereof as may be necessary, to 3 2 be used for the purposes designated: 3 3 1. OFFICE OF STATE BOARD OF REGENTS 3 4 a. For salaries, support, maintenance, and miscellaneous 3 5 purposes: 3 6 .................................................. $ 1,190,152 3 7 b. For allocation by the state board of regents to the 3 8 state university of Iowa, the Iowa state university of science 3 9 and technology, and the university of northern Iowa to 3 10 reimburse the institutions for deficiencies in their operating 3 11 funds resulting from the pledging of tuitions, student fees 3 12 and charges, and institutional income to finance the cost of 3 13 providing academic and administrative buildings and facilities 3 14 and utility services at the institutions: 3 15 .................................................. $ 12,701,278 3 16 Notwithstanding section 8.33, funds appropriated for 3 17 purposes of this lettered paragraph that remain unencumbered 3 18 or unobligated on June 30, 2005, shall not revert to the 3 19 general fund of the state, but shall be available for 3 20 expenditure for the following fiscal year for purposes 3 21 specified in this lettered paragraph. 3 22 c. For funds to be allocated to the southwest Iowa 3 23 graduate studies center: 3 24 .................................................. $ 108,673 3 25 d. For funds to be allocated to the siouxland interstate 3 26 metropolitan planning council for the tristate graduate center 3 27 under section 262.9, subsection 21: 3 28 .................................................. $ 79,940 3 29 e. For funds to be allocated to the quad-cities graduate 3 30 studies center: 3 31 .................................................. $ 161,173 3 32 2. STATE UNIVERSITY OF IOWA 3 33 a. General university, including lakeside laboratory 3 34 For salaries, support, maintenance, equipment, and 3 35 miscellaneous purposes: 4 1 .................................................. $276,520,093 4 2 b. University hospitals 4 3 For salaries, support, maintenance, equipment, and 4 4 miscellaneous purposes and for medical and surgical treatment 4 5 of indigent patients as provided in chapter 255, and for 4 6 medical education: 4 7 .................................................. $ 27,984,189 4 8 c. Psychiatric hospital 4 9 For salaries, support, maintenance, equipment, 4 10 miscellaneous purposes, and for the care, treatment, and 4 11 maintenance of committed and voluntary public patients: 4 12 .................................................. $ 7,223,647 4 13 d. Center for disabilities and development 4 14 For salaries, support, maintenance, and miscellaneous 4 15 purposes: 4 16 .................................................. $ 6,526,426 4 17 e. Oakdale campus 4 18 For salaries, support, maintenance, and miscellaneous 4 19 purposes: 4 20 .................................................. $ 2,725,472 4 21 f. State hygienic laboratory 4 22 For salaries, support, maintenance, and miscellaneous 4 23 purposes: 4 24 .................................................. $ 3,900,021 4 25 g. Family practice program 4 26 For allocation by the dean of the college of medicine, with 4 27 approval of the advisory board, to qualified participants, to 4 28 carry out chapter 148D for the family practice program, 4 29 including salaries and support: 4 30 .................................................. $ 2,129,177 4 31 h. Child health care services 4 32 For specialized child health care services, including 4 33 childhood cancer diagnostic and treatment network programs, 4 34 rural comprehensive care for hemophilia patients, and the Iowa 4 35 high-risk infant follow-up program, including salaries and 5 1 support: 5 2 .................................................. $ 665,709 5 3 i. Statewide cancer registry 5 4 For the statewide cancer registry: 5 5 .................................................. $ 183,322 5 6 j. Substance abuse consortium 5 7 For funds to be allocated to the Iowa consortium for 5 8 substance abuse research and evaluation: 5 9 .................................................. $ 66,534 5 10 k. Center for biocatalysis 5 11 For the center for biocatalysis: 5 12 .................................................. $ 903,984 5 13 l. Primary health care initiative 5 14 For the primary health care initiative in the college of 5 15 medicine: 5 16 .................................................. $ 779,359 5 17 m. Birth defects registry 5 18 For the birth defects registry: 5 19 .................................................. $ 45,781 5 20 3. IOWA STATE UNIVERSITY OF SCIENCE AND TECHNOLOGY 5 21 a. General university 5 22 For salaries, support, maintenance, equipment, and 5 23 miscellaneous purposes: 5 24 .................................................. $217,686,641 5 25 b. Agricultural experiment station 5 26 For salaries, support, maintenance, and miscellaneous 5 27 purposes: 5 28 .................................................. $ 31,814,892 5 29 c. Cooperative extension service in agriculture and home 5 30 economics 5 31 For salaries, support, maintenance, and miscellaneous 5 32 purposes: 5 33 .................................................. $ 20,244,546 5 34 d. Leopold center 5 35 For agricultural research grants at Iowa state university 6 1 under section 266.39B: 6 2 .................................................. $ 476,225 6 3 e. Livestock disease research 6 4 For deposit in and the use of the livestock disease 6 5 research fund under section 267.8: 6 6 .................................................. $ 226,367 6 7 4. UNIVERSITY OF NORTHERN IOWA 6 8 a. General university 6 9 For salaries, support, maintenance, equipment, and 6 10 miscellaneous purposes: 6 11 .................................................. $ 97,950,925 6 12 b. Recycling and reuse center 6 13 For purposes of the recycling and reuse center: 6 14 .................................................. $ 217,290 6 15 5. STATE SCHOOL FOR THE DEAF 6 16 For salaries, support, maintenance, and miscellaneous 6 17 purposes: 6 18 .................................................. $ 10,132,297 6 19 6. IOWA BRAILLE AND SIGHT SAVING SCHOOL 6 20 For salaries, support, maintenance, and miscellaneous 6 21 purposes: 6 22 .................................................. $ 5,669,244 6 23 7. TUITION AND TRANSPORTATION COSTS 6 24 For payment to local school boards for the tuition and 6 25 transportation costs of students residing in the Iowa braille 6 26 and sight saving school and the state school for the deaf 6 27 pursuant to section 262.43 and for payment of certain 6 28 clothing, prescription, and transportation costs for students 6 29 at these schools pursuant to section 270.5: 6 30 .................................................. $ 7,500 6 31 DIVISION V 6 32 COLLEGE STUDENT AID COMMISSION – TUITION GRANTS 6 33 Sec. 8. Section 261.25, subsection 1, Code Supplement 6 34 2003, is amended to read as follows: 6 35 1. There is appropriated from the general fund of the 7 1 state to the commission for each fiscal year the sum offorty-7 2sixforty-eight millionfoureight hundredseventeenthirty 7 3 thousandnine hundred sixty-fourseventy-five dollars for 7 4 tuition grants. 7 5 DIVISION VI 7 6 INCOME TAX 7 7 Sec. 9. Section 422.5, subsection 1, paragraphs a through 7 8 i, Code Supplement 2003, are amended to read as follows: 7 9 a. On all taxable income from zero through one thousand 7 10 dollars,thirty-six hundredthsfour-tenths of one percent. 7 11 b. On all taxable income exceeding one thousand dollars 7 12 but not exceeding two thousand dollars,seventy-two hundredths7 13 eight-tenths of one percent. 7 14 c. On all taxable income exceeding two thousand dollars 7 15 but not exceeding four thousand dollars, two andforty-three7 16hundredthsseven-tenths percent. 7 17 d. On all taxable income exceeding four thousand dollars 7 18 but not exceeding nine thousand dollars,four and one-half7 19 five percent. 7 20 e. On all taxable income exceeding nine thousand dollars 7 21 but not exceeding fifteen thousand dollars, six andtwelve7 22hundredthseight-tenths percent. 7 23 f. On all taxable income exceeding fifteen thousand 7 24 dollars but not exceeding twenty thousand dollars,six and7 25forty-eight hundredthsseven and two-tenths percent. 7 26 g. On all taxable income exceeding twenty thousand dollars 7 27 but not exceeding thirty thousand dollars,six and eight-7 28tenthsseven and fifty-five hundredths percent. 7 29 h. On all taxable income exceeding thirty thousand dollars 7 30 but not exceeding forty-five thousand dollars,seven and7 31ninety-two hundredthseight and eight-tenths percent. 7 32 i. On all taxable income exceeding forty-five thousand 7 33 dollars,eightnine and ninety-eight hundredths percent. 7 34 Sec. 10. Section 422.5, subsection 1, paragraph j, Code 7 35 Supplement 2003, is amended to read as follows: 8 1 j.(1)The tax imposed upon the taxable income of a 8 2 nonresident shall be computed by reducing the amount 8 3 determined pursuant to paragraphs "a" through "i" by the 8 4 amounts of nonrefundable credits under this division and by 8 5 multiplying this resulting amount by a fraction of which the 8 6 nonresident's net income allocated to Iowa, as determined in 8 7 section 422.8, subsection 2,paragraph "a",is the numerator 8 8 and the nonresident's total net income computed under section 8 9 422.7 is the denominator. This provision also applies to 8 10 individuals who are residents of Iowa for less than the entire 8 11 tax year. 8 12(2) The tax imposed upon the taxable income of a resident8 13shareholder in an S corporation which has in effect for the8 14tax year an election under subchapter S of the Internal8 15Revenue Code and carries on business within and without the8 16state may be computed by reducing the amount determined8 17pursuant to paragraphs "a" through "i" by the amounts of8 18nonrefundable credits under this division and by multiplying8 19this resulting amount by a fraction of which the resident's8 20net income allocated to Iowa, as determined in section 422.8,8 21subsection 2, paragraph "b", is the numerator and the8 22resident's total net income computed under section 422.7 is8 23the denominator. If a resident shareholder has elected to8 24take advantage of this subparagraph, and for the next tax year8 25elects not to take advantage of this subparagraph, the8 26resident shareholder shall not reelect to take advantage of8 27this subparagraph for the three tax years immediately8 28following the first tax year for which the shareholder elected8 29not to take advantage of this subparagraph, unless the8 30director consents to the reelection. This subparagraph also8 31applies to individuals who are residents of Iowa for less than8 32the entire tax year.8 33This subparagraph shall not affect the amount of the8 34taxpayer's checkoff to the Iowa election campaign fund under8 35section 68A.601, the checkoff for the fish and game fund in9 1section 456A.16, the credits from tax provided in sections9 2422.10, 422.11A, and 422.12 and the allocation of these9 3credits between spouses if the taxpayers filed separate9 4returns or separately on combined returns.9 5 Sec. 11. Section 422.5, subsection 1, paragraph k, 9 6 unnumbered paragraph 4, Code Supplement 2003, is amended to 9 7 read as follows: 9 8 In the case of a resident, including a resident estate or 9 9 trust, the state's apportioned share of the state alternative 9 10 minimum tax is one hundred percent of the state alternative 9 11 minimum tax computed in this subsection. In the case ofa9 12resident or part-year resident shareholder in an S corporation9 13which has in effect for the tax year an election under9 14subchapter S of the Internal Revenue Code and carries on9 15business within and without the state,a nonresident, 9 16 including a nonresident estate or trust, or an individual, 9 17 estate, or trust that is domiciled in the state for less than 9 18 the entire tax year, the state's apportioned share of the 9 19 state alternative minimum tax is the amount of tax computed 9 20 under this subsection, reduced by the applicable credits in 9 21 sections 422.10 through 422.12 and this result multiplied by a 9 22 fraction with a numerator of the sum of state net income 9 23 allocated to Iowa as determined in section 422.8, subsection 9 24 2,paragraph "a" or "b" as applicable,plus tax preference 9 25 items, adjustments, and losses under subparagraph (1) 9 26 attributable to Iowa and with a denominator of the sum of 9 27 total net income computed under section 422.7 plus all tax 9 28 preference items, adjustments, and losses under subparagraph 9 29 (1). In computing this fraction, those items excludable under 9 30 subparagraph (1) shall not be used in computing the tax 9 31 preference items. Married taxpayers electing to file separate 9 32 returns or separately on a combined return must allocate the 9 33 minimum tax computed in this subsection in the proportion that 9 34 each spouse's respective preference items, adjustments, and 9 35 losses under subparagraph (1) bear to the combined preference 10 1 items, adjustments, and losses under subparagraph (1) of both 10 2 spouses. 10 3 Sec. 12. Section 422.7, subsection 21, Code Supplement 10 4 2003, is amended by striking the subsection. 10 5 Sec. 13. Section 422.8, subsection 2, Code Supplement 10 6 2003, is amended to read as follows: 10 7 2.a.Nonresident's net income allocated to Iowa is the 10 8 net income, or portion of net income, which is derived from a 10 9 business, trade, profession, or occupation carried on within 10 10 this state or income from any property, trust, estate, or 10 11 other source within Iowa. However, income derived from a 10 12 business, trade, profession, or occupation carried on within 10 13 this state and income from any property, trust, estate, or 10 14 other source within Iowa shall not include distributions from 10 15 pensions, including defined benefit or defined contribution 10 16 plans, annuities, individual retirement accounts, and deferred 10 17 compensation plans or any earnings attributable thereto so 10 18 long as the distribution is directly related to an 10 19 individual's documented retirement and received while the 10 20 individual is a nonresident of this state. If a business, 10 21 trade, profession, or occupation is carried on partly within 10 22 and partly without the state, only the portion of the net 10 23 income which is fairly and equitably attributable to that part 10 24 of the business, trade, profession, or occupation carried on 10 25 within the state is allocated to Iowa for purposes of section 10 26 422.5, subsection 1, paragraph "j", and section 422.13 and 10 27 income from any property, trust, estate, or other source 10 28 partly within and partly without the state is allocated to 10 29 Iowa in the same manner, except that annuities, interest on 10 30 bank deposits and interest-bearing obligations, and dividends 10 31 are allocated to Iowa only to the extent to which they are 10 32 derived from a business, trade, profession, or occupation 10 33 carried on within the state. 10 34b. A resident's income allocable to Iowa is the income10 35determined under section 422.7 reduced by items of income and11 1expenses from an S corporation that carries on business within11 2and without the state when those items of income and expenses11 3pass directly to the shareholders under provisions of the11 4Internal Revenue Code. These items of income and expenses are11 5increased by the greater of the following:11 6(1) The net income or loss of the corporation which is11 7fairly and equitably attributable to this state under section11 8422.33, subsections 2 and 3.11 9(2) Any cash or the value of property distributions which11 10are made only to the extent that they are paid from income11 11upon which Iowa income tax has not been paid, as determined11 12under rules of the director, reduced by the amount of any of11 13these distributions that are made to enable the shareholder to11 14pay federal income tax on items of income, loss, and expenses11 15from the corporation.11 16 Sec. 14. Section 422.8, subsection 6, Code Supplement 11 17 2003, is amended by striking the subsection. 11 18 Sec. 15. Section 422.37, Code 2003, is amended by striking 11 19 the section and inserting in lieu thereof the following: 11 20 422.37 COMBINED RETURNS. 11 21 An affiliated group of corporations shall, under rules 11 22 prescribed by the director, file a combined return showing the 11 23 net income of all corporations engaged in a unitary business, 11 24 subject to the following: 11 25 1. The affiliated group filing under this section shall 11 26 meet the requirements to file a consolidated return for 11 27 federal income tax purposes under the Internal Revenue Code 11 28 for the same taxable year. 11 29 2. All members of the affiliated group shall join in the 11 30 filing of an Iowa combined return to the extent they are 11 31 engaged in a unitary business. 11 32 3. Members of the affiliated group exempt from taxation by 11 33 section 422.34 shall not be included in a combined return. 11 34 4. All members of the affiliated group shall use the 11 35 statutory method of allocation and apportionment unless the 12 1 director has granted permission to all members to use an 12 2 alternative method of allocation and apportionment. 12 3 5. The computation of federal taxable income before the 12 4 net operating loss deduction on a combined return for members 12 5 of an affiliated group shall be made in the same manner and 12 6 under the same procedures, including all intercompany 12 7 adjustments and eliminations, as are required for 12 8 consolidating the incomes of affiliated corporations for the 12 9 taxable year for federal income tax purposes in accordance 12 10 with the Internal Revenue Code. 12 11 6. The combined income approach reflects the federal 12 12 taxable income of the unitary members of the Iowa affiliated 12 13 group as a single economic unit, with the application of the 12 14 adjustments in section 422.35, and the affiliated group shall 12 15 only file one income tax return. Any nonunitary members of 12 16 the federal affiliated group subject to tax imposed by section 12 17 422.33 must each file its own separate corporate income tax 12 18 return. The net income of an affiliated group is determined 12 19 by applying the apportionment formula against the combined 12 20 income of the affiliated group. 12 21 7. Only the sales of those corporations in the affiliated 12 22 group subject to the tax imposed by section 422.33 are 12 23 included in the numerator of the apportionment formula. 12 24 8. Only those corporations in the affiliated group subject 12 25 to the tax imposed by section 422.33 are jointly and severally 12 26 liable for the Iowa tax of the combined group. 12 27 Sec. 16. EFFECTIVE AND APPLICABILITY DATES. This division 12 28 of this Act, being deemed of immediate importance, takes 12 29 effect upon enactment and applies as follows: 12 30 1. The section of this division amending section 422.5, 12 31 subsection 1, paragraphs "a" through "i", apply to tax years 12 32 beginning on or after January 1, 2005. 12 33 2. The section of this division amending section 422.5, 12 34 subsection 1, paragraphs "j" and "k", and section 422.8 apply 12 35 retroactively to January 1, 2004, for tax years beginning on 13 1 or after that date. 13 2 3. The section of this division amending section 422.7 13 3 applies retroactively to January 1, 2004, for tax years 13 4 beginning on or after that date. 13 5 4. The section of this division amending section 422.37 13 6 applies retroactively to January 1, 2004, for tax years 13 7 beginning on or after that date. 13 8 DIVISION VII 13 9 SALES AND USE TAXES 13 10 Sec. 17. Section 423.3, subsection 27, as enacted by 2003 13 11 Iowa Acts, First Extraordinary Session, chapter 2, section 96, 13 12 is amended to read as follows: 13 13 27. The sales price of tangible personal property sold, or 13 14 of services furnished, to a nonprofit hospital licensed 13 15 pursuant to chapter 135B which is located in a rural county to 13 16 be used in the operation of the hospital. For purposes of 13 17 this exemption, "rural county" is a county with a population 13 18 of not more than fifty thousand according to the latest 13 19 federal census. 13 20 Sec. 18. Section 423.3, subsections 51, 66, 67, 74, 75, 13 21 76, and 77, as enacted by 2003 Iowa Acts, First Extraordinary 13 22 Session, chapter 2, section 96, are amended by striking the 13 23 subsections. 13 24 Sec. 19. Section 423.3, subsection 45, as enacted by 2003 13 25 Iowa Acts, First Extraordinary Session, chapter 2, section 96, 13 26 is amended by striking the subsection and inserting in lieu 13 27 thereof the following: 13 28 45. The sales price from the sales by a trade shop to a 13 29 printer of lithographic-offset plates, photoengraved plates, 13 30 engravings, negatives, color separations, typesetting, the end 13 31 products of image modulation, or any base material used as a 13 32 carrier for light-sensitive emulsions to be used by the 13 33 printer to complete a finished product for sale at retail. 13 34 For purposes of this subsection, "trade shop" means a business 13 35 which is not normally engaged in printing and which sells 14 1 supplies to printers, including but not limited to, those 14 2 supplies enumerated in this subsection. 14 3 Sec. 20. Section 423.6, subsections 17 through 21, as 14 4 enacted by 2003 Iowa Acts, First Extraordinary Session, 14 5 chapter 2, section 99, are amended by striking the 14 6 subsections. 14 7 DIVISION VIII 14 8 INSURANCE PREMIUMS TAXES 14 9 Sec. 21. Section 432.1, subsection 1, paragraph a, Code 14 10 Supplement 2003, is amended to read as follows: 14 11 a.The applicable percent, as provided in subsection 2,14 12 Two percent of the gross amount of premiums received during 14 13 the preceding calendar year by every life insurance company or 14 14 association, not including fraternal beneficiary associations, 14 15 or the gross payments or deposits collected from holders of 14 16 fraternal beneficiary association certificates, on contracts 14 17 of insurance covering risks resident in this state during the 14 18 preceding year, including contracts for group insurance and 14 19 annuities and without including or deducting any amounts 14 20 received or paid for reinsurance. 14 21 Sec. 22. Section 432.1, subsection 2, Code Supplement 14 22 2003, is amended by striking the subsection. 14 23 Sec. 23. Section 432.1, subsection 3, Code Supplement 14 24 2003, is amended to read as follows: 14 25 3.The applicable percent, as provided in subsection 4,14 26 Two percent of the gross amount of premiums, assessments, and 14 27 fees received during the preceding calendar year by every 14 28 company or association other than life on contracts of 14 29 insurance other than life for business done in this state, 14 30 including all insurance upon property situated in this state, 14 31 after deducting the amounts returned upon canceled policies, 14 32 certificates and rejected applications but not including the 14 33 gross premiums, assessments, and fees in connection with ocean 14 34 marine insurance authorized in section 515.48. 14 35 Sec. 24. Section 432.1, subsection 4, Code Supplement 15 1 2003, is amended by striking the subsection. 15 2 Sec. 25. Section 432.1, subsection 6, Code Supplement 15 3 2003, is amended by striking the subsection and inserting in 15 4 lieu thereof the following: 15 5 6. Each insurance company and association transacting 15 6 business in this state whose Iowa premium tax liability for 15 7 the preceding calendar year was one thousand dollars or more 15 8 shall remit on or before June 1, on a prepayment basis, an 15 9 amount equal to one-half of the premium tax liability for the 15 10 preceding calendar year. 15 11 Sec. 26. Section 432.2, Code Supplement 2003, is amended 15 12 to read as follows: 15 13 432.2 MUTUAL SERVICE CORPORATIONS. 15 14 Notwithstanding section 432.1, a hospital service 15 15 corporation, medical service corporation, pharmaceutical 15 16 service corporation, optometric service corporation, and any 15 17 other service corporation operating under chapter 514 shall 15 18 pay as taxes to the director of revenue an amount equal tothe15 19applicable percent, as provided in section 432.1, subsection15 202,two percent of the gross amount of payments received during 15 21 the preceding calendar year for subscriber contracts covering 15 22 residents in this state after deducting the amounts returned 15 23 to subscribers upon canceled subscriber contracts and rejected 15 24 applications. Section 432.1, subsections 5 and 6, apply to 15 25 the tax imposed by this section. 15 26 Sec. 27. Section 518.18, subsection 1, Code Supplement 15 27 2003, is amended to read as follows: 15 281. The applicableTwo percent of the gross amount of 15 29 premiums received during the preceding calendar year, after 15 30 deducting the amount returned upon the canceled policies, 15 31 certificates, and rejected applications; and after deducting 15 32 premiums paid for windstorm or hail reinsurance on properties 15 33 specifically reinsured. However, the reinsurer of such 15 34 windstorm or hail risks shall paythe applicablea two percent 15 35oftax on the gross amount of reinsurance premiums received 16 1 upon such risks after deducting the amounts returned upon 16 2 canceled policies, certificates, and rejected applications. 16 3For purposes of this section, "applicable percent" means the16 4same as specified in section 432.1, subsection 4.16 5 Sec. 28. Section 518.18, subsections 2 and 3, Code 16 6 Supplement 2003, are amended by striking the subsections. 16 7 Sec. 29. Section 518A.35, subsection 1, Code Supplement 16 8 2003, is amended to read as follows: 16 91.A state mutual insurance association doing business 16 10 under this chapter shall on or before the first day of March, 16 11 each year, pay to the director of revenue, or a depository 16 12 designated by the director, a sum equivalent tothe applicable16 13 two percent of the gross receipts from premiums and fees for 16 14 business done within the state, including all insurance upon 16 15 property situated in the state without including or deducting 16 16 any amounts received or paid for reinsurance. However, a 16 17 company reinsuring windstorm or hail risks written by county 16 18 mutual insurance associations is required to paythe16 19applicablea two percent tax on the gross amount of 16 20 reinsurance premiums received upon such risks, but after 16 21 deducting the amount returned upon canceled policies and 16 22 rejected applications covering property situated within the 16 23 state, and dividends returned to policyholders on property 16 24 situated within the state.For purposes of this section,16 25"applicable percent" means the same as specified in section16 26432.1, subsection 4.16 27 Sec. 30. Section 518A.35, subsections 2 and 3, Code 16 28 Supplement 2003, are amended by striking the subsections. 16 29 DIVISION IX 16 30 USE TAX REVENUE TRANSFER 16 31 Sec. 31. Notwithstanding the provisions of section 423.43, 16 32 as enacted by 2003 Iowa Acts, First Extraordinary Session, 16 33 chapter 2, section 136, from the use tax revenues to be 16 34 credited to the road use tax fund pursuant to section 423.43, 16 35 subsection 1, as enacted by 2003 Iowa Acts, First 17 1 Extraordinary Session, chapter 2, section 136, the first seven 17 2 million dollars collected during the fiscal year beginning 17 3 July 1, 2004, and ending June 30, 2005, shall be credited to 17 4 the general fund of the state. 17 5 DIVISION X 17 6 AREA EDUCATION AGENCY FUNDING RESTORATION 17 7 Sec. 32. Section 257.35, subsection 2, Code Supplement 17 8 2003, is amended by striking the subsection. 17 9 DIVISION XI 17 10 REPEAL OF NEW TAX INCENTIVE CREDIT AND REFUND 17 11 Sec. 33. 2004 Iowa Acts, Senate File 2290, is repealed. 17 12 Sec. 34. EFFECTIVE DATE. This division of this Act, being 17 13 deemed of immediate importance, takes effect upon enactment. 17 14 EXPLANATION 17 15 This bill provides for a number of changes relating to 17 16 education funding. 17 17 The bill establishes a state percent of growth of 6 percent 17 18 for purposes of the state school foundation program for the 17 19 school budget year beginning July 1, 2004, which would be an 17 20 increase of 4 percent from the 2 percent level presently 17 21 specified in Code section 257.8 for that budget year. 17 22 The bill appropriates moneys for fiscal year 2004-2005 from 17 23 the general fund of the state to the college student aid 17 24 commission, the department of education and the state board of 17 25 regents and its institutions, and amends statutory provisions 17 26 to increase state aid to the college student aid commission 17 27 for tuition grants. 17 28 The bill appropriates moneys to the department of education 17 29 for distribution to community colleges. The bill also amends 17 30 Code language to increase statutory appropriations for at-risk 17 31 children programs administered by the child development 17 32 coordinating council. 17 33 The bill appropriates moneys to the state board of regents 17 34 for the board office, tuition replacement, the southwest Iowa 17 35 graduate studies center, the tristate graduate center, the 18 1 quad-cities graduate studies center, the state university of 18 2 Iowa, Iowa state university of science and technology, the 18 3 university of northern Iowa, the Iowa school for the deaf, the 18 4 Iowa braille and sight saving school, and for tuition and 18 5 transportation costs for students residing in the Iowa braille 18 6 and sight saving school, and the Iowa school for the deaf. 18 7 The bill increases the individual income tax rates back to 18 8 what they were prior to the 10 percent reduction first 18 9 applicable to tax years beginning on or after January 1, 1998. 18 10 Thus, the rates are increased from the current range of 0.36 18 11 percent to 8.98 percent to a range of 0.40 percent to 9.98 18 12 percent. The bill eliminates the deduction for certain 18 13 capital gains and the limitation of the taxing of resident 18 14 shareholders' income from S corporations to that income 18 15 derived from sales in the state. The income tax rate increase 18 16 applies beginning with the 2005 tax year. The other 18 17 provisions apply retroactively beginning with the 2004 tax 18 18 year. 18 19 The bill requires that the net income of affiliated groups 18 20 of corporations engaged in a unitary business be computed on a 18 21 combined return basis for corporate tax purposes. The 18 22 affiliated group would include corporations with common 18 23 ownership whereby one or more corporations own 80 percent or 18 24 more of another corporation. The bill would require that one 18 25 Iowa corporate income tax return be filed that would include 18 26 all unitary members of an affiliated group. Any nonunitary 18 27 member that is subject to Iowa tax would file its own separate 18 28 corporate return. Only Iowa sales of those corporations doing 18 29 business in Iowa would be included in the numerator of the 18 30 Iowa sales ratio. The bill also provides that only those 18 31 corporations doing business in Iowa are jointly and severally 18 32 liable for the tax of the combined return. This provision 18 33 applies retroactively to January 1, 2004, for tax years 18 34 beginning on or after that date. 18 35 The bill limits the sales and use tax exemption for 19 1 nonprofit hospitals to those located in a county with a 19 2 population of not more than 50,000. In addition, the bill 19 3 strikes the sales and use tax exemptions for sales of argon 19 4 gas, of aircraft and aircraft parts, of automobiles purchased 19 5 for lease, of various items and materials used in printing, 19 6 and sales delivered electromagnetically, over cable, or by 19 7 fiber optics. In addition, the sales tax holiday provision, 19 8 during which sales tax is not imposed on certain items, is 19 9 stricken. 19 10 The bill increases the gross premiums tax on life and 19 11 property insurance companies, and state and county mutual 19 12 insurance associations to 2 percent. This was the rate prior 19 13 to the phased reduction in the rate from 2 percent to 1 19 14 percent enacted in 2002 and 2003. Also, the requirement of 19 15 additional prepayment of the premiums tax which was enacted 19 16 with the reduction in tax rates is stricken. 19 17 The bill transfers $7 million to the general fund of the 19 18 state for FY 2004-2005 of use tax revenues collected which 19 19 were to be credited to the road use tax fund. 19 20 The bill provides for the deletion of a provision which 19 21 reduces funding for area education agencies for the fiscal 19 22 year beginning July 1, 2002, and each succeeding fiscal year, 19 23 by $7.5 million. This would result in the elimination of 19 24 funding reductions for area education agencies for the fiscal 19 25 year beginning July 1, 2004, totaling $17.5 million, when the 19 26 reduction in funding for the fiscal year beginning July 1, 19 27 2003, of $10 million pursuant to Code section 257.35, 19 28 subsection 3, is taken into account. 19 29 The bill repeals S.F. 2290, which was passed during the 19 30 2004 session. Senate File 2290 provides an additional 19 31 incentive for corporations for new job creation under existing 19 32 programs. The incentives would apply to corporations, 19 33 creating the new jobs, that are leasing property constructed 19 34 by another. The incentive is a refund of the amount of sales 19 35 tax paid by the lessor on materials used in such construction 20 1 or corporate tax credit equal to such sales tax amount. This 20 2 repeal takes effect upon enactment. 20 3 LSB 6209YH 80 20 4 rn/gg/14.2
Text: HF02555 Text: HF02557 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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