Text: S03390 Text: S03392 Text: S03300 - S03399 Text: S Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Amend House File 692, as amended, passed, and 1 2 reprinted by the House, as follows: 1 3 #1. By striking everything after the enacting 1 4 clause and inserting the following: 1 5 "DIVISION I 1 6 PROPERTY TAXATION 1 7 Section 1. Section 441.19, subsections 1 and 2, 1 8 Code 2003, are amended to read as follows: 1 9 1. Supplemental and optional to the procedure for 1 10 the assessment of property by the assessor as provided 1 11 in this chapter, the assessor may require from all 1 12 persons required to list their property for taxation 1 13 as provided by sections 428.1 and 428.2, a 1 14 supplemental return to be prescribed by the director 1 15 of revenue and finance upon which the person shall 1 16 list the person's property and any additions or 1 17 modifications completed in the prior year to a 1 18 structure located on the property. The supplemental 1 19 return shall be in substantially the same form as now 1 20 prescribed by law for the assessment rolls used in the 1 21 listing of property by the assessors. Every person 1 22 required to list property for taxation shall make a 1 23 complete listing of the property upon supplemental 1 24 forms and return the listing to the assessoras1 25promptly as possiblewithin thirty days of receiving 1 26 the assessment notice in section 441.23. The return 1 27 shall be verified over the signature of the person 1 28 making the return and section 441.25 applies to any 1 29 person making such a return. The assessor shall make 1 30 supplemental return forms available as soon as 1 31 practicable after the first day of January of each 1 32 year. The assessor shall make supplemental return 1 33 forms available to the taxpayer by mail, or at a 1 34 designated place within the taxing district. 1 35 2. Upon receipt of such supplemental return from 1 36 any person the assessor shall prepare a roll assessing 1 37 such person as hereinafter provided. In the 1 38 preparation of such assessment roll the assessor shall 1 39 be guided not only by the information contained in 1 40 such supplemental roll, but by any other information 1 41 the assessor may have or which may be obtained by the 1 42 assessor as prescribed by the law relating to the 1 43 assessment of property. The assessor shall not be 1 44 bound by any values or square footage determinations 1 45 or purchase prices as listed in such supplemental 1 46 return, and may include in the assessment roll any 1 47 property omitted from the supplemental return which in 1 48 the knowledge and belief of the assessor should be 1 49 listed as required by law by the person making the 1 50 supplemental return. Upon completion of such roll the 2 1 assessor shall deliver to the person submitting such 2 2 supplemental return a copy of the assessment roll, 2 3 either personally or by mail. 2 4 Sec. 2. NEW SECTION. 441.20 LEGISLATIVE INTENT. 2 5 It is the intent of the general assembly that there 2 6 be transparency in the property tax system. It is 2 7 further the intent of the general assembly that 2 8 property assessments for purposes of property taxation 2 9 be equal and uniform within classes of property. It 2 10 is further the intent of the general assembly to 2 11 minimize the impact that maintenance and upkeep by the 2 12 owner of property has on the assessment of that 2 13 property and that there be predictability in increases 2 14 of property assessments and that such predictability 2 15 be based primarily on the actions of the property 2 16 owner. It is further the intent of the general 2 17 assembly to minimize the impact that increases in 2 18 assessed value of property will have on property taxes 2 19 paid and that any increases will be primarily the 2 20 result of direct action taken by the local taxing 2 21 authority in setting budget amounts rather than by 2 22 increases in market value of property. 2 23 Sec. 3. Section 441.21, Code 2003, is amended by 2 24 striking the section and inserting in lieu thereof the 2 25 following: 2 26 441.21 ASSESSMENT OF STRUCTURES. 2 27 1. All real property, except land, subject to 2 28 taxation shall be assessed on a value per square foot 2 29 basis according to the provisions of this section. 2 30 2. a. Subject to paragraph "b", for valuations 2 31 established as of January 1, 2006, and for subsequent 2 32 assessment years, the assessed value per square foot 2 33 of a residential structure shall be an amount equal to 2 34 the valuation of the structure as determined for the 2 35 assessment year beginning January 1, 2005, prior to 2 36 application of the assessment limitation for that 2 37 year, divided by the total number of square feet of 2 38 the structure as of January 1, 2005. 2 39 b. (1) The assessed value per square foot of an 2 40 existing residential structure purchased after January 2 41 1, 2005, shall be the purchase price of the structure 2 42 divided by the cumulative inflation factor established 2 43 for the assessment year following the year of 2 44 purchase, divided by the total number of square feet 2 45 of the structure as of January 1 of the assessment 2 46 year. The assessed value per square foot of a 2 47 residential structure newly constructed after January 2 48 1, 2005, shall be the market value of the structure, 2 49 as determined by the assessor, divided by the 2 50 cumulative inflation factor established for the 3 1 assessment year following the year construction was 3 2 completed, divided by the total number of square feet 3 3 of the structure as of January 1 of the assessment 3 4 year. However, when valuing an addition that 3 5 substantially increases the square footage of a 3 6 structure, only that portion of the structure 3 7 comprising the addition shall be valued by the 3 8 assessor under this subparagraph. 3 9 (2) If additions or modifications to an existing 3 10 structure do not constitute a newly constructed 3 11 structure, the valuation of the structure shall only 3 12 increase if the square footage of the structure 3 13 increases. The increased valuation, if any, equals 3 14 the amount of increased square feet times the value 3 15 per square foot of the structure prior to the 3 16 additions or modifications. 3 17 3. a. Subject to paragraph "b" for valuations 3 18 established as of January 1, 2006, and for subsequent 3 19 assessment years, the assessed value per square foot 3 20 of a commercial or industrial structure shall be an 3 21 amount equal to the valuation of the structure as 3 22 determined for the assessment year beginning January 3 23 1, 2005, prior to application of the assessment 3 24 limitation for that year, divided by the total number 3 25 of square feet of the structure as of January 1, 2005. 3 26 b. (1) The assessed value per square foot of an 3 27 existing commercial or industrial structure purchased 3 28 after January 1, 2005, shall be the purchase price of 3 29 the structure divided by the cumulative inflation 3 30 factor established for the assessment year following 3 31 the year of purchase, divided by the total number of 3 32 square feet of the structure as of January 1 of the 3 33 assessment year. The assessed value per square foot 3 34 of a commercial or industrial structure newly 3 35 constructed after January 1, 2005, shall be the market 3 36 value of the structure, as determined by the assessor, 3 37 divided by the cumulative inflation factor established 3 38 for the assessment year following the year 3 39 construction was completed, divided by the total 3 40 number of square feet of the structure as of January 1 3 41 of the assessment year. However, when valuing an 3 42 addition that substantially increases the square 3 43 footage of a structure, only that portion of the 3 44 structure comprising the addition shall be valued by 3 45 the assessor under this subparagraph. 3 46 (2) If additions or modifications to an existing 3 47 structure do not constitute a newly constructed 3 48 structure, the valuation of the structure shall only 3 49 increase if the square footage of the structure 3 50 increases. The increased valuation, if any, equals 4 1 the amount of increased square feet times the value 4 2 per square foot of the structure prior to the 4 3 additions or modifications. 4 4 4. a. Subject to paragraph "b" for valuations 4 5 established as of January 1, 2006, and for subsequent 4 6 assessment years, the assessed value per square foot 4 7 of an agricultural structure that is not an 4 8 agricultural dwelling shall be an amount equal to the 4 9 valuation of the structure as determined for the 4 10 assessment year beginning January 1, 2005, prior to 4 11 application of the assessment limitation for that 4 12 year, divided by the total number of square feet of 4 13 the structure as of January 1, 2005. 4 14 b. (1) The assessed value per square foot of an 4 15 existing agricultural structure purchased after 4 16 January 1, 2005, shall be the productivity value of 4 17 the structure divided by the cumulative inflation 4 18 factor established for the assessment year following 4 19 the year of purchase, divided by the total number of 4 20 square feet of the structure as of January 1 of the 4 21 assessment year. The assessed value per square foot 4 22 of an agricultural structure newly constructed after 4 23 January 1, 2005, shall be the productivity value of 4 24 the structure for the assessment year following the 4 25 year construction was completed, as determined by the 4 26 assessor, divided by the cumulative inflation factor 4 27 established for the assessment year following the year 4 28 construction was completed, divided by the total 4 29 number of square feet of the structure as of January 1 4 30 of the assessment year. However, when valuing an 4 31 addition that substantially increases the square 4 32 footage of a structure, only that portion of the 4 33 structure comprising the addition shall be valued by 4 34 the assessor under this subparagraph. 4 35 (2) If additions or modifications to an existing 4 36 structure do not constitute a newly constructed 4 37 structure, the valuation of the structure shall only 4 38 increase if the square footage of the structure 4 39 increases. The increased valuation, if any, equals 4 40 the amount of increased square feet times the value 4 41 per square foot of the structure prior to the 4 42 additions or modifications. 4 43 5. a. In determining the market value of newly 4 44 constructed property, except agricultural structures, 4 45 the assessor may determine the value of the property 4 46 using uniform and recognized appraisal methods 4 47 including its productive and earning capacity, if any, 4 48 industrial conditions, its cost, physical and 4 49 functional depreciation and obsolescence and 4 50 replacement cost, and all other factors which would 5 1 assist in determining the fair and reasonable market 5 2 value of the property but the actual value shall not 5 3 be determined by use of only one such factor. The 5 4 following shall not be taken into consideration: 5 5 special value or use value of the property to its 5 6 present owner, and the goodwill or value of a business 5 7 that uses the property as distinguished from the value 5 8 of the property as property. However, in assessing 5 9 property that is rented or leased to low-income 5 10 individuals and families as authorized by section 42 5 11 of the Internal Revenue Code, as amended, and which 5 12 section limits the amount that the individual or 5 13 family pays for the rental or lease of units in the 5 14 property, the assessor shall use the productive and 5 15 earning capacity from the actual rents received as a 5 16 method of appraisal and shall take into account the 5 17 extent to which that use and limitation reduces the 5 18 market value of the property. The assessor shall not 5 19 consider any tax credit equity or other subsidized 5 20 financing as income provided to the property in 5 21 determining the market value. Upon adoption of 5 22 uniform rules by the department of revenue and finance 5 23 or covering assessments and valuations of such 5 24 properties, the valuation on such properties shall be 5 25 determined in accordance with such values for 5 26 assessment purposes to assure uniformity, but such 5 27 rules shall not be inconsistent with or change the 5 28 foregoing means of determining the market value. 5 29 b. The actual value of special purpose tooling, 5 30 which is subject to assessment and taxation as real 5 31 property under section 427A.1, subsection 1, paragraph 5 32 "e", but which can be used only to manufacture 5 33 property which is protected by one or more United 5 34 States or foreign patents, shall not exceed the fair 5 35 and reasonable exchange value between a willing buyer 5 36 and a willing seller, assuming that the willing buyer 5 37 is purchasing only the special purpose tooling and not 5 38 the patent covering the property which the special 5 39 purpose tooling is designed to manufacture nor the 5 40 rights to manufacture the patented property. For 5 41 purposes of this paragraph, special purpose tooling 5 42 includes dies, jigs, fixtures, molds, patterns, and 5 43 similar property. The assessor shall not take into 5 44 consideration the special value or use value to the 5 45 present owner of the special purpose tooling which is 5 46 designed and intended solely for the manufacture of 5 47 property protected by a patent in arriving at the 5 48 actual value of the special purpose tooling. 5 49 c. In determining the purchase price of a 5 50 structure, the assessor shall consider whether the 6 1 sale was a fair and reasonable exchange in the year in 6 2 which the property was listed and valued between a 6 3 willing buyer and a willing seller, neither being 6 4 under any compulsion to buy or sell and each being 6 5 familiar with all the facts relating to the particular 6 6 property. Sale prices of the property or comparable 6 7 property in normal transactions reflecting market 6 8 value, and the probable availability or unavailability 6 9 of persons interested in purchasing the property, 6 10 shall be taken into consideration in determining 6 11 purchase price. In determining purchase price, sale 6 12 prices of property in abnormal transactions not 6 13 reflecting market value shall not be taken into 6 14 account, or shall be adjusted to eliminate the effect 6 15 of factors which distort market value, including but 6 16 not limited to sales to immediate family of the 6 17 seller, foreclosure or other forced sales, contract 6 18 sales, or discounted purchase transactions. 6 19 d. If a county enters into a contract before May 6 20 1, 2003, for a comprehensive revaluation by a private 6 21 appraiser and such revaluation is for the assessment 6 22 year beginning January 1, 2006, the valuations 6 23 determined under the comprehensive revaluation for 6 24 that assessment year shall be divided by the 6 25 cumulative inflation factor for the assessment year 6 26 beginning January 1, 2006, and that quotient shall be 6 27 considered the valuation of the property for the 6 28 assessment year beginning January 1, 2005. 6 29 6. Notwithstanding any other provision of this 6 30 section, the assessed value per square foot of a 6 31 structure times the total number of square feet of the 6 32 structure shall not exceed its fair and reasonable 6 33 market value for the assessment year, except for 6 34 agricultural structures which shall be valued 6 35 exclusively as provided in subsection 4. 6 36 7. For purposes of this section: 6 37 a. "Annual inflation factor" means an index, 6 38 expressed as a percentage, determined by the 6 39 department by January 15 of the assessment year for 6 40 which the factor is determined, which reflects the 6 41 purchasing power of the dollar as a result of 6 42 inflation during the twelve-month period ending 6 43 September 30 of the calendar year preceding the 6 44 assessment year for which the factor is determined. 6 45 In determining the annual inflation factor, the 6 46 department shall use the annual percent change, but 6 47 not less than zero percent, in the gross domestic 6 48 product price deflator computed for the calendar year 6 49 by the bureau of economic analysis of the United 6 50 States department of commerce and shall add all of 7 1 that percent change to one hundred percent. The 7 2 annual inflation factor and the cumulative inflation 7 3 factor shall each be expressed as a percentage rounded 7 4 to the nearest one-tenth of one percent. The annual 7 5 inflation factor shall not be less than one hundred 7 6 percent. The annual inflation factor for the 2005 7 7 calendar year is one hundred percent. 7 8 b. "Cumulative inflation factor" means the product 7 9 of the annual inflation factor for the 2005 calendar 7 10 year and all annual inflation factors for subsequent 7 11 calendar years as determined pursuant to this 7 12 subsection. The cumulative inflation factor applies 7 13 to the assessment year beginning on January 1 of the 7 14 calendar year for which the latest annual inflation 7 15 factor has been determined. 7 16 c. "Newly constructed" includes, but is not 7 17 limited to, structural replacement, additions that 7 18 substantially increase the square footage, conversion 7 19 into another class of property, and conversion from 7 20 exempt property under section 427.1 to taxable 7 21 property. For commercial and industrial property, 7 22 "newly constructed" also includes an addition or 7 23 removal to a structure of personal property taxed as 7 24 real estate under chapter 427A. 7 25 d. "Structure" means any part of that which is 7 26 built or constructed, an edifice or building of any 7 27 kind, or any piece of work artificially built up or 7 28 composed of parts joined together in some definite 7 29 manner. For residential structures, structure 7 30 includes only those parts of the structure, including 7 31 basements and attics, that are or could be used as 7 32 living space. "Structure" does not include the land 7 33 beneath, or horizontal improvements relating to the 7 34 structure, such as sidewalks, sewers, or retaining 7 35 walls. 7 36 8. For the purpose of computing the debt 7 37 limitations for municipalities, political 7 38 subdivisions, and school districts, the term "actual 7 39 value" means the "actual value" as determined under 7 40 this section without application of any percentage 7 41 reduction and entered opposite each item, and as 7 42 listed on the tax list as provided in section 443.2, 7 43 as "actual value". 7 44 Whenever any board of review or other tribunal 7 45 changes the assessed value of property, all applicable 7 46 records of assessment shall be adjusted to reflect 7 47 such change in both assessed value and actual value of 7 48 such property. 7 49 9. The provisions of this chapter and chapters 7 50 443, 443A, and 444 shall be subject to legislative 8 1 review at least once every five years. The review 8 2 shall be based upon a property tax status report 8 3 containing the recommendations of a property tax 8 4 implementation committee appointed to conduct a review 8 5 of the land tax, square footage tax, the baseline 8 6 assessment for the square footage tax, and other 8 7 related provisions, to be prepared with the assistance 8 8 of the departments of management and revenue and 8 9 finance. The report shall include recommendations for 8 10 changes or revisions based upon demographic changes 8 11 and property tax valuation fluctuations observed 8 12 during the preceding five-year interval, and a summary 8 13 of issues that have arisen since the previous review 8 14 and potential approaches for their resolution. The 8 15 first such report shall be submitted to the general 8 16 assembly no later than January 1, 2010, with 8 17 subsequent reports developed and submitted by January 8 18 1 at least every fifth year thereafter. 8 19 Sec. 4. NEW SECTION. 441.21A PROPERTY 8 20 CLASSIFICATIONS. 8 21 1. a. Agricultural land shall be valued at its 8 22 productivity value. The productivity value of 8 23 agricultural land shall be determined on the basis of 8 24 productivity and net earning capacity of the land 8 25 determined on the basis of its use for agricultural 8 26 purposes capitalized at a rate of seven percent and 8 27 applied uniformly among counties and among classes of 8 28 property. Any formula or method employed to determine 8 29 productivity and net earning capacity of land shall be 8 30 adopted in full by rule. 8 31 b. In counties or townships in which field work on 8 32 a modern soil survey has been completed since January 8 33 1, 1949, the assessor shall place emphasis upon the 8 34 results of the survey in spreading the valuation among 8 35 individual parcels of such agricultural land. 8 36 c. "Agricultural land" includes the land of a 8 37 vineyard. 8 38 2. a. "Residential property" includes all lands 8 39 and buildings which are primarily used or intended for 8 40 human habitation, including those buildings located on 8 41 agricultural land. Buildings used primarily or 8 42 intended for human habitation shall include the 8 43 dwelling as well as structures and improvements used 8 44 primarily as a part of, or in conjunction with, the 8 45 dwelling. This includes but is not limited to 8 46 garages, whether attached or detached, tennis courts, 8 47 swimming pools, guest cottages, and storage sheds for 8 48 household goods. Residential property located on 8 49 agricultural land shall include only buildings. 8 50 b. "Residential property" includes all land and 9 1 buildings of multiple housing cooperatives organized 9 2 under chapter 499A and includes land and buildings 9 3 used primarily for human habitation which land and 9 4 buildings are owned and operated by organizations that 9 5 have received tax-exempt status under section 9 6 501(c)(3) of the Internal Revenue Code and rental 9 7 income from the property is not taxed as unrelated 9 8 business income under section 422.33, subsection 1A. 9 9 c. "Residential property" includes an apartment in 9 10 a horizontal property regime referred to in chapter 9 11 499B which is used or intended for use for human 9 12 habitation regardless of who occupies the apartment. 9 13 Existing structures shall not be converted to a 9 14 horizontal property regime unless applicable building 9 15 code requirements have been met. 9 16 d. Buildings for human habitation that are used as 9 17 commercial ventures, including but not limited to 9 18 hotels, motels, rest homes, and structures containing 9 19 three or more separate living quarters shall not be 9 20 considered residential property. 9 21 Sec. 5. Section 441.23, Code 2003, is amended to 9 22 read as follows: 9 23 441.23 NOTICE OF VALUATION. 9 24 If there has been an increase or decrease in the 9 25 valuation of the property, or upon the written request 9 26 of the person assessed, the assessor shall, at the 9 27 time of making the assessment, inform the person 9 28 assessed, in writing, of the valuation put upon the 9 29 taxpayer's property, and notify the person, if the 9 30 person feels aggrieved, to appear before the board of 9 31 review and show why the assessment should be changed. 9 32 However, if the valuation ofa class ofagricultural 9 33 property is uniformly decreased, the assessor may 9 34 notify the affected property owners by publication in 9 35 the official newspapers of the county. The owners of 9 36 real property shall be notified not later than April 9 37 15 of any adjustment of the real property assessment. 9 38 The notification shall include a supplemental return 9 39 form for the person to list the person's property and 9 40 any additions or modifications completed in the prior 9 41 year to a structure located on the property, as 9 42 required in section 441.19. 9 43 Sec. 6. Section 441.24, Code 2003, is amended to 9 44 read as follows: 9 45 441.24 REFUSAL TO FURNISH STATEMENT. 9 46 1. If a person refuses to furnish the verified 9 47 statements required in connection with the assessment 9 48 of property by the assessor, or to list the 9 49 corporation's or person's property, the director of 9 50 revenue and finance, or assessor, as the case may be, 10 1 shall proceed to list and assess the property 10 2 according to the best information obtainable, and 10 3 shall add to thetaxableagricultural land and square 10 4 footage valuation one hundred percent thereof, which 10 5 valuation and penalty shall be separately shown, and 10 6 shall constitute the assessment; and if the 10 7 agricultural land or square footage valuation of the 10 8 property is changed by a board of review, or on appeal 10 9 from a board of review, a like penalty shall be added 10 10 to the valuation thus fixed. 10 11 2. However, all or part of the penalty imposed 10 12 under this section may be waived by the board of 10 13 review upon application to the board by the assessor 10 14 or the property owner. The waiver or reduction in the 10 15 penalty shall be allowed only on the agricultural land 10 16 or the square footage valuation ofreal propertythe 10 17 structure against which the penalty has been imposed. 10 18 Sec. 7. Section 441.26, unnumbered paragraph 3, 10 19 Code 2003, is amended to read as follows: 10 20 The notice in19812007 and each odd-numbered year 10 21 thereafter shall contain a statement thatthe10 22 agricultural property assessments and property 10 23 assessed pursuant to section 441.21, subsection 2, 10 24 paragraph "b", subparagraph (1), and subsection 3, 10 25 paragraph "b", subparagraph (1), are subject to 10 26 equalization pursuant to an order issued by the 10 27 director of revenue and finance, that the county 10 28 auditor shall give notice on or before October 15 by 10 29 publication in an official newspaper of general 10 30 circulation to anyclass ofagricultural property 10 31 affected by the equalization order, and that the board 10 32 of review shall be in session from October 15 to 10 33 November 15 to hear protests of affected property 10 34 owners or taxpayers whose valuations have been 10 35 adjusted by the equalization order. 10 36 Sec. 8. Section 441.26, unnumbered paragraphs 4 10 37 and 5, Code 2003, are amended to read as follows: 10 38 The assessment rolls shall be used in listing the 10 39 property, the number of structures, and the total 10 40 square footage of the structures by class of property, 10 41 and showing the values affixed to agricultural land 10 42 and the assessed value per square foot affixed tothe10 43propertythe structures by class of property of all 10 44 persons assessed. The rolls shall be made in 10 45 duplicate. The duplicate roll shall be signed by the 10 46 assessor, detached from the original and delivered to 10 47 the person assessed if there has been an increase or 10 48 decrease in the valuation of the property. If there 10 49 has been no change in the evaluation, the information 10 50 on the roll may be printed on computer stock paper and 11 1 preserved as required by this chapter. If the person 11 2 assessed requests in writing a copy of the roll, the 11 3 copy shall be provided to the person. The pages of 11 4 the assessor's assessment book shall contain columns 11 5 ruled and headed for the information required by this 11 6 chapter and that which the director of revenue and 11 7 finance deems essential in the equalization work of 11 8 the director. The assessor shall return all 11 9 assessment rolls and schedules to the county auditor, 11 10 along with the completed assessment book, as provided 11 11 in this chapter, and the county auditor shall 11 12 carefully keep and preserve the rolls, schedules and 11 13 book for a period of five years from the time of its 11 14 filing in the county auditor's office. 11 15 Beginning with valuations for January 1,19772006, 11 16 and each succeeding year, for each parcel of 11 17 agricultural property and for each structure entered 11 18 in the assessment book, the assessor shall list the 11 19 classification of the property. 11 20 Sec. 9. Section 441.35, subsection 1, Code 2003, 11 21 is amended by striking the subsection. 11 22 Sec. 10. Section 441.35, unnumbered paragraph 2, 11 23 Code 2003, is amended by striking the unnumbered 11 24 paragraph. 11 25 Sec. 11. Section 441.36, Code 2003, is amended to 11 26 read as follows: 11 27 441.36 CHANGE OF ASSESSMENT – NOTICE. 11 28 All changes in assessments authorized by the board 11 29 of review, and reasons therefor, shall be entered in 11 30 the minute book kept bysaidthe board and on the 11 31 assessment roll.SaidThe minute book shall be filed 11 32 with the assessor after the adjournment of the board 11 33 of review and shall at all times be open to public 11 34 inspection. In case the value of any specific 11 35 property or structure or the entire assessment of any 11 36 person, partnership, or association is increased, or 11 37 new property or a new structure is added by the board, 11 38 the clerk shall give immediate notice thereof by mail 11 39 to each at the post-office address shown on the 11 40 assessment rolls, and at the conclusion of the action 11 41 of the board therein the clerk shall post an 11 42 alphabetical list of those whose assessments are thus 11 43 raised and added, in a conspicuous place in the office 11 44 or place of meeting of the board, and enter upon the 11 45 records a statement that such posting has been made, 11 46 which entry shall be conclusive evidence of the giving 11 47 of the notice required. The board shall hold an 11 48 adjourned meeting, with at least five days intervening 11 49 after the posting ofsaidthe notices, before final 11 50 action with reference to the raising of assessments or 12 1 the adding of property or structures to the rolls is 12 2 taken, and the posted notices shall state the time and 12 3 place of holding such adjourned meeting, which time 12 4 and place shall also be stated in the proceedings of 12 5 the board. 12 6 Sec. 12. Section 441.37, subsection 1, paragraphs 12 7 a and b, Code 2003, are amended to read as follows: 12 8 a. Thatsaidthe assessment is not equitable as 12 9 compared with assessments of other like property or 12 10 structures in the taxing district. When this ground 12 11 is relied upon as the basis of a protest the legal 12 12 description and assessments of a representative number 12 13 of comparablepropertiesstructures, as described by 12 14 the aggrieved taxpayer shall be listed on the protest, 12 15 otherwisesaidthe protest shall not be considered on 12 16 this ground. 12 17 b. That the property or structure is assessed for 12 18 more than the value authorized by law, stating the 12 19 specific amount which the protesting party believes 12 20 the property or structure to be overassessed, and the 12 21 amount which the party considers to be its actual 12 22 value and the amount the party considers a fair 12 23 assessment. 12 24 Sec. 13. Section 441.39, Code 2003, is amended to 12 25 read as follows: 12 26 441.39 TRIAL ON APPEAL. 12 27 The court shall hear the appeal in equity and 12 28 determine anew all questions arising before the board 12 29 which relate to the liability of the property or 12 30 structure to assessment or the amount thereof. The 12 31 court shall consider all of the evidence and there 12 32 shall be no presumption as to the correctness of the 12 33valuation ofassessment appealed from. Its decision 12 34 shall be certified by the clerk of the court to the 12 35 county auditor, and the assessor, who shall correct 12 36 the assessment books accordingly. 12 37 Sec. 14. Section 441.42, Code 2003, is amended to 12 38 read as follows: 12 39 441.42 APPEAL ON BEHALF OF PUBLIC. 12 40 Any officer of a county, city, township, drainage 12 41 district, levee district, or school district 12 42 interested or a taxpayer thereof may in like manner 12 43 make complaint beforesaidthe board of review in 12 44 respect to the assessment of any property or structure 12 45 in the township, drainage district, levee district or 12 46 city and an appeal from the action of the board of 12 47 review in fixing the amount of assessment on any 12 48 property or structure concerning which such complaint 12 49 is made, may be taken by any of such aforementioned 12 50 officers. 13 1 Such appeal is in addition to the appeal allowed to 13 2 the person whose property or structure is assessed and 13 3 shall be taken in the name of the county, city, 13 4 township, drainage district, levee district, or school 13 5 district interested, and tried in the same manner, 13 6 except that the notice of appeal shall also be served 13 7 upon the owner of the property or structure concerning 13 8 which the complaint is made and affected thereby or 13 9 person required to return said property or structure 13 10 for assessment. 13 11 Sec. 15. Section 441.43, Code 2003, is amended to 13 12 read as follows: 13 13 441.43 POWER OF COURT. 13 14 Upon trial of any appeal from the action of the 13 15 board of review fixing the amount of assessment upon 13 16 any property or structure concerning which complaint 13 17 is made, the court may increase, decrease, or affirm 13 18 the amount of the assessment appealed from. 13 19 Sec. 16. Section 441.45, subsections 1 and 2, Code 13 20 2003, are amended to read as follows: 13 21 1. The number of acres of land and the aggregate 13 22 taxable values of the agricultural land,exclusive of13 23city lots,returned by the assessors, as corrected by 13 24 the board of review. 13 25 2. The aggregate values of structures and the 13 26 taxable square footage values ofreal estate13 27 structures by class in each township and city in the 13 28 county and the aggregate value of agricultural land in 13 29 each township and city in the county, returned as 13 30 corrected by the board of review. 13 31 Sec. 17. Section 441.47, Code 2003, is amended by 13 32 adding the following new unnumbered paragraph: 13 33 NEW UNNUMBERED PARAGRAPH. For the assessment year 13 34 beginning January 1, 2007, and for all subsequent 13 35 assessment years, only property classified as 13 36 agricultural property and property assessed pursuant 13 37 to section 441.21, subsection 2, paragraph "b", 13 38 subparagraph (1), and subsection 3, paragraph "b", 13 39 subparagraph (1), shall be subject to equalization by 13 40 the director of revenue and finance under this section 13 41 and sections 441.48 and 441.49. 13 42 Sec. 18. NEW SECTION. 441.47A EQUALIZATION OF 13 43 INFLATION FACTORS. 13 44 The director of revenue and finance on or about 13 45 August 15, 2007, and every two years thereafter, shall 13 46 order the equalization of the assessed value per 13 47 square foot resulting from the application of the 13 48 cumulative inflation factor in the several assessing 13 49 jurisdictions in each case as may be necessary to 13 50 bring such values as fixed by the assessor in cases of 14 1 purchases of property and newly constructed property 14 2 to the values determined for the assessment year 14 3 beginning January 1, 2005. In equalizing the effects 14 4 of the application of the cumulative inflation factor, 14 5 the department shall make use of reports issued by 14 6 Iowa state university of science and technology which 14 7 reports shall more precisely indicate, on a county-by- 14 8 county basis, annual and cumulative inflation factors 14 9 for each county. If the cumulative inflation factor 14 10 for an assessing jurisdiction as reported by Iowa 14 11 state university of science and technology is five 14 12 percent above or below the cumulative inflation factor 14 13 as defined in section 441.21, subsection 7, the 14 14 director shall notify the assessor by mail of the 14 15 equalization of the effects of the cumulative 14 16 inflation factor for the assessing jurisdiction. The 14 17 assessor shall recompute the assessments made pursuant 14 18 to section 441.21, subsection 2, paragraph "b", 14 19 subparagraph (1), subsection 3, paragraph "b", 14 20 subparagraph (1), and subsection 4, paragraph "b", 14 21 subparagraph (1), by applying the equalized inflation 14 22 factor. The assessor shall send notice of the 14 23 equalized assessments to all affected property owners. 14 24 Sec. 19. Section 441.50, Code 2003, is amended to 14 25 read as follows: 14 26 441.50 APPRAISERS EMPLOYED. 14 27 The conference board shall have power to employ 14 28 appraisers or other technical or expert help to assist 14 29 in thevaluationassessment of property as provided in 14 30 section 441.21, the cost thereof to be paid in the 14 31 same manner as other expenses of the assessor's 14 32 office. The conference board may certify for levy 14 33 annually an amount not to exceed forty and one-half 14 34 cents per thousand dollars of assessed value of 14 35 taxable property for the purpose of establishing a 14 36 special appraiser's fund, to be used only for such 14 37 purposes. From time to time the conference board may 14 38 direct the transfer of any unexpended balance in the 14 39 special appraiser's fund to the assessment expense 14 40 fund. 14 41 Sec. 20. Section 443.1, Code 2003, is amended to 14 42 read as follows: 14 43 443.1 CONSOLIDATED TAX. 14 44 All square footage taxes which are uniform 14 45 throughout any township or school district shall be 14 46 formed into a single tax and entered upon the tax list 14 47 in a single column, to be known as a consolidated tax, 14 48 and each receipt shall show the percentage levied for 14 49 each separate fund. The land tax shall be separately 14 50 stated and each receipt shall show the percentage 15 1 levied for each separate fund. 15 2 Sec. 21. Section 443.2, Code 2003, is amended to 15 3 read as follows: 15 4 443.2 TAX LIST. 15 5 Before the first day of July in each year, the 15 6 county auditor shall transcribe the assessments of the 15 7 townships and cities into a book or record, to be 15 8 known as the tax list, properly ruled and headed, with 15 9 separate columns, in which shall be entered the names 15 10 of the taxpayers, descriptions of lands, number of 15 11 acres and value, numbers of city lots, their size in 15 12 acres, and value, and each description of the square 15 13 footage tax and the land tax, with a column for polls 15 14 and one for payments, and shall complete it by 15 15 entering the amount due on each installment, 15 16 separately, and carrying out the total of both 15 17 installments. The total of all columns of each page 15 18 of each book or other record shall balance with the 15 19 tax totals. After computing the amount of land tax 15 20 and square footage tax due and payable on each 15 21 property, the county auditor shall round the total 15 22 amount oftaxtaxes due and payable on the property to 15 23 the nearest even whole dollar. 15 24 The county auditor shall list the aggregate actual 15 25 value and the aggregate taxable value of all taxable 15 26 property within the county and each political 15 27 subdivision including property subject to the 15 28 statewide property tax imposed under section 437A.18 15 29 on the tax list in order that the actual value of the 15 30 taxable property within the county or a political 15 31 subdivision may be ascertained and shown by the tax 15 32 list for the purpose of computing the debt-incurring 15 33 capacity of the county or political subdivision. As 15 34 used in this section, "actual value" is the value 15 35 determined under section 441.21, subsections 1 to 3, 15 36 Code 2005, prior to the reduction to a percentage of 15 37 actual value as otherwise provided in section 441.21, 15 38 Code 2005. "Actual value" of property subject to 15 39 statewide property tax is the assessed value under 15 40 section 437A.18. 15 41 Sec. 22. Section 443.3, Code 2003, is amended to 15 42 read as follows: 15 43 443.3 CORRECTION – TAX APPORTIONED. 15 44 At the time of transcribingsaidthe assessments 15 45 into the tax list, the county auditor shall correct 15 46 all transfers up to date and place the legal 15 47 descriptions of all real estate in the name of the 15 48 owner atsaidthat date as shown by the transfer book 15 49 in the auditor's office. At the end of the list for 15 50 each township or city the auditor shall make an 16 1 abstract thereof, and apportion the consolidated tax 16 2 among the respective funds to which it belongs, 16 3 according to the amounts levied for each. The auditor 16 4 shall apportion the land tax as prescribed in section 16 5 443A.2. 16 6 Sec. 23. Section 443.6, Code 2003, is amended to 16 7 read as follows: 16 8 443.6 CORRECTIONS BY AUDITOR. 16 9 The auditor may correct any error in the assessment 16 10 or tax list, and the assessor or auditor may list for 16 11 taxation any omitted land and may assess and list for 16 12 taxation any omittedpropertystructure. 16 13 Sec. 24. Section 443.7, Code 2003, is amended to 16 14 read as follows: 16 15 443.7 NOTICE. 16 16 Before listing for taxation any omitted land and 16 17 before assessing and listing for taxation any omitted 16 18propertystructure, the assessor or auditor shall 16 19 notify by mail the person in whose name theproperty16 20 land or structure is taxed, to appear before the 16 21 assessor or auditor at the assessor's or auditor's 16 22 office within ten days from the date of the notice and 16 23 show cause, if any, why the correction or assessment 16 24 should not be made. 16 25 Sec. 25. Section 443.9, Code 2003, is amended to 16 26 read as follows: 16 27 443.9 ADJUSTMENT OF ACCOUNTS. 16 28 If such correction or assessment is made after the 16 29 books or other records approved by thestateauditor 16 30 of state have passed into the hands of the treasurer, 16 31 the treasurer shall be charged or credited therefor as 16 32 the case may be. In the event such listing of omitted 16 33 land or listing and assessment of omittedproperty16 34 structure is made by the assessor after the tax 16 35 records have passed into the hands of the auditor or 16 36 treasurer, such correction or assessment shall be 16 37 entered on the records by the auditor or treasurer. 16 38 Sec. 26. Section 443.12, Code 2003, is amended to 16 39 read as follows: 16 40 443.12 CORRECTIONS BY TREASURER. 16 41 Whenpropertyland or a structure subject to 16 42 taxation is withheld, overlooked, or from any other 16 43 cause is not listed, or is not listed and assessed, 16 44 the county treasurer shall, when apprised thereof, at 16 45 any time within two years from the date at which such 16 46 listing and assessment should have been made, demand 16 47 of the person, firm, corporation, or other party by 16 48 whom the same should have been listed, or to whom it 16 49 should have been listed and assessed, or of the 16 50 administrator thereof, the amount thepropertyland or 17 1 structure should have been taxed in each year the same 17 2 was so withheld or overlooked and not listed or not 17 3 listed and assessed, together with six percent 17 4 interest thereon from the time the taxes would have 17 5 become due and payable had suchpropertyland been 17 6 listed or such structure been listed and assessed. 17 7 Sec. 27. Section 443.13, Code 2003, is amended to 17 8 read as follows: 17 9 443.13 ACTION BY TREASURER – APPORTIONMENT. 17 10 Upon failure to pay such sum within thirty days, 17 11 with all accrued interest, the treasurer shall cause 17 12 an action to be brought in the name of the treasurer 17 13 for the use of the proper county, to be prosecuted by 17 14 the county attorney, or such other person as the board 17 15 of supervisors may appoint, and when suchproperty17 16 land has been fraudulently withheld from listing or 17 17 such structure fraudulently withheld from listing and 17 18 assessment, there shall be added to the sum found to 17 19 be due a penalty of fifty percent upon the amount, 17 20 which shall be included in the judgment. The amount 17 21 thus recovered shall be by the treasurer apportioned 17 22 ratably as the taxes would have been if they had been 17 23 paid according to law. 17 24 Sec. 28. Section 443.14, Code 2003, is amended to 17 25 read as follows: 17 26 443.14 DUTY OF TREASURER. 17 27 The treasurer shall assess anyreal property17 28 structure and shall list the acreage of any land 17 29 subject to taxation which may have been omitted by the 17 30 assessor, board of review, or county auditor, and 17 31 collect taxes thereon, and in such cases shall note, 17 32 opposite the tract or lot assessed, the words "by 17 33 treasurer". 17 34 Sec. 29. Section 443.15, Code 2003, is amended to 17 35 read as follows: 17 36 443.15 TIME LIMIT. 17 37 The assessment shall be made within two years after 17 38 the tax list shall have been delivered to the 17 39 treasurer for collection, and not afterwards, if the 17 40propertyland or structure is then owned by the person 17 41 who should have paid the tax. 17 42 Sec. 30. Section 443.17, Code 2003, is amended to 17 43 read as follows: 17 44 443.17 PRESUMPTION OF TWO-YEAR OWNERSHIP. 17 45 In any action or proceeding, now pending or 17 46 hereafter brought, to recover taxes uponpropertyland 17 47 not listed or agricultural land or a structure not 17 48 listed and assessed for taxation during the lifetime 17 49 of any decedent, it shall be presumed that any 17 50 property, any evidence of ownership of property, and 18 1 any evidence of a promise to pay, owned by a decedent 18 2 at the date of the decedent's death, had been acquired 18 3 and owned by such decedent more than two years before 18 4 the date of the decedent's death; and the burden of 18 5 proving that any such property had been acquired by 18 6 such decedent less than two years before the date of 18 7 the decedent's death shall be upon the heirs, 18 8 legatees, and legal representatives of any such 18 9 decedent. 18 10 Sec. 31. Section 443.18, Code 2003, is amended to 18 11 read as follows: 18 12 443.18 REAL ESTATE – DUTY OF OWNER. 18 13 In all cases wherereal estateland subject to 18 14 taxation has not been listed or agricultural land or a 18 15 structure subject to taxation has not been listed and 18 16 assessed, the owner, or an agent of the owner, shall 18 17 have the same done by the treasurer, and pay the taxes 18 18 thereon; and if the owner fails to do so the treasurer 18 19 shall list or list and assess the same and collect the 18 20 tax assessed as the treasurer does other taxes. 18 21 Sec. 32. Section 443.19, Code 2003, is amended to 18 22 read as follows: 18 23 443.19 IRREGULARITIES, ERRORS AND OMISSIONS – 18 24 EFFECT. 18 25NoA failure of the owner to have suchproperty18 26 land listed or agricultural land or structure listed 18 27 and assessed or to have the errors in the listing or 18 28 assessment corrected, andnoan irregularity, error or 18 29 omission in the listing of such land or listing and 18 30 assessment of suchpropertyagricultural land or 18 31 structure, shall not affect in any manner the legality 18 32 of the taxes levied thereon, or affect any right or 18 33 title to suchreal estateproperty which would have 18 34 accrued to any party claiming or holding under and by 18 35 virtue of a deed executed by the treasurer as provided 18 36 by this title, had the listing and assessment of such 18 37 property been in all respects regular and valid. 18 38 Sec. 33. Section 443.21, Code 2003, is amended to 18 39 read as follows: 18 40 443.21 ASSESSMENTS CERTIFIED TO COUNTY AUDITOR. 18 41 All assessors and assessing bodies, including the 18 42 department of revenue and finance having authority 18 43 over the listing of land or listing and assessment of 18 44propertyagricultural land and structures for tax 18 45 purposes shall certify to the county auditor of each 18 46 county the number of acres of land and the assessed 18 47 values of agricultural land and structures for all the 18 48 taxable property in such county as finallyequalized18 49anddetermined, and the same shall be transcribed onto 18 50 the tax lists as required by section 443.2. 19 1 Sec. 34. Section 443.22, Code 2003, is amended to 19 2 read as follows: 19 3 443.22 UNIFORM ASSESSMENTS MANDATORY. 19 4 All assessors and assessing bodies, including the 19 5 department of revenue and finance having authority 19 6 over the listing of land and listing and assessment of 19 7propertyagricultural land and structures for tax 19 8 purposes, shall comply with sections 428.4, 428.29, 19 9 434.15, 438.13, 441.21, and 441.45. The department of 19 10 revenue and finance, having authority over the listing 19 11 and assessments, shall exercise its powers and perform 19 12 its duties under section 421.17 and other applicable 19 13 laws so as to require the uniform and consistent 19 14 application ofsaidthat section. 19 15 Sec. 35. NEW SECTION. 443A.1 LAND TAX. 19 16 Effective for the fiscal year beginning July 1, 19 17 2007, and all subsequent fiscal years, a land tax 19 18 shall be imposed against each acre or portion of an 19 19 acre of land in a county. 19 20 Sec. 36. NEW SECTION. 443A.2 APPORTIONMENT OF 19 21 LAND TAX. 19 22 1. The land tax for each county shall be 19 23 apportioned as follows: 19 24 In the unincorporated area of the county, the land 19 25 tax shall be distributed to the county, the school 19 26 district located in the unincorporated area of the 19 27 county, and other taxing entities located in the 19 28 unincorporated area of the county in the same 19 29 proportion that property taxes levied in the 19 30 unincorporated area of the county for the fiscal year 19 31 beginning July 1, 2006, were allocated to those 19 32 entities. 19 33 In the incorporated areas of the county, the land 19 34 tax shall be distributed to the city, the county, each 19 35 school district located within the city, and other 19 36 taxing entities located within the city in the same 19 37 proportion that property taxes levied in the city for 19 38 the fiscal year beginning July 1, 2006, were allocated 19 39 to those entities. 19 40 2. The city finance committee and the county 19 41 finance committee shall jointly determine the 19 42 adjustments to be made to the allocation of the land 19 43 tax in the case of boundary adjustments made to a 19 44 taxing district on or after January 1, 2006. 19 45 3. After the auditor has computed the amount of 19 46 land tax to be distributed to each taxing district, 19 47 the auditor shall compute the rate of tax to be levied 19 48 upon the square footage valuation of structures 19 49 pursuant to chapter 444. 19 50 Sec. 37. Section 444.1, Code 2003, is amended to 20 1 read as follows: 20 2 444.1 BASIS FOR AMOUNT OF TAX. 20 3 In all taxing districts in the state, including 20 4 townships, school districts, cities and counties, when 20 5 by law then existing the people are authorized to 20 6 determine by vote, or officers are authorized to 20 7 estimate or determine, a rate of taxation required for 20 8 any public purpose, such rate shall in all cases be 20 9 estimated and based upon the amount of land tax 20 10 available to the district and the adjusted taxable 20 11 square footage valuation of such taxing district for 20 12 the preceding calendar year. 20 13 Sec. 38. Section 444.2, Code 2003, is amended to 20 14 read as follows: 20 15 444.2 AMOUNTS CERTIFIED IN DOLLARS. 20 16 When an authorized square footage tax rate within a 20 17 taxing district, including townships, school 20 18 districts, cities and counties, has been thus 20 19 determined as provided by law, the officer or officers 20 20 charged with the duty of certifying the authorized 20 21 rate to the county auditor or board of supervisors 20 22 shall, before certifying the rate, compute upon the 20 23 adjusted taxable square footage valuation of the 20 24 taxing district for the preceding fiscal year, the 20 25 amount of tax the rate will raise, stated in dollars, 20 26 and shall certify the computed amount in dollars and 20 27 not by rate, to the county auditor and board of 20 28 supervisors and shall further certify the percentage 20 29 of such amount to be levied against each class of 20 30 property. 20 31 Sec. 39. Section 444.3, Code 2003, is amended to 20 32 read as follows: 20 33 444.3 COMPUTATION OF SQUARE FOOTAGE RATE. 20 34 When the square footage valuations for the several 20 35 taxing districts shall have been adjusted by the 20 36 several boards for the current year, and the amount of 20 37 land tax to be distributed to each taxing district has 20 38 been deducted from the dollar amounts certified in 20 39 section 444.2 for each taxing district, the county 20 40 auditor shall thereupon apply such a rate, not20 41exceeding the rate authorized by law,or rates as will 20 42 raise the amount required for such taxing district, 20 43 and when combined with the land tax amount will raise 20 44 an amount not exceeding the dollar amount authorized 20 45 by law for the taxing district, andnowill not raise 20 46 a larger amount. For purposes of computing the square 20 47 footage rate under this section, the adjusted taxable 20 48 square footage valuation of the property of a taxing 20 49 district does not include the valuation of property of 20 50 a railway corporation or its trustee which corporation 21 1 has been declared bankrupt or is in bankruptcy 21 2 proceedings. Nothing in the preceding sentence 21 3 exempts the property of such railway corporation or 21 4 its trustee from taxation and the rate computed under 21 5 this section shall be levied on the taxable property 21 6 of such railway corporation or its trustee. 21 7 The square footage tax rate shall be expressed in 21 8 dollars and cents per one hundred dollars of valuation 21 9 per square foot. 21 10 Sec. 40. NEW SECTION. 444.9 COMPUTATION OF TAX. 21 11 The amount of tax imposed on any taxable property 21 12 is the sum of the amounts computed in subsections 1 21 13 and 2. 21 14 1. LAND TAX. The product of the land tax rate 21 15 times the number of acres or portion of an acre of the 21 16 taxable property. 21 17 2. SQUARE FOOTAGE TAX. The product of the square 21 18 footage tax rate times the valuation per square foot 21 19 of the taxable structure times the number of square 21 20 feet of the taxable structure. The square footage tax 21 21 shall be computed separately for each structure 21 22 located on the land. 21 23 Sec. 41. PROPERTY TAX IMPLEMENTATION COMMITTEE. 21 24 1. On or before July 1, 2003, the department of 21 25 revenue and finance, in consultation with the 21 26 department of management, shall initiate and 21 27 coordinate the establishment of a property tax 21 28 implementation committee and provide staffing 21 29 assistance to the committee. The property tax 21 30 implementation committee shall include four members of 21 31 the general assembly, one each appointed by the 21 32 majority leader of the senate, the speaker of the 21 33 house of representatives, the minority leader of the 21 34 senate, and the minority leader of the house of 21 35 representatives. The committee shall also include 21 36 members appointed by the department of revenue and 21 37 finance representing the department of revenue and 21 38 finance, the department of management, counties, 21 39 cities, school districts, local assessors, commercial 21 40 property taxpayers, residential property taxpayers, 21 41 and agricultural property taxpayers, and other 21 42 appropriate stakeholders. The department may consider 21 43 participation on the committee of former state 21 44 officials with expertise in budget and tax policy. 21 45 The chairpersons of the committee shall be those 21 46 members of the general assembly appointed by the 21 47 majority leader of the senate and the speaker of the 21 48 house of representatives. 21 49 2. The committee shall study and make 21 50 recommendations relating to the land tax, square 22 1 footage tax, the baseline assessment for the square 22 2 footage tax, and other related provisions. The 22 3 committee shall also study and make recommendations on 22 4 issues relating to implementation of a land tax and 22 5 square footage tax, including, but not limited to, 22 6 whether or not maximum square footage rates and land 22 7 tax rates should be imposed and, if such rates are 22 8 recommended, the imposition of rates that have a 22 9 revenue neutral impact on classes of property, the 22 10 property tax financing portion of the school funding 22 11 formula, treatment of current property tax credits and 22 12 exemptions under a land tax and square footage tax and 22 13 continued state reimbursement of any credits or 22 14 exemptions, implementation of urban revitalization and 22 15 urban renewal programs under the land tax and square 22 16 footage tax, implementation of a payment in lieu of 22 17 taxes program for local government services, and 22 18 maintenance of equity among classes of taxpayers and 22 19 among taxpayers within the same class. The property 22 20 tax implementation committee shall also study the role 22 21 of property taxes in funding local government services 22 22 and the types of services currently funded by property 22 23 taxes. 22 24 3. The property tax implementation committee shall 22 25 direct three counties and cities within those counties 22 26 to submit data as prescribed by the committee. The 22 27 department of revenue and finance, in consultation 22 28 with the department of management, shall select the 22 29 three counties and the cities within those counties 22 30 that will be required to provide data to the 22 31 committee. The committee shall devise a system for 22 32 testing the data, including the necessary computer 22 33 hardware and software to allow the selected counties 22 34 and cities to prepare projected budgets, to determine 22 35 the rates for the land tax and the square footage tax 22 36 for those projected budgets, and to provide a sampling 22 37 of the effect on the various classes of property in 22 38 those jurisdictions. The committee shall use the data 22 39 and the results of the projections to resolve, and 22 40 make recommendations relating to, the issues described 22 41 in subsection 2, and related issues, in a revenue 22 42 neutral manner that will not result in a shift of 22 43 property tax burden between classes of property. The 22 44 committee shall submit to the general assembly by 22 45 October 31, 2003, October 31, 2004, and October 31, 22 46 2005, a report for each of those years resolving the 22 47 issues in subsection 2 and other related issues for 22 48 implementation of this Act. The reports shall include 22 49 detailed estimates of the cost to the counties and 22 50 cities of providing the data and an estimate of the 23 1 cost of statewide implementation of this Act. 23 2 Sec. 42. EFFECTIVE AND APPLICABILITY DATES. 23 3 1. The section of this division of this Act 23 4 establishing the property tax implementation 23 5 committee, being deemed of immediate importance, takes 23 6 effect upon enactment. 23 7 2. The remainder of this division of this Act 23 8 takes effect July 1, 2005, and applies to assessment 23 9 years beginning on or after January 1, 2006, and 23 10 applies to tax collections for fiscal years beginning 23 11 on or after July 1, 2007. 23 12 Sec. 43. FUTURE REPEAL. This division of this Act 23 13 is repealed effective June 30, 2005. 23 14 DIVISION II 23 15 INDIVIDUAL INCOME TAX 23 16 2004-2006 TAX YEARS 23 17 Sec. 44. Section 422.5, subsection 1, paragraphs a 23 18 through i, Code 2003, are amended to read as follows: 23 19 For tax years beginning 23 20 in the calendar year: 23 21 2004 2005 2006 23 22 a. On all taxable income from 23 23 zero through one thousand dollars,23 24thirty-six hundredths of one23 25percent.: ............................. .35% .34% .33% 23 26 b. On all taxable income exceeding 23 27 one thousand dollars but not 23 28 exceeding two thousand dollars,23 29seventy-two hundredths of one23 30percent.: ............................. .71% .68% .65% 23 31 c. On all taxable income exceeding 23 32 two thousand dollars but not 23 33 exceeding four thousand dollars,23 34two and forty-three hundredths23 35percent.: ............................ 2.39% 2.30% 2.21% 23 36 d. On all taxable income exceeding 23 37 four thousand dollars but not 23 38 exceeding nine thousand dollars,23 39four and one-half percent.: .......... 4.42% 4.25% 4.09% 23 40 e. On all taxable income exceeding 23 41 nine thousand dollars but not 23 42 exceeding fifteen thousand 23 43 dollars, six and twelve hundredths23 44percent.: ............................ 6.01% 5.78% 5.56% 23 45 f. On all taxable income exceeding 23 46 fifteen thousand dollars but not 23 47 exceeding twenty thousand 23 48 dollars, six and forty-eight hundredths23 49percent.: ............................ 6.36% 6.12% 5.88% 23 50 g. On all taxable income exceeding 24 1 twenty thousand dollars but not 24 2 exceeding thirty thousand 24 3 dollars, six and eight-tenths24 4percent.: ............................ 6.68% 6.42% 6.17% 24 5 h. On all taxable income exceeding 24 6 thirty thousand dollars but not 24 7 exceeding forty-five thousand 24 8 dollars, seven and ninety-two hundredths24 9percent.: ............................ 7.78% 7.48% 7.19% 24 10 i. On all taxable income exceeding 24 11 forty-five thousand dollars, eight24 12and ninety-eight hundredths24 13percent.: ............................ 8.82% 8.48% 8.15% 24 14 Sec. 45. EFFECTIVE AND APPLICABILITY DATE 24 15 PROVISIONS. This division of this Act takes effect 24 16 January 1, 2004, for tax years beginning on or after 24 17 January 1, 2004, but before January 1, 2007. 24 18 DIVISION III 24 19 INDIVIDUAL INCOME TAX 24 20 2007 AND SUBSEQUENT TAX YEARS 24 21 Sec. 46. Section 422.5, subsection 1, paragraphs a 24 22 through i, Code 2003, are amended to read as follows: 24 23 For tax years beginning 24 24 in the calendar year: 24 25 2007 and subsequent 24 26 calendar years 24 27 a. On all taxable income from 24 28 zero through one thousand dollars,24 29thirty-six hundredths of one24 30percent.: ............................. .31% 24 31 b. On all taxable income exceeding 24 32 one thousand dollars but not 24 33 exceeding two thousand dollars,24 34seventy-two hundredths of one24 35percent.: ............................. .61% 24 36 c. On all taxable income exceeding 24 37 two thousand dollars but not 24 38 exceeding four thousand dollars,24 39two and forty-three hundredths24 40percent.: ............................ 2.06% 24 41 d. On all taxable income exceeding 24 42 four thousand dollars but not 24 43 exceeding nine thousand dollars,24 44four and one-half percent.: .......... 3.81% 24 45 e. On all taxable income exceeding 24 46 nine thousand dollars but not 24 47 exceeding fifteen thousand 24 48 dollars, six and twelve hundredths24 49percent.: ............................ 5.19% 24 50 f. On all taxable income exceeding 25 1 fifteen thousand dollars but not 25 2 exceeding twenty thousand 25 3 dollars, six and forty-eight hundredths25 4percent.: ............................ 5.49% 25 5 g. On all taxable income exceeding 25 6 twenty thousand dollars but not 25 7 exceeding thirty thousand 25 8 dollars, six and eight-tenths25 9percent.: ............................ 5.76% 25 10 h. On all taxable income exceeding 25 11 thirty thousand dollars but not 25 12 exceeding forty-five thousand 25 13 dollars, seven and ninety-two hundredths25 14percent.: ............................ 6.71% 25 15 i. On all taxable income exceeding 25 16 forty-five thousand dollars, eight25 17and ninety-eight hundredths25 18percent.: ............................ 7.61% 25 19 Sec. 47. EFFECTIVE AND APPLICABILITY DATE 25 20 PROVISIONS. This division of this Act takes effect 25 21 January 1, 2007, for tax years beginning on or after 25 22 January 1, 2007. 25 23 DIVISION IV 25 24 INDIVIDUAL INCOME TAX 25 25 2007 AND SUBSEQUENT TAX YEARS 25 26 Sec. 48. Section 422.4, subsection 1, paragraphs b 25 27 and c, Code 2003, are amended to read as follows: 25 28 b. "Cumulative inflation factor" means the product 25 29 of the annual inflation factor for the19882007 25 30 calendar year and all annual inflation factors for 25 31 subsequent calendar years as determined pursuant to 25 32 this subsection. The cumulative inflation factor 25 33 applies to all tax years beginning on or after January 25 34 1 of the calendar year for which the latest annual 25 35 inflation factor has been determined. 25 36 c. The annual inflation factor for the19882007 25 37 calendar year is one hundred percent. 25 38 Sec. 49. Section 422.4, subsection 2, paragraph b, 25 39 Code 2003, is amended to read as follows: 25 40 b. "Cumulative standard deduction factor" means 25 41 the product of the annual standard deduction factor 25 42 for the19892007 calendar year and all annual 25 43 standard deduction factors for subsequent calendar 25 44 years as determined pursuant to this subsection. The 25 45 cumulative standard deduction factor applies to all 25 46 tax years beginning on or after January 1 of the 25 47 calendar year for which the latest annual standard 25 48 deduction factor has been determined. 25 49 Sec. 50. Section 422.4, subsection 16, Code 2003, 25 50 is amended to read as follows: 26 1 16.The words "taxable"Taxable income"meanmeans 26 2 the net income as defined in section 422.7 minus the 26 3 deductions allowed by section 422.9, in the case of 26 4 individuals; in. In the case of estates or trusts, 26 5the words"taxable income"meanmeans the taxable 26 6 income,(without a deduction for personal exemption), 26 7 as computed for federal income tax purposes under the 26 8 Internal Revenue Code, but with the adjustments 26 9 specified in section 422.7plus the Iowa income tax26 10deducted in computing the federal taxable income and26 11minus federal income taxes as provided in section26 12422.9. 26 13 Sec. 51. Section 422.5, subsection 1, Code 2003, 26 14 as amended by 2003 Iowa Acts, Senate File 442, section 26 15 4, is amended by striking the subsection and inserting 26 16 in lieu thereof the following: 26 17 1. a. A tax is imposed upon every resident and 26 18 nonresident of the state which tax shall be levied, 26 19 collected, and paid annually upon and with respect to 26 20 the entire taxable income at rates as follows: 26 21 (1) On all taxable income from zero through eight 26 22 thousand dollars, two and five hundredths percent. 26 23 (2) On all taxable income exceeding eight thousand 26 24 dollars but not exceeding one hundred thousand 26 25 dollars, four and sixty-five hundredths percent. 26 26 (3) On all taxable income exceeding one hundred 26 27 thousand dollars, four and nine-tenths percent. 26 28 b. (1) The tax imposed upon the taxable income of 26 29 a nonresident shall be computed by reducing the amount 26 30 determined pursuant to paragraph "a" by the amounts of 26 31 nonrefundable credits under this division and by 26 32 multiplying this resulting amount by a fraction of 26 33 which the nonresident's net income allocated to Iowa, 26 34 as determined in section 422.8, subsection 2, 26 35 paragraph "a", is the numerator and the nonresident's 26 36 total net income computed under section 422.7 is the 26 37 denominator. This provision also applies to 26 38 individuals who are residents of Iowa for less than 26 39 the entire tax year. 26 40 (2) The tax imposed upon the taxable income of a 26 41 resident shareholder in an S corporation which has in 26 42 effect for the tax year an election under subchapter S 26 43 of the Internal Revenue Code and carries on business 26 44 within and without the state may be computed by 26 45 reducing the amount determined pursuant to paragraph 26 46 "a" by the amounts of nonrefundable credits under this 26 47 division and by multiplying this resulting amount by a 26 48 fraction of which the resident's net income allocated 26 49 to Iowa, as determined in section 422.8, subsection 2, 26 50 paragraph "b", is the numerator and the resident's 27 1 total net income computed under section 422.7 is the 27 2 denominator. If a resident shareholder has elected to 27 3 take advantage of this subparagraph, and for the next 27 4 tax year elects not to take advantage of this 27 5 subparagraph, the resident shareholder shall not 27 6 reelect to take advantage of this subparagraph for the 27 7 three tax years immediately following the first tax 27 8 year for which the shareholder elected not to take 27 9 advantage of this subparagraph, unless the director 27 10 consents to the reelection. This subparagraph also 27 11 applies to individuals who are residents of Iowa for 27 12 less than the entire tax year. 27 13 Sec. 52. Section 422.5, subsection 2, Code 2003, 27 14 is amended by striking the subsection and inserting in 27 15 lieu thereof the following: 27 16 2. a. However, if the married persons' filing 27 17 jointly or separately on a combined return, unmarried 27 18 head of household's, or surviving spouse's net income 27 19 exceeds thirteen thousand five hundred dollars or nine 27 20 thousand dollars in the case of all other persons, the 27 21 regular tax imposed under this division shall be the 27 22 lesser of the product of eight percent times the 27 23 portion of the net income in excess of thirteen 27 24 thousand five hundred dollars or nine thousand 27 25 dollars, as applicable, or the regular tax liability 27 26 computed without regard to this paragraph. 27 27 b. Paragraph "a" does not apply to estates and 27 28 trusts. Married taxpayers electing to file separately 27 29 shall compute the alternate tax described in paragraph 27 30 "a" using the total net income of the husband and 27 31 wife. The alternate tax described in paragraph "a" 27 32 does not apply if one spouse elects to carry back or 27 33 carry forward the loss as provided in section 422.9, 27 34 subsection 3. A person who is claimed as a dependent 27 35 by another person as defined in section 422.12 shall 27 36 not receive the benefit of paragraph "a" if the person 27 37 claiming the dependent has net income exceeding 27 38 thirteen thousand five hundred dollars or nine 27 39 thousand dollars as applicable or the person claiming 27 40 the dependent and the person's spouse have combined 27 41 net income exceeding thirteen thousand five hundred 27 42 dollars or nine thousand dollars as applicable. 27 43 Sec. 53. Section 422.5, subsection 5, Code 2003, 27 44 is amended to read as follows: 27 45 5. Upon determination of the latest cumulative 27 46 inflation factor, the director shall multiply each 27 47 dollar amount set forth in subsection 1,paragraphs27 48"a" through "i" of this sectionparagraph "a", by this 27 49 cumulative inflation factor, shall round off the 27 50 resulting product to the nearest one dollar, and shall 28 1 incorporate the result into the income tax forms and 28 2 instructions for each tax year. 28 3 Sec. 54. Section 422.5, subsection 7, Code 2003, 28 4 is amended by striking the subsection. 28 5 Sec. 55. Section 422.7, Code 2003, as amended by 28 6 2003 Iowa Acts, Senate File 442, section 5, and House 28 7 File 674, sections 5 and 6, is amended by striking the 28 8 section and inserting in lieu thereof the following: 28 9 422.7 "NET INCOME" – HOW COMPUTED. 28 10 The term "net income" means the adjusted gross 28 11 income before the net operating loss deduction as 28 12 properly computed for federal income tax purposes 28 13 under the Internal Revenue Code, with the following 28 14 adjustments: 28 15 1. The adjusted gross income is adjusted by adding 28 16 the sum of the following: 28 17 a. Add the amount of federal income tax refunds 28 18 received in a tax year beginning on or after January 28 19 1, 2007, but before January 1, 2010, to the extent 28 20 that the federal income tax was deducted on an Iowa 28 21 individual income tax return for a tax year beginning 28 22 prior to January 1, 2007. 28 23 b. Add interest and dividends from foreign 28 24 securities and from securities of state and other 28 25 political subdivisions exempt from federal income tax 28 26 under the Internal Revenue Code. 28 27 c. Add interest and dividends from regulated 28 28 investment companies exempt from federal income tax 28 29 under the Internal Revenue Code. 28 30 d. Add, to the extent not already included, income 28 31 from the sale of obligations of the state and its 28 32 political subdivisions. Income from the sale of these 28 33 obligations is exempt from the taxes imposed by this 28 34 division only if the law authorizing these obligations 28 35 specifically exempts the income from the sale from the 28 36 state individual income tax. 28 37 e. Add the amount resulting from the cancellation 28 38 of a participation agreement refunded to the taxpayer 28 39 as a participant in the Iowa educational savings plan 28 40 trust under chapter 12D to the extent previously 28 41 deducted as a contribution to the trust. 28 42 2. The adjusted gross income is adjusted by 28 43 subtracting the sum of the following: 28 44 a. Subtract the amount of federal income taxes 28 45 paid or accrued, as the case may be, in a tax year 28 46 beginning on or after January 1, 2007, but before 28 47 January 1, 2010, to the extent the federal tax payment 28 48 is for a tax year beginning prior to January 1, 2007. 28 49 b. Subtract interest and dividends from federal 28 50 securities. 29 1 c. Subtract the loss on the sale or exchange of a 29 2 share of a regulated investment company held for six 29 3 months or less to the extent the loss was disallowed 29 4 under section 852(b)(4)(B) of the Internal Revenue 29 5 Code. 29 6 d. (1) Subtract, to the extent included, the 29 7 amount of additional social security benefits taxable 29 8 under the Internal Revenue Code for tax years 29 9 beginning on or after January 1, 1994. The amount of 29 10 social security benefits taxable as provided in 29 11 section 86 of the Internal Revenue Code, as amended up 29 12 to and including January 1, 1993, continues to apply 29 13 for state income tax purposes for tax years beginning 29 14 on or after January 1, 1994. 29 15 (2) Married taxpayers, who file a joint federal 29 16 income tax return and who elect to file separate 29 17 returns or who elect separate filing on a combined 29 18 return for state income tax purposes, shall allocate 29 19 between the spouses the amount of benefits subtracted 29 20 under subparagraph (1) from net income in the ratio of 29 21 the social security benefits received by each spouse 29 22 to the total of these benefits received by both 29 23 spouses. 29 24 e. (1) For a person who is disabled, or is fifty- 29 25 five years of age or older, or is the surviving spouse 29 26 of an individual or a survivor having an insurable 29 27 interest in an individual who would have qualified for 29 28 the exemption under this paragraph for the tax year, 29 29 subtract, to the extent included, the total amount of 29 30 a governmental or other pension or retirement pay, 29 31 including, but not limited to, defined benefit or 29 32 defined contribution plans, annuities, individual 29 33 retirement accounts, plans maintained or contributed 29 34 to by an employer, or maintained or contributed to by 29 35 a self-employed person as an employer, and deferred 29 36 compensation plans or any earnings attributable to the 29 37 deferred compensation plans, up to a maximum of six 29 38 thousand dollars for a person, other than a husband or 29 39 wife, who files a separate state income tax return and 29 40 up to a maximum of twelve thousand dollars for a 29 41 husband and wife who file a joint state income tax 29 42 return. 29 43 (2) However, a surviving spouse who is not 29 44 disabled or fifty-five years of age or older can only 29 45 exclude the amount of pension or retirement pay 29 46 received as a result of the death of the other spouse. 29 47 A husband and wife filing separate state income tax 29 48 returns or separately on a combined return are allowed 29 49 a combined maximum exclusion under this paragraph "e" 29 50 of up to the amount allowed for a husband and wife who 30 1 file a joint state income tax return. The exclusion 30 2 shall be allocated to the husband or wife in the 30 3 proportion that each spouse's respective pension and 30 4 retirement pay received bears to total combined 30 5 pension and retirement pay received. 30 6 f. Notwithstanding the method for computing income 30 7 from an installment sale under section 453 of the 30 8 Internal Revenue Code, as defined in section 422.3, 30 9 the method to be used in computing income from an 30 10 installment sale shall be the method under section 453 30 11 of the Internal Revenue Code, as amended up to and 30 12 including January 1, 2000. A taxpayer affected by 30 13 this paragraph shall make adjustments in the adjusted 30 14 gross income pursuant to rules adopted by the 30 15 director. 30 16 The adjustment to net income provided in this 30 17 paragraph "f" is repealed for tax years beginning on 30 18 or after January 1, 2002. However, to the extent that 30 19 a taxpayer using the accrual method of accounting 30 20 reported the entire capital gain from the sale or 30 21 exchange of property on the Iowa return for the tax 30 22 year beginning in the 2001 calendar year and the 30 23 capital gain was reported on the installment method on 30 24 the federal income tax return, any additional 30 25 installment from the capital gain reported for federal 30 26 income tax purposes is not to be included in net 30 27 income in tax years beginning on or after January 1, 30 28 2002. 30 29 g. Subtract, if the taxpayer is the owner of an 30 30 individual development account certified under chapter 30 31 541A at any time during the tax year, all of the 30 32 following: 30 33 (1) Contributions made to the account by persons 30 34 and entities, other than the taxpayer, as authorized 30 35 in chapter 541A. 30 36 (2) The amount of any savings refund authorized 30 37 under section 541A.3, subsection 1. 30 38 (3) Earnings from the account. 30 39 h. (1) Subtract the maximum contribution that may 30 40 be deducted for income tax purposes as a participant 30 41 in the Iowa educational savings plan trust pursuant to 30 42 section 12D.3, subsection 1, paragraph "a". 30 43 (2) Subtract, to the extent included, income from 30 44 interest and earnings received from the Iowa 30 45 educational savings plan trust created in chapter 12D. 30 46 (3) Subtract, to the extent not deducted for 30 47 federal income tax purposes, the amount of any gift, 30 48 grant, or donation made to the Iowa educational 30 49 savings plan trust for deposit in the endowment fund 30 50 of that trust. 31 1 i. Subtract, to the extent included, active duty 31 2 pay received by a person in the national guard or 31 3 armed forces military reserve for services performed 31 4 on or after August 2, 1990, pursuant to military 31 5 orders related to the Persian Gulf Conflict. 31 6 j. Subtract, to the extent included, active duty 31 7 pay received by a person in the national guard or 31 8 armed forces military reserve for service performed on 31 9 or after November 21, 1995, pursuant to military 31 10 orders related to peacekeeping in Bosnia-Herzegovina. 31 11 k. Subtract, to the extent included, the 31 12 following: 31 13 (1) Payments made to the taxpayer because of the 31 14 taxpayer's status as a victim of persecution for 31 15 racial, ethnic, or religious reasons by Nazi Germany 31 16 or any other Axis regime or as an heir of such victim. 31 17 (2) Items of income attributable to, derived from, 31 18 or in any way related to assets stolen from, hidden 31 19 from, or otherwise lost to a victim of persecution for 31 20 racial, ethnic, or religious reasons by Nazi Germany 31 21 or any other Axis regime immediately prior to, during, 31 22 and immediately after World War II, including, but not 31 23 limited to, interest on the proceeds receivable as 31 24 insurance under policies issued to a victim of 31 25 persecution for racial, ethnic, or religious reasons 31 26 by Nazi Germany or any other Axis regime by European 31 27 insurance companies immediately prior to and during 31 28 World War II. However, income from assets acquired 31 29 with such assets or with the proceeds from the sale of 31 30 such assets shall not be subtracted. This 31 31 subparagraph shall only apply to a taxpayer who was 31 32 the first recipient of such assets after recovery of 31 33 the assets and who is a victim of persecution for 31 34 racial, ethnic, or religious reasons by Nazi Germany 31 35 or any other Axis regime or is an heir of such victim. 31 36 l. Subtract, to the extent included, active duty 31 37 pay received by a person in the national guard or 31 38 armed forces military reserve for service performed on 31 39 or after January 1, 2003, pursuant to military orders 31 40 related to Operation Iraqi Freedom, Operation Noble 31 41 Eagle, and Operation Enduring Freedom. 31 42 m. Subtract, not to exceed one thousand five 31 43 hundred dollars, the overnight transportation, meals, 31 44 and lodging expenses, to the extent not reimbursed, 31 45 incurred by the taxpayer for travel away from home of 31 46 more than one hundred miles for the performance of 31 47 services by the taxpayer as a member of the national 31 48 guard or armed forces military reserve. 31 49 n. Subtract, to the extent included, military 31 50 student loan repayments received by the taxpayer 32 1 serving on active duty in the national guard or armed 32 2 forces military reserve or on active duty status in 32 3 the armed forces. 32 4 o. Subtract, to the extent not otherwise excluded, 32 5 the amount of the death gratuity payable under 10 32 6 U.S.C. } 1475-1491 for deaths occurring after 32 7 September 10, 2001. 32 8 3. a. In determining the amount of federal income 32 9 tax refunds or taxes paid or accrued under subsection 32 10 1 or 2, for tax years beginning in the 2001 calendar 32 11 year, the amount shall not be adjusted by the amount 32 12 received during the tax year of the advanced refund of 32 13 the rate reduction tax credit provided pursuant to the 32 14 federal Economic Growth and Tax Relief Reconciliation 32 15 Act of 2001, Pub. L. No. 107-16, and the advanced 32 16 refund of such credit shall not be subject to taxation 32 17 under this division. 32 18 b. In determining the amount of federal income tax 32 19 refunds or taxes paid or accrued under subsection 1 or 32 20 2, for tax years beginning in the 2002 calendar year, 32 21 the amount shall not be adjusted by the amount of the 32 22 rate reduction credit received during the tax year to 32 23 the extent that the credit is attributable to the rate 32 24 reduction credit provided pursuant to the federal 32 25 Economic Growth and Tax Relief Reconciliation Act of 32 26 2001, Pub. L. No. 107-16, and the amount of such 32 27 credit shall not be taxable under this division. 32 28 4. The additional first-year depreciation allowance 32 29 authorized in section 168(k) of the Internal Revenue 32 30 Code, as enacted by Pub. L. No. 107-147, section 101, 32 31 does not apply in computing net income for state tax 32 32 purposes. If the taxpayer has taken such deduction in 32 33 computing federal adjusted gross income, the following 32 34 adjustments shall be made: 32 35 a. Add the total amount of depreciation taken on 32 36 all property for which the election under section 32 37 168(k) of the Internal Revenue Code was made for the 32 38 tax year. 32 39 b. Subtract an amount equal to depreciation taken 32 40 on such property for the tax year using the modified 32 41 accelerated cost recovery system depreciation method 32 42 applicable under section 168 of the Internal Revenue 32 43 Code without regard to section 168(k). 32 44 c. Any other adjustments to gains or losses to 32 45 reflect the adjustments made in paragraphs "a" and "b" 32 46 pursuant to rules adopted by the director. 32 47 Sec. 56. Section 422.8, subsection 2, paragraph a, 32 48 Code 2003, is amended to read as follows: 32 49 a. Nonresident's net income allocated to Iowa is 32 50 the net income, or portion of net income, which is 33 1 derived from a business, trade, profession, or 33 2 occupation carried on within this state or income from 33 3 any property, trust, estate, or other source within 33 4 Iowa. However, income derived from a business, trade, 33 5 profession, or occupation carried on within this state 33 6 and income from any property, trust, estate, or other 33 7 source within Iowa shall not include distributions 33 8 from pensions, including defined benefit or defined 33 9 contribution plans, annuities, individual retirement 33 10 accounts, and deferred compensation plans or any 33 11 earnings attributable thereto so long as the 33 12 distribution is directly related to an individual's 33 13 documented retirement and received while the 33 14 individual is a nonresident of this state. If a 33 15 business, trade, profession, or occupation is carried 33 16 on partly within and partly without the state, only 33 17 the portion of the net income which is fairly and 33 18 equitably attributable to that part of the business, 33 19 trade, profession, or occupation carried on within the 33 20 state is allocated to Iowa for purposes of section 33 21 422.5, subsection 1, paragraph"j""b", and section 33 22 422.13 and income from any property, trust, estate, or 33 23 other source partly within and partly without the 33 24 state is allocated to Iowa in the same manner, except 33 25 that annuities, interest on bank deposits and 33 26 interest-bearing obligations, and dividends are 33 27 allocated to Iowa only to the extent to which they are 33 28 derived from a business, trade, profession, or 33 29 occupation carried on within the state. 33 30 Sec. 57. Section 422.8, subsection 4, Code 2003, 33 31 is amended by striking the subsection. 33 32 Sec. 58. Section 422.9, subsection 1, Code 2003, 33 33 is amended to read as follows: 33 34 1. An optional standard deduction, after deduction33 35of federal income tax,equal to one thousand two 33 36 hundred thirty dollars for a married person who files 33 37 separately or a single person or equal to three 33 38 thousand thirty dollars for a husband and wife who 33 39 file a joint return, a surviving spouse, or an 33 40 unmarried head of household.The optional standard33 41deduction shall not exceed the amount remaining after33 42deduction of the federal income tax.33 43 Sec. 59. Section 422.9, subsection 2, paragraph b, 33 44 Code 2003, is amended by striking the paragraph. 33 45 Sec. 60. Section 422.9, subsections 6 and 7, Code 33 46 2003, are amended by striking the subsections. 33 47 Sec. 61. Section 422.11B, subsection 1, Code 2003, 33 48 is amended to read as follows: 33 49 1. There is allowed as a credit against the tax 33 50 determined in section 422.5, subsection 1, paragraphs 34 1 "a" through "j" for a tax year an amount equal to the 34 2 minimum tax credit for that tax year. 34 3 The minimum tax credit for a tax year is the 34 4 excess, if any, of the adjusted net minimum tax 34 5 imposed for all prior tax years beginning on or after 34 6 January 1, 1987, but before January 1, 2007, over the 34 7 amount allowable as a credit under this section for 34 8 those prior tax years. 34 9 If a minimum tax credit is available to a tax 34 10 period beginning on or after January 1, 2007, the 34 11 credit can be carried over to tax years beginning on 34 12 or after January 1, 2007, but before January 1, 2010. 34 13 The minimum tax credit is limited to the tax 34 14 determined in section 422.5, subsection 1, paragraphs 34 15 "a" and "b". 34 16 Sec. 62. Section 422.13, subsection 1, paragraph 34 17 c, and subsection 1A, Code 2003, are amended to read 34 18 as follows: 34 19 c. However, if that part of the net income of a 34 20 nonresident which is allocated to Iowa pursuant to 34 21 section 422.8, subsection 2, is less than one thousand 34 22 dollars the nonresident is not required to make and 34 23 sign a returnexcept when the nonresident is subject34 24to the state alternative minimum tax imposed pursuant34 25to section 422.5, subsection 1, paragraph "k". 34 26 1A. Notwithstanding any other provision in this 34 27 section, a resident of this state is not required to 34 28 make and file a return if the person's net income is 34 29 equal to or less than the appropriate dollar amount 34 30 listed in section 422.5, subsection 2, upon which tax 34 31 is not imposed. A nonresident of this state is not 34 32 required to make and file a return if the person's 34 33 total net income in section 422.5, subsection 1, 34 34 paragraph"j","b", is equal to or less than the 34 35 appropriate dollar amount provided in section 422.5, 34 36 subsection 2, upon which tax is not imposed. For 34 37 purposes of this subsection, the amount of a lump sum 34 38 distribution subject to separate federal tax shall be 34 39 included in net income for purposes of determining if 34 40 a resident is required to file a return and the 34 41 portion of the lump sum distribution that is allocable 34 42 to Iowa is included in total net income for purposes 34 43 of determining if a nonresident is required to make 34 44 and file a return. 34 45 Sec. 63. Section 422.21, unnumbered paragraph 5, 34 46 Code 2003, is amended to read as follows: 34 47 The director shall determine for the19892008 and 34 48 each subsequent calendar year the annual and 34 49 cumulative inflation factors for each calendar year to 34 50 be applied to tax years beginning on or after January 35 1 1 of that calendar year. The director shall compute 35 2 the new dollar amounts as specified to be adjusted in 35 3 section 422.5 by the latest cumulative inflation 35 4 factor and round off the result to the nearest one 35 5 dollar. The annual and cumulative inflation factors 35 6 determined by the director are not rules as defined in 35 7 section 17A.2, subsection 11. The director shall 35 8 determine for the19902008 calendar year and each 35 9 subsequent calendar year the annual and cumulative 35 10 standard deduction factors to be applied to tax years 35 11 beginning on or after January 1 of that calendar year. 35 12 The director shall compute the new dollar amounts of 35 13 the standard deductions specified in section 422.9, 35 14 subsection 1, by the latest cumulative standard 35 15 deduction factor and round off the result to the 35 16 nearest ten dollars. The annual and cumulative 35 17 standard deduction factors determined by the director 35 18 are not rules as defined in section 17A.2, subsection 35 19 11. 35 20 Sec. 64. Section 422.11B, Code 2003, is repealed. 35 21 COORDINATING AMENDMENTS 35 22 Sec. 65. Section 12D.9, subsection 2, Code 2003, 35 23 is amended to read as follows: 35 24 2. State income tax treatment of the Iowa 35 25 educational savings plan trust shall be as provided in 35 26 section 422.7,subsections 32, 33, and 34subsection 35 27 1, paragraph "e", and subsection 2, paragraph "h", and 35 28 section 422.35, subsection 14. 35 29 Sec. 66. Section 217.39, Code 2003, is amended to 35 30 read as follows: 35 31 217.39 PERSECUTED VICTIMS OF WORLD WAR II – 35 32 REPARATIONS – HEIRS. 35 33 Notwithstanding any other law of this state, 35 34 payments paid to and income from lost property of a 35 35 victim of persecution for racial, ethnic, or religious 35 36 reasons by Nazi Germany or any other Axis regime or as 35 37 an heir of such victim which is exempt from state 35 38 income tax as provided in section 422.7, subsection3535 39 2, paragraph "k", shall not be considered as income or 35 40 an asset for determining the eligibility for state or 35 41 local government benefit or entitlement programs. The 35 42 proceeds are not subject to recoupment for the receipt 35 43 of governmental benefits or entitlements, and liens, 35 44 except liens for child support, are not enforceable 35 45 against these sums for any reason. 35 46 Sec. 67. Section 422.120, subsection 1, paragraph 35 47 b, subparagraph (3), Code 2003, is amended to read as 35 48 follows: 35 49 (3) The annual index factor for the 1997 calendar 35 50 year is one hundred percent. Foreach subsequentthe 36 1 1998 through 2006 calendaryearyears, the annual 36 2 index factor equals the annual inflation factor for 36 3 that calendar year as computed in section 422.4 for 36 4 purposes of the individual income tax. For the 2007 36 5 calendar year and each subsequent calendar year the 36 6 annual index factor shall be determined by the 36 7 department by October 15 of the calendar year 36 8 preceding the calendar year for which the factor is 36 9 determined, which reflects the purchasing power of the 36 10 dollar as a result of inflation during the fiscal year 36 11 ending in the calendar year preceding the calendar 36 12 year for which the factor is determined. In 36 13 determining the annual index factor, the department 36 14 shall use the annual percent change, but not less than 36 15 zero percent, in the gross domestic product price 36 16 deflator computed for the second quarter of the 36 17 calendar year by the bureau of economic analysis of 36 18 the United States department of commerce and shall add 36 19 all of that percent change to one hundred percent. 36 20 The annual index factor and the cumulative index 36 21 factor shall each be expressed as a percentage rounded 36 22 to the nearest one-tenth of one percent. The annual 36 23 index factor shall not be less than one hundred 36 24 percent. 36 25 Sec. 68. Section 425.23, subsection 4, paragraph 36 26 b, Code 2003, is amended to read as follows: 36 27 b. The annual adjustment factor for the 1998 base 36 28 year is one hundred percent. Foreach subsequentthe 36 29 1999 through 2006 baseyearyears, the annual 36 30 adjustment factor equals the annual inflation factor 36 31 for the calendar year, in which the base year begins, 36 32 as computed in section 422.4 for purposes of the 36 33 individual income tax. For the 2007 base year and 36 34 each subsequent base year, the annual adjustment 36 35 factor equals the annual index factor, in which the 36 36 base year begins, as computed in section 422.120, 36 37 subsection 1, for purposes of the livestock production 36 38 tax credit. 36 39 Sec. 69. Section 450.4, subsection 8, Code 2003, 36 40 is amended to read as follows: 36 41 8. On the value of that portion of any lump sum or 36 42 installment payments which are received by a 36 43 beneficiary under an annuity which was purchased under 36 44 an employee's pension or retirement plan which was 36 45 excluded from net incomeas set forth inunder section 36 46 422.7, subsection 31. 36 47 Sec. 70. Section 541A.2, subsection 7, unnumbered 36 48 paragraph 1, Code 2003, is amended to read as follows: 36 49 An individual development account closed in 36 50 accordance with this subsection is not subject to the 37 1 limitations and benefits provided by this chapter but 37 2 is subject to state tax in accordance with the 37 3 provisions of section 422.7, subsection282, 37 4 paragraph "g", and section 450.4, subsection 6. An 37 5 individual development account may be closed for any 37 6 of the following reasons: 37 7 Sec. 71. Section 541A.3, subsection 2, Code 2003, 37 8 is amended to read as follows: 37 9 2. Income earned by an individual development 37 10 account is not subject to state tax, in accordance 37 11 with the provisions of section 422.7, subsection282, 37 12 paragraph "g". 37 13 Sec. 72. Division III of this Act is repealed. 37 14 CONTINGENT EFFECTIVE AND APPLICABILITY DATE PROVISION 37 15 Sec. 73. 37 16 1. This division of this Act takes effect upon 37 17 ratification prior to January 1, 2007, of an amendment 37 18 to the Constitution of the State of Iowa requiring a 37 19 three-fifths majority vote of each house of the 37 20 general assembly in order to pass a bill that amends 37 21 the state individual income tax by raising the rate or 37 22 rates of the individual income tax or of an amendment 37 23 to the Constitution of the State of Iowa requiring a 37 24 statewide referendum in order to approve a bill that 37 25 amends the state individual income tax by raising the 37 26 rate or rates of the individual income tax. 37 27 2. If this division of this Act takes effect as 37 28 provided in subsection 1, this division of this Act, 37 29 except as provided in subsection 3, applies to tax 37 30 years beginning on or after January 1, 2007. 37 31 3. The section of this division of this Act 37 32 repealing section 422.11B applies to tax years 37 33 beginning on or after January 1, 2010. 37 34 DIVISION V 37 35 SALES AND USE TAX STUDIES 37 36 Sec. 74. INDUSTRIAL PROCESSING EXEMPTION STUDY 37 37 COMMITTEE. On or before July 1, 2003, the department 37 38 of revenue and finance shall initiate and coordinate 37 39 the establishment of an industrial processing 37 40 exemption study committee and provide staffing 37 41 assistance to the committee. It is the intent of the 37 42 general assembly that the committee shall include 37 43 representatives of the department of revenue and 37 44 finance, department of management, industrial 37 45 producers including manufacturers, fabricators, 37 46 printers and publishers, and an association that 37 47 specifically represents business tax issues, and other 37 48 stakeholders. 37 49 The industrial processing exemption under the sales 37 50 and use tax is a significant exemption for business. 38 1 The committee shall study and make legislative and 38 2 administrative recommendations relating to Iowa's 38 3 processing exemption to ensure maximum utilization by 38 4 Iowa's industries. 38 5 The committee shall study and make recommendations 38 6 regarding all of the following: 38 7 1. The current sales and use tax industrial 38 8 processing exemption. 38 9 2. The corresponding administrative rules, 38 10 including a review and recommendation of an 38 11 administrative rules process relating to the 38 12 industrial processing exemption prior to filing with 38 13 the administrative rules review committee. 38 14 3. Other states' industrial processing exemptions. 38 15 4. Recommendations for change for issues including 38 16 effectiveness and competitiveness. 38 17 5. Development of additional publications to 38 18 improve compliance. 38 19 The committee shall annually report to the general 38 20 assembly by January 1 of each year through January 1, 38 21 2013. 38 22 Sec. 75. IOWA SALES, SERVICES, AND USE TAX STUDY 38 23 COMMITTEE. On or before July 1, 2003, the department 38 24 of revenue and finance shall initiate and coordinate 38 25 the establishment of a state sales, services, and use 38 26 tax study committee and provide staffing assistance to 38 27 the committee. It is the intent of the general 38 28 assembly that the committee shall include 38 29 representatives of the department of revenue and 38 30 finance, department of management, an association of 38 31 Iowa farmers and other agricultural interests, retail 38 32 associations, contractors, taxpayers, an association 38 33 that specifically represents business tax issues, and 38 34 other stakeholders, two members of the general 38 35 assembly, and a representative of the governor's 38 36 office. 38 37 The committee shall study the current sales, 38 38 services, and use tax law. Programs funded through 38 39 special features of the tax code often escape regular 38 40 review. It is intended that the study committee shall 38 41 review the current sales, services, and use tax 38 42 exemptions to improve government accountability. 38 43 The committee shall study and make recommendations 38 44 regarding all of the following: 38 45 1. Retaining or eliminating current sales, 38 46 services, and use tax exemptions or providing new 38 47 exemptions. Such decisions shall be based at least 38 48 partially on the issues of effectiveness and 38 49 competitiveness and their impact on economic behavior. 38 50 2. Tax simplification and consistency issues in 39 1 applying the tax, including recordkeeping burdens on 39 2 retailers and application by the department of revenue 39 3 and finance. 39 4 3. Streamline sales tax implementation in Iowa. 39 5 4. The tax rate. 39 6 5. Comparison of Iowa sales, services, and use tax 39 7 structure with other states. 39 8 The committee shall report to the general assembly 39 9 by January 1, 2004. The report shall provide 39 10 rationale for each decision made by the study 39 11 committee. 39 12 Sec. 76. EFFECTIVE DATE. This division of this 39 13 Act, being deemed of immediate importance, takes 39 14 effect July 1, 2003. 39 15 DIVISION VI 39 16 GROW IOWA BOARD AND FUND 39 17 Sec. 77. Section 15.108, subsection 9, Code 2003, 39 18 is amended by adding the following new paragraph: 39 19 NEW PARAGRAPH. g. Administer the marketing 39 20 strategy selected pursuant to section 15G.108. 39 21 Sec. 78. NEW SECTION. 15G.101 DEFINITIONS. 39 22 As used in this chapter, unless the context 39 23 otherwise requires: 39 24 1. "Board" means the grow Iowa board established 39 25 in section 15G.102. 39 26 2. "Department" means the Iowa department of 39 27 economic development created in section 15.105. 39 28 3. "Director" means the director of the department 39 29 of economic development. 39 30 4. "Fund" means the grow Iowa fund created in 39 31 section 15G.107. 39 32 5. "Grow Iowa geographic regions" means the 39 33 geographic regions defined in section 15G.105. 39 34 Sec. 79. NEW SECTION. 15G.102 GROW IOWA BOARD. 39 35 1. The grow Iowa board is established consisting 39 36 of nine voting members. The grow Iowa board shall be 39 37 located for administrative purposes within the 39 38 department and the director shall provide office 39 39 space, staff assistance, and necessary supplies and 39 40 equipment for the board. The director shall budget 39 41 moneys to pay the compensation and expenses of the 39 42 board. In performing its functions, the board is 39 43 performing a public function on behalf of the state 39 44 and is a public instrumentality of the state. 39 45 2. a. The members of the board shall be appointed 39 46 as follows: 39 47 (1) Five individuals appointed by the governor, 39 48 subject to confirmation by the senate. 39 49 (2) Four individuals appointed by the legislative 39 50 council. 40 1 b. All appointments shall comply with sections 40 2 69.16 and 69.16A. 40 3 c. At least one member of the board shall be from 40 4 each grow Iowa geographic region. 40 5 d. Each of the following areas of expertise shall 40 6 be represented by at least one member of the board who 40 7 has professional experience in that area of expertise: 40 8 (1) Accounting and finance. 40 9 (2) Business development for employers with less 40 10 than two hundred employees and sales of less than ten 40 11 million dollars per year. 40 12 (3) Insurance. 40 13 (4) Economics. 40 14 (5) Personnel. 40 15 e. All members of the board shall be actively 40 16 employed in the private, for-profit sector of the 40 17 economy. 40 18 f. The board membership shall be balanced between 40 19 representation by employers with less than two hundred 40 20 employees and employers with two hundred or more 40 21 employees. 40 22 3. The chairperson and vice chairperson shall be 40 23 elected by the members of the board from the 40 24 membership of the board. In the case of the absence 40 25 or disability of the chairperson and vice chairperson, 40 26 the members of the board shall elect a temporary 40 27 chairperson by a majority vote of those members who 40 28 are present and voting, provided a quorum is present. 40 29 4. The members of the board shall be appointed to 40 30 three-year staggered terms and the terms shall 40 31 commence and end as provided in section 69.19. If a 40 32 vacancy occurs, a successor shall be appointed in the 40 33 same manner and subject to the same qualifications as 40 34 the original appointment to serve the unexpired term. 40 35 5. A majority of the board constitutes a quorum. 40 36 6. A member of the board shall abstain from voting 40 37 on the provision of financial assistance to a project 40 38 which is located in the county in which the member of 40 39 the board resides. 40 40 7. The members of the board are entitled to 40 41 receive reimbursement for actual expenses incurred 40 42 while engaged in the performance of official duties. 40 43 A board member may also be eligible to receive 40 44 compensation as provided in section 7E.6. 40 45 Sec. 80. NEW SECTION. 15G.103 BOARD DUTIES. 40 46 The board shall do all of the following: 40 47 1. Organize. 40 48 2. Receive advice and recommendations from the 40 49 grow Iowa investment board, the economic development 40 50 marketing board, and the grow Iowa review commission. 41 1 3. Provide advice and recommendations to the 41 2 department and the Iowa economic development board for 41 3 making appropriations from and administering the grow 41 4 Iowa fund. A recommendation made by the grow Iowa 41 5 board to the department or the Iowa economic 41 6 development board shall be either approved or denied 41 7 by the department or the Iowa economic development 41 8 board. 41 9 4. Assist the department in implementing programs 41 10 and activities in a manner designed to achieve the 41 11 goals set out in section 15G.106. 41 12 5. By December 15 of each year, submit a written 41 13 report to the general assembly reviewing the 41 14 activities of the board during the calendar year. The 41 15 report shall include information necessary for the 41 16 review of the goals and performance measures set out 41 17 in section 15G.106. State agencies and other entities 41 18 receiving moneys from the fund shall cooperate with 41 19 and assist the board in compilation of the report. 41 20 6. Adopt administrative rules pursuant to chapter 41 21 17A necessary to administer this chapter. 41 22 Sec. 81. NEW SECTION. 15G.104 GROW IOWA 41 23 INVESTMENT BOARD. 41 24 1. A grow Iowa investment board is established 41 25 consisting of three members and is located for 41 26 administrative purposes within the department. The 41 27 director of the department shall provide office space, 41 28 staff assistance, and necessary supplies and equipment 41 29 for the board. The director shall budget moneys to 41 30 pay the compensation and expenses of the board. In 41 31 performing its functions, the board is performing a 41 32 public function on behalf of the state and is a public 41 33 instrumentality of the state. 41 34 2. a. Membership of the grow Iowa investment 41 35 board shall include all of the following: 41 36 (1) One member appointed by the governor from a 41 37 list of three banking representatives provided by the 41 38 superintendent of banking. This member shall serve a 41 39 three-year term. 41 40 (2) One member appointed by the governor from a 41 41 list of entrepreneurs provided jointly by the Iowa 41 42 association of business and industry and the national 41 43 federation of independent business. This member shall 41 44 serve a three-year term. 41 45 (3) The entrepreneur of the year as selected by 41 46 the Iowa small business development centers shall be 41 47 offered a one-year membership on the investment board. 41 48 If the entrepreneur of the year declines to serve on 41 49 the investment board, a member shall be appointed by 41 50 the governor from the list provided pursuant to 42 1 subparagraph (2) for the one-year term. 42 2 b. The chairperson and vice chairperson of the 42 3 grow Iowa investment board shall be elected by and 42 4 from the investment board members. The terms of the 42 5 members shall commence and end as provided by section 42 6 69.19. If a vacancy occurs, a successor shall be 42 7 appointed in the same manner and subject to the same 42 8 qualifications as the original appointment to serve 42 9 the unexpired term. A majority of the investment 42 10 board constitutes a quorum. 42 11 3. The grow Iowa investment board shall provide 42 12 recommendations to the grow Iowa board regarding any 42 13 moneys proposed to be expended from the grow Iowa 42 14 fund, with the exception of moneys appropriated for 42 15 purposes of the loan and credit guarantee program. 42 16 The recommendations shall be based on whether the 42 17 expenditure would make the achievement of the goals in 42 18 accordance with the performance measures set out in 42 19 section 15G.106 more likely. The grow Iowa board 42 20 shall consider the recommendations of the grow Iowa 42 21 investment board and shall make an independent 42 22 recommendation to the department and the Iowa economic 42 23 development board regarding the expenditure. The 42 24 recommendations of the grow Iowa board shall include 42 25 the recommendations made by the grow Iowa investment 42 26 board. 42 27 4. The members of the board are entitled to 42 28 receive reimbursement for actual expenses incurred 42 29 while engaged in the performance of official duties. 42 30 A board member may also be eligible to receive 42 31 compensation as provided in section 7E.6. 42 32 Sec. 82. NEW SECTION. 15G.104A GROW IOWA REVIEW 42 33 COMMISSION. 42 34 1. A grow Iowa review commission is established 42 35 consisting of three members and is located for 42 36 administrative purposes within the department. The 42 37 director of the department shall provide office space, 42 38 staff assistance, and necessary supplies and equipment 42 39 for the review commission. The director shall budget 42 40 moneys to pay the compensation and expenses of the 42 41 commission. In performing its functions, the review 42 42 commission is performing a public function on behalf 42 43 of the state and is a public instrumentality of the 42 44 state. 42 45 2. Membership of the review commission shall 42 46 include the auditor of state, an economist for the 42 47 Iowa state university cooperative extension service in 42 48 agriculture and home economics appointed by the 42 49 president of the senate after consultation with the 42 50 minority leader of the senate, and a private sector 43 1 economist with broad experience reviewing and 43 2 analyzing the Iowa economy and the economy of the 43 3 upper midwest appointed by the speaker of the house of 43 4 representatives after consultation with the minority 43 5 leader of the house of representatives. The 43 6 appointments shall comply with sections 69.16 and 43 7 69.16A. The chairperson of the review commission 43 8 shall be the auditor of state. The members shall be 43 9 appointed to three-year staggered terms and the terms 43 10 shall commence and end as provided by section 69.19. 43 11 If a vacancy occurs, a successor shall be appointed in 43 12 the same manner and subject to the same qualifications 43 13 as the original appointment to serve the unexpired 43 14 term. A majority of the review commission constitutes 43 15 a quorum. For purposes of this subsection, "upper 43 16 midwest" includes the states of Iowa, Kansas, 43 17 Minnesota, Missouri, Nebraska, North Dakota, and South 43 18 Dakota. 43 19 3. The review commission shall analyze all annual 43 20 reports of the grow Iowa board for purposes of 43 21 determining if the goals and performance measures set 43 22 out in section 15G.106 have been met. By January 1, 43 23 2007, the review commission shall submit a report to 43 24 the grow Iowa board, the department, and the general 43 25 assembly. The report shall include findings, itemized 43 26 by grow Iowa geographic regions, regarding whether the 43 27 goals and performance measures were met. The report 43 28 shall also include recommendations regarding the 43 29 continuation, elimination, or modification of any 43 30 programs receiving moneys from the grow Iowa fund and 43 31 whether moneys should continue to be appropriated to 43 32 and from the grow Iowa fund. The recommendations 43 33 shall be based on whether the goals in accordance with 43 34 the performance measures are being achieved. 43 35 4. The members of the commission are entitled to 43 36 receive reimbursement for actual expenses incurred 43 37 while engaged in the performance of official duties. 43 38 A commission member may also be eligible to receive 43 39 compensation as provided in section 7E.6. 43 40 Sec. 83. NEW SECTION. 15G.105 GROW IOWA 43 41 GEOGRAPHIC REGIONS. 43 42 For purposes of applying the goals and performance 43 43 measurements, the state shall be divided into five 43 44 grow Iowa geographic regions. The regions shall be 43 45 the following: 43 46 1. The northwest region shall include the counties 43 47 of Lyon, Osceola, Dickinson, Emmet, Kossuth, 43 48 Winnebago, Sioux, O'Brien, Clay, Palo Alto, Hancock, 43 49 Plymouth, Cherokee, Buena Vista, Pocahontas, Humboldt, 43 50 Wright, Woodbury, Ida, Sac, Calhoun, Webster, and 44 1 Hamilton. 44 2 2. The northeast region shall include the counties 44 3 of Worth, Mitchell, Howard, Winneshiek, Allamakee, 44 4 Cerro Gordo, Floyd, Chickasaw, Fayette, Clayton, 44 5 Franklin, Butler, Bremer, Hardin, Grundy, Black Hawk, 44 6 Buchanan, Delaware, Dubuque, Tama, Benton, Linn, 44 7 Jones, and Jackson. 44 8 3. The southeast region shall include the counties 44 9 of Poweshiek, Iowa, Johnson, Cedar, Clinton, Scott, 44 10 Muscatine, Mahaska, Keokuk, Washington, Louisa, 44 11 Monroe, Wapello, Jefferson, Henry, Des Moines, 44 12 Appanoose, Davis, Van Buren, and Lee. 44 13 4. The southwest region shall include the counties 44 14 of Monona, Crawford, Carroll, Greene, Harrison, 44 15 Shelby, Audubon, Guthrie, Pottawattamie, Cass, Adair, 44 16 Mills, Montgomery, Adams, Union, Clarke, Lucas, 44 17 Fremont, Page, Taylor, Ringgold, Decatur, and Wayne. 44 18 5. The central region shall include the counties 44 19 of Boone, Story, Marshall, Dallas, Polk, Jasper, 44 20 Madison, Warren, and Marion. 44 21 Sec. 84. NEW SECTION. 15G.106 GOALS – 44 22 PERFORMANCE MEASURES. 44 23 1. In performing the duties provided in this 44 24 chapter, chapter 15, and chapter 15E, the grow Iowa 44 25 board, the grow Iowa investment board, the economic 44 26 development marketing board, the grow Iowa review 44 27 commission, and the department shall achieve the goals 44 28 of expanding and stimulating the state economy, 44 29 increasing the wealth of Iowans, and increasing the 44 30 population of the state. For purposes of this 44 31 section, "upper midwest region" includes the states of 44 32 Iowa, Kansas, Minnesota, Missouri, Nebraska, North 44 33 Dakota, and South Dakota. 44 34 2. Goal achievement shall be examined on a 44 35 regional basis using the grow Iowa geographic regions 44 36 and not on a statewide basis. The performance of the 44 37 grow Iowa geographic regions shall be compared to the 44 38 performance of the state, the upper midwest region, 44 39 and the United States. The baseline year shall be the 44 40 calendar year 2000. In each grow Iowa geographic 44 41 region, the goal shall be to increase the baseline 44 42 performance measures listed in subsections 3 and 4, 44 43 with the exception of subsection 3, paragraph "c", by 44 44 thirty percent. 44 45 3. a. In determining whether the goal of 44 46 expanding and stimulating the state economy has been 44 47 met, the following performance measures shall be 44 48 considered: 44 49 (1) An increase in Iowa's gross domestic product. 44 50 (2) A net increase in business start-ups. 45 1 (3) A net increase in business expansion. 45 2 (4) A net increase in business modernization. 45 3 (5) A net increase in attracting new businesses to 45 4 the state. 45 5 (6) A net increase in business retention. 45 6 (7) A net increase in job creation and retention. 45 7 (8) A decrease in Iowa of the ratio of the 45 8 government wage earnings as a percentage share of the 45 9 earnings of private industry in Iowa at a rate at 45 10 least equal to the ratio of the upper midwest region. 45 11 b. By December 15 of each year the department 45 12 shall submit a report to the grow Iowa review 45 13 commission and the grow Iowa board that identifies 45 14 information pertinent to the performance measures in 45 15 paragraph "a", subparagraphs (3), (4), and (6), that 45 16 the department gains through interviews with 45 17 businesses in the state that close all or a portion of 45 18 operations in the state. 45 19 c. By December 15 of each year the department 45 20 shall submit a report to the grow Iowa review 45 21 commission and the grow Iowa board that identifies 45 22 lost sale reports information pertinent to the 45 23 performance measures in paragraph "a", subparagraphs 45 24 (2) and (5), which indicate that the state has not 45 25 been successful in the performance measures in 45 26 paragraph "a", subparagraphs (2) and (5). 45 27 d. For purposes of the performance measure in 45 28 paragraph "a", subparagraph (7), the department of 45 29 economic development, in consultation with the 45 30 department of workforce development and the auditor of 45 31 state, shall determine an average annual job creation 45 32 and retention rate based on the ten years prior to 45 33 2003. During the fiscal years beginning July 1, 2003, 45 34 July 1, 2004, and July 1, 2005, the department of 45 35 economic development shall report the job creation and 45 36 retention rate of those businesses that receive moneys 45 37 originating from the grow Iowa fund and the job 45 38 creation and retention rate of those businesses that 45 39 do not receive moneys originating from the grow Iowa 45 40 fund. The ten-year average annual job creation and 45 41 retention rate shall be compared to the job creation 45 42 and retention rates determined under this paragraph 45 43 for the fiscal years beginning July 1, 2003, July 1, 45 44 2004, and July 1, 2005. The department of economic 45 45 development shall assist the department of workforce 45 46 development in maintaining detailed employment 45 47 statistics on businesses that receive moneys 45 48 originating from the grow Iowa fund, on businesses 45 49 that do not receive moneys originating from the grow 45 50 Iowa fund, and on industries in Iowa that those 46 1 businesses represent. The auditor of state shall 46 2 audit the accuracy of the statistics compiled pursuant 46 3 to this paragraph. 46 4 4. In determining whether the goal of increasing 46 5 the wealth of Iowans has been met, the following 46 6 performance measures shall be considered: 46 7 a. The per capita personal income in Iowa shall 46 8 equal or exceed the average per capita personal income 46 9 for the upper midwest region. 46 10 b. The average earnings per job in Iowa shall 46 11 equal or exceed the average earnings per job in the 46 12 upper midwest region. 46 13 c. The average manufacturing earnings per employee 46 14 in Iowa shall equal or exceed the average 46 15 manufacturing earnings per employee in the upper 46 16 midwest region. 46 17 d. The average service earnings per employee in 46 18 Iowa shall equal or exceed the average service 46 19 earnings per employee in the upper midwest region. 46 20 e. The average earnings per employee in the 46 21 financial, insurance, and real estate industries in 46 22 Iowa shall equal or exceed the average earnings per 46 23 employee in the financial, insurance, and real estate 46 24 industries in the upper midwest region. 46 25 5. In determining whether the goal of increasing 46 26 the population of the state has been met, the 46 27 following performance measures shall be considered: 46 28 a. The net increase in new residents in the state 46 29 gained through attracting new businesses to the state. 46 30 b. The increase in the retention of high school 46 31 graduates and college graduates from private and 46 32 public colleges and universities in the state after 46 33 graduation. 46 34 c. The ability to retain fifty percent of all 46 35 undergraduate graduates of universities under the 46 36 control of the state board of regents in the state 46 37 after graduation. 46 38 Sec. 85. NEW SECTION. 15G.107 GROW IOWA FUND. 46 39 A grow Iowa fund is created in the state treasury 46 40 under the control of the grow Iowa board consisting of 46 41 moneys appropriated to the grow Iowa board. Moneys in 46 42 the fund are not subject to section 8.33. 46 43 Notwithstanding section 12C.7, interest or earnings on 46 44 moneys in the fund shall be credited to the fund. The 46 45 fund shall be administered by the grow Iowa board, 46 46 which shall make expenditures from the fund consistent 46 47 with this chapter and pertinent Acts of the general 46 48 assembly. 46 49 Sec. 86. NEW SECTION. 15G.108 ECONOMIC 46 50 DEVELOPMENT MARKETING BOARD – MARKETING STRATEGIES – 47 1 APPROPRIATIONS. 47 2 1. a. An economic development marketing board is 47 3 established consisting of seven members and is located 47 4 for administrative purposes within the department. 47 5 The director of the department shall provide office 47 6 space, staff assistance, and necessary supplies and 47 7 equipment for the board. The director shall budget 47 8 moneys to pay the compensation and expenses of the 47 9 board. In performing its functions, the board is 47 10 performing a public function on behalf of the state 47 11 and is a public instrumentality of the state. 47 12 b. The membership of the board shall be as 47 13 follows: 47 14 (1) Three members with significant demonstrated 47 15 experience in marketing or advertising appointed by 47 16 the governor. 47 17 (2) Four members with significant demonstrated 47 18 experience in marketing or advertising appointed by 47 19 the legislative council. 47 20 c. The appointments made by the governor shall 47 21 comply with sections 69.16 and 69.16A and shall be 47 22 subject to confirmation by the senate. 47 23 d. The chairperson and vice chairperson of the 47 24 board shall be elected by and from the board members 47 25 listed in paragraph "b". In case of the absence or 47 26 disability of the chairperson and vice chairperson, 47 27 the members of the board shall elect a temporary 47 28 chairperson by a majority vote of those members who 47 29 are present and voting. 47 30 e. The members shall be appointed to three-year 47 31 staggered terms and the terms shall commence and end 47 32 as provided by section 69.19. If a vacancy occurs, a 47 33 successor shall be appointed to serve the unexpired 47 34 term. A successor shall be appointed in the same 47 35 manner and subject to the same qualifications as the 47 36 original appointment to serve the unexpired term. 47 37 f. A majority of the board constitutes a quorum. 47 38 2. The board shall administer the approval process 47 39 provided in subsection 3. 47 40 3. The economic development marketing board shall 47 41 accept proposals for marketing strategies for purposes 47 42 of selecting a strategy for the department to 47 43 administer. The marketing strategies shall be 47 44 designed to market Iowa as a lifestyle, increase the 47 45 population of the state, increase the wealth of 47 46 Iowans, and expand and stimulate the state economy. 47 47 The economic development marketing board shall submit 47 48 a recommendation regarding the proposal to the grow 47 49 Iowa board. In selecting a marketing strategy for 47 50 recommendation, the economic development marketing 48 1 board shall base the selection on the goals and 48 2 performance measures provided in section 15G.106. The 48 3 grow Iowa board shall either approve or deny the 48 4 recommendation. 48 5 4. The department shall implement and administer 48 6 the marketing strategy approved by the grow Iowa board 48 7 as provided in subsection 3. The department shall 48 8 provide the economic development marketing board with 48 9 assistance in implementing administrative functions of 48 10 the board and provide technical assistance to the 48 11 board. 48 12 5. The members of the board are entitled to 48 13 receive reimbursement for actual expenses incurred 48 14 while engaged in the performance of official duties. 48 15 A board member may also be eligible to receive 48 16 compensation as provided in section 7E.6. 48 17 Sec. 87. NEW SECTION. 15G.109 FUTURE 48 18 CONSIDERATION. 48 19 Not later than February 1, 2007, the legislative 48 20 services agency shall prepare and deliver to the 48 21 secretary of the senate and the chief clerk of the 48 22 house of representatives identical bills that repeal 48 23 the provisions of this chapter. It is the intent of 48 24 this section that the general assembly shall bring the 48 25 bill to a vote in either the senate or the house of 48 26 representatives expeditiously. It is further the 48 27 intent of this chapter that if the bill is approved by 48 28 the first house in which it is considered, it shall 48 29 expeditiously be brought to a vote in the second 48 30 house. 48 31 DIVISION VII 48 32 VALUE-ADDED AGRICULTURAL PRODUCTS AND PROCESSES 48 33 FINANCIAL ASSISTANCE PROGRAM 48 34 Sec. 88. Section 15E.111, subsection 1, Code 2003, 48 35 is amended to read as follows: 48 36 1. a. The department shall establish a value- 48 37 added agricultural products and processes financial 48 38 assistance program. The department shall consult with 48 39the Iowa corn growers association and the Iowa soybean48 40associationIowa commodity groups. The purpose of the 48 41 program is to encourage the increased utilization of 48 42 agricultural commodities produced in this state. The 48 43 program shall assist in efforts to revitalize rural 48 44 regions of this state, by committing resources to 48 45 provide financial assistance to new or existing value- 48 46 added production facilities. The department of 48 47 economic development may consult with other state 48 48 agencies regarding any possible future environmental, 48 49 health, or safety issues linked to technology related 48 50 to the biotechnology industry. In awarding financial 49 1 assistance, the department shall prefer producer- 49 2 owned, value-added businesses and commit resources to 49 3 assist the following: 49 4a.(1) Facilities which are involved in the 49 5 development of new innovative products and processes 49 6 related to agriculture. The facility must do either 49 7 of the following: produce a good derived from an 49 8 agricultural commodity, if the good is not commonly 49 9 produced from an agricultural commodity; or use a 49 10 process to produce a good derived from an agricultural 49 11 process, if the process is not commonly used to 49 12 produce the good. 49 13b.(2) Renewable fuel production facilities. As 49 14 used in this section, "renewable fuel" means an energy 49 15 source which is derived from an organic compound 49 16 capable of powering machinery, including an engine or 49 17 power plant. 49 18 (3) Agricultural business facilities in the 49 19 agricultural biotechnology industry, agricultural 49 20 biomass industry, and alternative energy industry. 49 21 For purposes of this subsection: 49 22 (a) "Agricultural biomass industry" means 49 23 businesses that utilize agricultural commodity crops, 49 24 agricultural by-products, or animal feedstock in the 49 25 production of chemicals, protein products, or other 49 26 high-value products. 49 27 (b) "Agricultural biotechnology industry" means 49 28 businesses that utilize scientifically enhanced plants 49 29 or animals that can be raised by producers and used in 49 30 the production of high-value products. 49 31 (c) "Alternative energy industry" includes 49 32 businesses involved in the production of ethanol, 49 33 biodiesel, biomass, or in the production of wind 49 34 energy. 49 35 (4) Facilities that add value to Iowa agricultural 49 36 commodities through further processing and development 49 37 of organic products and emerging markets. 49 38 (5) Producer-owned, value-added businesses, 49 39 education of producers and management boards in value- 49 40 added businesses, and other activities that would 49 41 support the infrastructure in the development of 49 42 value-added agriculture. For purposes of this 49 43 subsection, "producer-owned, valued-added business" 49 44 means a person who holds an equity interest in the 49 45 agricultural business and is personally involved in 49 46 the production of crops or livestock on a regular, 49 47 continuous, and substantial basis. 49 48 b. Financial assistance awarded under this section 49 49 may be in the form of a loan, loan guarantee, grant, 49 50 production incentive payment, or a combination of 50 1 financial assistance. The department shall not award 50 2 more than twenty-five percent of the amount allocated 50 3 to the value-added agricultural products and processes 50 4 financial assistance fund during any fiscal year to 50 5 support a single person. The department may finance 50 6 any size of facility. However, the departmentshall50 7 may reserve up to fifty percent of the total amount 50 8 allocated to the fund, for purposes of assisting 50 9 persons requiringonefive hundred thousand dollars or 50 10 less in financial assistance. The amount shall be 50 11 reserved until the end of the third quarter of the 50 12 fiscal year. The department shall not provide 50 13 financial assistance to support a value-added 50 14 production facility if the facility or a person owning 50 15 a controlling interest in the facility has 50 16 demonstrated a continuous and flagrant disregard for 50 17 the health and safety of its employees or the quality 50 18 of the environment. Evidence of such disregard shall 50 19 include a history of serious or uncorrected violations 50 20 of state or federal law protecting occupational health 50 21 and safety or the environment, including but not 50 22 limited to serious or uncorrected violations of 50 23 occupational safety and health standards enforced by 50 24 the division of labor services of the department of 50 25 workforce development pursuant to chapter 84A, or 50 26 rules enforced by the department of natural resources 50 27 pursuant to chapter 455B or 459, subchapters II and 50 28 III. 50 29 DIVISION VIII 50 30 ENDOW IOWA GRANTS 50 31 Sec. 89. NEW SECTION. 15E.301 SHORT TITLE. 50 32 This division shall be known as and may be cited as 50 33 the "Endow Iowa Program Act". 50 34 Sec. 90. NEW SECTION. 15E.302 PURPOSE. 50 35 The purpose of this division is to enhance the 50 36 quality of life for citizens of this state through 50 37 increased philanthropic activity by providing capital 50 38 to new and existing citizen groups of this state 50 39 organized to establish endowment funds that will 50 40 address community needs. The purpose of this division 50 41 is also to encourage individuals, businesses, and 50 42 organizations to invest in community foundations. 50 43 Sec. 91. NEW SECTION. 15E.303 DEFINITIONS. 50 44 As used in this division, unless the context 50 45 otherwise requires: 50 46 1. "Board" means the governing board of the lead 50 47 philanthropic entity identified by the department 50 48 pursuant to section 15E.304. 50 49 2. "Business" means a business operating within 50 50 the state and includes individuals operating a sole 51 1 proprietorship or having rental, royalty, or farm 51 2 income in this state and includes a consortium of 51 3 businesses. 51 4 3. "Community affiliate organization" means a 51 5 group of five or more community leaders or advocates 51 6 organized for the purpose of increasing philanthropic 51 7 activity in an identified community or geographic area 51 8 in this state with the intention of establishing a 51 9 community affiliate endowment fund. 51 10 4. "Endowment gift" means an irrevocable 51 11 contribution to a permanent endowment held by a 51 12 qualified community foundation. 51 13 5. "Lead philanthropic entity" means the entity 51 14 identified by the department pursuant to section 51 15 15E.304. 51 16 6. "Qualified community foundation" means a 51 17 community foundation organized or operating in this 51 18 state that meets or exceeds the national standards 51 19 established by the national council on foundations. 51 20 Sec. 92. NEW SECTION. 15E.304 ENDOW IOWA GRANTS. 51 21 1. The department shall identify a lead 51 22 philanthropic entity for purposes of encouraging the 51 23 development of qualified community foundations in this 51 24 state. A lead philanthropic entity shall meet all of 51 25 the following qualifications: 51 26 a. The entity shall be a nonprofit entity which is 51 27 exempt from federal income taxation pursuant to 51 28 section 501(c)(3) of the Internal Revenue Code. 51 29 b. The entity shall be a statewide organization 51 30 with membership consisting of organizations, such as 51 31 community, corporate, and private foundations, whose 51 32 principal function is the making of grants within the 51 33 state of Iowa. 51 34 c. The entity shall have a minimum of forty 51 35 members and that membership shall include qualified 51 36 community foundations. 51 37 2. A lead philanthropic entity may receive a grant 51 38 from the department. The board shall use the grant 51 39 moneys to award endow Iowa grants to new and existing 51 40 qualified community foundations and to community 51 41 affiliate organizations that do all of the following: 51 42 a. Provide the board with all information required 51 43 by the board. 51 44 b. Demonstrate a dollar-for-dollar funding match 51 45 in a form approved by the board. 51 46 c. Identify a qualified community foundation to 51 47 hold all funds. A qualified community foundation 51 48 shall not be required to meet this requirement. 51 49 d. Provide a plan to the board demonstrating the 51 50 method for distributing grant moneys received from the 52 1 board to organizations within the community or 52 2 geographic area as defined by the qualified community 52 3 foundation or the community affiliate organization. 52 4 3. Endow Iowa grants awarded to new and existing 52 5 qualified community foundations and to community 52 6 affiliate organizations shall not exceed twenty-five 52 7 thousand dollars per foundation or organization unless 52 8 a foundation or organization demonstrates a multiple 52 9 county or regional approach. Endow Iowa grants may be 52 10 awarded on an annual basis with not more than three 52 11 grants going to one county in a fiscal year. 52 12 4. In ranking applications for grants, the board 52 13 shall consider a variety of factors including the 52 14 following: 52 15 a. The demonstrated need for financial assistance. 52 16 b. The potential for future philanthropic activity 52 17 in the area represented by or being considered for 52 18 assistance. 52 19 c. The proportion of the funding match being 52 20 provided. 52 21 d. For community affiliate organizations, the 52 22 demonstrated need for the creation of a community 52 23 affiliate endowment fund in the applicant's geographic 52 24 area. 52 25 e. The identification of community needs and the 52 26 manner in which additional funding will address those 52 27 needs. 52 28 f. The geographic diversity of awards. 52 29 5. Of any moneys received by a lead philanthropic 52 30 entity from the state, not more than five percent of 52 31 such moneys shall be used by the entity for 52 32 administrative purposes. 52 33 Sec. 93. NEW SECTION. 15E.306 REPORTS – AUDITS. 52 34 By January 31 of each year, the lead philanthropic 52 35 entity, in cooperation with the department, shall 52 36 publish an annual report of the activities conducted 52 37 pursuant to this division during the previous calendar 52 38 year and shall submit the report to the governor and 52 39 the general assembly. The annual report shall include 52 40 a listing of endowment funds and the amount of tax 52 41 credits authorized by the department. 52 42 Sec. 94. EFFECTIVE AND RETROACTIVE APPLICABILITY 52 43 DATES. This division of this Act, being deemed of 52 44 immediate importance, takes effect upon enactment and 52 45 is retroactively applicable to January 1, 2003, for 52 46 tax years beginning on or after that date. 52 47 DIVISION IX 52 48 TECHNOLOGY TRANSFER ADVISORS 52 49 Sec. 95. NEW SECTION. 7.23 TECHNOLOGY TRANSFER 52 50 ADVISOR. 53 1 Two technology transfer advisors shall be appointed 53 2 by the governor, serve at the pleasure of the 53 3 governor, and be located at offices at the university 53 4 of Iowa and Iowa state university of science and 53 5 technology. A technology transfer advisor is not a 53 6 state agency and is not subject to chapter 17A. A 53 7 technology transfer advisor shall do all of the 53 8 following: 53 9 1. Facilitate the transfer of technology developed 53 10 at the university of Iowa, the university of northern 53 11 Iowa, Iowa state university of science and technology, 53 12 community colleges, and private colleges and 53 13 universities. 53 14 2. Coordinate the technology transfer activities 53 15 at each of the public and private universities to 53 16 encourage the implementation of best practices in 53 17 technology transfer, establish measures of 53 18 performance, and design programs of continuous quality 53 19 improvement for each technology transfer office. 53 20 3. Establish technology transfer goals for the 53 21 state. 53 22 4. Provide technical assistance to Iowa-based 53 23 entrepreneurs associated with or unrelated to the 53 24 universities under the control of the state board of 53 25 regents regarding technology transfer-related issues. 53 26 The technical assistance shall include assistance in 53 27 the areas of patents and licensing, business 53 28 development and management, finance, production, 53 29 sales, and marketing. 53 30 5. Receive the technology transfer-related report 53 31 submitted by the state board of regents pursuant to 53 32 section 262.9, subsection 31. 53 33 6. To ensure economic growth, serve as a 53 34 coordinator between Iowa-based businesses and 53 35 businesses intending to locate in Iowa. 53 36 Sec. 96. Section 15.108, Code 2003, is amended by 53 37 adding the following new subsection: 53 38 NEW SUBSECTION. 12. TECHNOLOGY TRANSFER ADVISORS. 53 39 The department shall cooperate with and provide 53 40 staffing support to the technology transfer advisors 53 41 appointed pursuant to section 7.23. 53 42 Sec. 97. Section 262.9, Code 2003, is amended by 53 43 adding the following new subsections: 53 44 NEW SUBSECTION. 29. Actively encourage and 53 45 promote the transfer of technology and research at 53 46 universities under the control of the board to 53 47 commercial application, including the start-up of 53 48 business entities. 53 49 NEW SUBSECTION. 30. Give preference and technical 53 50 support to those faculty members and staff members 54 1 desiring to obtain licenses for intellectual property 54 2 rights created in whole or in part by the faculty 54 3 member or staff member. However, such preference 54 4 shall not be construed to be a right accruing to that 54 5 faculty member or staff member. 54 6 NEW SUBSECTION. 31. By January 15 of each year, 54 7 submit a report to the governor, through the 54 8 technology transfer advisors, and the general assembly 54 9 containing information from the previous calendar year 54 10 regarding all of the following: 54 11 a. Patents secured or applied for by each 54 12 university under the control of the board delineated 54 13 by university and by faculty member and staff member 54 14 responsible for the research or activity that resulted 54 15 in the patent. In the initial report filed by January 54 16 15, 2004, the board shall include an inventory of 54 17 patent portfolios with details concerning which 54 18 patents are creating financial benefit and the amount 54 19 of financial benefit and which patents are not 54 20 creating financial benefit and the amount invested in 54 21 those patents. 54 22 b. Research grants secured by each university 54 23 under the control of the board from both public and 54 24 private sources delineated by university and by 54 25 faculty member and staff member. The board shall also 54 26 include the same information for grant applications 54 27 that are denied. 54 28 c. The number of faculty members and staff members 54 29 at each university under the control of the board 54 30 involved in a start-up company. 54 31 d. The number of grant applications for research 54 32 received by each university under the control of the 54 33 board for start-up companies, the number of 54 34 applications approved, and the number of applications 54 35 denied. 54 36 e. The number of agreements entered into by 54 37 faculty members and staff members at each university 54 38 under the control of the board with foundations 54 39 affiliated with the universities relating to business 54 40 start-ups. 54 41 f. An accounting of the financial gain received by 54 42 each university under the control of the board 54 43 relating to patents sold, royalties received, 54 44 licensing fees, and any other remuneration received by 54 45 the university related to technology transfer. 54 46 g. The number of professional employees at each 54 47 university under the control of the board who assist 54 48 in the transfer of technology and research to 54 49 commercial application. 54 50 Sec. 98. This division of this Act is repealed 55 1 July 1, 2008. 55 2 DIVISION X 55 3 IOWA ECONOMIC DEVELOPMENT 55 4 LOAN AND CREDIT GUARANTEE FUND 55 5 Sec. 99. NEW SECTION. 15E.221 SHORT TITLE. 55 6 This division shall be known and may be cited as 55 7 the "Iowa Economic Development Loan and Credit 55 8 Guarantee Fund Act". 55 9 Sec. 100. NEW SECTION. 15E.222 LEGISLATIVE 55 10 FINDING – PURPOSES. 55 11 1. The general assembly finds all of the 55 12 following: 55 13 a. That small and medium-sized businesses, in 55 14 general, and certain targeted industry businesses and 55 15 other qualified businesses, in particular, may not 55 16 qualify for conventional financing. 55 17 b. That the limited availability of credit for 55 18 export transactions limits the ability of small and 55 19 medium-sized businesses in this state to compete in 55 20 international markets. 55 21 c. That, to enhance competitiveness and foster 55 22 economic development, this state must focus on growth 55 23 in certain specific targeted industry businesses and 55 24 other qualified businesses, especially during a time 55 25 of war. 55 26 d. That the challenge for the public economic 55 27 sector is to create an atmosphere conducive to 55 28 economic growth, in conjunction with financial 55 29 institutions in the private sector, which fill the 55 30 gaps in credit availability and export finance, and 55 31 that allow the private sector to identify the lending 55 32 opportunities and foster decision making at the local 55 33 level. 55 34 2. The general assembly declares the purposes of 55 35 this division to be all of the following: 55 36 a. To create incentives and assistance to increase 55 37 the flow of private capital to targeted industry 55 38 businesses and other qualified businesses. 55 39 b. To promote industrial modernization and 55 40 technology adoption. 55 41 c. To encourage the retention and creation of 55 42 jobs. 55 43 d. To encourage the export of goods and services 55 44 sold by Iowa businesses in national and international 55 45 markets. 55 46 Sec. 101. NEW SECTION. 15E.223 DEFINITIONS. 55 47 As used in this division, unless the context 55 48 otherwise requires: 55 49 1. "Financial institution" means an institution 55 50 listed in section 422.61, subsection 1, or such other 56 1 financial institution as defined by the department for 56 2 purposes of this division. 56 3 2. "Program" means the loan and credit guarantee 56 4 program established in this division. 56 5 3. "Qualified business" means an existing or 56 6 proposed business entity with an annual average number 56 7 of employees not exceeding two hundred employees. 56 8 "Qualified business" does not include businesses 56 9 engaged primarily in retail sales, real estate, or the 56 10 provision of health care or other professional 56 11 services. "Qualified business" includes professional 56 12 services businesses that provide services to targeted 56 13 industry businesses or other entities within and 56 14 outside of this state. 56 15 4. "Targeted industry business" means an existing 56 16 or proposed business entity, including an emerging 56 17 small business or qualified business which is operated 56 18 for profit and which has a primary business purpose of 56 19 doing business in at least one of the targeted 56 20 industries designated by the department which include 56 21 life sciences, software and information technology, 56 22 advanced manufacturing, value-added agriculture, and 56 23 any other industry designated as a targeted industry 56 24 by the loan and credit guarantee advisory board. 56 25 Sec. 102. NEW SECTION. 15E.224 LOAN AND CREDIT 56 26 GUARANTEE PROGRAM. 56 27 1. The department shall, with the advice of the 56 28 loan and credit guarantee advisory board, establish 56 29 and administer a loan and credit guarantee program. 56 30 The department, pursuant to agreements with financial 56 31 institutions, shall provide loan and credit 56 32 guarantees, or other forms of credit guarantees for 56 33 qualified businesses and targeted industry businesses 56 34 for eligible project costs. A loan or credit 56 35 guarantee provided under the program may stand alone 56 36 or may be used in conjunction with or to enhance other 56 37 loans or credit guarantees, offered by private, state, 56 38 or federal entities. However, the department shall 56 39 not in any manner directly or indirectly pledge the 56 40 credit of the state. Eligible project costs include 56 41 expenditures for productive equipment and machinery, 56 42 working capital for operations and export 56 43 transactions, research and development, marketing, and 56 44 such other costs as the department may so designate. 56 45 2. A loan or credit guarantee or other form of 56 46 credit guarantee provided under the program to a 56 47 participating financial institution for a single 56 48 qualified business or targeted industry business shall 56 49 not exceed one million dollars in value. Loan or 56 50 credit guarantees or other forms of credit guarantees 57 1 provided under the program to more than one 57 2 participating financial institution for a single 57 3 qualified business or targeted industry business shall 57 4 not exceed ten million dollars in value. 57 5 3. In administering the program, the department 57 6 shall consult and cooperate with financial 57 7 institutions in this state and with the loan and 57 8 credit guarantee advisory board. Administrative 57 9 procedures and application procedures, as practicable, 57 10 shall be responsive to the needs of qualified 57 11 businesses, targeted industry businesses, and 57 12 financial institutions, and shall be consistent with 57 13 prudent investment and lending practices and criteria. 57 14 4. Each participating financial institution shall 57 15 identify and underwrite potential lending 57 16 opportunities with qualified businesses and targeted 57 17 industry businesses. Upon a determination by a 57 18 participating financial institution that a qualified 57 19 business or targeted industry business meets the 57 20 underwriting standards of the financial institution, 57 21 subject to the approval of a loan or credit guarantee, 57 22 the financial institution shall submit the 57 23 underwriting information and a loan or credit 57 24 guarantee application to the department. 57 25 5. The department, with the advice of the loan and 57 26 credit guarantee advisory board, shall adopt a loan or 57 27 credit guarantee application procedure for a financial 57 28 institution on behalf of a qualified business or 57 29 targeted industry business. 57 30 6. Upon approval of a loan or credit guarantee, 57 31 the department shall enter into a loan or credit 57 32 guarantee agreement with the participating financial 57 33 institution. The agreement shall specify all of the 57 34 following: 57 35 a. The fee to be charged to the financial 57 36 institution. 57 37 b. The evidence of debt assurance of, and security 57 38 for, the loan or credit guarantee. 57 39 c. A loan or credit guarantee that does not exceed 57 40 fifteen years. 57 41 d. Any other terms and conditions considered 57 42 necessary or desirable by the department. 57 43 7. The department, with the advice of the loan and 57 44 credit guarantee advisory board, may adopt loan and 57 45 credit guarantee application procedures that allow a 57 46 qualified business or targeted industry business to 57 47 apply directly to the department for a preliminary 57 48 guarantee commitment. A preliminary guarantee 57 49 commitment may be issued by the department subject to 57 50 the qualified business or targeted industry business 58 1 securing a commitment for financing from a financial 58 2 institution. The application procedures shall specify 58 3 the process by which a financial institution may 58 4 obtain a final loan and credit guarantee. 58 5 Sec. 103. NEW SECTION. 15E.225 TERMS – FEES. 58 6 1. When entering into a loan or credit guarantee 58 7 agreement, the department, with the advice of the loan 58 8 and credit guarantee advisory board, shall establish 58 9 fees and other terms for participation in the program 58 10 by qualified businesses and targeted industry 58 11 businesses. 58 12 2. The department, with due regard for the 58 13 possibility of losses and administrative costs and 58 14 with the advice of the loan and credit guarantee 58 15 advisory board, shall set fees and other terms at 58 16 levels sufficient to assure that the program is self- 58 17 financing. 58 18 3. For a preliminary guarantee commitment, the 58 19 department may charge a qualified business or targeted 58 20 industry business a preliminary guarantee commitment 58 21 fee. The application fee shall be in addition to any 58 22 other fees charged by the department under this 58 23 section and shall not exceed one thousand dollars for 58 24 an application. 58 25 Sec. 104. NEW SECTION. 15E.226 LOAN AND CREDIT 58 26 GUARANTEE ADVISORY BOARD. 58 27 The department, in consultation with the 58 28 superintendent of banking, shall establish a loan and 58 29 credit guarantee advisory board. The advisory board 58 30 shall provide the department with technical advice 58 31 regarding the administration of the program, including 58 32 the adoption of administrative rules pursuant to 58 33 chapter 17A. The advisory board shall review and 58 34 provide recommendations regarding all applications 58 35 under the program. Members of the advisory board are 58 36 entitled to receive reimbursement for actual expenses 58 37 incurred while engaged in the performance of official 58 38 duties. Advisory board members may also be eligible 58 39 to receive compensation as provided in section 7E.6. 58 40 The director of the department shall budget moneys to 58 41 pay the compensation and expenses of the advisory 58 42 board. 58 43 Sec. 105. This division of this Act is repealed 58 44 July 1, 2008. 58 45 DIVISION XI 58 46 ECONOMIC DEVELOPMENT ASSISTANCE AND DATA COLLECTION 58 47 Sec. 106. NEW SECTION. 15E.118 BUSINESS START-UP 58 48 INFORMATION – INTERNET WEB SITE. 58 49 The department shall provide information through an 58 50 internet web site and a toll-free telephone service to 59 1 assist persons interested in establishing a commercial 59 2 facility or engaging in a commercial activity. The 59 3 information shall include all of the following: 59 4 1. Assistance, information, and guidance for 59 5 start-up businesses. 59 6 2. Information gathered by the department pursuant 59 7 to section 15E.17, subsection 2. 59 8 3. Personal and corporate income tax information. 59 9 4. Information regarding financial assistance and 59 10 incentives available to businesses. 59 11 5. Workforce availability in the state presented 59 12 in a regional format. 59 13 Sec. 107. NEW SECTION. 15E.119 ECONOMIC 59 14 DEVELOPMENT-RELATED DATA COLLECTION. 59 15 1. The department shall interview any business 59 16 that considered locating in Iowa but decided to locate 59 17 elsewhere. The department shall attempt to determine 59 18 factors that affected the location decision of the 59 19 business. 59 20 2. The department shall interview any business 59 21 that closes major operations in the state or dissolves 59 22 the business's corporate status in an effort to 59 23 identify factors that led to the closure or 59 24 dissolution. 59 25 3. By January 15 of each year, the department 59 26 shall submit a written report to the general assembly 59 27 that summarizes the information collected pursuant to 59 28 this section. 59 29 Sec. 108. INTERNET WEB SITE DEVELOPMENT. In 59 30 developing the internet web site required in section 59 31 15E.118, the department of economic development shall 59 32 examine similar efforts in other states and 59 33 incorporate the best practices. 59 34 DIVISION XII 59 35 CULTURAL AND ENTERTAINMENT DISTRICTS 59 36 Sec. 109. NEW SECTION. 303.3B CULTURAL AND 59 37 ENTERTAINMENT DISTRICTS. 59 38 1. The department of cultural affairs shall 59 39 establish and administer a cultural and entertainment 59 40 district certification program. The program shall 59 41 encourage the growth of communities through the 59 42 development of areas within a city or county for 59 43 public and private uses related to cultural and 59 44 entertainment purposes. 59 45 2. A city or county may create and designate a 59 46 cultural and entertainment district subject to 59 47 certification by the department of cultural affairs, 59 48 in consultation with the department of economic 59 49 development. A cultural and entertainment district 59 50 shall consist of a geographic area not exceeding one 60 1 square mile in size. A cultural and entertainment 60 2 district certification shall remain in effect for ten 60 3 years following the date of certification. Two or 60 4 more cities or counties may apply jointly for 60 5 certification of a district that extends across a 60 6 common boundary. Through the adoption of 60 7 administrative rules, the department of cultural 60 8 affairs shall develop a certification application for 60 9 use in the certification process. 60 10 3. The department of cultural affairs shall 60 11 encourage development projects and activities located 60 12 in certified cultural and entertainment districts 60 13 through incentives under cultural grant programs 60 14 pursuant to section 303.3, chapter 303A, and any other 60 15 grant programs. 60 16 DIVISION XIII 60 17 WORKFORCE ISSUES 60 18 Sec. 110. NEW SECTION. 15A.10 JOB RETENTION – 60 19 INCENTIVES. 60 20 1. In order to assure the retention of existing 60 21 jobs that would otherwise be lost, the director of the 60 22 department of economic development may authorize 60 23 incentives and assistance provided to a business under 60 24 this section for a period not to exceed ten years upon 60 25 finding the following: 60 26 a. The business currently employing, at one place 60 27 of business, at least one thousand employees is likely 60 28 to close or substantially reduce employment. 60 29 b. The business agrees to remain in the state for 60 30 at least ten years and invest at least fifteen million 60 31 dollars to retool or upgrade facilities. 60 32 2. Incentives and assistance that may be 60 33 authorized by the director include any of the 60 34 following: 60 35 a. New jobs credit from withholding, as provided 60 36 in section 15.331. 60 37 b. Sales, services, and use tax refund, as 60 38 provided in section 15.331A. 60 39 c. Investment tax credit, as provided in section 60 40 15.333. 60 41 d. Research activities tax credit, as provided in 60 42 section 15.335. 60 43 3. A business shall enter into an agreement with 60 44 the department and the city or county specifying the 60 45 terms and conditions that must be met in exchange for 60 46 the incentives and assistance authorized in this 60 47 section. The agreement shall specify how the 60 48 incentives will be repaid in the event the business 60 49 fails to meet or maintain the terms and conditions of 60 50 the agreement. 61 1 DIVISION XIV 61 2 UNIVERSITY-BASED RESEARCH UTILIZATION PROGRAM 61 3 Sec. 111. NEW SECTION. 262B.11 UNIVERSITY-BASED 61 4 RESEARCH UTILIZATION PROGRAM. 61 5 1. The department of economic development shall 61 6 establish and administer a university-based research 61 7 utilization program for purposes of encouraging the 61 8 utilization of university-based research, primarily in 61 9 the area of high technology, in new or existing 61 10 businesses. The program shall include the three 61 11 universities under the control of the state board of 61 12 regents and all accredited private universities 61 13 located in the state. 61 14 2. A new or existing business that utilizes a 61 15 technology developed by an employee at a university 61 16 under the control of the state board of regents may 61 17 apply to the department of economic development for 61 18 approval to participate in the university-based 61 19 research utilization program. The department shall 61 20 approve an applicant if the applicant meets all of the 61 21 following criteria: 61 22 a. The applicant utilizes a technology developed 61 23 by an employee at a university under the control of 61 24 the state board of regents, provided that the 61 25 technology has received a patent after the effective 61 26 date of this Act. If the applicant has been in 61 27 existence more than one year prior to applying, the 61 28 applicant shall organize a separate company to utilize 61 29 the technology. For purposes of this section, the 61 30 separate company shall be considered the applicant 61 31 and, if approved, the approved business. 61 32 b. The applicant develops a five-year business 61 33 plan approved by the department. The plan shall 61 34 include information concerning the applicant's Iowa 61 35 employment goals and projected impact on the Iowa 61 36 economy. The department shall only approve plans 61 37 showing sufficient potential impact on Iowa employment 61 38 and economic development. 61 39 c. The applicant meets a minimum-size business 61 40 standard determined by the department. 61 41 d. The applicant provides annual reports to the 61 42 department that include employment statistics for the 61 43 applicant and the total taxable wages paid to Iowa 61 44 employees and reported to the department of revenue 61 45 and finance pursuant to section 422.16. 61 46 3. A business approved under the program and the 61 47 university employee responsible for the development of 61 48 the technology utilized by the approved business shall 61 49 be eligible for a tax credit. The credit shall be 61 50 allowed against the taxes imposed in chapter 422, 62 1 divisions II and III. An individual may claim a tax 62 2 credit under this section of a partnership, limited 62 3 liability company, S corporation, estate, or trust 62 4 electing to have income taxed directly to the 62 5 individual. The amount claimed by the individual 62 6 shall be based upon the pro rata share of the 62 7 individual's earnings from the partnership, limited 62 8 liability company, S corporation, estate, or trust. A 62 9 tax credit shall not be claimed under this subsection 62 10 unless a tax credit certificate issued by the 62 11 department of economic development is attached to the 62 12 taxpayer's tax return for the tax year for which the 62 13 tax credit is claimed. The amount of a tax credit 62 14 allowed under this subsection shall equal the amount 62 15 listed on a tax credit certificate issued by the 62 16 department of economic development pursuant to 62 17 subsection 4. A tax credit certificate shall not be 62 18 transferable. Any tax credit in excess of the 62 19 taxpayer's liability for the tax year may be credited 62 20 to the taxpayer's tax liability for the following five 62 21 years or until depleted, whichever occurs first. A 62 22 tax credit shall not be carried back to a tax year 62 23 prior to the tax year in which the taxpayer redeems 62 24 the tax credit. 62 25 4. For the five tax years following the tax year 62 26 in which a business is approved under the program, the 62 27 department of revenue and finance shall provide the 62 28 department of economic development with information 62 29 required by the department of economic development 62 30 from each tax return filed by the approved business. 62 31 Upon receiving the tax return-related information, the 62 32 department of economic development shall do all of the 62 33 following: 62 34 a. Review the information provided by the 62 35 department of revenue and finance pursuant to this 62 36 subsection and the annual report submitted by the 62 37 applicant pursuant to subsection 2, paragraph "d". If 62 38 the department determines that the business activities 62 39 of the applicant are not providing the benefits to 62 40 Iowa employment and economic development projected in 62 41 the applicant's approved five-year business plan, the 62 42 department shall not issue tax credit certificates for 62 43 that year to the applicant or university employee and 62 44 shall determine any related university share to be 62 45 equal to zero for that year. 62 46 b. Effective for the fiscal year beginning July 1, 62 47 2004, and for subsequent fiscal years, issue a tax 62 48 credit certificate to the approved business and the 62 49 university employee responsible for the development of 62 50 the technology utilized by the approved business in an 63 1 amount determined pursuant to subsection 5. A tax 63 2 credit certificate shall contain the taxpayer's name, 63 3 address, tax identification number, the amount of the 63 4 tax credit, and other information required by the 63 5 department of revenue and finance. 63 6 c. (1) Determine the university share which is 63 7 equal to the value of thirty percent of the tax 63 8 liability of the approved business for purposes of 63 9 making an appropriation pursuant to section 262B.12, 63 10 if enacted by 2003 Iowa Acts, House File 683 or 63 11 another Act, to the university where the technology 63 12 utilized by the approved business was developed. A 63 13 university share shall not exceed two hundred twenty- 63 14 five thousand dollars per year per technology 63 15 utilized. For each technology utilized, the aggregate 63 16 university share over a five-year period shall not 63 17 exceed six hundred thousand dollars. 63 18 (2) The department shall maintain records for each 63 19 university during each fiscal year regarding the 63 20 university share each university is entitled to 63 21 receive through the appropriation in section 262B.12, 63 22 if enacted by 2003 Iowa Acts, House File 683 or 63 23 another Act. A university shall be entitled to 63 24 receive the total university share for that particular 63 25 university during the previous fiscal year. 63 26 d. For the fiscal year beginning July 1, 2004, not 63 27 more than two million dollars worth of certificates 63 28 shall be issued pursuant to paragraph "b". For the 63 29 fiscal year beginning July 1, 2005, and every fiscal 63 30 year thereafter, not more than ten million dollars 63 31 worth of certificates shall be issued pursuant to 63 32 paragraph "b". 63 33 5. The tax credit certificates issued by the 63 34 department for each of the five years following the 63 35 tax year in which the business is approved under the 63 36 program shall be for the following amounts: 63 37 a. For the approved business, the value of the tax 63 38 credit certificate shall equal thirty percent of the 63 39 tax liability of the approved business. The value of 63 40 a certificate issued to an approved business shall not 63 41 exceed two hundred twenty-five thousand dollars. The 63 42 total aggregate value of certificates issued over a 63 43 five-year period to an approved business shall not 63 44 exceed six hundred thousand dollars. 63 45 b. For the university employee responsible for the 63 46 development of the technology utilized by the approved 63 47 business, the value of the tax credit certificate 63 48 shall equal ten percent of the tax liability of the 63 49 approved business. If more than one employee is 63 50 responsible for the development of the technology, the 64 1 value equal to ten percent of the tax liability of the 64 2 approved business shall be divided equally and 64 3 individual tax credit certificates shall be issued to 64 4 each employee responsible for the development of the 64 5 technology. Each year, the total value of a 64 6 certificate or certificates issued for a utilized 64 7 technology shall not exceed seventy-five thousand 64 8 dollars. For each technology utilized, the total 64 9 aggregate value of certificates issued over a five- 64 10 year period to the university employee responsible for 64 11 the development of the technology shall not exceed two 64 12 hundred thousand dollars. 64 13 6. The department of economic development shall 64 14 notify the department of revenue and finance when a 64 15 tax credit certificate is issued pursuant to 64 16 subsection 4. The notification shall include the name 64 17 and tax identification number appearing on any tax 64 18 credit certificate. 64 19 Sec. 112. NEW SECTION. 422.11H UNIVERSITY-BASED 64 20 RESEARCH UTILIZATION PROGRAM TAX CREDIT. 64 21 The taxes imposed under this division, less the 64 22 credits allowed under sections 422.12 and 422.12B, 64 23 shall be reduced by a university-based research 64 24 utilization program tax credit authorized pursuant to 64 25 section 262B.11. 64 26 Sec. 113. Section 422.33, Code 2003, is amended by 64 27 adding the following new subsection: 64 28 NEW SUBSECTION. 14. The taxes imposed under this 64 29 division shall be reduced by a university-based 64 30 research utilization program tax credit authorized 64 31 pursuant to section 262B.11. 64 32 DIVISION XV 64 33 FUTURE REPEAL 64 34 Sec. 114. The divisions of this Act designated the 64 35 grow Iowa board and fund, the value-added agricultural 64 36 products and processes financial assistance program, 64 37 the endow Iowa grants, the technology transfer 64 38 advisors, the Iowa economic development loan and 64 39 credit guarantee fund, the economic development 64 40 assistance and data collection, the cultural and 64 41 entertainment districts, the workforce issues, and the 64 42 university-based research utilization program, are 64 43 repealed effective June 30, 2010. 64 44 DIVISION XVI 64 45 LIABILITY REFORM 64 46 Sec. 115. Section 668.12, Code 2003, is amended to 64 47 read as follows: 64 48 668.12 LIABILITY FOR PRODUCTS –STATE OF THE ART64 49DEFENSEDEFENSES. 64 50 1. In any action brought pursuant to this chapter 65 1 against an assembler, designer, supplier of 65 2 specifications, distributor, manufacturer, or seller 65 3 for damages arising from an alleged defect in the 65 4 design, testing, manufacturing, formulation, 65 5 packaging, warning, or labeling of a product, a 65 6 percentage of fault shall not be assigned to such 65 7 persons if they plead and prove that the product 65 8 conformed to the state of the art in existence at the 65 9 time the product was designed, tested, manufactured, 65 10 formulated, packaged, provided with a warning, or 65 11 labeled. 65 12 2. Nothing contained inthis sectionsubsection 1 65 13 shall diminish the duty of an assembler, designer, 65 14 supplier of specifications, distributor, manufacturer 65 15 or seller to warn concerning subsequently acquired 65 16 knowledge of a defect or dangerous condition that 65 17 would render the product unreasonably dangerous for 65 18 its foreseeable use or diminish the liability for 65 19 failure to so warn. 65 20 3. An assembler, designer, supplier of 65 21 specifications, distributor, manufacturer, or seller 65 22 shall not be subject to liability under a theory of 65 23 civil conspiracy unless the person knowingly and 65 24 voluntarily entered into an agreement, express or 65 25 implied, to participate in a common plan with the 65 26 intent to commit a tortious act upon another. Mere 65 27 membership in a trade or industrial association or 65 28 group is not, in and of itself, evidence of such an 65 29 agreement. 65 30 Sec. 116. Section 668A.1, subsection 1, Code 2003, 65 31 is amended to read as follows: 65 32 1. In a trial of a claim involving the request for 65 33 punitive or exemplary damages, the court shall 65 34 instruct the jury to answer special interrogatories 65 35 or, if there is no jury, shall make findings, 65 36 indicating all of the following: 65 37 a.Whether, by a preponderance of clear,65 38convincing, and satisfactory evidence, the conduct of65 39the defendant from which the claim arose constituted65 40willful and wanton disregard for the rights or safety65 41of another.65 42b.Whether the conduct of the defendant was 65 43 directed specifically at the claimant, or at the 65 44 person from which the claimant's claim is derived. 65 45 b. Whether, by a preponderance of clear and 65 46 convincing evidence, the conduct of the defendant from 65 47 which the claim arose constituted actual malice. 65 48 Sec. 117. NEW SECTION. 668A.2 DEFINITIONS. 65 49 As used in this chapter, the following terms shall 65 50 have the following meanings: 66 1 1. "Clear and convincing evidence" means evidence 66 2 which leaves no serious or substantial doubt about the 66 3 correctness of the conclusions drawn from the 66 4 evidence. It is more than a preponderance of 66 5 evidence, but less than beyond a reasonable doubt. 66 6 2. "Malice" means either conduct which is 66 7 specifically intended by the defendant to cause 66 8 tangible or intangible serious injury to the plaintiff 66 9 or conduct that is carried out by the defendant both 66 10 with a flagrant indifference to the rights of the 66 11 plaintiff and with a subjective awareness that such 66 12 conduct will result in tangible serious injury. 66 13 Sec. 118. NEW SECTION. 668A.3 AWARD OF PUNITIVE 66 14 OR EXEMPLARY DAMAGES – PROOF – STANDARD. 66 15 Punitive or exemplary damages shall only be awarded 66 16 where the plaintiff proves by clear and convincing 66 17 evidence that the plaintiff's harm was the result of 66 18 actual malice. This burden of proof shall not be 66 19 satisfied by proof of any degree of negligence, 66 20 including gross negligence. 66 21 Sec. 119. APPLICABILITY. This division of this 66 22 Act, relating to liability reform, applies to cases 66 23 filed on or after July 1, 2003. 66 24 DIVISION XVII 66 25 WORKERS' COMPENSATION 66 26 Sec. 120. Section 85.34, subsection 2, unnumbered 66 27 paragraph 1, Code 2003, is amended to read as follows: 66 28 Compensation for permanent partial disability shall 66 29 begin at the termination of the healing period 66 30 provided in subsection 1. The compensation shall be 66 31 in addition to the benefits provided by sections 85.27 66 32 and 85.28. The compensation shall be based only upon 66 33 the extent of the disability related to the injury 66 34 received and upon the basis of eighty percent per week 66 35 of the employee's average spendable weekly earnings, 66 36 but not more than a weekly benefit amount, rounded to 66 37 the nearest dollar, equal to one hundred eighty-four 66 38 percent of the statewide average weekly wage paid 66 39 employees as determined by the department of workforce 66 40 development under section 96.19, subsection 36, and in 66 41 effect at the time of the injury. The minimum weekly 66 42 benefit amount shall be equal to the weekly benefit 66 43 amount of a person whose gross weekly earnings are 66 44 thirty-five percent of the statewide average weekly 66 45 wage. For all cases of permanent partial disability 66 46 compensation shall be paid as follows: 66 47 Sec. 121. Section 85.34, subsection 2, paragraph 66 48 u, Code 2003, is amended by adding the following new 66 49 unnumbered paragraph after unnumbered paragraph 2 as 66 50 follows: 67 1 NEW UNNUMBERED PARAGRAPH. When an employee makes a 67 2 claim for benefits under this subsection, the employer 67 3 is not liable for that portion of the employee's 67 4 present disability caused by a prior work-related 67 5 injury or illness that was sustained by the employee 67 6 while the employee was employed by a different 67 7 employer. When an employee's present disability 67 8 includes disability caused by a prior work-related 67 9 injury or illness that was sustained by the employee 67 10 while in the employ of the same employer, the employer 67 11 is liable for compensating all of the employee's work- 67 12 related disability sustained by the employee while in 67 13 the employ of the employer, except that any portion of 67 14 the disability that was previously compensated by the 67 15 employer shall be deducted from the employer's 67 16 obligation to pay benefits for the employee's present 67 17 disability. If an employee's present disability is 67 18 reduced by a portion of disability sustained from 67 19 prior work-related injuries or illnesses for which the 67 20 employee has already been compensated by the same 67 21 employer, then the employee shall receive compensation 67 22 for the remaining disability caused by the present 67 23 work-related injury or illness plus an additional ten 67 24 percent of the amount of the increase in disability. 67 25 Sec. 122. APPLICABILITY. This division of this 67 26 Act, relating to workers' compensation, applies to an 67 27 injury occurring on or after July 1, 2003. 67 28 DIVISION XVIII 67 29 FINANCIAL SERVICES 67 30 Sec. 123. Section 537.2502, subsections 3 and 6, 67 31 Code 2003, are amended to read as follows: 67 32 3. A delinquency charge shall not be collected 67 33 under subsection 1, paragraph "a", on an installment 67 34whichthat is paid in full within ten days after its 67 35 scheduled or deferred installment due date even though 67 36 an earlier maturing installment or a delinquency or 67 37 deferral charge on an earlier installment may not have 67 38 been paid in full. For purposes of this subsection, 67 39 payments associated with a precomputed transaction are 67 40 applied first to current installments and then to 67 41 delinquent installments. 67 42 6. A delinquency charge shall not be collected 67 43 under subsection 4 on a paymentwhichassociated with 67 44 a precomputed transaction that is paid in full on or 67 45 before its scheduled or deferred due date even though 67 46 an earlier maturing payment or a delinquency or 67 47 deferred charge on an earlier payment has not been 67 48 paid in full. For purposes of this subsection, 67 49 payments are applied first to amounts due for the 67 50 current billing cycle and then to delinquent payments. 68 1 Sec. 124. Section 537.2601, subsection 1, Code 68 2 2003, is amended to read as follows: 68 3 1.Except as provided in subsection 2, withWith 68 4 respect to a credit transaction other than a consumer 68 5 credit transaction, the parties may contract for the 68 6 payment by the debtor of any finance or other charge 68 7 as permitted by law.Except with respect to debt68 8obligations issued by a government, governmental68 9agency or instrumentality, in calculating any finance68 10charge contracted for, any month may be counted as68 11one-twelfth of a year, but a day is to be counted as68 12one three-hundred sixty-fifth of a year.68 13 DIVISION XIX 68 14 UNEMPLOYMENT COMPENSATION SURCHARGE 68 15 Sec. 125. Section 96.7, subsection 12, paragraph 68 16 a, Code 2003, is amended to read as follows: 68 17 a. An employer other than a governmental entity or 68 18 a nonprofit organization, subject to this chapter, 68 19 shall pay an administrative contribution surcharge 68 20 equal in amount to one-tenth of one percent of federal 68 21 taxable wages, as defined in section 96.19, subsection 68 22 37, paragraph "b", subject to the surcharge formula to 68 23 be developed by the department under this paragraph. 68 24 The department shall develop a surcharge formula that 68 25 provides a target revenue level of no greater than six 68 26 million five hundred twenty-five thousand dollars 68 27annuallyfor calendar years 2003, 2004, and 2005 and a 68 28 target revenue level of no greater than three million 68 29 two hundred sixty-two thousand five hundred dollars 68 30 for calendar year 2006 and each subsequent calendar 68 31 year. The department shall reduce the administrative 68 32 contribution surcharge established for any calendar 68 33 year proportionate to any federal government funding 68 34 that provides an increased allocation of moneys for 68 35 workforce development offices, under the federal 68 36 employment services financing reform legislation. Any 68 37 administrative contribution surcharge revenue that is 68 38 collected in calendar year20022003, 2004, or 2005 in 68 39 excess of six million five hundred twenty-five 68 40 thousand dollars or in calendar year 2006 or a 68 41 subsequent calendar year in excess of three million 68 42 two hundred sixty-two thousand five hundred dollars 68 43 shall be deducted from the amount to be collected in 68 44 the subsequent calendar year 2003 before the 68 45 department establishes the administrative contribution 68 46 surcharge. The department shall recompute the amount 68 47 as a percentage of taxable wages, as defined in 68 48 section 96.19, subsection 37, and shall add the 68 49 percentage surcharge to the employer's contribution 68 50 rate determined under this section. The percentage 69 1 surcharge shall be capped at a maximum of seven 69 2 dollars per employee. The department shall adopt 69 3 rules prescribing the manner in which the surcharge 69 4 will be collected. Interest shall accrue on all 69 5 unpaid surcharges under this subsection at the same 69 6 rate as on regular contributions and shall be 69 7 collectible in the same manner. Interest accrued and 69 8 collected under this paragraph and interest earned and 69 9 credited to the fund under paragraph "b" shall be used 69 10 by the department only for the purposes set forth in 69 11 paragraph "c". 69 12 Sec. 126. Section 96.7, subsection 12, paragraph 69 13 d, Code 2003, is amended to read as follows: 69 14 d. This subsection is repealed July 1,20032006, 69 15 and the repeal is applicable to contribution rates for 69 16 calendar year20042007 and subsequent calendar years. 69 17 Sec. 127. EFFECTIVE DATE. This division of this 69 18 Act, concerning the unemployment compensation 69 19 surcharge, being deemed of immediate importance, takes 69 20 effect upon enactment. 69 21 DIVISION XX 69 22 ECONOMIC DEVELOPMENT 69 23 Sec. 128. NEW SECTION. 15E.18 CITIES, COUNTIES, 69 24 AND REGIONS – SITE PREPARATION FOR TARGETED ECONOMIC 69 25 DEVELOPMENT. 69 26 1. For purposes of this section, "region" means a 69 27 group of two or more contiguous counties that 69 28 establishes a single, focused economic development 69 29 effort. 69 30 2. A city, county, or region, subject to the 69 31 approval of the property owner, may designate an area 69 32 within the boundaries of the city, county, or region 69 33 for a specific type of targeted economic development. 69 34 The specific type of targeted economic development 69 35 shall be one of the following: 69 36 a. Manufacturing. 69 37 b. Light industrial. 69 38 c. Warehouse and distribution. 69 39 d. Office parks. 69 40 e. Business and commerce parks. 69 41 f. Research and development. 69 42 3. A city, county, or region that designates an 69 43 area for a specific type of targeted economic 69 44 development may apply to the department for purposes 69 45 of certifying the area as a preapproved development 69 46 site. The department shall develop criteria for the 69 47 certification process. 69 48 4. Prior to a specific project being developed, a 69 49 city, county, or region designating the area for 69 50 targeted economic development pursuant to this section 70 1 may apply for and obtain appropriate licenses, 70 2 permits, and approvals for the type of targeted 70 3 economic development project desired for the area. 70 4 Sec. 129. NEW SECTION. 15E.19 REGULATORY 70 5 ASSISTANCE. 70 6 1. The department of economic development shall 70 7 coordinate all regulatory assistance for the state of 70 8 Iowa. Each state agency with regulatory programs for 70 9 business shall maintain a coordinator within the 70 10 office of the director or the administrative division 70 11 of the state agency. Each coordinator shall do all of 70 12 the following: 70 13 a. Serve as the department of economic 70 14 development's primary contact for regulatory affairs. 70 15 b. Provide regulatory requirements to businesses 70 16 and represent the agency in the private sector. 70 17 c. Monitor permit applications and provide timely 70 18 permit status information to the department of 70 19 economic development. 70 20 d. Have the ability to require regulatory staff 70 21 participation in negotiations and discussions with 70 22 businesses. 70 23 e. Notify the department of economic development 70 24 regarding proposed rulemaking activities that impact a 70 25 regulatory program and any subsequent changes to a 70 26 regulatory program. 70 27 2. The department of economic development shall, 70 28 in consultation with the coordinators described in 70 29 this section, examine, and to the extent permissible, 70 30 assist in the implementation of methods, including the 70 31 possible establishment of an electronic database, to 70 32 streamline the process for issuing permits to 70 33 business. 70 34 3. By January 15 of each year, the department of 70 35 economic development shall submit a written report to 70 36 the general assembly regarding the provision of 70 37 regulatory assistance by state agencies, including the 70 38 department's efforts, and its recommendations and 70 39 proposed solutions, to streamline the process of 70 40 issuing permits to business. 70 41 Sec. 130. NEW SECTION. 15E.20 PERMIT APPROVAL 70 42 REQUIREMENTS. 70 43 A state agency which requires a permit, license, or 70 44 other regulatory approval shall issue or deny the 70 45 permit, license, or other regulatory approval within 70 46 ninety days of the receipt by the state agency of an 70 47 application. Unless such a state agency communicates 70 48 any concerns to or requests additional information 70 49 from an applicant within ten days of the receipt of 70 50 the application, the application shall be considered 71 1 complete. A permit, license, or other regulatory 71 2 approval not issued or denied within the ninety days 71 3 shall be deemed to be issued and valid. 71 4 DIVISION XXI 71 5 UTILITY SALES TAX EXEMPTION 71 6 Sec. 131. Section 422.45, subsection 61, paragraph 71 7 b, subparagraphs (2), (3), (4), and (5), Code 2003, 71 8 are amended to read as follows: 71 9 (2) If the date of the utility billing or meter 71 10 reading cycle of the residential customer for the 71 11 sale, furnishing, or service of metered gas and 71 12 electricity is on or after January 1, 2003, through 71 13December 31, 2003June 30, 2008, or if the sale, 71 14 furnishing, or service of fuel for purposes of 71 15 residential energy and the delivery of the fuel occurs 71 16 on or after January 1, 2003, throughDecember 31, 200371 17 June 30, 2008, the rate of tax is three percent of the 71 18 gross receipts. 71 19 (3) If the date of the utility billing or meter 71 20 reading cycle of the residential customer for the 71 21 sale, furnishing, or service of metered gas and 71 22 electricity is on or afterJanuary 1, 2004July 1, 71 23 2008, throughDecember 31, 2004June 30, 2009, or if 71 24 the sale, furnishing, or service of fuel for purposes 71 25 of residential energy and the delivery of the fuel 71 26 occurs on or afterJanuary 1, 2004July 1, 2008, 71 27 throughDecember 31, 2004June 30, 2009, the rate of 71 28 tax is two percent of the gross receipts. 71 29 (4) If the date of the utility billing or meter 71 30 reading cycle of the residential customer for the 71 31 sale, furnishing, or service of metered gas and 71 32 electricity is on or afterJanuary 1, 2005July 1, 71 33 2009, throughDecember 31, 2005June 30, 2010, or if 71 34 the sale, furnishing, or service of fuel for purposes 71 35 of residential energy and the delivery of the fuel 71 36 occurs on or afterJanuary 1, 2005July 1, 2009, 71 37 throughDecember 31, 2005June 30, 2010, the rate of 71 38 tax is one percent of the gross receipts. 71 39 (5) If the date of the utility billing or meter 71 40 reading cycle of the residential customer for the 71 41 sale, furnishing, or service of metered gas and 71 42 electricity is on or afterJanuary 1, 2006July 1, 71 43 2010, or if the sale, furnishing, or service of fuel 71 44 for purposes of residential energy and the delivery of 71 45 the fuel occurs on or afterJanuary 1, 2006July 1, 71 46 2010, the rate of tax is zero percent of the gross 71 47 receipts. 71 48 DIVISION XXII 71 49 STREAMLINED SALES AND USE TAXES 71 50 SUBCHAPTER I 72 1 DEFINITIONS 72 2 Sec. 132. NEW SECTION. 423.1 DEFINITIONS. 72 3 As used in this chapter the following words, terms, 72 4 and phrases have the meanings ascribed to them by this 72 5 section, except where the context clearly indicates 72 6 that a different meaning is intended: 72 7 1. "Agent" means a person appointed by a seller to 72 8 represent the seller before the member states. 72 9 2. "Agreement" means the streamlined sales and use 72 10 tax agreement authorized by subchapter IV of this 72 11 chapter to provide a mechanism for establishing and 72 12 maintaining a cooperative, simplified system for the 72 13 application and administration of sales and use taxes. 72 14 3. "Agricultural production" includes the 72 15 production of flowering, ornamental, or vegetable 72 16 plants in commercial greenhouses or otherwise, and 72 17 production from aquaculture. "Agricultural products" 72 18 includes flowering, ornamental, or vegetable plants 72 19 and those products of aquaculture. 72 20 4. "Business" includes any activity engaged in by 72 21 any person or caused to be engaged in by the person 72 22 with the object of gain, benefit, or advantage, either 72 23 direct or indirect. 72 24 5. "Certificate of title" means a certificate of 72 25 title issued for a vehicle or for manufactured housing 72 26 under chapter 321. 72 27 6. "Certified automated system" means software 72 28 certified under the agreement to calculate the tax 72 29 imposed by each jurisdiction on a transaction, 72 30 determine the amount of tax to remit to the 72 31 appropriate state, and maintain a record of the 72 32 transaction. 72 33 7. "Certified service provider" means an agent 72 34 certified under the agreement to perform all of a 72 35 seller's sales or use tax functions, other than the 72 36 seller's obligation to remit tax on its own purchases. 72 37 8. "Computer" means an electronic device that 72 38 accepts information in digital or similar form and 72 39 manipulates the information for a result based on a 72 40 sequence of instructions. 72 41 9. "Computer software" means a set of coded 72 42 instructions designed to cause a computer or automatic 72 43 data processing equipment to perform a task. 72 44 10. "Delivered electronically" means delivered to 72 45 the purchaser by means other than tangible storage 72 46 media. 72 47 11. "Delivery charges" means charges assessed by a 72 48 seller of personal property or services for 72 49 preparation and delivery to a location designated by 72 50 the purchaser of personal property or services 73 1 including, but not limited to, transportation, 73 2 shipping, postage, handling, crating, and packing 73 3 charges. 73 4 12. "Department" means the department of revenue 73 5 and finance. 73 6 13. "Direct mail" means printed material delivered 73 7 or distributed by United States mail or other delivery 73 8 service to a mass audience or to addressees on a 73 9 mailing list provided by the purchaser or at the 73 10 direction of the purchaser when the cost of the items 73 11 is not billed directly to the recipients. "Direct 73 12 mail" includes tangible personal property supplied 73 13 directly or indirectly by the purchaser to the direct 73 14 mail seller for inclusion in the package containing 73 15 the printed material. "Direct mail" does not include 73 16 multiple items of printed material delivered to a 73 17 single address. 73 18 14. "Director" means the director of revenue and 73 19 finance. 73 20 15. "Electronic" means relating to technology 73 21 having electrical, digital, magnetic, wireless, 73 22 optical, electromagnetic, or similar capabilities. 73 23 16. "Farm deer" means the same as defined in 73 24 section 189A.2. 73 25 17. "Farm machinery and equipment" means machinery 73 26 and equipment used in agricultural production. 73 27 18. "First use of a service". A "first use of a 73 28 service" occurs, for the purposes of this chapter, 73 29 when a service is rendered, furnished, or performed in 73 30 Iowa or if rendered, furnished, or performed outside 73 31 of Iowa, when the product or result of the service is 73 32 used in Iowa. 73 33 19. "Goods, wares, or merchandise" means the same 73 34 as tangible personal property. 73 35 20. "Governing board" means the group comprised of 73 36 representatives of the member states of the agreement 73 37 which is created by the agreement to be responsible 73 38 for the agreement's administration and operation. 73 39 21. "Installed purchase price" is the amount 73 40 charged, valued in money whether paid in money or 73 41 otherwise, by a building contractor to convert 73 42 manufactured housing from tangible personal property 73 43 into realty. "Installed purchase price" includes, but 73 44 is not limited to, amounts charged for installing a 73 45 foundation and electrical and plumbing hookups. 73 46 "Installed purchase price" excludes any amount charged 73 47 for landscaping in connection with the conversion. 73 48 22. "Lease or rental". 73 49 a. "Lease or rental" means any transfer of 73 50 possession or control of tangible personal property 74 1 for a fixed or indeterminate term for consideration. 74 2 A "lease or rental" may include future options to 74 3 purchase or extend. 74 4 b. "Lease or rental" includes agreements covering 74 5 motor vehicles and trailers when the amount of 74 6 consideration may be increased or decreased by 74 7 reference to the amount realized upon sale or 74 8 disposition of the property as defined in 26 U.S.C. } 74 9 7701(h)(1). 74 10 c. "Lease or rental" does not include any of the 74 11 following: 74 12 (1) A transfer of possession or control of 74 13 property under a security agreement or deferred 74 14 payment plan that requires the transfer of title upon 74 15 completion of the required payments. 74 16 (2) A transfer of possession or control of 74 17 property under an agreement that requires the transfer 74 18 of title upon completion of required payments, and 74 19 payment of any option price does not exceed the 74 20 greater of one hundred dollars or one percent of the 74 21 total required payments. 74 22 (3) Providing tangible personal property along 74 23 with an operator for a fixed or indeterminate period 74 24 of time. A condition of this exclusion is that the 74 25 operator is necessary for the equipment to perform as 74 26 designed. For the purpose of this subparagraph, an 74 27 operator must do more than maintain, inspect, or set 74 28 up the tangible personal property. 74 29 d. This definition shall be used for sales and use 74 30 tax purposes regardless of whether a transaction is 74 31 characterized as a lease or rental under generally 74 32 accepted accounting principles, the Internal Revenue 74 33 Code, the Uniform Commercial Code, or other provisions 74 34 of federal, state, or local law. 74 35 23. "Livestock" includes but is not limited to an 74 36 animal classified as an ostrich, rhea, emu, bison, or 74 37 farm deer. 74 38 24. "Manufactured housing" means "manufactured 74 39 home" as defined in section 321.1. 74 40 25. "Member state" is any state which has signed 74 41 the agreement. 74 42 26. "Mobile home" means "manufactured or mobile 74 43 home" as defined in section 321.1. 74 44 27. "Model 1 seller" is a seller that has selected 74 45 a certified service provider as its agent to perform 74 46 all the seller's sales and use tax functions, other 74 47 than the seller's obligation to remit tax on its own 74 48 purchases. 74 49 28. "Model 2 seller" is a seller that has selected 74 50 a certified automated system to perform part of its 75 1 sales and use tax functions, but retains 75 2 responsibility for remitting the tax. 75 3 29. "Model 3 seller" is a seller that has sales in 75 4 at least five member states, has total annual sales 75 5 revenue of at least five hundred million dollars, has 75 6 a proprietary system that calculates the amount of tax 75 7 due each jurisdiction, and has entered into a 75 8 performance agreement with the member states that 75 9 establishes a tax performance standard for the seller. 75 10 As used in this definition, a "seller" includes an 75 11 affiliated group of sellers using the same proprietary 75 12 system. 75 13 30. "Nonresidential commercial operations" means 75 14 industrial, commercial, mining, or agricultural 75 15 operations, whether for profit or not, but does not 75 16 include apartment complexes or mobile home parks. 75 17 31. "Not registered under the agreement" means 75 18 lack of registration by a seller with the member 75 19 states under the central registration system 75 20 referenced in section 423.11, subsection 4. 75 21 32. "Person" means an individual, trust, estate, 75 22 fiduciary, partnership, limited liability company, 75 23 limited liability partnership, corporation, or any 75 24 other legal entity. 75 25 33. "Place of business" means any warehouse, 75 26 store, place, office, building, or structure where 75 27 goods, wares, or merchandise are offered for sale at 75 28 retail or where any taxable amusement is conducted, or 75 29 each office where gas, water, heat, communication, or 75 30 electric services are offered for sale at retail. 75 31 When a retailer or amusement operator sells 75 32 merchandise by means of vending machines or operates 75 33 music or amusement devices by coin-operated machines 75 34 at more than one location within the state, the 75 35 office, building, or place where the books, papers, 75 36 and records of the taxpayer are kept shall be deemed 75 37 to be the taxpayer's place of business. 75 38 34. "Prewritten computer software" includes 75 39 software designed and developed by the author or other 75 40 creator to the specifications of a specific purchaser 75 41 when it is sold to a person other than the purchaser. 75 42 The combining of two or more prewritten computer 75 43 software programs or prewritten portions of prewritten 75 44 programs does not cause the combination to be other 75 45 than prewritten computer software. "Prewritten 75 46 computer software" also means computer software, 75 47 including prewritten upgrades, which is not designed 75 48 and developed by the author or other creator to the 75 49 specifications of a specific purchaser. 75 50 When a person modifies or enhances computer 76 1 software of which the person is not the author or 76 2 creator, the person shall be deemed to be the author 76 3 or creator only of such person's modifications or 76 4 enhancements. Prewritten computer software or a 76 5 prewritten portion of the prewritten software that is 76 6 modified or enhanced to any degree, when such 76 7 modification or enhancement is designed and developed 76 8 to the specifications of a specific purchaser, remains 76 9 prewritten computer software. However, when there is 76 10 a reasonable, separately stated charge or an invoice 76 11 or other statement of the price given to the purchaser 76 12 for such modification or enhancement, such 76 13 modification or enhancement shall not constitute 76 14 prewritten computer software. 76 15 35. "Property purchased for resale in connection 76 16 with the performance of a service" means property 76 17 which is purchased for resale in connection with the 76 18 rendition, furnishing, or performance of a service by 76 19 a person who renders, furnishes, or performs the 76 20 service if all of the following occur: 76 21 a. The provider and user of the service intend 76 22 that a sale of the property will occur. 76 23 b. The property is transferred to the user of the 76 24 service in connection with the performance of the 76 25 service in a form or quantity capable of a fixed or 76 26 definite price value. 76 27 c. The sale is evidenced by a separate charge for 76 28 the identifiable piece of property. 76 29 36. "Purchase" means any transfer, exchange, or 76 30 barter, conditional or otherwise, in any manner or by 76 31 any means whatsoever, for a consideration. 76 32 37. "Purchase price" means the same as "sales 76 33 price" as defined in this section. 76 34 38. "Purchaser" is a person to whom a sale of 76 35 personal property is made or to whom a service is 76 36 furnished. 76 37 39. "Receive" and "receipt" mean any of the 76 38 following: 76 39 a. Taking possession of tangible personal 76 40 property. 76 41 b. Making first use of a service. 76 42 c. Taking possession or making first use of 76 43 digital goods, whichever comes first. 76 44 "Receive" and "receipt" do not include possession 76 45 by a shipping company on behalf of a purchaser. 76 46 40. "Registered under the agreement" means 76 47 registration by a seller under the central 76 48 registration system referenced in section 423.11, 76 49 subsection 4. 76 50 41. "Relief agency" means the state, any county, 77 1 city and county, city, or district thereof, or any 77 2 agency engaged in actual relief work. 77 3 42. "Retailer" means and includes every person 77 4 engaged in the business of selling tangible personal 77 5 property or taxable services at retail, or the 77 6 furnishing of gas, electricity, water, or 77 7 communication service, and tickets or admissions to 77 8 places of amusement and athletic events or operating 77 9 amusement devices or other forms of commercial 77 10 amusement from which revenues are derived. However, 77 11 when in the opinion of the director it is necessary 77 12 for the efficient administration of this chapter to 77 13 regard any salespersons, representatives, truckers, 77 14 peddlers, or canvassers as agents of the dealers, 77 15 distributors, supervisors, employers, or persons under 77 16 whom they operate or from whom they obtain tangible 77 17 personal property sold by them irrespective of whether 77 18 or not they are making sales on their own behalf or on 77 19 behalf of such dealers, distributors, supervisors, 77 20 employers, or persons, the director may so regard 77 21 them, and may regard such dealers, distributors, 77 22 supervisors, employers, or persons as retailers for 77 23 the purposes of this chapter. "Retailer" includes a 77 24 seller obligated to collect sales or use tax. 77 25 43. "Retailer maintaining a place of business in 77 26 this state" or any like term includes any retailer 77 27 having or maintaining within this state, directly or 77 28 by a subsidiary, an office, distribution house, sales 77 29 house, warehouse, or other place of business, or any 77 30 representative operating within this state under the 77 31 authority of the retailer or its subsidiary, 77 32 irrespective of whether that place of business or 77 33 representative is located here permanently or 77 34 temporarily, or whether the retailer or subsidiary is 77 35 admitted to do business within this state pursuant to 77 36 chapter 490. 77 37 44. "Retailers who are not model sellers" means 77 38 all retailers other than model 1, model 2, or model 3 77 39 sellers. 77 40 45. "Retail sale" or "sale at retail" means any 77 41 sale, lease, or rental for any purpose other than 77 42 resale, sublease, or subrent. 77 43 46. "Sales" or "sale" means any transfer, 77 44 exchange, or barter, conditional or otherwise, in any 77 45 manner or by any means whatsoever, for consideration. 77 46 47. "Sales price" applies to the measure subject 77 47 to sales tax. 77 48 a. "Sales price" means the total amount of 77 49 consideration, including cash, credit, property, and 77 50 services, for which personal property or services are 78 1 sold, leased, or rented, valued in money, whether 78 2 received in money or otherwise, without any deduction 78 3 for any of the following: 78 4 (1) The seller's cost of the property sold. 78 5 (2) The cost of materials used, labor or service 78 6 cost, interest, losses, all costs of transportation to 78 7 the seller, all taxes imposed on the seller, and any 78 8 other expenses of the seller. 78 9 (3) Charges by the seller for any services 78 10 necessary to complete the sale, other than delivery 78 11 and installation charges. 78 12 (4) Delivery charges. 78 13 (5) Installation charges. 78 14 (6) The value of exempt personal property given to 78 15 the purchaser where taxable and exempt personal 78 16 property have been bundled together and sold by the 78 17 seller as a single product or piece of merchandise. 78 18 (7) Credit for any trade-in authorized by section 78 19 423.3, subsection 58. 78 20 b. "Sales price" does not include: 78 21 (1) Discounts, including cash, term, or coupons 78 22 that are not reimbursed by a third party that are 78 23 allowed by a seller and taken by a purchaser on a 78 24 sale. 78 25 (2) Interest, financing, and carrying charges from 78 26 credit extended on the sale of personal property or 78 27 services, if the amount is separately stated on the 78 28 invoice, bill of sale, or similar document given to 78 29 the purchaser. 78 30 (3) Any taxes legally imposed directly on the 78 31 consumer that are separately stated on the invoice, 78 32 bill of sale, or similar document given to the 78 33 purchaser. 78 34 (4) The amounts received for charges included in 78 35 paragraph "a", subparagraphs (3) through (7), if they 78 36 are separately contracted for and separately stated on 78 37 the invoice, billing, or similar document given to the 78 38 purchaser. 78 39 48. "Sales tax" means the tax levied under 78 40 subchapter II of this chapter. 78 41 49. "Seller" means any person making sales, 78 42 leases, or rentals of personal property or services. 78 43 50. "Services" means all acts or services 78 44 rendered, furnished, or performed, other than services 78 45 used in processing of tangible personal property for 78 46 use in retail sales or services, for an employer, as 78 47 defined in section 422.4, subsection 3, for a valuable 78 48 consideration by any person engaged in any business or 78 49 occupation specifically enumerated in section 423.2. 78 50 The tax shall be due and collectible when the service 79 1 is rendered, furnished, or performed for the ultimate 79 2 user of the service. 79 3 51. "Services used in the processing of tangible 79 4 personal property" includes the reconditioning or 79 5 repairing of tangible personal property of the type 79 6 normally sold in the regular course of the retailer's 79 7 business and which is held for sale. 79 8 52. "State" means any state of the United States 79 9 and the District of Columbia. 79 10 53. "System" means the central electronic 79 11 registration system maintained by Iowa and other 79 12 states which are signatories to the agreement. 79 13 54. "Tangible personal property" means personal 79 14 property that can be seen, weighed, measured, felt, or 79 15 touched, or that is in any other manner perceptible to 79 16 the senses. "Tangible personal property" includes 79 17 electricity, water, gas, steam, and prewritten 79 18 computer software. 79 19 55. "Taxpayer" includes any person who is subject 79 20 to a tax imposed by this chapter, whether acting on 79 21 the person's own behalf or as a fiduciary. 79 22 56. "Trailer" shall mean every trailer, as is now 79 23 or may be hereafter so defined by chapter 321, which 79 24 is required to be registered or is subject only to the 79 25 issuance of a certificate of title under chapter 321. 79 26 57. "Use" means and includes the exercise by any 79 27 person of any right or power over tangible personal 79 28 property incident to the ownership of that property. 79 29 A retailer's or building contractor's sale of 79 30 manufactured housing for use in this state, whether in 79 31 the form of tangible personal property or of realty, 79 32 is a use of that property for the purposes of this 79 33 chapter. 79 34 58. "Use tax" means the tax levied under 79 35 subchapter III of this chapter for which the retailer 79 36 collects and remits tax to the department. 79 37 59. "User" means the immediate recipient of the 79 38 services who is entitled to exercise a right of power 79 39 over the product of such services. 79 40 60. "Value of services" means the price to the 79 41 user exclusive of any direct tax imposed by the 79 42 federal government or by this chapter. 79 43 61. "Vehicles subject to registration" means any 79 44 vehicle subject to registration pursuant to section 79 45 321.18. 79 46 SUBCHAPTER II 79 47 SALES TAX 79 48 Sec. 133. NEW SECTION. 423.2 TAX IMPOSED. 79 49 1. There is imposed a tax of five percent upon the 79 50 sales price of all sales of tangible personal 80 1 property, consisting of goods, wares, or merchandise, 80 2 sold at retail in the state to consumers or users 80 3 except as otherwise provided in this subchapter. 80 4 a. For the purposes of this subchapter, sales of 80 5 the following services are treated as if they were 80 6 sales of tangible personal property: 80 7 (1) Sales of engraving, photography, retouching, 80 8 printing, and binding services. 80 9 (2) Sales of vulcanizing, recapping, and 80 10 retreading services. 80 11 (3) Sales of prepaid telephone calling cards and 80 12 prepaid authorization numbers. 80 13 (4) Sales of optional service or warranty 80 14 contracts, except residential service contracts 80 15 regulated under chapter 523C, which provide for the 80 16 furnishing of labor and materials and require the 80 17 furnishing of any taxable service enumerated under 80 18 this section. The sales price is subject to tax even 80 19 if some of the services furnished are not enumerated 80 20 under this section. Additional sales, services, or 80 21 use taxes shall not be levied on services, parts, or 80 22 labor provided under optional service or warranty 80 23 contracts which are subject to tax under this 80 24 subsection. 80 25 If the optional service or warranty contract is a 80 26 computer software maintenance or support service 80 27 contract and there is no separately stated fee for the 80 28 taxable personal property or for the nontaxable 80 29 service, the tax imposed by this subsection shall be 80 30 imposed on fifty percent of the sales price from the 80 31 sale of such contract. If the contract provides for 80 32 technical support services only, no tax shall be 80 33 imposed under this subsection. The provisions of this 80 34 subparagraph (4) also apply to the use tax. 80 35 (5) Renting of rooms, apartments, or sleeping 80 36 quarters in a hotel, motel, inn, public lodging house, 80 37 rooming house, mobile home which is tangible personal 80 38 property, or tourist court, or in any place where 80 39 sleeping accommodations are furnished to transient 80 40 guests for rent, whether with or without meals. 80 41 "Renting" and "rent" include any kind of direct or 80 42 indirect charge for such rooms, apartments, or 80 43 sleeping quarters, or their use. However, the tax 80 44 does not apply to the sales price from the renting of 80 45 a room, apartment, or sleeping quarters while rented 80 46 by the same person for a period of more than thirty- 80 47 one consecutive days. 80 48 b. Sales of building materials, supplies, and 80 49 equipment to owners, contractors, subcontractors, or 80 50 builders for the erection of buildings or the 81 1 alteration, repair, or improvement of real property 81 2 are retail sales of tangible personal property in 81 3 whatever quantity sold. Where the owner, contractor, 81 4 subcontractor, or builder is also a retailer holding a 81 5 retail sales tax permit and transacting retail sales 81 6 of building materials, supplies, and equipment, the 81 7 person shall purchase such items of tangible personal 81 8 property without liability for the tax if such 81 9 property will be subject to the tax at the time of 81 10 resale or at the time it is withdrawn from inventory 81 11 for construction purposes. The sales tax shall be due 81 12 in the reporting period when the materials, supplies, 81 13 and equipment are withdrawn from inventory for 81 14 construction purposes or when sold at retail. The tax 81 15 shall not be due when materials are withdrawn from 81 16 inventory for use in construction outside of Iowa and 81 17 the tax shall not apply to tangible personal property 81 18 purchased and consumed by the manufacturer as building 81 19 materials in the performance by the manufacturer or 81 20 its subcontractor of construction outside of Iowa. 81 21 The sale of carpeting is not a sale of building 81 22 materials. The sale of carpeting to owners, 81 23 contractors, subcontractors, or builders shall be 81 24 treated as the sale of ordinary tangible personal 81 25 property and subject to the tax imposed under this 81 26 subsection and the use tax. 81 27 c. The use within this state of tangible personal 81 28 property by the manufacturer thereof, as building 81 29 materials, supplies, or equipment, in the performance 81 30 of construction contracts in Iowa, shall, for the 81 31 purpose of this subchapter, be construed as a sale at 81 32 retail of tangible personal property by the 81 33 manufacturer who shall be deemed to be the consumer of 81 34 such tangible personal property. The tax shall be 81 35 computed upon the cost to the manufacturer of the 81 36 fabrication or production of the tangible personal 81 37 property. 81 38 2. A tax of five percent is imposed upon the sales 81 39 price of the sale or furnishing of gas, electricity, 81 40 water, heat, pay television service, and communication 81 41 service, including the sales price from such sales by 81 42 any municipal corporation or joint water utility 81 43 furnishing gas, electricity, water, heat, pay 81 44 television service, and communication service to the 81 45 public in its proprietary capacity, except as 81 46 otherwise provided in this subchapter, when sold at 81 47 retail in the state to consumers or users. 81 48 3. A tax of five percent is imposed upon the sales 81 49 price of all sales of tickets or admissions to places 81 50 of amusement, fairs, and athletic events except those 82 1 of elementary and secondary educational institutions. 82 2 A tax of five percent is imposed on the sales price of 82 3 an entry fee or like charge imposed solely for the 82 4 privilege of participating in an activity at a place 82 5 of amusement, fair, or athletic event unless the sales 82 6 price of tickets or admissions charges for observing 82 7 the same activity are taxable under this subchapter. 82 8 A tax of five percent is imposed upon that part of 82 9 private club membership fees or charges paid for the 82 10 privilege of participating in any athletic sports 82 11 provided club members. 82 12 4. A tax of five percent is imposed upon the sales 82 13 price derived from the operation of all forms of 82 14 amusement devices and games of skill, games of chance, 82 15 raffles, and bingo games as defined in chapter 99B, 82 16 operated or conducted within the state, the tax to be 82 17 collected from the operator in the same manner as for 82 18 the collection of taxes upon the sales price of 82 19 tickets or admission as provided in this section. 82 20 Nothing in this subsection shall legalize any games of 82 21 skill or chance or slot-operated devices which are now 82 22 prohibited by law. 82 23 The tax imposed under this subsection covers the 82 24 total amount from the operation of games of skill, 82 25 games of chance, raffles, and bingo games as defined 82 26 in chapter 99B, and musical devices, weighing 82 27 machines, shooting galleries, billiard and pool 82 28 tables, bowling alleys, pinball machines, slot- 82 29 operated devices selling merchandise not subject to 82 30 the general sales taxes and on the total amount from 82 31 devices or systems where prizes are in any manner 82 32 awarded to patrons and upon the receipts from fees 82 33 charged for participation in any game or other form of 82 34 amusement, and generally upon the sales price from any 82 35 source of amusement operated for profit, not specified 82 36 in this section, and upon the sales price from which 82 37 tax is not collected for tickets or admission, but tax 82 38 shall not be imposed upon any activity exempt from 82 39 sales tax under section 423.3, subsection 78. Every 82 40 person receiving any sales price from the sources 82 41 described in this section is subject to all provisions 82 42 of this subchapter relating to retail sales tax and 82 43 other provisions of this chapter as applicable. 82 44 5. There is imposed a tax of five percent upon the 82 45 sales price from the furnishing of services as defined 82 46 in section 423.1. 82 47 6. The sales price of any of the following 82 48 enumerated services is subject to the tax imposed by 82 49 subsection 5: alteration and garment repair; armored 82 50 car; vehicle repair; battery, tire, and allied; 83 1 investment counseling; service charges of all 83 2 financial institutions; barber and beauty; boat 83 3 repair; vehicle wash and wax; campgrounds; carpentry; 83 4 roof, shingle, and glass repair; dance schools and 83 5 dance studios; dating services; dry cleaning, 83 6 pressing, dyeing, and laundering; electrical and 83 7 electronic repair and installation; excavating and 83 8 grading; farm implement repair of all kinds; flying 83 9 service; furniture, rug, carpet, and upholstery repair 83 10 and cleaning; fur storage and repair; golf and country 83 11 clubs and all commercial recreation; gun and camera 83 12 repair; house and building moving; household 83 13 appliance, television, and radio repair; janitorial 83 14 and building maintenance or cleaning; jewelry and 83 15 watch repair; lawn care, landscaping, and tree 83 16 trimming and removal; limousine service, including 83 17 driver; machine operator; machine repair of all kinds; 83 18 motor repair; motorcycle, scooter, and bicycle repair; 83 19 oilers and lubricators; office and business machine 83 20 repair; painting, papering, and interior decorating; 83 21 parking facilities; pay television; pet grooming; pipe 83 22 fitting and plumbing; wood preparation; executive 83 23 search agencies; private employment agencies, 83 24 excluding services for placing a person in employment 83 25 where the principal place of employment of that person 83 26 is to be located outside of the state; reflexology; 83 27 security and detective services; sewage services for 83 28 nonresidential commercial operations; sewing and 83 29 stitching; shoe repair and shoeshine; sign 83 30 construction and installation; storage of household 83 31 goods, mini-storage, and warehousing of raw 83 32 agricultural products; swimming pool cleaning and 83 33 maintenance; tanning beds or salons; taxidermy 83 34 services; telephone answering service; test 83 35 laboratories, including mobile testing laboratories 83 36 and field testing by testing laboratories, and 83 37 excluding tests on humans or animals; termite, bug, 83 38 roach, and pest eradicators; tin and sheet metal 83 39 repair; Turkish baths, massage, and reducing salons, 83 40 excluding services provided by massage therapists 83 41 licensed under chapter 152C; water conditioning and 83 42 softening; weighing; welding; well drilling; wrapping, 83 43 packing, and packaging of merchandise other than 83 44 processed meat, fish, fowl, and vegetables; wrecking 83 45 service; wrecker and towing. 83 46 For the purposes of this subsection, the sales 83 47 price of a lease or rental includes rents, royalties, 83 48 and copyright and license fees. For the purposes of 83 49 this subsection, "financial institutions" means all 83 50 national banks, federally chartered savings and loan 84 1 associations, federally chartered savings banks, 84 2 federally chartered credit unions, banks organized 84 3 under chapter 524, savings and loan associations and 84 4 savings banks organized under chapter 534, and credit 84 5 unions organized under chapter 533. 84 6 7. a. A tax of five percent is imposed upon the 84 7 sales price from the sales, furnishing, or service of 84 8 solid waste collection and disposal service. 84 9 For purposes of this subsection, "solid waste" 84 10 means garbage, refuse, sludge from a water supply 84 11 treatment plant or air contaminant treatment facility, 84 12 and other discarded waste materials and sludges, in 84 13 solid, semisolid, liquid, or contained gaseous form, 84 14 resulting from nonresidential commercial operations, 84 15 but does not include auto hulks; street sweepings; 84 16 ash; construction debris; mining waste; trees; tires; 84 17 lead acid batteries; used oil; hazardous waste; animal 84 18 waste used as fertilizer; earthen fill, boulders, or 84 19 rock; foundry sand used for daily cover at a sanitary 84 20 landfill; sewage sludge; solid or dissolved material 84 21 in domestic sewage or other common pollutants in water 84 22 resources, such as silt, dissolved or suspended solids 84 23 in industrial waste water effluents or discharges 84 24 which are point sources subject to permits under 84 25 section 402 of the federal Water Pollution Control 84 26 Act, or dissolved materials in irrigation return 84 27 flows; or source, special nuclear, or by-product 84 28 material defined by the federal Atomic Energy Act of 84 29 1954. 84 30 A recycling facility that separates or processes 84 31 recyclable materials and that reduces the volume of 84 32 the waste by at least eighty-five percent is exempt 84 33 from the tax imposed by this subsection if the waste 84 34 exempted is collected and disposed of separately from 84 35 other solid waste. 84 36 b. A person who transports solid waste generated 84 37 by that person or another person without compensation 84 38 shall pay the tax imposed by this subsection at the 84 39 collection or disposal facility based on the disposal 84 40 charge or tipping fee. However, the costs of a 84 41 service or portion of a service to collect and manage 84 42 recyclable materials separated from solid waste by the 84 43 waste generator are exempt from the tax imposed by 84 44 this subsection. 84 45 8. a. A tax of five percent is imposed upon the 84 46 sales price from sales of bundled services contracts. 84 47 For purposes of this subsection, a "bundled services 84 48 contract" means an agreement providing for a 84 49 retailer's performance of services, one or more of 84 50 which is a taxable service enumerated in this section 85 1 and one or more of which is not, in return for a 85 2 consumer's or user's single payment for the 85 3 performance of the services, with no separate 85 4 statement to the consumer or user of what portion of 85 5 that payment is attributable to any one service which 85 6 is a part of the contract. 85 7 b. For purposes of the administration of the tax 85 8 on bundled services contracts, the director may enter 85 9 into agreements of limited duration with individual 85 10 retailers, groups of retailers, or organizations 85 11 representing retailers of bundled services contracts. 85 12 Such an agreement shall impose the tax rate only upon 85 13 that portion of the sales price from a bundled 85 14 services contract which is attributable to taxable 85 15 services provided under the contract. 85 16 9. A tax of five percent is imposed upon the sales 85 17 price from any mobile telecommunications service which 85 18 this state is allowed to tax by the provisions of the 85 19 federal Mobile Telecommunications Sourcing Act, Pub. 85 20 L. No. 106-252, 4 U.S.C. } 116 et seq. For purposes 85 21 of this subsection, taxes on mobile telecommunications 85 22 service, as defined under the federal Mobile 85 23 Telecommunications Sourcing Act that are deemed to be 85 24 provided by the customer's home service provider, 85 25 shall be paid to the taxing jurisdiction whose 85 26 territorial limits encompass the customer's place of 85 27 primary use, regardless of where the mobile 85 28 telecommunications service originates, terminates, or 85 29 passes through and shall in all other respects be 85 30 taxed in conformity with the federal Mobile 85 31 Telecommunications Sourcing Act. All other provisions 85 32 of the federal Mobile Telecommunications Sourcing Act 85 33 are adopted by the state of Iowa and incorporated into 85 34 this subsection by reference. With respect to mobile 85 35 telecommunications service under the federal Mobile 85 36 Telecommunications Sourcing Act, the director shall, 85 37 if requested, enter into agreements consistent with 85 38 the provisions of the federal Act. 85 39 10. All revenues arising under the operation of 85 40 the provisions of this section shall be deposited into 85 41 the general fund of the state. 85 42 Sec. 134. NEW SECTION. 423.3 EXEMPTIONS. 85 43 There is exempted from the provisions of this 85 44 subchapter and from the computation of the amount of 85 45 tax imposed by it the following: 85 46 1. The sales price from sales of tangible personal 85 47 property and services furnished which this state is 85 48 prohibited from taxing under the Constitution or laws 85 49 of the United States or under the Constitution of this 85 50 state. 86 1 2. The sales price of sales for resale of tangible 86 2 personal property or taxable services, or for resale 86 3 of tangible personal property in connection with the 86 4 furnishing of taxable services. 86 5 3. The sales price of agricultural breeding 86 6 livestock and domesticated fowl. 86 7 4. The sales price of commercial fertilizer. 86 8 5. The sales price of agricultural limestone, 86 9 herbicide, pesticide, insecticide, including 86 10 adjuvants, surfactants, and other products directly 86 11 related to the application enhancement of those 86 12 products, food, medication, or agricultural drain 86 13 tile, including installation of agricultural drain 86 14 tile, any of which are to be used in disease control, 86 15 weed control, insect control, or health promotion of 86 16 plants or livestock produced as part of agricultural 86 17 production for market. 86 18 6. The sales price of tangible personal property 86 19 which will be consumed as fuel in creating heat, 86 20 power, or steam for grain drying, or for providing 86 21 heat or cooling for livestock buildings or for 86 22 greenhouses or buildings or parts of buildings 86 23 dedicated to the production of flowering, ornamental, 86 24 or vegetable plants intended for sale in the ordinary 86 25 course of business, or for use in cultivation of 86 26 agricultural products by aquaculture, or in implements 86 27 of husbandry engaged in agricultural production. 86 28 7. The sales price of services furnished by 86 29 specialized flying implements of husbandry used for 86 30 agricultural aerial spraying. 86 31 8. The sales price exclusive of services of farm 86 32 machinery and equipment, including auxiliary 86 33 attachments which improve the performance, safety, 86 34 operation, or efficiency of the machinery and 86 35 equipment and replacement parts, if the following 86 36 conditions are met: 86 37 a. The farm machinery and equipment shall be 86 38 directly and primarily used in production of 86 39 agricultural products. 86 40 b. The farm machinery and equipment shall 86 41 constitute self-propelled implements or implements 86 42 customarily drawn or attached to self-propelled 86 43 implements or the farm machinery or equipment is a 86 44 grain dryer. 86 45 c. The replacement part is essential to any repair 86 46 or reconstruction necessary to the farm machinery's or 86 47 equipment's exempt use in the production of 86 48 agricultural products. 86 49 Vehicles subject to registration, as defined in 86 50 section 423.1, or replacement parts for such vehicles, 87 1 are not eligible for this exemption. 87 2 9. The sales price of wood chips, sawdust, hay, 87 3 straw, paper, or other materials used for bedding in 87 4 the production of agricultural livestock or fowl. 87 5 10. The sales price of gas, electricity, water, or 87 6 heat to be used in implements of husbandry engaged in 87 7 agricultural production. 87 8 11. The sales price exclusive of services of farm 87 9 machinery and equipment, including auxiliary 87 10 attachments which improve the performance, safety, 87 11 operation, or efficiency of the machinery and 87 12 equipment and replacement parts, if all of the 87 13 following conditions are met: 87 14 a. The implement, machinery, or equipment is 87 15 directly and primarily used in livestock or dairy 87 16 production, aquaculture production, or the production 87 17 of flowering, ornamental, or vegetable plants. 87 18 b. The implement is not a self-propelled implement 87 19 or implement customarily drawn or attached to self- 87 20 propelled implements. 87 21 c. The replacement part is essential to any repair 87 22 or reconstruction necessary to the farm machinery's or 87 23 equipment's exempt use in livestock or dairy 87 24 production, aquaculture production, or the production 87 25 of flowering, ornamental, or vegetable plants. 87 26 12. The sales price, exclusive of services, from 87 27 sales of irrigation equipment used in farming 87 28 operations. 87 29 13. The sales price from the sale or rental of 87 30 irrigation equipment, whether installed above or below 87 31 ground, to a contractor or farmer if the equipment 87 32 will be primarily used in agricultural operations. 87 33 14. The sales price from the sales of horses, 87 34 commonly known as draft horses, when purchased for use 87 35 and so used as draft horses. 87 36 15. The sales price from the sale of property 87 37 which is a container, label, carton, pallet, packing 87 38 case, wrapping, baling wire, twine, bag, bottle, 87 39 shipping case, or other similar article or receptacle 87 40 sold for use in agricultural, livestock, or dairy 87 41 production. 87 42 16. The sales price from the sale of feed and feed 87 43 supplements and additives when used for consumption by 87 44 farm deer or bison. 87 45 17. The sales price of all goods, wares, or 87 46 merchandise, or services, used for educational 87 47 purposes sold to any private nonprofit educational 87 48 institution in this state. For the purpose of this 87 49 subsection, "educational institution" means an 87 50 institution which primarily functions as a school, 88 1 college, or university with students, faculty, and an 88 2 established curriculum. The faculty of an educational 88 3 institution must be associated with the institution 88 4 and the curriculum must include basic courses which 88 5 are offered every year. "Educational institution" 88 6 includes an institution primarily functioning as a 88 7 library. 88 8 18. The sales price of tangible personal property 88 9 sold, or of services furnished, to the following 88 10 nonprofit corporations: 88 11 a. Residential care facilities and intermediate 88 12 care facilities for persons with mental retardation 88 13 and residential care facilities for persons with 88 14 mental illness licensed by the department of 88 15 inspections and appeals under chapter 135C. 88 16 b. Residential facilities licensed by the 88 17 department of human services pursuant to chapter 237, 88 18 other than those maintained by individuals as defined 88 19 in section 237.1, subsection 7. 88 20 c. Rehabilitation facilities that provide 88 21 accredited rehabilitation services to persons with 88 22 disabilities which are accredited by the commission on 88 23 accreditation of rehabilitation facilities or the 88 24 accreditation council for services for persons with 88 25 mental retardation and other persons with 88 26 developmental disabilities and adult day care services 88 27 approved for reimbursement by the state department of 88 28 human services. 88 29 d. Community mental health centers accredited by 88 30 the department of human services pursuant to chapter 88 31 225C. 88 32 e. Community health centers as defined in 42 88 33 U.S.C. } 254(c) and migrant health centers as defined 88 34 in 42 U.S.C. } 254(b). 88 35 19. The sales price of tangible personal property 88 36 sold to a nonprofit organization which was organized 88 37 for the purpose of lending the tangible personal 88 38 property to the general public for use by them for 88 39 nonprofit purposes. 88 40 20. The sales price of tangible personal property 88 41 sold, or of services furnished, to nonprofit legal aid 88 42 organizations. 88 43 21. The sales price of goods, wares, or 88 44 merchandise, or of services, used for educational, 88 45 scientific, historic preservation, or aesthetic 88 46 purpose sold to a nonprofit private museum. 88 47 22. The sales price from sales of goods, wares, or 88 48 merchandise, or from services furnished, to a 88 49 nonprofit private art center to be used in the 88 50 operation of the art center. 89 1 23. The sales price of tangible personal property 89 2 sold, or of services furnished, by a fair society 89 3 organized under chapter 174. 89 4 24. The sales price from services furnished by the 89 5 notification center established pursuant to section 89 6 480.3, and the vendor selected pursuant to section 89 7 480.3 to provide the notification service. 89 8 25. The sales price of food and beverages sold for 89 9 human consumption by a nonprofit organization which 89 10 principally promotes a food or beverage product for 89 11 human consumption produced, grown, or raised in this 89 12 state and whose income is exempt from federal taxation 89 13 under section 501(c) of the Internal Revenue Code. 89 14 26. The sales price of tangible personal property 89 15 sold, or of services furnished, to a statewide 89 16 nonprofit organ procurement organization, as defined 89 17 in section 142C.2. 89 18 27. The sales price of tangible personal property 89 19 sold, or of services furnished, to a nonprofit 89 20 hospital licensed pursuant to chapter 135B to be used 89 21 in the operation of the hospital. 89 22 28. The sales price of tangible personal property 89 23 sold, or of services furnished, to a freestanding 89 24 nonprofit hospice facility which operates a hospice 89 25 program as defined in 42 C.F.R., ch. IV, } 418.3, 89 26 which property or services are to be used in the 89 27 hospice program. 89 28 29. The sales price of all goods, wares, or 89 29 merchandise sold, or of services furnished, which are 89 30 used in the fulfillment of a written construction 89 31 contract with a nonprofit hospital licensed pursuant 89 32 to chapter 135B if all of the following apply: 89 33 a. The sales and delivery of the goods, wares, or 89 34 merchandise, or the services furnished occurred 89 35 between July 1, 1998, and December 31, 2001. 89 36 b. The written construction contract was entered 89 37 into prior to December 31, 1999, or bonds to fund the 89 38 construction were issued prior to December 31, 1999. 89 39 c. The sales or services were purchased by a 89 40 contractor as the agent for the hospital or were 89 41 purchased directly by the hospital. 89 42 30. The sales price of livestock ear tags sold by 89 43 a nonprofit organization whose income is exempt from 89 44 federal taxation under section 501(c)(6) of the 89 45 Internal Revenue Code where the proceeds are used in 89 46 bovine research programs selected or approved by such 89 47 organization. 89 48 31. The sales price of goods, wares, or 89 49 merchandise sold to and of services furnished, and 89 50 used for public purposes sold to a tax-certifying or 90 1 tax-levying body of the state or a governmental 90 2 subdivision of the state, including regional transit 90 3 systems, as defined in section 324A.1, the state board 90 4 of regents, department of human services, state 90 5 department of transportation, any municipally owned 90 6 solid waste facility which sells all or part of its 90 7 processed waste as fuel to a municipally owned public 90 8 utility, and all divisions, boards, commissions, 90 9 agencies, or instrumentalities of state, federal, 90 10 county, or municipal government which have no earnings 90 11 going to the benefit of an equity investor or 90 12 stockholder, except any of the following: 90 13 a. The sales price of goods, wares, or merchandise 90 14 sold to, or of services furnished, and used by or in 90 15 connection with the operation of any municipally owned 90 16 public utility engaged in selling gas, electricity, 90 17 heat, or pay television service to the general public. 90 18 b. The sales price of furnishing of sewage 90 19 services to a county or municipality on behalf of 90 20 nonresidential commercial operations. 90 21 c. The furnishing of solid waste collection and 90 22 disposal service to a county or municipality on behalf 90 23 of nonresidential commercial operations located within 90 24 the county or municipality. 90 25 The exemption provided by this subsection shall 90 26 also apply to all such sales of goods, wares, or 90 27 merchandise or of services furnished and subject to 90 28 use tax. 90 29 32. The sales price of tangible personal property 90 30 sold, or of services furnished, by a county or city. 90 31 This exemption does not apply to any of the following: 90 32 a. The tax specifically imposed under section 90 33 423.2 on the sales price from sales or furnishing of 90 34 gas, electricity, water, heat, pay television service, 90 35 or communication service to the public by a municipal 90 36 corporation in its proprietary capacity. 90 37 b. The sale or furnishing of solid waste 90 38 collection and disposal service to nonresidential 90 39 commercial operations. 90 40 c. The sale or furnishing of sewage service for 90 41 nonresidential commercial operations. 90 42 d. Fees paid to cities and counties for the 90 43 privilege of participating in any athletic sports. 90 44 33. The sales price of mementos and other items 90 45 relating to Iowa history and historic sites, the 90 46 general assembly, and the state capitol, sold by the 90 47 legislative service bureau and its legislative 90 48 information office on the premises of property under 90 49 the control of the legislative council, at the state 90 50 capitol, and on other state property. 91 1 34. The sales price from sales of mementos and 91 2 other items relating to Iowa history and historic 91 3 sites by the department of cultural affairs on the 91 4 premises of property under its control and at the 91 5 state capitol. 91 6 35. The sales price from sales or services 91 7 furnished by the state fair organized under chapter 91 8 173. 91 9 36. The sales price from sales of tangible 91 10 personal property or of the sale or furnishing of 91 11 electrical energy, natural or artificial gas, or 91 12 communication service to another state or political 91 13 subdivision of another state if the other state 91 14 provides a similar reciprocal exemption for this state 91 15 and political subdivision of this state. 91 16 37. The sales price of services on or connected 91 17 with new construction, reconstruction, alteration, 91 18 expansion, remodeling, or the services of a general 91 19 building contractor, architect, or engineer. 91 20 38. The sales price from the sale of building 91 21 materials, supplies, or equipment sold to rural water 91 22 districts organized under chapter 504A as provided in 91 23 chapter 357A and used for the construction of 91 24 facilities of a rural water district. 91 25 39. The sales price from "casual sales". 91 26 "Casual sales" means: 91 27 a. Sales of tangible personal property, or the 91 28 furnishing of services, of a nonrecurring nature, by 91 29 the owner, if the seller, at the time of the sale, is 91 30 not engaged for profit in the business of selling 91 31 tangible personal property or services taxed under 91 32 section 423.2. 91 33 b. The sale of all or substantially all of the 91 34 tangible personal property or services held or used by 91 35 a seller in the course of the seller's trade or 91 36 business for which the seller is required to hold a 91 37 sales tax permit when the seller sells or otherwise 91 38 transfers the trade or business to another person who 91 39 shall engage in a similar trade or business. 91 40 40. The sales price from the sale of automotive 91 41 fluids to a retailer to be used either in providing a 91 42 service which includes the installation or application 91 43 of the fluids in or on a motor vehicle, which service 91 44 is subject to section 423.2, subsection 6, or to be 91 45 installed in or applied to a motor vehicle which the 91 46 retailer intends to sell, which sale is subject to 91 47 section 423.26. For purposes of this subsection, 91 48 automotive fluids are all those which are refined, 91 49 manufactured, or otherwise processed and packaged for 91 50 sale prior to their installation in or application to 92 1 a motor vehicle. They include but are not limited to 92 2 motor oil and other lubricants, hydraulic fluids, 92 3 brake fluid, transmission fluid, sealants, 92 4 undercoatings, antifreeze, and gasoline additives. 92 5 41. The sales price from the rental of motion 92 6 picture films, video and audio tapes, video and audio 92 7 discs, records, photos, copy, scripts, or other media 92 8 used for the purpose of transmitting that which can be 92 9 seen, heard, or read, if either of the following 92 10 conditions are met: 92 11 a. The lessee imposes a charge for the viewing of 92 12 such media and the charge for the viewing is subject 92 13 to taxation under this subchapter or is subject to use 92 14 tax. 92 15 b. The lessee broadcasts the contents of such 92 16 media for public viewing or listening. 92 17 42. The sales price from the sale of tangible 92 18 personal property consisting of advertising material 92 19 including paper to a person in Iowa if that person or 92 20 that person's agent will, subsequent to the sale, send 92 21 that advertising material outside this state and the 92 22 material is subsequently used solely outside of Iowa. 92 23 For the purpose of this subsection, "advertising 92 24 material" means any brochure, catalog, leaflet, flyer, 92 25 order form, return envelope, or similar item used to 92 26 promote sales of property or services. 92 27 43. The sales price from the sale of property or 92 28 of services performed on property which the retailer 92 29 transfers to a carrier for shipment to a point outside 92 30 of Iowa, places in the United States mail or parcel 92 31 post directed to a point outside of Iowa, or 92 32 transports to a point outside of Iowa by means of the 92 33 retailer's own vehicles, and which is not thereafter 92 34 returned to a point within Iowa, except solely in the 92 35 course of interstate commerce or transportation. This 92 36 exemption shall not apply if the purchaser, consumer, 92 37 or their agent, other than a carrier, takes physical 92 38 possession of the property in Iowa. 92 39 44. The sales price from the sale of property 92 40 which is a container, label, carton, pallet, packing 92 41 case, wrapping paper, twine, bag, bottle, shipping 92 42 case, or other similar article or receptacle sold to 92 43 retailers or manufacturers for the purpose of 92 44 packaging or facilitating the transportation of 92 45 tangible personal property sold at retail or 92 46 transferred in association with the maintenance or 92 47 repair of fabric or clothing. 92 48 45. The sales price from sales or rentals to a 92 49 printer or publisher of the following: acetate; anti- 92 50 halation backing; antistatic spray; back lining; base 93 1 material used as a carrier for light sensitive 93 2 emulsions; blankets; blow-ups; bronze powder; carbon 93 3 tissue; codas; color filters; color separations; 93 4 contacts; continuous tone separations; creative art; 93 5 custom dies and die cutting materials; dampener 93 6 sleeves; dampening solution; design and styling; diazo 93 7 coating; dot etching; dot etching solutions; drawings; 93 8 drawsheets; driers; duplicate films or prints; 93 9 electronically digitized images; electrotypes; end 93 10 product of image modulation; engravings; etch 93 11 solutions; film; finished art or final art; fix; 93 12 fixative spray; flats; flying pasters; foils; 93 13 goldenrod paper; gum; halftones; illustrations; ink; 93 14 ink paste; keylines; lacquer; lasering images; 93 15 layouts; lettering; line negatives and positives; 93 16 linotypes; lithographic offset plates; magnesium and 93 17 zinc etchings; masking paper; masks; masters; mats; 93 18 mat service; metal toner; models and modeling; mylar; 93 19 negatives; nonoffset spray; opaque film process paper; 93 20 opaquing; padding compound; paper stock; photographic 93 21 materials: acids, plastic film, desensitizer 93 22 emulsion, exposure chemicals, fix, developers, and 93 23 paper; photography, day rate; photopolymer coating; 93 24 photographs; photostats; photo-display tape; 93 25 phototypesetter materials; ph-indicator sticks; 93 26 positives; press pack; printing cylinders; printing 93 27 plates, all types; process lettering; proof paper; 93 28 proofs and proof processes, all types; pumice powder; 93 29 purchased author alterations; purchased composition; 93 30 purchased phototypesetting; purchased stripping and 93 31 pasteups; red litho tape; reducers; roller covering; 93 32 screen tints; sketches; stepped plates; stereotypes; 93 33 strip types; substrate; tints; tissue overlays; 93 34 toners; transparencies; tympan; typesetting; 93 35 typography; varnishes; veloxes; wood mounts; and any 93 36 other items used in a like capacity to any of the 93 37 above enumerated items by the printer or publisher to 93 38 complete a finished product for sale at retail. 93 39 Expendable tools and supplies which are not enumerated 93 40 in this subsection are excluded from the exemption. 93 41 "Printer" means that portion of a person's business 93 42 engaged in printing that completes a finished product 93 43 for ultimate sale at retail or means that portion of a 93 44 person's business used to complete a finished printed 93 45 packaging material used to package a product for 93 46 ultimate sale at retail. "Printer" does not mean an 93 47 in-house printer who prints or copyrights its own 93 48 materials. 93 49 46. a. The sales price from the sale or rental of 93 50 computers, machinery, and equipment, including 94 1 replacement parts, and materials used to construct or 94 2 self-construct computers, machinery, and equipment if 94 3 such items are any of the following: 94 4 (1) Directly and primarily used in processing by a 94 5 manufacturer. 94 6 (2) Directly and primarily used to maintain the 94 7 integrity of the product or to maintain unique 94 8 environmental conditions required for either the 94 9 product or the computers, machinery, and equipment 94 10 used in processing by a manufacturer, including test 94 11 equipment used to control quality and specifications 94 12 of the product. 94 13 (3) Directly and primarily used in research and 94 14 development of new products or processes of 94 15 processing. 94 16 (4) Computers used in processing or storage of 94 17 data or information by an insurance company, financial 94 18 institution, or commercial enterprise. 94 19 (5) Directly and primarily used in recycling or 94 20 reprocessing of waste products. 94 21 (6) Pollution-control equipment used by a 94 22 manufacturer, including but not limited to that 94 23 required or certified by an agency of this state or of 94 24 the United States government. 94 25 b. The sales price from the sale of fuel used in 94 26 creating heat, power, steam, or for generating 94 27 electrical current, or from the sale of electricity, 94 28 consumed by computers, machinery, or equipment used in 94 29 an exempt manner described in paragraph "a", 94 30 subparagraph (1), (2), (3), (5), or (6). 94 31 c. The sales price from the sale or rental of the 94 32 following shall not be exempt from the tax imposed by 94 33 this subchapter: 94 34 (1) Hand tools. 94 35 (2) Point-of-sale equipment and computers. 94 36 (3) Industrial machinery, equipment, and 94 37 computers, including pollution-control equipment 94 38 within the scope of section 427A.1, subsection 1, 94 39 paragraphs "h" and "i". 94 40 (4) Vehicles subject to registration, except 94 41 vehicles subject to registration which are directly 94 42 and primarily used in recycling or reprocessing of 94 43 waste products. 94 44 d. As used in this subsection: 94 45 (1) "Commercial enterprise" includes businesses 94 46 and manufacturers conducted for profit and centers for 94 47 data processing services to insurance companies, 94 48 financial institutions, businesses, and manufacturers, 94 49 but excludes professions and occupations and nonprofit 94 50 organizations. 95 1 (2) "Financial institution" means as defined in 95 2 section 527.2. 95 3 (3) "Insurance company" means an insurer organized 95 4 or operating under chapter 508, 514, 515, 518, 518A, 95 5 519, or 520, or authorized to do business in Iowa as 95 6 an insurer or an insurance producer under chapter 95 7 522B. 95 8 (4) "Manufacturer" means as defined in section 95 9 428.20, but also includes contract manufacturers. A 95 10 contract manufacturer is a manufacturer that otherwise 95 11 falls within the definition of manufacturer under 95 12 section 428.20, except that a contract manufacturer 95 13 does not sell the tangible personal property the 95 14 contract manufacturer processes on behalf of other 95 15 manufacturers. A business engaged in activities 95 16 subsequent to the extractive process of quarrying or 95 17 mining, such as crushing, washing, sizing, or blending 95 18 of aggregate materials, is a manufacturer with respect 95 19 to these activities. 95 20 (5) "Processing" means a series of operations in 95 21 which materials are manufactured, refined, purified, 95 22 created, combined, or transformed by a manufacturer, 95 23 ultimately into tangible personal property. 95 24 Processing encompasses all activities commencing with 95 25 the receipt or producing of raw materials by the 95 26 manufacturer and ending at the point products are 95 27 delivered for shipment or transferred from the 95 28 manufacturer. Processing includes but is not limited 95 29 to refinement or purification of materials; treatment 95 30 of materials to change their form, context, or 95 31 condition; maintenance of the quality or integrity of 95 32 materials, components, or products; maintenance of 95 33 environmental conditions necessary for materials, 95 34 components, or products; quality control activities; 95 35 and construction of packaging and shipping devices, 95 36 placement into shipping containers or any type of 95 37 shipping devices or medium, and the movement of 95 38 materials, components, or products until shipment from 95 39 the processor. 95 40 (6) "Receipt or producing of raw materials" means 95 41 activities performed upon tangible personal property 95 42 only. With respect to raw materials produced from or 95 43 upon real estate, the receipt or producing of raw 95 44 materials is deemed to occur immediately following the 95 45 severance of the raw materials from the real estate. 95 46 47. The sales price from the furnishing of the 95 47 design and installation of new industrial machinery or 95 48 equipment, including electrical and electronic 95 49 installation. 95 50 48. The sales price from the sale of carbon 96 1 dioxide in a liquid, solid, or gaseous form, 96 2 electricity, steam, and other taxable services when 96 3 used by a manufacturer of food products to produce 96 4 marketable food products for human consumption, 96 5 including but not limited to treatment of material to 96 6 change its form, context, or condition, in order to 96 7 produce the food product, maintenance of quality or 96 8 integrity of the food product, changing or maintenance 96 9 of temperature levels necessary to avoid spoilage or 96 10 to hold the food product in marketable condition, 96 11 maintenance of environmental conditions necessary for 96 12 the safe or efficient use of machinery and material 96 13 used to produce the food product, sanitation and 96 14 quality control activities, formation of packaging, 96 15 placement into shipping containers, and movement of 96 16 the material or food product until shipment from the 96 17 building of manufacture. 96 18 49. The sales price of sales of electricity, 96 19 steam, or any taxable service when purchased and used 96 20 in the processing of tangible personal property 96 21 intended to be sold ultimately at retail. 96 22 50. The sales price of tangible personal property 96 23 sold for processing. Tangible personal property is 96 24 sold for processing within the meaning of this 96 25 subsection only when it is intended that the property 96 26 will, by means of fabrication, compounding, 96 27 manufacturing, or germination, become an integral part 96 28 of other tangible personal property intended to be 96 29 sold ultimately at retail; or for generating electric 96 30 current; or the property is a chemical, solvent, 96 31 sorbent, or reagent, which is directly used and is 96 32 consumed, dissipated, or depleted, in processing 96 33 tangible personal property which is intended to be 96 34 sold ultimately at retail or consumed in the 96 35 maintenance or repair of fabric or clothing, and which 96 36 may not become a component or integral part of the 96 37 finished product. The distribution to the public of 96 38 free newspapers or shoppers guides is a retail sale 96 39 for purposes of the processing exemption set out in 96 40 this subsection and in subsection 49. 96 41 51. The sales price from the sale of argon and 96 42 other similar gases to be used in the manufacturing 96 43 process. 96 44 52. The sales price from the sale of electricity 96 45 to water companies assessed for property tax pursuant 96 46 to sections 428.24, 428.26, and 428.28 which is used 96 47 solely for the purpose of pumping water from a river 96 48 or well. 96 49 53. The sales price from the sale of wind energy 96 50 conversion property to be used as an electric power 97 1 source and the sale of the materials used to 97 2 manufacture, install, or construct wind energy 97 3 conversion property used or to be used as an electric 97 4 power source. 97 5 For purposes of this subsection, "wind energy 97 6 conversion property" means any device, including, but 97 7 not limited to, a wind charger, windmill, wind 97 8 turbine, tower and electrical equipment, pad mount 97 9 transformers, power lines, and substation, which 97 10 converts wind energy to a form of usable energy. 97 11 54. The sales price from the sales of newspapers, 97 12 free newspapers, or shoppers guides and the printing 97 13 and publishing of such newspapers and shoppers guides, 97 14 and envelopes for advertising. 97 15 55. The sales price from the sale of motor fuel 97 16 and special fuel consumed for highway use or in 97 17 watercraft or aircraft where the fuel tax has been 97 18 imposed and paid and no refund has been or will be 97 19 allowed and the sales price from the sales of ethanol 97 20 blended gasoline, as defined in section 452A.2. 97 21 56. The sales price from all sales of food and 97 22 food ingredients. However, as used in this 97 23 subsection, "food" does not include alcoholic 97 24 beverages, candy, dietary supplements, food sold 97 25 through vending machines, prepared food, soft drinks, 97 26 and tobacco. 97 27 For the purposes of this subsection: 97 28 a. "Alcoholic beverages" means beverages that are 97 29 suitable for human consumption and contain one-half of 97 30 one percent or more of alcohol by volume. 97 31 b. "Candy" means a preparation of sugar, honey, or 97 32 other natural or artificial sweeteners in combination 97 33 with chocolate, fruits, nuts, or other ingredients or 97 34 flavorings in the form of bars, drops, or pieces. 97 35 Candy shall not include any preparation containing 97 36 flour and shall require no refrigeration. 97 37 c. "Dietary supplement" means any product, other 97 38 than tobacco, intended to supplement the diet that 97 39 contains one or more of the following dietary 97 40 ingredients: 97 41 (1) A vitamin. 97 42 (2) A mineral. 97 43 (3) An herb or other botanical. 97 44 (4) An amino acid. 97 45 (5) A dietary substance for use by humans to 97 46 supplement the diet by increasing the total dietary 97 47 intake. 97 48 (6) A concentrate, metabolite, constituent, 97 49 extract, or combination of any of the ingredients in 97 50 subparagraphs (1) through (5) that is intended for 98 1 ingestion in tablet, capsule, powder, softgel, gelcap, 98 2 or liquid form, or if not intended for ingestion in 98 3 such a form, is not represented as conventional food 98 4 and is not represented for use as a sole item of a 98 5 meal or of the diet; and is required to be labeled as 98 6 a dietary supplement, identifiable by the "supplement 98 7 facts" box found on the label and as required pursuant 98 8 to 21 C.F.R. } 101.36. 98 9 d. "Food and food ingredients" means substances, 98 10 whether in liquid, concentrated, solid, frozen, dried, 98 11 or dehydrated form, that are sold for ingestion or 98 12 chewing by humans and are consumed for their taste or 98 13 nutritional value. 98 14 e. "Food sold through vending machines" means food 98 15 dispensed from a machine or other mechanical device 98 16 that accepts payment, other than food which would be 98 17 qualified for exemption under subsection 57 if 98 18 purchased with a coupon described in subsection 57. 98 19 f. "Prepared food" means any of following: 98 20 (1) Food sold in a heated state or heated by the 98 21 seller, including food sold by a caterer. 98 22 (2) Two or more food ingredients mixed or combined 98 23 by the seller for sale as a single item. 98 24 (3) "Prepared food", for the purposes of this 98 25 paragraph, does not include food that is any of the 98 26 following: 98 27 (a) Only cut, repackaged, or pasteurized by the 98 28 seller. 98 29 (b) Eggs, fish, meat, poultry, and foods 98 30 containing these raw animal foods requiring cooking by 98 31 the consumer as recommended by the United States food 98 32 and drug administration in chapter 3, part 401.11 of 98 33 its food code, so as to prevent food borne illnesses. 98 34 (c) Bakery items sold by the seller which baked 98 35 them. The words "bakery items" includes but is not 98 36 limited to breads, rolls, buns, biscuits, bagels, 98 37 croissants, pastries, donuts, Danish, cakes, tortes, 98 38 pies, tarts, muffins, bars, cookies, and tortillas. 98 39 (d) Food sold without eating utensils provided by 98 40 the seller in an unheated state as a single item which 98 41 is priced by weight or volume. 98 42 (4) Food sold with eating utensils provided by the 98 43 seller, including plates, knives, forks, spoons, 98 44 glasses, cups, napkins, or straws. A plate does not 98 45 include a container or packaging used to transport 98 46 food. 98 47 g. "Soft drinks" means nonalcoholic beverages that 98 48 contain natural or artificial sweeteners. "Soft 98 49 drinks" does not include beverages that contain milk 98 50 or milk products; soy, rice, or similar milk 99 1 substitutes; or greater than fifty percent of 99 2 vegetable or fruit juice by volume. 99 3 f. "Tobacco" means cigarettes, cigars, chewing or 99 4 pipe tobacco, or any other item that contains tobacco. 99 5 57. The sales price from the sale of items 99 6 purchased with coupons issued under the federal Food 99 7 Stamp Act of 1977, 7 U.S.C. } 2011 et seq. 99 8 58. In transactions in which tangible personal 99 9 property is traded toward the sales price of other 99 10 tangible personal property, that portion of the sales 99 11 price which is not payable in money to the retailer is 99 12 exempted from the taxable amount if the following 99 13 conditions are met: 99 14 a. The tangible personal property traded to the 99 15 retailer is the type of property normally sold in the 99 16 regular course of the retailer's business. 99 17 b. The tangible personal property traded to the 99 18 retailer is intended by the retailer to be ultimately 99 19 sold at retail or is intended to be used by the 99 20 retailer or another in the remanufacturing of a like 99 21 item. 99 22 59. The sales price from the sale or rental of 99 23 prescription drugs or medical devices intended for 99 24 human use or consumption. 99 25 For the purposes of this subsection: 99 26 a. "Drug" means a compound, substance, or 99 27 preparation, and any component of a compound, 99 28 substance, or preparation, other than food and food 99 29 ingredients, dietary supplements, or alcoholic 99 30 beverages which is any of the following: 99 31 (1) Recognized in the official United States 99 32 pharmacopoeia, official homeopathic pharmacopoeia of 99 33 the United States, or official national formulary, and 99 34 supplement to any of them. 99 35 (2) Intended for use in the diagnosis, cure, 99 36 mitigation, treatment, or prevention of disease. 99 37 (3) Intended to affect the structure or any 99 38 function of the body. 99 39 b. "Medical device" means equipment or a supply, 99 40 intended to be prescribed by a practitioner, including 99 41 orthopedic or orthotic devices. However, "medical 99 42 device" also includes prosthetic devices, ostomy, 99 43 urological, and tracheostomy equipment and supplies, 99 44 and diabetic testing materials, hypodermic syringes 99 45 and needles, anesthesia trays, biopsy trays and biopsy 99 46 needles, cannula systems, catheter trays and invasive 99 47 catheters, dialyzers, drug infusion devices, fistula 99 48 sets, hemodialysis devices, insulin infusion devices, 99 49 intraocular lenses, irrigation solutions, intravenous 99 50 administering sets, solutions and stopcocks, myelogram 100 1 trays, nebulizers, small vein infusion kits, spinal 100 2 puncture trays, transfusion sets, venous blood sets, 100 3 and oxygen equipment, intended to be dispensed for 100 4 human use with or without a prescription to an 100 5 ultimate user. 100 6 c. "Practitioner" means a practitioner as defined 100 7 in section 155A.3, or a person licensed to prescribe 100 8 drugs. 100 9 d. "Prescription drug" means a drug intended to be 100 10 dispensed to an ultimate user pursuant to a 100 11 prescription drug order, formula, or recipe issued in 100 12 any form of oral, written, electronic, or other means 100 13 of transmission by a duly licensed practitioner, or 100 14 oxygen or insulin dispensed for human consumption with 100 15 or without a prescription drug order or medication 100 16 order. 100 17 e. "Prosthetic device" means a replacement, 100 18 corrective, or supportive device including repair and 100 19 replacement parts for the same worn on or in the body 100 20 to do any of the following: 100 21 (1) Artificially replace a missing portion of the 100 22 body. 100 23 (2) Prevent or correct physical deformity or 100 24 malfunction. 100 25 (3) Support a weak or deformed portion of the 100 26 body. 100 27 f. "Ultimate user" means an individual who has 100 28 lawfully obtained and possesses a prescription drug or 100 29 medical device for the individual's own use or for the 100 30 use of a member of the individual's household, or an 100 31 individual to whom a prescription drug or medical 100 32 device has been lawfully supplied, administered, 100 33 dispensed, or prescribed. 100 34 60. The sales price from services furnished by 100 35 aerial commercial and charter transportation services. 100 36 61. The sales price from the sale of raffle 100 37 tickets for a raffle licensed pursuant to section 100 38 99B.5. 100 39 62. The sales price from the sale of tangible 100 40 personal property which will be given as prizes to 100 41 players in games of skill, games of chance, raffles, 100 42 and bingo games as defined in chapter 99B. 100 43 63. The sales price from the sale of a modular 100 44 home, as defined in section 435.1, to the extent of 100 45 the portion of the purchase price of the modular home 100 46 which is not attributable to the cost of the tangible 100 47 personal property used in the processing of the 100 48 modular home. For purposes of this exemption, the 100 49 portion of the purchase price which is not 100 50 attributable to the cost of the tangible personal 101 1 property used in the processing of the modular home is 101 2 forty percent. 101 3 64. The sales price from charges paid to a 101 4 provider for access to on-line computer services. For 101 5 purposes of this subsection, "on-line computer 101 6 service" means a service that provides or enables 101 7 computer access by multiple users to the internet or 101 8 to other information made available through a computer 101 9 server. 101 10 65. The sales price from the sale or rental of 101 11 information services. "Information services" means 101 12 every business activity, process, or function by which 101 13 a seller or its agent accumulates, prepares, 101 14 organizes, or conveys data, facts, knowledge, 101 15 procedures, and like services to a buyer or its agent 101 16 of such information through any tangible or intangible 101 17 medium. Information accumulated, prepared, or 101 18 organized for a buyer or its agent is an information 101 19 service even though it may incorporate preexisting 101 20 components of data or other information. "Information 101 21 services" includes, but is not limited to, database 101 22 files, mailing lists, subscription files, market 101 23 research, credit reports, surveys, real estate 101 24 listings, bond rating reports, abstracts of title, bad 101 25 check lists, broadcasting rating services, wire 101 26 services, and scouting reports, or other similar 101 27 items. 101 28 66. The sales price of a sale at retail if the 101 29 substance of the transaction is delivered to the 101 30 purchaser digitally, electronically, or utilizing 101 31 cable, or by radio waves, microwaves, satellites, or 101 32 fiber optics. 101 33 67. a. The sales price from the sale of an 101 34 article of clothing designed to be worn on or about 101 35 the human body if all of the following apply: 101 36 (1) The sales price of the article is less than 101 37 one hundred dollars. 101 38 (2) The sale takes place during a period beginning 101 39 at 12:01 a.m. on the first Friday in August and ending 101 40 at midnight on the following Saturday. 101 41 b. This subsection does not apply to any of the 101 42 following: 101 43 (1) Sport or recreational equipment and protective 101 44 equipment. 101 45 (2) Clothing accessories or equipment. 101 46 (3) The rental of clothing. 101 47 c. For purposes of this subsection: 101 48 (1) "Clothing" means all human wearing apparel 101 49 suitable for general use. "Clothing" includes, but is 101 50 not limited to the following: aprons, household and 102 1 shop; athletic supporters; baby receiving blankets; 102 2 bathing suits and caps; beach capes and coats; belts 102 3 and suspenders; boots; coats and jackets; costumes; 102 4 diapers (children and adults, including disposable 102 5 diapers); earmuffs; footlets; formal wear; garters and 102 6 garter belts; girdles; gloves and mittens for general 102 7 use; hats and caps; hosiery; insoles for shoes; lab 102 8 coats; neckties; overshoes; pantyhose; rainwear; 102 9 rubber pants; sandals; scarves; shoes and shoelaces; 102 10 slippers; sneakers; socks and stockings; steel-toed 102 11 shoes; underwear; uniforms, athletic and nonathletic; 102 12 and wedding apparel. 102 13 "Clothing" does not include the following: belt 102 14 buckles sold separately; costume masks sold 102 15 separately; patches and emblems sold separately; 102 16 sewing equipment and supplies (including, but not 102 17 limited to, knitting needles, patterns, pins, 102 18 scissors, sewing machines, sewing needles, tape 102 19 measures, and thimbles); and sewing materials that 102 20 become part of clothing (including, but not limited 102 21 to, buttons, fabric, lace, thread, yarn, and zippers). 102 22 (2) "Clothing accessories or equipment" means 102 23 incidental items worn on the person or in conjunction 102 24 with clothing. "Clothing accessories or equipment" 102 25 includes, but is not limited to, the following: 102 26 briefcases; cosmetics; hair notions (including, but 102 27 not limited to, barrettes, hair bows, and hair nets); 102 28 handbags; handkerchiefs; jewelry; sunglasses, 102 29 nonprescription; umbrellas; wallets; watches; and wigs 102 30 and hairpieces. 102 31 (3) "Protective equipment" means items for human 102 32 wear and designed as protection for the wearer against 102 33 injury or disease or as protection against damage or 102 34 injury of other persons or property but not suitable 102 35 for general use. "Protective equipment" includes, but 102 36 is not limited to, the following: breathing masks; 102 37 clean room apparel and equipment; ear and hearing 102 38 protectors; face shields; hard hats; helmets; paint or 102 39 dust respirators; protective gloves; safety glasses 102 40 and goggles; safety belts; tool belts; and welders 102 41 gloves and masks. 102 42 (4) "Sport or recreational equipment" means items 102 43 designed for human use and worn in conjunction with an 102 44 athletic or recreational activity that are not 102 45 suitable for general use. "Sport or recreational 102 46 equipment" includes, but is not limited to, the 102 47 following: ballet and tap shoes; cleated or spiked 102 48 athletic shoes; gloves (including, but not limited to, 102 49 baseball, bowling, boxing, hockey, and golf); goggles; 102 50 hand and elbow guards; life preservers and vests; 103 1 mouth guards; roller and ice skates; shin guards; 103 2 shoulder pads; ski boots; waders; and wetsuits and 103 3 fins. 103 4 68. a. Subject to paragraph "b", the sales price 103 5 from the sale or furnishing of metered gas, 103 6 electricity, and fuel, including propane and heating 103 7 oil, to residential customers which is used to provide 103 8 energy for residential dwellings and units of 103 9 apartment and condominium complexes used for human 103 10 occupancy. 103 11 b. The exemption in this subsection shall be 103 12 phased in by means of a reduction in the tax rate as 103 13 follows: 103 14 (1) If the date of the utility billing or meter 103 15 reading cycle of the residential customer for the sale 103 16 or furnishing of metered gas and electricity is on or 103 17 after January 1, 2002, through December 31, 2002, or 103 18 if the sale or furnishing of fuel for purposes of 103 19 residential energy and the delivery of the fuel occurs 103 20 on or after January 1, 2002, through December 31, 103 21 2002, the rate of tax is four percent of the sales 103 22 price. 103 23 (2) If the date of the utility billing or meter 103 24 reading cycle of the residential customer for the sale 103 25 or furnishing of metered gas and electricity is on or 103 26 after January 1, 2003, through June 30, 2008, or if 103 27 the sale or furnishing of fuel for purposes of 103 28 residential energy and the delivery of the fuel occurs 103 29 on or after January 1, 2003, through June 30, 2008, 103 30 the rate of tax is three percent of the sales price. 103 31 (3) If the date of the utility billing or meter 103 32 reading cycle of the residential customer for the sale 103 33 or furnishing of metered gas and electricity is on or 103 34 after July 1, 2008, through June 30, 2009, or if the 103 35 sale or furnishing of fuel for purposes of residential 103 36 energy and the delivery of the fuel occurs on or after 103 37 July 1, 2008, through June 30, 2009, the rate of tax 103 38 is two percent of the sales price. 103 39 (4) If the date of the utility billing or meter 103 40 reading cycle of the residential customer for the sale 103 41 or furnishing of metered gas and electricity is on or 103 42 after July 1, 2009, through June 30, 2010, or if the 103 43 sale or furnishing of fuel for purposes of residential 103 44 energy and the delivery of the fuel occurs on or after 103 45 July 1, 2009, through June 30, 2010, the rate of tax 103 46 is one percent of the sales price. 103 47 (5) If the date of the utility billing or meter 103 48 reading cycle of the residential customer for the sale 103 49 or furnishing of metered gas and electricity is on or 103 50 after July 1, 2010, or if the sale, furnishing, or 104 1 service of fuel for purposes of residential energy and 104 2 the delivery of the fuel occurs on or after July 1, 104 3 2010, the rate of tax is zero percent of the sales 104 4 price. 104 5 c. The exemption in this subsection does not apply 104 6 to local option sales and services tax imposed 104 7 pursuant to chapters 423B and 423E. 104 8 69. The sales price from charges paid for the 104 9 delivery of electricity or natural gas if the sale or 104 10 furnishing of the electricity or natural gas or its 104 11 use is exempt from the tax on sales prices imposed 104 12 under this subchapter or from the use tax imposed 104 13 under subchapter III. 104 14 70. The sales price from the sales, furnishing, or 104 15 service of transportation service except the rental of 104 16 recreational vehicles or recreational boats, except 104 17 the rental of motor vehicles subject to registration 104 18 which are registered for a gross weight of thirteen 104 19 tons or less for a period of sixty days or less, and 104 20 except the rental of aircraft for a period of sixty 104 21 days or less. This exemption does not apply to the 104 22 transportation of electric energy or natural gas. 104 23 71. The sales price from sales of tangible 104 24 personal property used or to be used as railroad 104 25 rolling stock for transporting persons or property, or 104 26 as materials or parts therefor. 104 27 72. The sales price from the sales of special fuel 104 28 for diesel engines consumed or used in the operation 104 29 of ships, barges, or waterborne vessels which are used 104 30 primarily in or for the transportation of property or 104 31 cargo, or the conveyance of persons for hire on rivers 104 32 bordering on the state if the fuel is delivered by the 104 33 seller to the purchaser's barge, ship, or waterborne 104 34 vessel while it is afloat upon such a river. 104 35 73. The sales price from sales of vehicles subject 104 36 to registration or subject only to the issuance of a 104 37 certificate of title and sales of aircraft subject to 104 38 registration under section 328.20. 104 39 74. The sales price from the sale of aircraft for 104 40 use in a scheduled interstate federal aviation 104 41 administration certificated air carrier operation. 104 42 75. The sales price from the sale or rental of 104 43 aircraft; the sale or rental of tangible personal 104 44 property permanently affixed or attached as a 104 45 component part of the aircraft, including but not 104 46 limited to repair or replacement materials or parts; 104 47 and the sales price of all services used for aircraft 104 48 repair, remodeling, and maintenance services when such 104 49 services are performed on aircraft, aircraft engines, 104 50 or aircraft component materials or parts. For the 105 1 purposes of this exemption, "aircraft" means aircraft 105 2 used in a scheduled interstate federal aviation 105 3 administration certificated air carrier operation. 105 4 76. The sales price from the sale or rental of 105 5 tangible personal property permanently affixed or 105 6 attached as a component part of the aircraft, 105 7 including but not limited to repair or replacement 105 8 materials or parts; and the sales price of all 105 9 services used for aircraft repair, remodeling, and 105 10 maintenance services when such services are performed 105 11 on aircraft, aircraft engines, or aircraft component 105 12 materials or parts. For the purposes of this 105 13 exemption, "aircraft" means aircraft used in 105 14 nonscheduled interstate federal aviation 105 15 administration certificated air carrier operation 105 16 operating under 14 C.F.R. ch. 1, pt. 135. 105 17 77. The sales price from the sale of aircraft to 105 18 an aircraft dealer who in turn rents or leases the 105 19 aircraft if all of the following apply: 105 20 a. The aircraft is kept in the inventory of the 105 21 dealer for sale at all times. 105 22 b. The dealer reserves the right to immediately 105 23 take the aircraft from the renter or lessee when a 105 24 buyer is found. 105 25 c. The renter or lessee is aware that the dealer 105 26 will immediately take the aircraft when a buyer is 105 27 found. 105 28 If an aircraft exempt under this subsection is used 105 29 for any purpose other than leasing or renting, or the 105 30 conditions in paragraphs "a", "b", and "c" are not 105 31 continuously met, the dealer claiming the exemption 105 32 under this subsection is liable for the tax that would 105 33 have been due except for this subsection. The tax 105 34 shall be computed upon the original purchase price. 105 35 78. The sales price from sales or rental of 105 36 tangible personal property, or services rendered by 105 37 any entity where the profits from the sales or rental 105 38 of the tangible personal property, or services 105 39 rendered are used by or donated to a nonprofit entity 105 40 which is exempt from federal income taxation pursuant 105 41 to section 501(c)(3) of the Internal Revenue Code, a 105 42 government entity, or a nonprofit private educational 105 43 institution, and where the entire proceeds from the 105 44 sales, rental, or services are expended for any of the 105 45 following purposes: 105 46 a. Educational. 105 47 b. Religious. 105 48 c. Charitable. A charitable act is an act done 105 49 out of goodwill, benevolence, and a desire to add to 105 50 or to improve the good of humankind in general or any 106 1 class or portion of humankind, with no pecuniary 106 2 profit inuring to the person performing the service or 106 3 giving the gift. 106 4 This exemption does not apply to the sales price 106 5 from games of skill, games of chance, raffles, and 106 6 bingo games as defined in chapter 99B. This exemption 106 7 is disallowed on the amount of the sales price only to 106 8 the extent the profits from the sales, rental, or 106 9 services are not used by or donated to the appropriate 106 10 entity and expended for educational, religious, or 106 11 charitable purposes. 106 12 79. The sales price from the sale or rental of 106 13 tangible personal property or from services furnished 106 14 to a recognized community action agency as provided in 106 15 section 216A.93 to be used for the purposes of the 106 16 agency. 106 17 80. a. For purposes of this subsection, 106 18 "designated exempt entity" means an entity which is 106 19 designated in section 423.4, subsection 1. 106 20 b. If a contractor, subcontractor, or builder is 106 21 to use building materials, supplies, and equipment in 106 22 the performance of a construction contract with a 106 23 designated exempt entity, the person shall purchase 106 24 such items of tangible personal property without 106 25 liability for the tax if such property will be used in 106 26 the performance of the construction contract and a 106 27 purchasing agent authorization letter and an exemption 106 28 certificate, issued by the designated exempt entity, 106 29 are presented to the retailer. 106 30 c. Where the owner, contractor, subcontractor, or 106 31 builder is also a retailer holding a retail sales tax 106 32 permit and transacting retail sales of building 106 33 materials, supplies, and equipment, the tax shall not 106 34 be due when materials are withdrawn from inventory for 106 35 use in construction performed for a designated exempt 106 36 entity if an exemption certificate is received from 106 37 such entity. 106 38 d. Tax shall not apply to tangible personal 106 39 property purchased and consumed by a manufacturer as 106 40 building materials, supplies, or equipment in the 106 41 performance of a construction contract for a 106 42 designated exempt entity, if a purchasing agent 106 43 authorization letter and an exemption certificate are 106 44 received from such entity and presented to a retailer. 106 45 81. The sales price from the sales of lottery 106 46 tickets or shares pursuant to chapter 99G. 106 47 82. The sales price from the sale or rental of 106 48 core and mold making equipment and sand handling 106 49 equipment directly and primarily used in the handling 106 50 equipment directly and primarily used in the mold 107 1 making process by a foundry. 107 2 83. The sales price from noncustomer point of sale 107 3 or noncustomer automated teller machine access or 107 4 service charges assessed by a financial institution. 107 5 For purposes of this subsection, "financial 107 6 institution" means the same as defined in section 107 7 527.2. 107 8 Sec. 135. NEW SECTION. 423.4 REFUNDS. 107 9 1. A private nonprofit educational institution in 107 10 this state, nonprofit private museum in this state, 107 11 tax-certifying or tax-levying body or governmental 107 12 subdivision of the state, including the state board of 107 13 regents, state department of human services, state 107 14 department of transportation, a municipally owned 107 15 solid waste facility which sells all or part of its 107 16 processed waste as fuel to a municipally owned public 107 17 utility, and all divisions, boards, commissions, 107 18 agencies, or instrumentalities of state, federal, 107 19 county, or municipal government which do not have 107 20 earnings going to the benefit of an equity investor or 107 21 stockholder, may make application to the department 107 22 for the refund of the sales or use tax upon the sales 107 23 price of all sales of goods, wares, or merchandise, or 107 24 from services furnished to a contractor, used in the 107 25 fulfillment of a written contract with the state of 107 26 Iowa, any political subdivision of the state, or a 107 27 division, board, commission, agency, or 107 28 instrumentality of the state or a political 107 29 subdivision, a private nonprofit educational 107 30 institution in this state, or a nonprofit private 107 31 museum in this state if the property becomes an 107 32 integral part of the project under contract and at the 107 33 completion of the project becomes public property, is 107 34 devoted to educational uses, or becomes a nonprofit 107 35 private museum; except goods, wares, or merchandise, 107 36 or services furnished which are used in the 107 37 performance of any contract in connection with the 107 38 operation of any municipal utility engaged in selling 107 39 gas, electricity, or heat to the general public or in 107 40 connection with the operation of a municipal pay 107 41 television system; and except goods, wares, and 107 42 merchandise used in the performance of a contract for 107 43 a "project" under chapter 419 as defined in that 107 44 chapter other than goods, wares, or merchandise used 107 45 in the performance of a contract for a "project" under 107 46 chapter 419 for which a bond issue was approved by a 107 47 municipality prior to July 1, 1968, or for which the 107 48 goods, wares, or merchandise becomes an integral part 107 49 of the project under contract and at the completion of 107 50 the project becomes public property or is devoted to 108 1 educational uses. 108 2 a. Such contractor shall state under oath, on 108 3 forms provided by the department, the amount of such 108 4 sales of goods, wares, or merchandise, or services 108 5 furnished and used in the performance of such 108 6 contract, and upon which sales or use tax has been 108 7 paid, and shall file such forms with the governmental 108 8 unit, private nonprofit educational institution, or 108 9 nonprofit private museum which has made any written 108 10 contract for performance by the contractor. The forms 108 11 shall be filed by the contractor with the governmental 108 12 unit, educational institution, or nonprofit private 108 13 museum before final settlement is made. 108 14 b. Such governmental unit, educational 108 15 institution, or nonprofit private museum shall, not 108 16 more than one year after the final settlement has been 108 17 made, make application to the department for any 108 18 refund of the amount of the sales or use tax which 108 19 shall have been paid upon any goods, wares, or 108 20 merchandise, or services furnished, the application to 108 21 be made in the manner and upon forms to be provided by 108 22 the department, and the department shall forthwith 108 23 audit the claim and, if approved, issue a warrant to 108 24 the governmental unit, educational institution, or 108 25 nonprofit private museum in the amount of the sales or 108 26 use tax which has been paid to the state of Iowa under 108 27 the contract. 108 28 Refunds authorized under this subsection shall 108 29 accrue interest at the rate in effect under section 108 30 421.7 from the first day of the second calendar month 108 31 following the date the refund claim is received by the 108 32 department. 108 33 c. Any contractor who willfully makes a false 108 34 report of tax paid under the provisions of this 108 35 subsection is guilty of a simple misdemeanor and in 108 36 addition shall be liable for the payment of the tax 108 37 and any applicable penalty and interest. 108 38 2. The refund of sales and use tax paid on 108 39 transportation construction projects let by the state 108 40 department of transportation is subject to the special 108 41 provisions of this subsection. 108 42 a. A contractor awarded a contract for a 108 43 transportation construction project is considered the 108 44 consumer of all building materials, building supplies, 108 45 and equipment and shall pay sales tax to the supplier 108 46 or remit consumer use tax directly to the department. 108 47 b. The contractor is not required to file 108 48 information with the state department of 108 49 transportation stating the amount of goods, wares, or 108 50 merchandise, or services rendered, furnished, or 109 1 performed and used in the performance of the contract 109 2 or the amount of sales or use tax paid. 109 3 c. The state department of transportation shall 109 4 file a refund claim based on a formula that considers 109 5 the following: 109 6 (1) The quantity of material to complete the 109 7 contract, and quantities of items of work. 109 8 (2) The estimated cost of these materials included 109 9 in the items of work, and the state sales or use tax 109 10 to be paid on the tax rate in effect in section 423.2. 109 11 The quantity of materials shall be determined after 109 12 each letting based on the contract quantities of all 109 13 items of work let to contract. The quantity of 109 14 individual component materials required for each item 109 15 shall be determined and maintained in a database. The 109 16 total quantities of materials shall be determined by 109 17 multiplying the quantities of component materials for 109 18 each contract item of work by the total quantities of 109 19 each contract item for each letting. Where variances 109 20 exist in the cost of materials, the lowest cost shall 109 21 be used as the base cost. 109 22 d. Only the state sales or use tax is refundable. 109 23 Local option taxes paid by the contractor are not 109 24 refundable. 109 25 3. A relief agency may apply to the director for 109 26 refund of the amount of sales or use tax imposed and 109 27 paid upon sales to it of any goods, wares, 109 28 merchandise, or services furnished, used for free 109 29 distribution to the poor and needy. 109 30 a. The refunds may be obtained only in the 109 31 following amounts and manner and only under the 109 32 following conditions: 109 33 (1) On forms furnished by the department, and 109 34 filed within the time as the director shall provide by 109 35 rule, the relief agency shall report to the department 109 36 the total amount or amounts, valued in money, expended 109 37 directly or indirectly for goods, wares, merchandise, 109 38 or services furnished, used for free distribution to 109 39 the poor and needy. 109 40 (2) On these forms the relief agency shall 109 41 separately list the persons making the sales to it or 109 42 to its order, together with the dates of the sales, 109 43 and the total amount so expended by the relief agency. 109 44 (3) The relief agency must prove to the 109 45 satisfaction of the director that the person making 109 46 the sales has included the amount thereof in the 109 47 computation of the sales price of such person and that 109 48 such person has paid the tax levied by this subchapter 109 49 or subchapter III, based upon such computation of the 109 50 sales price. 110 1 b. If satisfied that the foregoing conditions and 110 2 requirements have been complied with, the director 110 3 shall refund the amount claimed by the relief agency. 110 4 SUBCHAPTER III 110 5 USE TAX 110 6 Sec. 136. NEW SECTION. 423.5 IMPOSITION OF TAX. 110 7 An excise tax at the rate of five percent of the 110 8 purchase price or installed purchase price is imposed 110 9 on the following: 110 10 1. The use in this state of tangible personal 110 11 property as defined in section 423.1, including 110 12 aircraft subject to registration under section 328.20, 110 13 purchased for use in this state. For the purposes of 110 14 this subchapter, the furnishing or use of the 110 15 following services is also treated as the use of 110 16 tangible personal property: optional service or 110 17 warranty contracts, except residential service 110 18 contracts regulated under chapter 523C, vulcanizing, 110 19 recapping, or retreading services, engraving, 110 20 photography, retouching, printing, or binding 110 21 services, and communication service when furnished or 110 22 delivered to consumers or users within this state. 110 23 2. The use of manufactured housing in this state, 110 24 on the purchase price if the manufactured housing is 110 25 sold in the form of tangible personal property or on 110 26 the installed purchase price if the manufactured 110 27 housing is sold in the form of realty. 110 28 3. The use of leased vehicles, on the amount 110 29 subject to tax as calculated pursuant to section 110 30 423.27. 110 31 4. Purchases of tangible personal property made 110 32 from the government of the United States or any of its 110 33 agencies by ultimate consumers shall be subject to the 110 34 tax imposed by this section. Services purchased from 110 35 the same source or sources shall be subject to the 110 36 service tax imposed by this subchapter and apply to 110 37 the user of the services. 110 38 5. The use in this state of services enumerated in 110 39 section 423.2. This tax is applicable where services 110 40 are furnished in this state or where the product or 110 41 result of the service is used in this state. 110 42 6. The excise tax is imposed upon every person 110 43 using the property within this state until the tax has 110 44 been paid directly to the county treasurer, the state 110 45 department of transportation, a retailer, or the 110 46 department. This tax is imposed on every person using 110 47 the services or the product of the services in this 110 48 state until the user has paid the tax either to an 110 49 Iowa use tax permit holder or to the department. 110 50 7. For the purpose of the proper administration of 111 1 the use tax and to prevent its evasion, evidence that 111 2 tangible personal property was sold by any person for 111 3 delivery in this state shall be prima facie evidence 111 4 that such tangible personal property was sold for use 111 5 in this state. 111 6 Sec. 137. NEW SECTION. 423.6 EXEMPTIONS. 111 7 The use in this state of the following tangible 111 8 personal property and services is exempted from the 111 9 tax imposed by this subchapter: 111 10 1. Tangible personal property and enumerated 111 11 services, the sales price from the sale of which are 111 12 required to be included in the measure of the sales 111 13 tax, if that tax has been paid to the department or 111 14 the retailer. This exemption does not include 111 15 vehicles subject to registration or subject only to 111 16 the issuance of a certificate of title. 111 17 2. The sale of tangible personal property or the 111 18 furnishing of services in the regular course of 111 19 business. 111 20 3. Property used in processing. The use of 111 21 property in processing within the meaning of this 111 22 subsection shall mean and include any of the 111 23 following: 111 24 a. Any tangible personal property including 111 25 containers which it is intended shall, by means of 111 26 fabrication, compounding, manufacturing, or 111 27 germination, become an integral part of other tangible 111 28 personal property intended to be sold ultimately at 111 29 retail, and containers used in the collection, 111 30 recovery, or return of empty beverage containers 111 31 subject to chapter 455C. 111 32 b. Fuel which is consumed in creating power, heat, 111 33 or steam for processing or for generating electric 111 34 current. 111 35 c. Chemicals, solvents, sorbents, or reagents, 111 36 which are directly used and are consumed, dissipated, 111 37 or depleted in processing tangible personal property 111 38 which is intended to be sold ultimately at retail, and 111 39 which may not become a component or integral part of 111 40 the finished product. 111 41 d. The distribution to the public of free 111 42 newspapers or shoppers guides shall be deemed a retail 111 43 sale for purposes of the processing exemption in this 111 44 subsection. 111 45 4. All articles of tangible personal property 111 46 brought into the state of Iowa by a nonresident 111 47 individual for the individual's use or enjoyment while 111 48 within the state. 111 49 5. Services exempt from taxation by the provisions 111 50 of section 423.3. 112 1 6. Tangible personal property or services the 112 2 sales price of which is exempt from the sales tax 112 3 under section 423.3, except subsections 39 and 73, as 112 4 it relates to the sale, but not the lease or rental, 112 5 of vehicles subject to registration or subject only to 112 6 the issuance of a certificate of title and as it 112 7 relates to aircraft subject to registration under 112 8 section 328.20. 112 9 7. Advertisement and promotional material and 112 10 matter, seed catalogs, envelopes for same, and other 112 11 similar material temporarily stored in this state 112 12 which are acquired outside of Iowa and which, 112 13 subsequent to being brought into this state, are sent 112 14 outside of Iowa, either singly or physically attached 112 15 to other tangible personal property sent outside of 112 16 Iowa. 112 17 8. Vehicles, as defined in section 321.1, 112 18 subsections 41, 64A, 71, 85, and 88, except such 112 19 vehicles subject to registration which are designed 112 20 primarily for carrying persons, when purchased for 112 21 lease and actually leased to a lessee for use outside 112 22 the state of Iowa and the subsequent sole use in Iowa 112 23 is in interstate commerce or interstate 112 24 transportation. 112 25 9. Tangible personal property which, by means of 112 26 fabrication, compounding, or manufacturing, becomes an 112 27 integral part of vehicles, as defined in section 112 28 321.1, subsections 41, 64A, 71, 85, and 88, 112 29 manufactured for lease and actually leased to a lessee 112 30 for use outside the state of Iowa and the subsequent 112 31 sole use in Iowa is in interstate commerce or 112 32 interstate transportation. Vehicles subject to 112 33 registration which are designed primarily for carrying 112 34 persons are excluded from this subsection. 112 35 10. Vehicles subject to registration which are 112 36 transferred from a business or individual conducting a 112 37 business within this state as a sole proprietorship, 112 38 partnership, or limited liability company to a 112 39 corporation formed by the sole proprietorship, 112 40 partnership, or limited liability company for the 112 41 purpose of continuing the business when all of the 112 42 stock of the corporation so formed is owned by the 112 43 sole proprietor and the sole proprietor's spouse, by 112 44 all the partners in the case of a partnership, or by 112 45 all the members in the case of a limited liability 112 46 company. This exemption is equally available where 112 47 the vehicles subject to registration are transferred 112 48 from a corporation to a sole proprietorship, 112 49 partnership, or limited liability company formed by 112 50 that corporation for the purpose of continuing the 113 1 business when all of the incidents of ownership are 113 2 owned by the same person or persons who were 113 3 stockholders of the corporation. 113 4 This exemption also applies where the vehicles 113 5 subject to registration are transferred from a 113 6 corporation as part of the liquidation of the 113 7 corporation to its stockholders if within three months 113 8 of such transfer the stockholders retransfer those 113 9 vehicles subject to registration to a sole 113 10 proprietorship, partnership, or limited liability 113 11 company for the purpose of continuing the business of 113 12 the corporation when all of the incidents of ownership 113 13 are owned by the same person or persons who were 113 14 stockholders of the corporation. 113 15 10A. Vehicles subject to registration which are 113 16 transferred from a corporation that is primarily 113 17 engaged in the business of leasing vehicles subject to 113 18 registration to a corporation that is primarily 113 19 engaged in the business of leasing vehicles subject to 113 20 registration when the transferor and transferee 113 21 corporations are part of the same controlled group for 113 22 federal income tax purposes. 113 23 11. Vehicles registered or operated under chapter 113 24 326 and used substantially in interstate commerce, 113 25 section 423.5, subsection 7, notwithstanding. For 113 26 purposes of this subsection, "substantially in 113 27 interstate commerce" means that a minimum of twenty- 113 28 five percent of the miles operated by the vehicle 113 29 accrues in states other than Iowa. This subsection 113 30 applies only to vehicles which are registered for a 113 31 gross weight of thirteen tons or more. 113 32 For purposes of this subsection, trailers and 113 33 semitrailers registered or operated under chapter 326 113 34 are deemed to be used substantially in interstate 113 35 commerce and to be registered for a gross weight of 113 36 thirteen tons or more. 113 37 For the purposes of this subsection, if a vehicle 113 38 meets the requirement that twenty-five percent of the 113 39 miles operated accrues in states other than Iowa in 113 40 each year of the first four-year period of operation, 113 41 the exemption from use tax shall continue until the 113 42 vehicle is sold or transferred. If the vehicle is 113 43 found to have not met the exemption requirements or 113 44 the exemption was revoked, the value of the vehicle 113 45 upon which the use tax shall be imposed is the book or 113 46 market value, whichever is less, at the time the 113 47 exemption requirements were not met or the exemption 113 48 was revoked. 113 49 12. Mobile homes and manufactured housing the use 113 50 of which has previously been subject to the tax 114 1 imposed under this subchapter and for which that tax 114 2 has been paid. 114 3 13. Mobile homes to the extent of the portion of 114 4 the purchase price of the mobile home which is not 114 5 attributable to the cost of the tangible personal 114 6 property used in the processing of the mobile home, 114 7 and manufactured housing to the extent of the purchase 114 8 price or the installed purchase price of the 114 9 manufactured housing which is not attributable to the 114 10 cost of the tangible personal property used in the 114 11 processing of the manufactured housing. For purposes 114 12 of this exemption, the portion of the purchase price 114 13 which is not attributable to the cost of the tangible 114 14 personal property used in the processing of the mobile 114 15 home is forty percent and the portion of the purchase 114 16 price or installed purchase price which is not 114 17 attributable to the cost of the tangible personal 114 18 property used in the processing of the manufactured 114 19 housing is forty percent. 114 20 14. Tangible personal property used or to be used 114 21 as a ship, barge, or waterborne vessel which is used 114 22 or to be used primarily in or for the transportation 114 23 of property or cargo for hire on the rivers bordering 114 24 the state or as materials or parts of such ship, 114 25 barge, or waterborne vessel. 114 26 15. Vehicles subject to registration in any state 114 27 when purchased for rental or registered and titled by 114 28 a motor vehicle dealer licensed pursuant to chapter 114 29 322 for rental use, and held for rental for a period 114 30 of one hundred twenty days or more and actually rented 114 31 for periods of sixty days or less by a person 114 32 regularly engaged in the business of renting vehicles 114 33 including, but not limited to, motor vehicle dealers 114 34 licensed pursuant to chapter 322 who rent automobiles 114 35 to users, if the rental of the vehicles is subject to 114 36 taxation under chapter 423C. 114 37 16. Motor vehicles subject to registration which 114 38 were registered and titled between July 1, 1982, and 114 39 July 1, 1992, to a motor vehicle dealer licensed under 114 40 chapter 322 and which were rented to a user as defined 114 41 in section 423C.2 if the following occurred: 114 42 a. The dealer kept the vehicle on the inventory of 114 43 vehicles for sale at all times. 114 44 b. The vehicle was to be immediately taken from 114 45 the user of the vehicle when a buyer was found. 114 46 c. The user was aware of this situation. 114 47 17. Vehicles subject to registration under chapter 114 48 321, with a gross vehicle weight rating of less than 114 49 sixteen thousand pounds, excluding motorcycles and 114 50 motorized bicycles, when purchased for lease and 115 1 titled by the lessor licensed pursuant to chapter 321F 115 2 and actually leased for a period of twelve months or 115 3 more if the lease of the vehicle is subject to 115 4 taxation under section 423.27. 115 5 A lessor may maintain the exemption from use tax 115 6 under this subsection for a qualifying lease that 115 7 terminates at the conclusion or prior to the 115 8 contracted expiration date, if the lessor does not use 115 9 the vehicle for any purpose other than for lease. 115 10 Once the vehicle is used by the lessor for a purpose 115 11 other than for lease, the exemption from use tax under 115 12 this subsection no longer applies and, unless there is 115 13 an exemption from the use tax, use tax is due on the 115 14 fair market value of the vehicle determined at the 115 15 time the lessor uses the vehicle for a purpose other 115 16 than for lease, payable to the department. If the 115 17 lessor holds the vehicle exclusively for sale, use tax 115 18 is due and payable on the purchase price of the 115 19 vehicle at the time of purchase pursuant to this 115 20 subchapter. 115 21 18. Aircraft for use in a scheduled interstate 115 22 federal aviation administration certificated air 115 23 carrier operation. 115 24 19. Aircraft; tangible personal property 115 25 permanently affixed or attached as a component part of 115 26 the aircraft, including but not limited to repair or 115 27 replacement materials or parts; and all services used 115 28 for aircraft repair, remodeling, and maintenance 115 29 services when such services are performed on aircraft, 115 30 aircraft engines, or aircraft component materials or 115 31 parts. For the purposes of this exemption, "aircraft" 115 32 means aircraft used in a scheduled interstate federal 115 33 aviation administration certificated air carrier 115 34 operation. 115 35 20. Tangible personal property permanently affixed 115 36 or attached as a component part of the aircraft, 115 37 including but not limited to repair or replacement 115 38 materials or parts; and all services used for aircraft 115 39 repair, remodeling, and maintenance services when such 115 40 services are performed on aircraft, aircraft engines, 115 41 or aircraft component materials or parts. For the 115 42 purposes of this exemption, "aircraft" means aircraft 115 43 used in a nonscheduled interstate federal aviation 115 44 administration certificated air carrier operation 115 45 operating under 14 C.F.R., ch. 1, pt. 135. 115 46 21. Aircraft sold to an aircraft dealer who in 115 47 turn rents or leases the aircraft if all of the 115 48 following apply: 115 49 a. The aircraft is kept in the inventory of the 115 50 dealer for sale at all times. 116 1 b. The dealer reserves the right to immediately 116 2 take the aircraft from the renter or lessee when a 116 3 buyer is found. 116 4 c. The renter or lessee is aware that the dealer 116 5 will immediately take the aircraft when a buyer is 116 6 found. 116 7 If an aircraft exempt under this subsection is used 116 8 for any purpose other than leasing or renting, or the 116 9 conditions in paragraphs "a", "b", and "c" are not 116 10 continuously met, the dealer claiming the exemption 116 11 under this subsection is liable for the tax that would 116 12 have been due except for this subsection. The tax 116 13 shall be computed upon the original purchase price. 116 14 22. The use in this state of building materials, 116 15 supplies, or equipment, the sale or use of which is 116 16 not treated as a retail sale or a sale at retail under 116 17 section 423.2, subsection 1. 116 18 23. Exempted from the purchase price of any 116 19 vehicle subject to registration is: 116 20 a. The amount of any cash rebate which is provided 116 21 by a motor vehicle manufacturer to the purchaser of 116 22 the vehicle subject to registration so long as the 116 23 rebate is applied to the purchase price of the 116 24 vehicle. 116 25 b. That in transactions, except those subject to 116 26 paragraph "c", in which tangible personal property is 116 27 traded toward the purchase price of other tangible 116 28 personal property the purchase price is only that 116 29 portion of the purchase price which is payable in 116 30 money to the retailer if the following conditions are 116 31 met: 116 32 (1) The tangible personal property traded to the 116 33 retailer is the type of property normally sold in the 116 34 regular course of the retailer's business. 116 35 (2) The tangible personal property traded to the 116 36 retailer is intended by the retailer to be ultimately 116 37 sold at retail or is intended to be used by the 116 38 retailer or another in the remanufacturing of a like 116 39 item. 116 40 c. In a transaction between persons, neither of 116 41 which is a retailer of vehicles subject to 116 42 registration, in which a vehicle subject to 116 43 registration is traded toward the purchase price of 116 44 another vehicle subject to registration, the amount of 116 45 the trade-in value allowed on the vehicle subject to 116 46 registration traded. 116 47 SUBCHAPTER IV 116 48 UNIFORM SALES AND USE TAX ADMINISTRATION ACT 116 49 Sec. 138. NEW SECTION. 423.7 TITLE. 116 50 This subchapter shall be known and may be cited as 117 1 the "Uniform Sales and Use Tax Administration Act". 117 2 Sec. 139. NEW SECTION. 423.8 LEGISLATIVE FINDING 117 3 AND INTENT. 117 4 The general assembly finds that Iowa should enter 117 5 into an agreement with one or more states to simplify 117 6 and modernize sales and use tax administration in 117 7 order to substantially reduce the burden of tax 117 8 compliance for all sellers and for all types of 117 9 commerce. It is the intent of the general assembly 117 10 that entering into this agreement will lead to 117 11 simplification and modernization of the sales and use 117 12 tax law and not to the imposition of new taxes or an 117 13 increase or decrease in the existing number of 117 14 exemptions, unless such a result is unavoidable under 117 15 the terms of the agreement. 117 16 Sec. 140. NEW SECTION. 423.9 AUTHORITY TO ENTER 117 17 AGREEMENT AND TO REPRESENT THE STATE. 117 18 The director is authorized and directed to enter 117 19 into the streamlined sales and use tax agreement with 117 20 one or more states to simplify and modernize sales and 117 21 use tax administration in order to substantially 117 22 reduce the burden of tax compliance for all sellers 117 23 and for all types of commerce. 117 24 The director is further authorized to take other 117 25 actions reasonably required to implement the 117 26 provisions set forth in this chapter. Other actions 117 27 authorized by this section include, but are not 117 28 limited to, the adoption of rules and the joint 117 29 procurement, with other member states, of goods and 117 30 services in furtherance of the cooperative agreement. 117 31 The director or the director's designee is 117 32 authorized to be a member of the governing board 117 33 established pursuant to the agreement and to represent 117 34 Iowa before that body. 117 35 Sec. 141. NEW SECTION. 423.10 RELATIONSHIP TO 117 36 STATE LAW. 117 37 Entry into the agreement by the director does not 117 38 amend or modify any law of this state. Implementation 117 39 of any condition of the agreement in this state, 117 40 whether adopted before, at, or after membership of 117 41 this state in the agreement, shall be by action of the 117 42 general assembly. 117 43 Sec. 142. NEW SECTION. 423.11 AGREEMENT 117 44 REQUIREMENTS. 117 45 The director shall not enter into the agreement 117 46 unless the agreement requires each state to abide by 117 47 the following requirements: 117 48 1. UNIFORM STATE RATE. The agreement must set 117 49 restrictions to achieve more uniform state rates 117 50 through the following: 118 1 a. Limiting the number of state rates. 118 2 b. Limiting the application of maximums on the 118 3 amount of state tax that is due on a transaction. 118 4 c. Limiting the application of thresholds on the 118 5 application of state tax. 118 6 2. UNIFORM STANDARDS. The agreement must 118 7 establish uniform standards for the following: 118 8 a. The sourcing of transactions to taxing 118 9 jurisdictions. 118 10 b. The administration of exempt sales. 118 11 c. The allowances a seller can take for bad debts. 118 12 d. Sales and use tax returns and remittances. 118 13 3. UNIFORM DEFINITIONS. The agreement must 118 14 require states to develop and adopt uniform 118 15 definitions of sales and use tax terms. The 118 16 definitions must enable a state to preserve its 118 17 ability to make policy choices not inconsistent with 118 18 the uniform definitions. 118 19 4. CENTRAL REGISTRATION. The agreement must 118 20 provide a central, electronic registration system that 118 21 allows a seller to register to collect and remit sales 118 22 and use taxes for all member states. 118 23 5. NO NEXUS ATTRIBUTION. The agreement must 118 24 provide that registration with the central 118 25 registration system and the collection of sales and 118 26 use taxes in the member states must not be used as a 118 27 factor in determining whether the seller has nexus 118 28 with a state for any tax. 118 29 6. LOCAL SALES AND USE TAXES. The agreement must 118 30 provide for reduction of the burdens of complying with 118 31 local sales and use taxes through the following: 118 32 a. Restricting variances between the state and 118 33 local tax bases. 118 34 b. Requiring states to administer any sales and 118 35 use taxes levied by local jurisdictions within the 118 36 state so that sellers collecting and remitting these 118 37 taxes must not have to register or file returns with, 118 38 remit funds to, or be subject to independent audits 118 39 from local taxing jurisdictions. 118 40 c. Restricting the frequency of changes in the 118 41 local sales and use tax rates and setting effective 118 42 dates for the application of local jurisdictional 118 43 boundary changes to local sales and use taxes. 118 44 d. Providing notice of changes in local sales and 118 45 use tax rates and of changes in the boundaries of 118 46 local taxing jurisdictions. 118 47 7. MONETARY ALLOWANCES. The agreement must 118 48 outline any monetary allowances that are to be 118 49 provided by the states to sellers or certified service 118 50 providers. 119 1 8. STATE COMPLIANCE. The agreement must require 119 2 each state to certify compliance with the terms of the 119 3 agreement prior to joining and to maintain compliance, 119 4 under the laws of the member state, with all 119 5 provisions of the agreement while a member. 119 6 9. CONSUMER PRIVACY. The agreement must require 119 7 each state to adopt a uniform policy for certified 119 8 service providers that protects the privacy of 119 9 consumers and maintains the confidentiality of tax 119 10 information. 119 11 10. ADVISORY COUNCILS. The agreement must provide 119 12 for the appointment of an advisory council of private 119 13 sector representatives and an advisory council of 119 14 nonmember state representatives to consult with in the 119 15 administration of the agreement. 119 16 Sec. 143. NEW SECTION. 423.12 LIMITED BINDING 119 17 AND BENEFICIAL EFFECT. 119 18 1. The agreement binds and inures only to the 119 19 benefit of Iowa and the other member states. A 119 20 person, other than a member state, is not an intended 119 21 beneficiary of the agreement. Any benefit to a person 119 22 other than a member state is established by the law of 119 23 Iowa and not by the terms of the agreement. 119 24 2. A person shall not have any cause of action or 119 25 defense under the agreement or by virtue of this 119 26 state's entry into the agreement. A person may not 119 27 challenge, in any action brought under any provision 119 28 of law, any action or inaction by any department, 119 29 agency, or other instrumentality of this state, or any 119 30 political subdivision of this state on the ground that 119 31 the action or inaction is inconsistent with the 119 32 agreement. 119 33 3. A law of this state, or the application of it, 119 34 shall not be declared invalid as to any such person or 119 35 circumstance on the ground that the provision or 119 36 application is inconsistent with the agreement. 119 37 SUBCHAPTER V 119 38 SALES AND USE TAX ACT – ADMINISTRATION OF 119 39 RETAILERS NOT REGISTERED UNDER THE AGREEMENT AND OF 119 40 CONSUMERS OBLIGATED TO PAY USE TAX DIRECTLY 119 41 Sec. 144. NEW SECTION. 423.13 PURPOSE OF THIS 119 42 SUBCHAPTER. 119 43 The purpose of this subchapter is to provide for 119 44 the administration and collection of sales or use tax 119 45 on the part of retailers who are not registered under 119 46 the agreement and for the collection of use tax on the 119 47 part of consumers who are obligated to pay that tax 119 48 directly. Any application of the sections of this 119 49 subchapter to retailers registered under the agreement 119 50 is only by way of incorporation by reference into 120 1 subchapter VI of this chapter. 120 2 Sec. 145. NEW SECTION. 423.14 SALES AND USE TAX 120 3 COLLECTION. 120 4 1. a. Sales tax, other than that described in 120 5 paragraph "c", shall be collected by sellers who are 120 6 retailers or by their agents. Sellers or their agents 120 7 shall, as far as practicable, add the sales tax, or 120 8 the average equivalent thereof, to the sales price or 120 9 charge, less trade-ins allowed and taken and when 120 10 added such tax shall constitute a part of the sales 120 11 price or charge, shall be a debt from consumer or user 120 12 to seller or agent until paid, and shall be 120 13 recoverable at law in the same manner as other debts. 120 14 b. In computing the tax to be collected as the 120 15 result of any transaction, the tax computation must be 120 16 carried to the third decimal place. Whenever the 120 17 third decimal place is greater than four, the tax must 120 18 be rounded up to the next whole cent; whenever the 120 19 third decimal place is four or less, the tax must be 120 20 rounded downward to a whole cent. Sellers may elect 120 21 to compute the tax due on transactions on an item or 120 22 invoice basis. Sellers are not required to use a 120 23 bracket system. 120 24 c. The tax imposed upon those sales of motor 120 25 vehicle fuel which are subject to tax and refund under 120 26 chapter 452A shall be collected by the state treasurer 120 27 by way of deduction from refunds otherwise allowable 120 28 under that chapter. The treasurer shall transfer the 120 29 amount of such deductions from the motor vehicle fuel 120 30 tax fund to the special tax fund. 120 31 2. Use tax shall be collected in the following 120 32 manner: 120 33 a. The tax upon the use of all vehicles subject to 120 34 registration or subject only to the issuance of a 120 35 certificate of title or the tax upon the use of 120 36 manufactured housing shall be collected by the county 120 37 treasurer or the state department of transportation 120 38 pursuant to sections 423.26 and 423.27. The county 120 39 treasurer shall retain one dollar from each tax 120 40 payment collected, to be credited to the county 120 41 general fund. 120 42 b. The tax upon the use of all tangible personal 120 43 property other than that enumerated in paragraph "a", 120 44 which is sold by a seller who is a retailer 120 45 maintaining a place of business in this state, or by 120 46 such other retailer or agent as the director shall 120 47 authorize pursuant to section 423.30, shall be 120 48 collected by the retailer or agent and remitted to the 120 49 department, pursuant to the provisions of paragraph 120 50 "e", and sections 423.24, 423.29, 423.30, 423.32, and 121 1 423.33. 121 2 c. The tax upon the use of all tangible personal 121 3 property not paid pursuant to paragraphs "a" and "b" 121 4 shall be paid to the department directly by any person 121 5 using the property within this state, pursuant to the 121 6 provisions of section 423.34. 121 7 d. The tax imposed on the use of services 121 8 enumerated in section 423.5 shall be collected, 121 9 remitted, and paid to the department of revenue and 121 10 finance in the same manner as use tax on tangible 121 11 personal property is collected, remitted, and paid 121 12 under this subchapter. 121 13 e. All persons obligated by paragraph "a", "b", or 121 14 "d", to collect use tax shall, as far as practicable, 121 15 add that tax, or the average equivalent thereof, to 121 16 the purchase price, less trade-ins allowed and taken, 121 17 and when added the tax shall constitute a part of the 121 18 purchase price. Use tax which this section requires 121 19 to be collected by a retailer and any tax collected 121 20 pursuant to this section by a retailer shall 121 21 constitute a debt owed by the retailer to this state. 121 22 Tax which must be paid directly to the department, 121 23 pursuant to paragraph "c" or "d", is to be computed 121 24 and added by the consumer or user to the purchase 121 25 price in the same manner as this paragraph requires a 121 26 seller to compute and add the tax. The tax shall be a 121 27 debt from the consumer or user to the department until 121 28 paid, and shall be recoverable at law in the same 121 29 manner as other debts. 121 30 Sec. 146. NEW SECTION. 423.15 GENERAL SOURCING 121 31 RULES. 121 32 All sellers obligated to collect Iowa sales or use 121 33 tax shall use the standards set out in this section to 121 34 determine where sales of products occur, excluding 121 35 sales enumerated in section 423.16. These provisions 121 36 apply regardless of the characterization of a product 121 37 as tangible personal property, a digital good, or a 121 38 service, excluding telecommunications services. This 121 39 section only applies to determine a seller's 121 40 obligation to pay or collect and remit a sales or use 121 41 tax with respect to the seller's sale of a product. 121 42 This section does not affect the obligation of a 121 43 purchaser or lessee to remit tax on the use of the 121 44 product to the taxing jurisdictions in which the use 121 45 occurs. A seller's obligation to collect Iowa sales 121 46 tax or Iowa use tax only occurs if the sale is sourced 121 47 to this state. The application of whether Iowa sales 121 48 tax applies to sales sourced to Iowa depends upon 121 49 where the sale is consummated by delivery. 121 50 1. Sales, excluding leases or rentals other than 122 1 leases or rentals set out in subsection 2, of products 122 2 shall be sourced as follows. 122 3 a. When the product is received by the purchaser 122 4 at a business location of the seller, the sale is 122 5 sourced to that business location. 122 6 b. When the product is not received by the 122 7 purchaser at a business location of the seller, the 122 8 sale is sourced to the location where receipt by the 122 9 purchaser or the purchaser's donee, designated as such 122 10 by the purchaser, occurs, including the location 122 11 indicated by instructions for delivery to the 122 12 purchaser or donee, known to the seller. 122 13 c. When paragraphs "a" and "b" do not apply, the 122 14 sale is sourced to the location indicated by an 122 15 address for the purchaser that is available from the 122 16 business records of the seller that are maintained in 122 17 the ordinary course of the seller's business when use 122 18 of this address does not constitute bad faith. 122 19 d. When paragraphs "a", "b", and "c" do not apply, 122 20 the sale is sourced to the location indicated by an 122 21 address for the purchaser obtained during the 122 22 consummation of the sale, including the address of a 122 23 purchaser's payment instrument, if no other address is 122 24 available, when use of this address does not 122 25 constitute bad faith. 122 26 e. When paragraphs "a", "b", "c", and "d" do not 122 27 apply, including the circumstance where the seller is 122 28 without sufficient information to apply the previous 122 29 rules, then the location will be determined by the 122 30 address from which tangible personal property was 122 31 shipped, from which the digital good or the computer 122 32 software delivered electronically was first available 122 33 for transmission by the seller, or from which the 122 34 service was provided disregarding for these purposes 122 35 any location that merely provided the digital transfer 122 36 of the product sold. 122 37 2. The lease or rental of tangible personal 122 38 property, other than property identified in subsection 122 39 3 or section 423.16, shall be sourced as follows: 122 40 a. For a lease or rental that requires recurring 122 41 periodic payments, the first periodic payment is 122 42 sourced the same as a retail sale in accordance with 122 43 the provisions of subsection 1. Periodic payments 122 44 made subsequent to the first payment are sourced to 122 45 the primary property location for each period covered 122 46 by the payment. The primary property location shall 122 47 be as indicated by an address for the property 122 48 provided by the lessee that is available to the lessor 122 49 from its records maintained in the ordinary course of 122 50 business, when use of this address does not constitute 123 1 bad faith. The property location shall not be altered 123 2 by intermittent use at different locations, such as 123 3 use of business property that accompanies employees on 123 4 business trips and service calls. 123 5 b. For a lease or rental that does not require 123 6 recurring periodic payments, the payment is sourced 123 7 the same as a retail sale in accordance with the 123 8 provisions of subsection 1. 123 9 c. This subsection does not affect the imposition 123 10 or computation of sales or use tax on leases or 123 11 rentals based on a lump sum or accelerated basis, or 123 12 on the acquisition of property for lease. 123 13 3. The retail sale, including lease or rental, of 123 14 transportation equipment shall be sourced the same as 123 15 a retail sale in accordance with the provisions of 123 16 subsection 1, notwithstanding the exclusion of lease 123 17 or rental in that subsection. "Transportation 123 18 equipment" means any of the following: 123 19 a. Locomotives or railcars that are utilized for 123 20 the carriage of persons or property in interstate 123 21 commerce. 123 22 b. Trucks and truck-tractors with a gross vehicle 123 23 weight rating of ten thousand one pounds or greater, 123 24 trailers, semitrailers, or passenger buses that meet 123 25 both of the following requirements: 123 26 (1) Are registered through the international 123 27 registration plan. 123 28 (2) Are operated under authority of a carrier 123 29 authorized and certificated by the United States 123 30 department of transportation or another federal 123 31 authority to engage in the carriage of persons or 123 32 property in interstate commerce. 123 33 c. Aircraft that are operated by air carriers 123 34 authorized and certificated by the United States 123 35 department of transportation or another federal or a 123 36 foreign authority to engage in the carriage of persons 123 37 or property in interstate or foreign commerce. 123 38 d. Containers designed for use on and component 123 39 parts attached or secured on the items set forth in 123 40 paragraphs "a" through "c". 123 41 Sec. 147. NEW SECTION. 423.16 TRANSACTIONS TO 123 42 WHICH THE GENERAL SOURCING RULES DO NOT APPLY. 123 43 Section 423.15 does not apply to sales or use taxes 123 44 levied on the following: 123 45 1. The retail sale or transfer of watercraft, 123 46 modular homes, manufactured housing, or mobile homes, 123 47 and the retail sale, excluding lease or rental, of 123 48 motor vehicles, trailers, semitrailers, or aircraft 123 49 that do not qualify as transportation equipment, as 123 50 defined in section 423.15, subsection 3. 124 1 2. The lease or rental of motor vehicles, 124 2 trailers, semitrailers, or aircraft that do not 124 3 qualify as transportation equipment, as defined in 124 4 section 423.15, subsection 3, which shall be sourced 124 5 in accordance with section 423.17. 124 6 3. Transactions to which the multiple points use 124 7 exemption is applicable, which shall be sourced in 124 8 accordance with section 423.18. 124 9 4. Transactions to which direct mail sourcing is 124 10 applicable, which shall be sourced in accordance with 124 11 section 423.19. 124 12 5. Telecommunications services, as set out in 124 13 section 423.20, which shall be sourced in accordance 124 14 with section 423.20, subsection 2. 124 15 Sec. 148. NEW SECTION. 423.17 SOURCING RULES FOR 124 16 VARIOUS TYPES OF LEASED OR RENTED EQUIPMENT WHICH IS 124 17 NOT TRANSPORTATION EQUIPMENT. 124 18 The lease or rental of motor vehicles, trailers, 124 19 semitrailers, or aircraft that do not qualify as 124 20 transportation equipment, as defined in section 124 21 423.15, subsection 3, shall be sourced as follows: 124 22 1. For a lease or rental that requires recurring 124 23 periodic payments, each periodic payment is sourced to 124 24 the primary property location. The primary property 124 25 location shall be as indicated by an address for the 124 26 property provided by the lessee that is available to 124 27 the lessor from its records maintained in the ordinary 124 28 course of business, when use of this address does not 124 29 constitute bad faith. This location shall not be 124 30 altered by intermittent use at different locations. 124 31 2. For a lease or rental that does not require 124 32 recurring periodic payments, the payment is sourced 124 33 the same as a retail sale in accordance with the 124 34 provisions of section 423.15, subsection 1. 124 35 3. This section does not affect the imposition or 124 36 computation of sales or use tax on leases or rentals 124 37 based on a lump sum or accelerated basis, or on the 124 38 acquisition of property for lease. 124 39 Sec. 149. NEW SECTION. 423.18 MULTIPLE POINTS OF 124 40 USE EXEMPTION FORMS. 124 41 A business purchaser that is not a holder of a 124 42 direct pay tax permit pursuant to section 423.36 that 124 43 knows at the time of its purchase of a digital good, 124 44 computer software delivered electronically, or a 124 45 service that the digital good, computer software 124 46 delivered electronically, or service will be 124 47 concurrently available for use in more than one 124 48 jurisdiction shall deliver to the seller in 124 49 conjunction with its purchase a "multiple points of 124 50 use" or "MPU" exemption form disclosing this fact. 125 1 1. Upon receipt of the MPU exemption form, the 125 2 seller is relieved of all obligation to collect, pay, 125 3 or remit the applicable tax and the purchaser shall be 125 4 obligated to collect, pay, or remit the applicable tax 125 5 on a direct pay basis. 125 6 2. A purchaser delivering the MPU exemption form 125 7 may use any reasonable, but consistent and uniform, 125 8 method of apportionment that is supported by the 125 9 purchaser's business records as they exist at the time 125 10 of the consummation of the sale. 125 11 3. The MPU exemption form will remain in effect 125 12 for all future sales by the seller to the purchaser 125 13 except as to the subsequent sale's specific 125 14 apportionment that is governed by the principle of 125 15 subsection 2 and the facts existing at the time of the 125 16 sale until it is revoked in writing. 125 17 4. A holder of a direct pay tax permit under 125 18 section 423.36 shall not be required to deliver an MPU 125 19 exemption form to the seller. A direct pay tax permit 125 20 holder shall follow the provisions of subsection 2 in 125 21 apportioning the tax due on a digital good, computer 125 22 software delivered electronically, or service that 125 23 will be concurrently available for use in more than 125 24 one jurisdiction. 125 25 Sec. 150. NEW SECTION. 423.19 DIRECT MAIL 125 26 SOURCING. 125 27 1. Notwithstanding section 423.15, a purchaser of 125 28 direct mail that is not a holder of a direct pay tax 125 29 permit pursuant to section 423.36 shall provide to the 125 30 seller in conjunction with the purchase either a 125 31 direct mail form or information to show the 125 32 jurisdictions to which the direct mail is delivered to 125 33 recipients. 125 34 a. Upon receipt of the direct mail form, the 125 35 seller is relieved of all obligations to collect, pay, 125 36 or remit the applicable tax and the purchaser is 125 37 obligated to pay or remit the applicable tax on a 125 38 direct pay basis. A direct mail form shall remain in 125 39 effect for all future sales of direct mail by the 125 40 seller to the purchaser until it is revoked in 125 41 writing. 125 42 b. Upon receipt of information from the purchaser 125 43 showing the jurisdictions to which the direct mail is 125 44 delivered to recipients, the seller shall collect the 125 45 tax according to the delivery information provided by 125 46 the purchaser. In the absence of bad faith, the 125 47 seller is relieved of any further obligation to 125 48 collect tax on any transaction where the seller has 125 49 collected tax pursuant to the delivery information 125 50 provided by the purchaser. 126 1 2. If the purchaser of direct mail does not have a 126 2 direct pay tax permit and does not provide the seller 126 3 with either a direct mail form or delivery 126 4 information, as required by subsection 1, the seller 126 5 shall collect the tax according to section 423.15, 126 6 subsection 1, paragraph "e". Nothing in this 126 7 subsection shall limit a purchaser's obligation for 126 8 sales or use tax to any state to which the direct mail 126 9 is delivered. 126 10 3. If a purchaser of direct mail provides the 126 11 seller with documentation of direct pay authority, the 126 12 purchaser shall not be required to provide a direct 126 13 mail form or delivery information to the seller. 126 14 Sec. 151. NEW SECTION. 423.20 TELECOMMUNICATIONS 126 15 SERVICE SOURCING. 126 16 1. As used in this section: 126 17 a. "Air-to-ground radiotelephone service" means a 126 18 radio service, as that term is used in 47 C.F.R. } 126 19 22.99, in which common carriers are authorized to 126 20 offer and provide radio telecommunications service for 126 21 hire to subscribers in aircraft. 126 22 b. "Call-by-call basis" means any method of 126 23 charging for the telecommunications service where the 126 24 price is measured by individual calls. 126 25 c. "Communications channel" means a physical or 126 26 virtual path of communications over which signals are 126 27 transmitted between or among customer channel 126 28 termination points. 126 29 d. "Customer" means the person or entity that 126 30 contracts with the seller of the telecommunications 126 31 service. If the end user of the telecommunications 126 32 service is not the contracting party, the end user of 126 33 the telecommunications service is the customer of the 126 34 telecommunications service, but this sentence only 126 35 applies for the purpose of sourcing sales of the 126 36 telecommunications service under this section. 126 37 "Customer" does not include a reseller of a 126 38 telecommunications service or for mobile 126 39 telecommunications service of a serving carrier under 126 40 an agreement to serve the customer outside the home 126 41 service provider's licensed service area. 126 42 e. "Customer channel termination point" means the 126 43 location where the customer either inputs or receives 126 44 the communications. 126 45 f. "End user" means the person who utilizes the 126 46 telecommunications service. In the case of an entity, 126 47 "end user" means the individual who utilizes the 126 48 service on behalf of the entity. 126 49 g. "Home service provider" means the same as that 126 50 term is defined in the federal Mobile 127 1 Telecommunications Sourcing Act, Pub. L. No. 106-252, 127 2 4 U.S.C. } 124(5). 127 3 h. "Mobile telecommunications service" means the 127 4 same as that term is defined in federal Mobile 127 5 Telecommunications Sourcing Act, Pub. L. No. 106-252, 127 6 4 U.S.C. } 124(7). 127 7 i. "Place of primary use" means the street address 127 8 representative of where the customer's use of the 127 9 telecommunications service primarily occurs, which 127 10 must be the residential street address or the primary 127 11 business street address of the customer. In the case 127 12 of mobile telecommunications service, "place of 127 13 primary use" must be within the licensed service area 127 14 of the home service provider. 127 15 j. "Postpaid calling service" means the 127 16 telecommunications service obtained by making a 127 17 payment on a call-by-call basis either through the use 127 18 of a credit card or payment mechanism such as a bank 127 19 card, travel card, credit card, or debit card, or by 127 20 charge made to a telephone number which is not 127 21 associated with the origination or termination of the 127 22 telecommunications service. A "postpaid calling 127 23 service" includes a telecommunications service that 127 24 would be a prepaid calling service except it is not 127 25 exclusively a telecommunications service. 127 26 k. "Prepaid calling service" means the right to 127 27 access exclusively telecommunications services, which 127 28 must be paid for in advance and which enables the 127 29 origination of calls using an access number or 127 30 authorization code, whether manually or electronically 127 31 dialed, and that is sold in predetermined units or 127 32 dollars of which the amount declines with use in a 127 33 known amount. 127 34 l. "Private communication service" means a 127 35 telecommunications service that entitles the customer 127 36 to exclusive or priority use of a communications 127 37 channel or group of channels between or among 127 38 termination points, regardless of the manner in which 127 39 such channel or channels are connected, and includes 127 40 switching capacity, extension lines, stations, and any 127 41 other associated services that are provided in 127 42 connection with the use of such channel or channels. 127 43 m. "Service address" means one of the following: 127 44 (1) The location of the telecommunications 127 45 equipment to which a customer's call is charged and 127 46 from which the call originates or terminates, 127 47 regardless of where the call is billed or paid. 127 48 (2) If the location in subparagraph (1) is not 127 49 known, "service address" means the origination point 127 50 of the signal of the telecommunications service first 128 1 identified by either the seller's telecommunications 128 2 system or in information received by the seller from 128 3 its service provider, where the system used to 128 4 transport such signals is not that of the seller. 128 5 (3) If the locations in subparagraphs (1) and (2) 128 6 are not known, the "service address" means the 128 7 location of the customer's place of primary use. 128 8 2. Sales of telecommunications services shall be 128 9 sourced in the following manner: 128 10 a. Except for the defined telecommunications 128 11 services in paragraph "c", the sale of 128 12 telecommunications services sold on a call-by-call 128 13 basis shall be sourced to one of the following: 128 14 (1) Each level of taxing jurisdiction where the 128 15 call originates and terminates in that jurisdiction. 128 16 (2) Each level of taxing jurisdiction where the 128 17 call either originates or terminates and in which the 128 18 service address is also located. 128 19 b. Except for the defined telecommunications 128 20 services in paragraph "c", a sale of 128 21 telecommunications services sold on a basis other than 128 22 a call-by-call basis is sourced to the customer's 128 23 place of primary use. 128 24 c. Sale of the following telecommunications 128 25 services shall be sourced to each level of taxing 128 26 jurisdiction as follows: 128 27 (1) A sale of mobile telecommunications services 128 28 other than air-to-ground radiotelephone service or 128 29 prepaid calling service is sourced to the customer's 128 30 place of primary use as required by the federal Mobile 128 31 Telecommunications Sourcing Act. 128 32 (2) A sale of postpaid calling service is sourced 128 33 to the origination point of the telecommunications 128 34 signal as first identified by either of the following: 128 35 (a) The seller's telecommunications system. 128 36 (b) Information received by the seller from its 128 37 service provider, where the system used to transport 128 38 such signals is not that of the seller. 128 39 (3) A sale of prepaid calling service is sourced 128 40 in accordance with section 423.15. However, in the 128 41 case of a sale of mobile telecommunications services 128 42 that is a prepaid telecommunications service, the rule 128 43 provided in section 423.15, subsection 1, paragraph 128 44 "e", shall include as an option the location 128 45 associated with the mobile telephone number. 128 46 (4) A sale of a private telecommunications service 128 47 is sourced as follows: 128 48 (a) Service for a separate charge related to a 128 49 customer channel termination point is sourced to each 128 50 level of jurisdiction in which such customer channel 129 1 termination point is located. 129 2 (b) Service where all customer termination points 129 3 are located entirely within one jurisdiction or level 129 4 of jurisdiction is sourced in such jurisdiction in 129 5 which the customer channel termination points are 129 6 located. 129 7 (c) Service for segments of a channel between two 129 8 customer channel termination points located in 129 9 different jurisdictions and which segments of a 129 10 channel are separately charged is sourced fifty 129 11 percent in each level of jurisdiction in which the 129 12 customer channel termination points are located. 129 13 (d) Service for segments of a channel located in 129 14 more than one jurisdiction or levels of jurisdiction 129 15 and which segments are not separately billed is 129 16 sourced in each jurisdiction based on the percentage 129 17 determined by dividing the number of customer channel 129 18 termination points in such jurisdiction by the total 129 19 number of customer channel termination points. 129 20 Sec. 152. NEW SECTION. 423.21 BAD DEBT 129 21 DEDUCTIONS. 129 22 1. For the purposes of this section, "bad debt" 129 23 means an amount properly calculated pursuant to 129 24 section 166 of the Internal Revenue Code then adjusted 129 25 to exclude financing charges or interest, sales or use 129 26 taxes charged on the purchase price, uncollectible 129 27 amounts on property that remain in the possession of 129 28 the seller until the full purchase price is paid, 129 29 expenses incurred in attempting to collect any debt, 129 30 and repossessed property. 129 31 2. In computing the amount of tax due, a seller 129 32 may deduct bad debts from the total amount upon which 129 33 the tax is calculated for any return. Any deduction 129 34 taken or refund paid which is attributed to bad debts 129 35 shall not include interest. 129 36 3. A seller may deduct bad debts on the return for 129 37 the period during which the bad debt is written off as 129 38 uncollectible in the seller's books and records and is 129 39 eligible to be deducted for federal income tax 129 40 purposes. For purposes of this subsection, a seller 129 41 who is not required to file federal income tax returns 129 42 may deduct a bad debt on a return filed for the period 129 43 in which the bad debt is written off as uncollectible 129 44 in the seller's books and records and would be 129 45 eligible for a bad debt deduction for federal income 129 46 tax purposes if the seller were required to file a 129 47 federal income tax return. 129 48 4. If a deduction is taken for a bad debt and the 129 49 seller subsequently collects the debt in whole or in 129 50 part, the tax on the amount so collected must be paid 130 1 and reported on the return filed for the period in 130 2 which the collection is made. 130 3 5. A seller may obtain a refund of tax on any 130 4 amount of bad debt that exceeds the amount of taxable 130 5 sales within the period allowed for refund claims by 130 6 section 423.47. However, the period allowed for 130 7 refund claims shall be measured from the due date of 130 8 the return on which the bad debt could first be 130 9 claimed. 130 10 6. For the purposes of computing a bad debt 130 11 deduction or reporting a payment received on a 130 12 previously claimed bad debt, any payments made on a 130 13 debt or account shall be applied first to the price of 130 14 the property or service and tax thereon, 130 15 proportionally, and secondly to interest, service 130 16 charges, and any other charges. 130 17 Sec. 153. NEW SECTION. 423.22 TAXATION IN 130 18 ANOTHER STATE. 130 19 If any person who causes tangible personal property 130 20 to be brought into this state or who uses in this 130 21 state services enumerated in section 423.2 has already 130 22 paid a tax in another state in respect to the sale or 130 23 use of the property or the performance of the service, 130 24 or an occupation tax in respect to the property or 130 25 service, in an amount less than the tax imposed by 130 26 subchapter II or III, the provisions of those 130 27 subchapters shall apply, but at a rate measured by the 130 28 difference only between the rate fixed by subchapter 130 29 II or III and the rate by which the previous tax on 130 30 the sale or use, or the occupation tax, was computed. 130 31 If the tax imposed and paid in the other state is 130 32 equal to or more than the tax imposed by those 130 33 subchapters, then a tax is not due in this state on 130 34 the personal property or service. 130 35 Sec. 154. NEW SECTION. 423.23 SELLERS' 130 36 AGREEMENTS. 130 37 Agreements between competing sellers, or the 130 38 adoption of appropriate rules and regulations by 130 39 organizations or associations of sellers to provide 130 40 uniform methods for adding sales or use tax or the 130 41 average equivalent thereof, and which do not involve 130 42 price-fixing agreements otherwise unlawful, are 130 43 expressly authorized and shall be held not in 130 44 violation of chapter 553 or other antitrust laws of 130 45 this state. The director shall cooperate with 130 46 sellers, organizations, or associations in formulating 130 47 agreements and rules. 130 48 Sec. 155. NEW SECTION. 423.24 ABSORBING TAX 130 49 PROHIBITED. 130 50 A seller shall not advertise or hold out or state 131 1 to the public or to any purchaser, consumer, or user, 131 2 directly or indirectly, that the taxes or any parts 131 3 thereof imposed by subchapter II or III will be 131 4 assumed or absorbed by the seller or the taxes will 131 5 not be added to the sales price of the property sold, 131 6 or if added that the taxes or any part thereof will be 131 7 refunded. Any person violating any of the provisions 131 8 of this section within this state is guilty of a 131 9 simple misdemeanor. 131 10 Sec. 156. NEW SECTION. 423.25 DIRECTOR'S POWER 131 11 TO ADOPT RULES. 131 12 The director shall have the power to adopt rules 131 13 for adding the taxes imposed by subchapters II and 131 14 III, or the average equivalents thereof, by providing 131 15 different methods applying uniformly to retailers 131 16 within the same general classification for the purpose 131 17 of enabling the retailers to add and collect, as far 131 18 as practicable, the amounts of those taxes. 131 19 Sec. 157. NEW SECTION. 423.26 VEHICLES SUBJECT 131 20 TO REGISTRATION OR ONLY TO THE ISSUANCE OF TITLE – 131 21 MANUFACTURED HOUSING. 131 22 The use tax imposed upon the use of vehicles 131 23 subject to registration or subject only to the 131 24 issuance of a certificate of title or imposed upon the 131 25 use of manufactured housing shall be paid by the owner 131 26 of the vehicle or of the manufactured housing to the 131 27 county treasurer or the state department of 131 28 transportation from whom the registration receipt or 131 29 certificate of title is obtained. A registration 131 30 receipt for a vehicle subject to registration or 131 31 certificate of title shall not be issued until the tax 131 32 has been paid. The county treasurer or the state 131 33 department of transportation shall require every 131 34 applicant for a registration receipt for a vehicle 131 35 subject to registration or certificate of title to 131 36 supply information as the county treasurer or the 131 37 director deems necessary as to the time of purchase, 131 38 the purchase price, installed purchase price, and 131 39 other information relative to the purchase of the 131 40 vehicle or manufactured housing. On or before the 131 41 tenth day of each month, the county treasurer or the 131 42 state department of transportation shall remit to the 131 43 department the amount of the taxes collected during 131 44 the preceding month. 131 45 A person who willfully makes a false statement in 131 46 regard to the purchase price of a vehicle subject to 131 47 taxation under this section is guilty of a fraudulent 131 48 practice. A person who willfully makes a false 131 49 statement in regard to the purchase price of such a 131 50 vehicle with the intent to evade the payment of tax 132 1 shall be assessed a penalty of seventy-five percent of 132 2 the amount of tax unpaid and required to be paid on 132 3 the actual purchase price less trade-in allowance. 132 4 Sec. 158. NEW SECTION. 423.27 MOTOR VEHICLE 132 5 LEASE TAX. 132 6 1. The use tax imposed upon the use of leased 132 7 vehicles subject to registration under chapter 321, 132 8 with gross vehicle weight ratings of less than sixteen 132 9 thousand pounds, excluding motorcycles and motorized 132 10 bicycles, which are leased by a lessor licensed 132 11 pursuant to chapter 321F for a period of twelve months 132 12 or more shall be paid by the owner of the vehicle to 132 13 the county treasurer or state department of 132 14 transportation from whom the registration receipt or 132 15 certificate of title is obtained. A registration 132 16 receipt for a vehicle subject to registration or 132 17 issuance of a certificate of title shall not be issued 132 18 until the tax is paid in the initial instance. Tax on 132 19 the lease transaction that does not require titling or 132 20 registration of the vehicle shall be remitted to the 132 21 department. Tax and the reporting of tax due to the 132 22 department shall be remitted on or before fifteen days 132 23 from the last day of the month that the vehicle lease 132 24 tax becomes due. Failure to timely report or remit 132 25 any of the tax when due shall result in a penalty and 132 26 interest being imposed on the tax due pursuant to 132 27 section 423.40, subsection 1, and section 423.42, 132 28 subsection 1. 132 29 2. The amount subject to tax shall be computed on 132 30 each separate lease transaction by taking the total of 132 31 the lease payments, plus the down payment, and 132 32 excluding all of the following: 132 33 a. Title fee. 132 34 b. Registration fees. 132 35 c. Vehicle lease tax pursuant to this section. 132 36 d. Federal excise taxes attributable to the sale 132 37 of the vehicle to the owner or to the lease of the 132 38 vehicle by the owner. 132 39 e. Optional service or warranty contracts subject 132 40 to tax pursuant to section 423.2, subsection 1. 132 41 f. Insurance. 132 42 g. Manufacturer's rebate. 132 43 h. Refundable deposit. 132 44 i. Finance charges, if any, on items listed in 132 45 paragraphs "a" through "h". 132 46 If any or all of the items in paragraphs "a" 132 47 through "i" are excluded from the taxable lease price, 132 48 the owner shall maintain adequate records of the 132 49 amounts of those items. If the parties to a lease 132 50 enter into an agreement providing that the tax imposed 133 1 under this statute is to be paid by the lessee or 133 2 included in the monthly lease payments to be paid by 133 3 the lessee, the total cost of the tax shall not be 133 4 included in the computation of lease price for the 133 5 purpose of taxation under this section. The county 133 6 treasurer, the state department of transportation, or 133 7 the department of revenue and finance shall require 133 8 every applicant for a registration receipt for a 133 9 vehicle subject to tax under this section to supply 133 10 information as the county treasurer or director deems 133 11 necessary as to the date of the lease transaction, the 133 12 lease price, and other information relative to the 133 13 lease of the vehicle. 133 14 3. On or before the tenth day of each month, the 133 15 county treasurer or the state department of 133 16 transportation shall remit to the department the 133 17 amount of the taxes collected during the preceding 133 18 month. 133 19 4. If the lease is terminated prior to the 133 20 termination date contained in the lease agreement, no 133 21 refund shall be allowed for tax previously paid under 133 22 this section, except as provided in section 322G.4. 133 23 Sec. 159. NEW SECTION. 423.28 SALES TAX REPORT 133 24 – DEDUCTION. 133 25 Motor vehicle or trailer dealers, in making their 133 26 reports and returns to the department for the purpose 133 27 of paying the sales tax, shall be permitted to deduct 133 28 all sales prices from retail sales of vehicles subject 133 29 to registration or subject only to the issuance of a 133 30 certificate of title. Sales prices from sales of 133 31 vehicles subject to registration or subject only to 133 32 the issuance of a certificate of title are exempted 133 33 from the sales tax, but, if required by the director, 133 34 the sales prices shall be included in the returns made 133 35 by motor vehicle or trailer dealers under subchapter 133 36 II, and proper deductions taken pursuant to this 133 37 section. 133 38 Sec. 160. NEW SECTION. 423.29 COLLECTIONS BY 133 39 SELLERS. 133 40 Every seller who is a retailer and who is making 133 41 taxable sales of tangible personal property in Iowa 133 42 shall, at the time of selling the property, collect 133 43 the sales tax. Every seller who is a retailer 133 44 maintaining a place of business in this state and 133 45 selling tangible personal property for use in Iowa 133 46 shall, at the time of making the sale, whether within 133 47 or without the state, collect the use tax. Sellers 133 48 required to collect sales or use tax shall give to any 133 49 purchaser a receipt for the tax collected in the 133 50 manner and form prescribed by the director. 134 1 Every seller who is a retailer furnishing taxable 134 2 services in Iowa and every seller who is a retailer 134 3 maintaining a place of business in this state and 134 4 furnishing taxable services in Iowa or services 134 5 outside Iowa if the product or result of the service 134 6 is used in Iowa shall be subject to the provisions of 134 7 the preceding paragraph. 134 8 Sec. 161. NEW SECTION. 423.30 FOREIGN SELLERS 134 9 NOT REGISTERED UNDER THE AGREEMENT. 134 10 The director may, upon application, authorize the 134 11 collection of the use tax by any seller who is a 134 12 retailer not maintaining a place of business within 134 13 this state and not registered under the agreement, 134 14 who, to the satisfaction of the director, furnishes 134 15 adequate security to ensure collection and payment of 134 16 the tax. Such sellers shall be issued, without 134 17 charge, permits to collect tax subject to any 134 18 regulations which the director shall prescribe. When 134 19 so authorized, it shall be the duty of foreign sellers 134 20 to collect the tax upon all tangible personal property 134 21 sold, to the retailer's knowledge, for use within this 134 22 state, in the same manner and subject to the same 134 23 requirements as a retailer maintaining a place of 134 24 business within this state. The authority and permit 134 25 may be canceled when, at any time, the director 134 26 considers the security inadequate, or that tax can 134 27 more effectively be collected from the person using 134 28 property in this state. 134 29 The discretionary power granted in this section is 134 30 extended to apply in the case of foreign retailers 134 31 furnishing services enumerated in section 423.2. 134 32 Sec. 162. NEW SECTION. 423.31 FILING OF SALES 134 33 TAX RETURNS AND PAYMENT OF SALES TAX. 134 34 1. Each person subject to this section and section 134 35 423.36 and in accordance with the provisions of this 134 36 section and section 423.36 shall, on or before the 134 37 last day of the month following the close of each 134 38 calendar quarter during which such person is or has 134 39 become or ceased being subject to the provisions of 134 40 this section and section 423.36, make, sign, and file 134 41 a return for the calendar quarter in the form as may 134 42 be required. Returns shall show information relating 134 43 to sales prices including goods, wares, and services 134 44 converted to the use of such person, the amounts of 134 45 sales prices excluded and exempt from the tax, the 134 46 amounts of sales prices subject to tax, a calculation 134 47 of tax due, and any other information for the period 134 48 covered by the return as may be required. Returns 134 49 shall be signed by the retailer or the retailer's 134 50 authorized agent and must be certified by the retailer 135 1 to be correct in accordance with forms and rules 135 2 prescribed by the director. 135 3 2. Persons required to file, or committed to file 135 4 by reason of voluntary action or by order of the 135 5 department, deposits of taxes due under this 135 6 subchapter shall be entitled to take credit against 135 7 the total quarterly amount of tax due such amount as 135 8 shall have been deposited by such persons during that 135 9 calendar quarter. The balance remaining due after 135 10 such credit for deposits shall be entered on the 135 11 return. However, such person may be granted an 135 12 extension of time not exceeding thirty days for filing 135 13 the quarterly return, upon a proper showing of 135 14 necessity. If an extension is granted, such person 135 15 shall have paid by the twentieth day of the month 135 16 following the close of such quarter ninety percent of 135 17 the estimated tax due. 135 18 3. The sales tax forms prescribed by the director 135 19 shall be referred to as "retailers tax deposit". 135 20 Deposit forms shall be signed by the retailer or the 135 21 retailer's duly authorized agent, and shall be duly 135 22 certified by the retailer or agent to be correct. The 135 23 director may authorize incorporated banks and trust 135 24 companies or other depositories authorized by law 135 25 which are depositories or financial agents of the 135 26 United States, or of this state, to receive any sales 135 27 tax imposed under this chapter, in the manner, at the 135 28 times, and under the conditions the director 135 29 prescribes. The director shall prescribe the manner, 135 30 times, and conditions under which the receipt of the 135 31 tax by those depositories is to be treated as payment 135 32 of the tax to the department. 135 33 4. Every retailer at the time of making any return 135 34 required by this section shall compute and pay to the 135 35 department the tax due for the preceding period. The 135 36 tax on sales prices from the sale or rental of 135 37 tangible personal property under a consumer rental 135 38 purchase agreement as defined in section 537.3604, 135 39 subsection 8, is payable in the tax period of receipt. 135 40 5. Upon making application and receiving approval 135 41 from the director, a parent corporation and its 135 42 affiliated corporations that make retail sales of 135 43 tangible personal property or taxable enumerated 135 44 services may make deposits and file a consolidated 135 45 sales tax return for the affiliated group, pursuant to 135 46 rules adopted by the director. A parent corporation 135 47 and each affiliate corporation that files a 135 48 consolidated return are jointly and severally liable 135 49 for all tax, penalty, and interest found due for the 135 50 tax period for which a consolidated return is filed or 136 1 required to be filed. 136 2 A business required to file a consolidated sales 136 3 tax return shall file a form entitled "schedule of 136 4 consolidated business locations" with its quarterly 136 5 sales tax return that shows the taxpayer's 136 6 consolidated permit number, the permit number for each 136 7 Iowa business location, the state sales tax amount by 136 8 business location, and the amount of state sales tax 136 9 due on goods consumed that are not assigned to a 136 10 specific business location. Consolidated quarterly 136 11 sales tax returns that are not accompanied by the 136 12 schedule of consolidated business locations form are 136 13 considered incomplete and are subject to penalty under 136 14 section 421.27. 136 15 6. If necessary or advisable in order to insure 136 16 the payment of the tax, the director may require 136 17 returns and payment of the tax to be made for other 136 18 than quarterly periods, the provisions of this 136 19 section, or other provision to the contrary 136 20 notwithstanding. 136 21 Sec. 163. NEW SECTION. 423.32 FILING OF USE TAX 136 22 RETURNS AND PAYMENT OF USE TAX. 136 23 1. A retailer maintaining a place of business in 136 24 this state who is required to collect or a user who is 136 25 required to pay the use tax or a foreign retailer 136 26 authorized, pursuant to section 423.30, to collect the 136 27 use tax, shall remit to the department the amount of 136 28 tax on or before the last day of the month following 136 29 each calendar quarterly period. However, a retailer 136 30 who collects or owes more than fifteen hundred dollars 136 31 in use taxes in a month shall deposit with the 136 32 department or in a depository authorized by law and 136 33 designated by the director, the amount collected or 136 34 owed, with a deposit form for the month as prescribed 136 35 by the director. 136 36 a. The deposit form is due on or before the 136 37 twentieth day of the month following the month of 136 38 collection, except a deposit is not required for the 136 39 third month of the calendar quarter, and the total 136 40 quarterly amount, less the amounts deposited for the 136 41 first two months of the quarter, is due with the 136 42 quarterly report on the last day of the month 136 43 following the month of collection. At that time, the 136 44 retailer shall file with the department a return for 136 45 the preceding quarterly period in the form prescribed 136 46 by the director showing the purchase price of the 136 47 tangible personal property sold by the retailer during 136 48 the preceding quarterly period, the use of which is 136 49 subject to the use tax imposed by this chapter, and 136 50 other information the director deems necessary for the 137 1 proper administration of the use tax. 137 2 b. The return shall be accompanied by a remittance 137 3 of the use tax for the period covered by the return. 137 4 If necessary in order to ensure payment to the state 137 5 of the tax, the director may in any or all cases 137 6 require returns and payments to be made for other than 137 7 quarterly periods. The director, upon request and a 137 8 proper showing of necessity, may grant an extension of 137 9 time not to exceed thirty days for making any return 137 10 and payment. Returns shall be signed, in accordance 137 11 with forms and rules prescribed by the director, by 137 12 the retailer or the retailer's authorized agent, and 137 13 shall be certified by the retailer or agent to be 137 14 correct. 137 15 2. If it is reasonably expected, as determined by 137 16 rules prescribed by the director, that a retailer's 137 17 annual sales or use tax liability will not exceed one 137 18 hundred twenty dollars for a calendar year, the 137 19 retailer may request and the director may grant 137 20 permission to the retailer, in lieu of the quarterly 137 21 filing and remitting requirements set out elsewhere in 137 22 this section, to file the return required by and remit 137 23 the sales or use tax due under this section on a 137 24 calendar-year basis. The return and tax are due and 137 25 payable no later than January 31 following each 137 26 calendar year in which the retailer carries on 137 27 business. 137 28 3. The director, in cooperation with the 137 29 department of management, may periodically change the 137 30 filing and remittance thresholds by administrative 137 31 rule if in the best interests of the state and 137 32 taxpayer to do so. 137 33 Sec. 164. NEW SECTION. 423.33 LIABILITY OF 137 34 PERSONS OTHER THAN RETAILERS FOR PAYMENT OF SALES OR 137 35 USE TAX. 137 36 1. LIABILITY OF PURCHASER FOR SALES TAX. If a 137 37 purchaser fails to pay sales tax to the retailer 137 38 required to collect the tax, then in addition to all 137 39 of the rights, obligations, and remedies provided, the 137 40 tax is payable by the purchaser directly to the 137 41 department, and sections 423.31, 423.32, 423.37, 137 42 423.38, 423.39, 423.40, 423.41, and 423.42 apply to 137 43 the purchaser. For failure to pay, the retailer and 137 44 purchaser are liable, unless the circumstances 137 45 described in section 421.60, subsection 2, paragraph 137 46 "m", or section 423.45, subsection 4, paragraph "b" or 137 47 "e", or subsection 5, paragraph "c" or "e", are 137 48 applicable. 137 49 2. IMMEDIATE SUCCESSOR LIABILITY FOR SALES OR USE 137 50 TAX. If a retailer sells the retailer's business or 138 1 stock of goods or quits the business, the retailer 138 2 shall prepare a final return and pay all sales or use 138 3 tax due within the time required by law. The 138 4 immediate successor to the retailer, if any, shall 138 5 withhold a sufficient portion of the purchase price, 138 6 in money or money's worth, to pay the amount of 138 7 delinquent tax, interest, or penalty due and unpaid. 138 8 If the immediate successor of the business or stock of 138 9 goods intentionally fails to withhold the amount due 138 10 from the purchase price as provided in this 138 11 subsection, the immediate successor is personally 138 12 liable for the payment of delinquent taxes, interest, 138 13 and penalty accrued and unpaid on account of the 138 14 operation of the business by the immediate former 138 15 retailer, except when the purchase is made in good 138 16 faith as provided in section 421.28. However, a 138 17 person foreclosing on a valid security interest or 138 18 retaking possession of premises under a valid lease is 138 19 not an "immediate successor" for purposes of this 138 20 section. The department may waive the liability of 138 21 the immediate successor under this subsection if the 138 22 immediate successor exercised good faith in 138 23 establishing the amount of the previous liability. 138 24 3. EVENT SPONSOR'S LIABILITY FOR SALES TAX. A 138 25 person sponsoring a flea market or a craft, antique, 138 26 coin, or stamp show or similar event shall obtain from 138 27 every retailer selling tangible personal property or 138 28 taxable services at the event proof that the retailer 138 29 possesses a valid sales tax permit or secure from the 138 30 retailer a statement, taken in good faith, that 138 31 property or services offered for sale are not subject 138 32 to sales tax. Failure to do so renders a sponsor of 138 33 the event liable for payment of any sales tax, 138 34 interest, and penalty due and owing from any retailer 138 35 selling property or services at the event. Sections 138 36 423.31, 423.32, 423.37, 423.38, 423.39, 423.40, 138 37 423.41, and 423.42 apply to the sponsors. For 138 38 purposes of this subsection, a person sponsoring a 138 39 flea market or a craft, antique, coin, or stamp show 138 40 or similar event does not include an organization 138 41 which sponsors an event less than three times a year 138 42 or a state, county, or district agricultural fair. 138 43 Sec. 165. NEW SECTION. 423.34 LIABILITY OF USER. 138 44 Any person who uses any property or services 138 45 enumerated in section 423.2 upon which the use tax has 138 46 not been paid, either to the county treasurer or to a 138 47 retailer or direct to the department as required by 138 48 this subchapter, shall be liable for the payment of 138 49 tax, and shall on or before the last day of the month 138 50 next succeeding each quarterly period pay the use tax 139 1 upon all property or services used by the person 139 2 during the preceding quarterly period in the manner 139 3 and accompanied by such returns as the director shall 139 4 prescribe. All of the provisions of sections 423.32 139 5 and 423.33 with reference to the returns and payments 139 6 shall be applicable to the returns and payments 139 7 required by this section. 139 8 Sec. 166. NEW SECTION. 423.35 POSTING OF BOND TO 139 9 SECURE PAYMENT. 139 10 The director may, when necessary and advisable in 139 11 order to secure the collection of the sales or use 139 12 tax, authorize any person subject to either tax, and 139 13 any retailer required or authorized to collect those 139 14 taxes pursuant to the provisions of section 423.14, to 139 15 file with the department a bond, issued by a surety 139 16 company authorized to transact business in this state 139 17 and approved by the insurance commissioner as to 139 18 solvency and responsibility, in an amount as the 139 19 director may fix, to secure the payment of any tax, 139 20 interest, or penalties due or which may become due 139 21 from such person. In lieu of a bond, securities 139 22 approved by the director, in an amount which the 139 23 director may prescribe, may be deposited with the 139 24 department, which securities shall be kept in the 139 25 custody of the department and may be sold by the 139 26 director at public or private sale, without notice to 139 27 the depositor, if it becomes necessary to do so in 139 28 order to recover any tax, interest, or penalties due. 139 29 Upon the sale, the surplus, if any, above the amounts 139 30 due under this chapter shall be returned to the person 139 31 who deposited the securities. 139 32 Sec. 167. NEW SECTION. 423.36 PERMITS REQUIRED 139 33 TO COLLECT SALES OR USE TAX – APPLICATIONS – 139 34 REVOCATION. 139 35 1. A person shall not engage in or transact 139 36 business as a retailer making taxable sales of 139 37 tangible personal property or furnishing services 139 38 within this state or as a retailer making taxable 139 39 sales of tangible personal property or furnishing 139 40 services for use within this state, unless a permit 139 41 has been issued to the retailer under this section, 139 42 except as provided in subsection 6. Every person 139 43 desiring to engage in or transact business as a 139 44 retailer shall file with the department an application 139 45 for a permit to collect sales or use tax. Every 139 46 application for a sales or use tax permit shall be 139 47 made upon a form prescribed by the director and shall 139 48 set forth any information the director may require. 139 49 The application shall be signed by an owner of the 139 50 business if a natural person; in the case of a 140 1 retailer which is an association or partnership, by a 140 2 member or partner; and in the case of a retailer which 140 3 is a corporation, by an executive officer or some 140 4 person specifically authorized by the corporation to 140 5 sign the application, to which shall be attached the 140 6 written evidence of the person's authority. 140 7 2. To collect sales or use tax, the applicant must 140 8 have a permit for each place of business in the state 140 9 of Iowa. The department may deny a permit to an 140 10 applicant who is substantially delinquent in paying a 140 11 tax due, or the interest or penalty on the tax, 140 12 administered by the department at the time of 140 13 application. If the applicant is a partnership, a 140 14 permit may be denied if a partner is substantially 140 15 delinquent in paying any delinquent tax, penalty, or 140 16 interest. If the applicant is a corporation, a permit 140 17 may be denied if any officer having a substantial 140 18 legal or equitable interest in the ownership of the 140 19 corporation owes any delinquent tax, penalty, or 140 20 interest. 140 21 3. The department shall grant and issue to each 140 22 applicant a permit for each place of business in this 140 23 state where sales or use tax is collected. A permit 140 24 is not assignable and is valid only for the person in 140 25 whose name it is issued and for the transaction of 140 26 business at the place designated or at a place of 140 27 relocation within the state if the ownership remains 140 28 the same. 140 29 If an applicant is making sales outside Iowa for 140 30 use in this state or furnishing services outside Iowa, 140 31 the product or result of which will be used in this 140 32 state, that applicant shall be issued one use tax 140 33 permit by the department applicable to these out-of- 140 34 state sales or services. 140 35 4. Permits issued under this section are valid and 140 36 effective until revoked by the department. 140 37 5. If the holder of a permit fails to comply with 140 38 any of the provisions of this subchapter or of 140 39 subchapter II or III or any order or rule of the 140 40 department adopted under those subchapters or is 140 41 substantially delinquent in the payment of a tax 140 42 administered by the department or the interest or 140 43 penalty on the tax, or if the person is a corporation 140 44 and if any officer having a substantial legal or 140 45 equitable interest in the ownership of the corporation 140 46 owes any delinquent tax of the permit-holding 140 47 corporation, or interest or penalty on the tax, 140 48 administered by the department, the director may 140 49 revoke the permit. The director shall send notice by 140 50 mail to a permit holder informing that person of the 141 1 director's intent to revoke the permit and of the 141 2 permit holder's right to a hearing on the matter. If 141 3 the permit holder petitions the director for a hearing 141 4 on the proposed revocation, after giving ten days' 141 5 notice of the time and place of the hearing in 141 6 accordance with section 17A.18, subsection 3, the 141 7 matter may be heard and a decision rendered. The 141 8 director may restore permits after revocation. The 141 9 director shall adopt rules setting forth the period of 141 10 time a retailer must wait before a permit may be 141 11 restored or a new permit may be issued. The waiting 141 12 period shall not exceed ninety days from the date of 141 13 the revocation of the permit. 141 14 6. Sellers who are not regularly engaged in 141 15 selling at retail and do not have a permanent place of 141 16 business, but who are temporarily engaged in selling 141 17 from trucks, portable roadside stands, concessionaires 141 18 at state, county, district, or local fairs, carnivals, 141 19 or the like, shall report and remit the sales tax on a 141 20 temporary basis, under rules the director shall 141 21 provide for the efficient collection of the sales tax. 141 22 This subsection applies to sellers who are temporarily 141 23 engaged in furnishing services. 141 24 Persons engaged in selling tangible personal 141 25 property or furnishing services shall not be required 141 26 to obtain or retain a sales tax permit for a place of 141 27 business at which taxable sales of tangible personal 141 28 property or taxable performance of services will not 141 29 occur. 141 30 7. The provisions of subsection 1, dealing with 141 31 the lawful right of a retailer to transact business, 141 32 as applicable, apply to persons having receipts from 141 33 furnishing services enumerated in section 423.2, 141 34 except that a person holding a permit pursuant to 141 35 subsection 1 shall not be required to obtain any 141 36 separate sales tax permit for the purpose of engaging 141 37 in business involving the services. 141 38 8. a. Except as provided in paragraph "b", 141 39 purchasers, users, and consumers of tangible personal 141 40 property or enumerated services taxed pursuant to 141 41 subchapter II or III of this chapter or chapters 423B 141 42 and 423E may be authorized, pursuant to rules adopted 141 43 by the director, to remit tax owed directly to the 141 44 department instead of the tax being collected and paid 141 45 by the seller. To qualify for a direct pay tax 141 46 permit, the purchaser, user, or consumer must accrue a 141 47 tax liability of more than four thousand dollars in 141 48 tax under subchapters II and III in a semimonthly 141 49 period and make deposits and file returns pursuant to 141 50 section 423.31. This authority shall not be granted 142 1 or exercised except upon application to the director 142 2 and then only after issuance by the director of a 142 3 direct pay tax permit. 142 4 b. The granting of a direct pay tax permit is not 142 5 authorized for any of the following: 142 6 (1) Taxes imposed on the sales, furnishing, or 142 7 service of gas, electricity, water, heat, pay 142 8 television service, and communication service. 142 9 (2) Taxes imposed under sections 423.26 and 423.27 142 10 and chapter 423C. 142 11 Sec. 168. NEW SECTION. 423.37 FAILURE TO FILE 142 12 SALES OR USE TAX RETURNS – INCORRECT RETURNS. 142 13 1. As soon as practicable after a return is filed 142 14 and in any event within three years after the return 142 15 is filed, the department shall examine it, assess and 142 16 determine the tax due if the return is found to be 142 17 incorrect, and give notice to the person liable for 142 18 the tax of the assessment and determination as 142 19 provided in subsection 2. The period for the 142 20 examination and determination of the correct amount of 142 21 tax is unlimited in the case of a false or fraudulent 142 22 return made with the intent to evade tax or in the 142 23 case of a failure to file a return. 142 24 2. If a return required by this subchapter is not 142 25 filed, or if a return when filed is incorrect or 142 26 insufficient and the maker fails to file a corrected 142 27 or sufficient return within twenty days after the same 142 28 is required by notice from the department, the 142 29 department shall determine the amount of tax due from 142 30 information as the department may be able to obtain 142 31 and, if necessary, may estimate the tax on the basis 142 32 of external indices, such as number of employees of 142 33 the person concerned, rentals paid by the person, 142 34 stock on hand, or other factors. The department shall 142 35 give notice of the determination to the person liable 142 36 for the tax. The determination shall fix the tax 142 37 unless the person against whom it is assessed shall, 142 38 within sixty days after the giving of notice of the 142 39 determination, apply to the director for a hearing or 142 40 unless the taxpayer contests the determination by 142 41 paying the tax, interest, and penalty and timely 142 42 filing a claim for refund. At the hearing evidence 142 43 may be offered to support the determination or to 142 44 prove that it is incorrect. After the hearing the 142 45 director shall give notice of the decision to the 142 46 person liable for the tax. 142 47 3. The three-year period of limitation provided in 142 48 subsection 1 may be extended by a taxpayer by signing 142 49 a waiver agreement form to be provided by the 142 50 department. The agreement shall stipulate the period 143 1 of extension and the tax period to which the extension 143 2 applies. The agreement shall also provide that a 143 3 claim for refund may be filed by the taxpayer at any 143 4 time during the period of extension. 143 5 Sec. 169. NEW SECTION. 423.38 JUDICIAL REVIEW. 143 6 1. Judicial review of actions of the director may 143 7 be sought in accordance with the terms of the Iowa 143 8 administrative procedure Act. 143 9 2. For cause and upon a showing by the director 143 10 that collection of the tax in dispute is in doubt, the 143 11 court may order the petitioner to file with the clerk 143 12 a bond for the use of the respondent, with sureties 143 13 approved by the clerk, in the amount of tax appealed 143 14 from, conditioned that the petitioner shall perform 143 15 the orders of the court. 143 16 3. An appeal may be taken by the taxpayer or the 143 17 director to the supreme court of this state 143 18 irrespective of the amount involved. 143 19 Sec. 170. NEW SECTION. 423.39 SERVICE OF 143 20 NOTICES. 143 21 1. A notice authorized or required under this 143 22 subchapter may be given by mailing the notice to the 143 23 person for whom it is intended, addressed to that 143 24 person at the address given in the last return filed 143 25 by the person pursuant to this subchapter, or if no 143 26 return has been filed, then to any address obtainable. 143 27 The mailing of the notice is presumptive evidence of 143 28 the receipt of the notice by the person to whom 143 29 addressed. Any period of time which is determined 143 30 according to this subchapter by the giving of notice 143 31 commences to run from the date of mailing of the 143 32 notice. 143 33 2. The provisions of the Code relative to the 143 34 limitation of time for the enforcement of a civil 143 35 remedy shall not apply to any proceeding or action 143 36 taken to levy, appraise, assess, determine, or enforce 143 37 the collection of any tax or penalty provided by this 143 38 chapter. 143 39 Sec. 171. NEW SECTION. 423.40 PENALTIES – 143 40 OFFENSES – LIMITATION. 143 41 1. In addition to the sales or use tax or 143 42 additional sales or use tax, the taxpayer shall pay a 143 43 penalty as provided in section 421.27. The taxpayer 143 44 shall also pay interest on the sales or use tax or 143 45 additional sales or use tax at the rate in effect 143 46 under section 421.7 for each month counting each 143 47 fraction of a month as an entire month, computed from 143 48 the date the semimonthly or monthly tax deposit form 143 49 or return was required to be filed. The penalty and 143 50 interest shall be paid to the department and disposed 144 1 of in the same manner as other receipts under this 144 2 subchapter. Unpaid penalties and interest may be 144 3 enforced in the same manner as the taxes imposed by 144 4 this chapter. 144 5 2. a. Any person who knowingly sells tangible 144 6 personal property, tickets or admissions to places of 144 7 amusement and athletic events, or gas, water, 144 8 electricity, or communication service at retail, or 144 9 engages in the furnishing of services enumerated in 144 10 section 423.2, in this state without procuring a 144 11 permit to collect tax, as provided in section 423.36, 144 12 or who violates section 423.24 and the officers of any 144 13 corporation who so act are guilty of a serious 144 14 misdemeanor. 144 15 b. A person who knowingly sells tangible personal 144 16 property, tickets or admissions to places of amusement 144 17 and athletic events, or gas, water, electricity, or 144 18 communication service at retail, or engages in the 144 19 furnishing of services enumerated in section 423.2, in 144 20 this state after the person's sales tax permit has 144 21 been revoked and before it has been restored as 144 22 provided in section 423.36, subsection 5, and the 144 23 officers of any corporation who so act are guilty of 144 24 an aggravated misdemeanor. 144 25 3. A person who willfully attempts in any manner 144 26 to evade any tax imposed by this chapter or the 144 27 payment of the tax or a person who makes or causes to 144 28 be made a false or fraudulent semimonthly or monthly 144 29 tax deposit form or return with intent to evade any 144 30 tax imposed by subchapter II or III or the payment of 144 31 the tax is guilty of a class "D" felony. 144 32 4. The certificate of the director to the effect 144 33 that a tax has not been paid, that a return has not 144 34 been filed, or that information has not been supplied 144 35 pursuant to the provisions of this subchapter shall be 144 36 prima facie evidence thereof. 144 37 5. A person required to pay sales or use tax, or 144 38 to make, sign, or file a tax deposit form or return or 144 39 supplemental return, who willfully makes a false or 144 40 fraudulent tax deposit form or return, or willfully 144 41 fails to pay at least ninety percent of the tax or 144 42 willfully fails to make, sign, or file the tax deposit 144 43 form or return, at the time required by law, is guilty 144 44 of a fraudulent practice. 144 45 6. A prosecution for an offense specified in this 144 46 section shall be commenced within six years after its 144 47 commission. 144 48 Sec. 172. NEW SECTION. 423.41 BOOKS – 144 49 EXAMINATION. 144 50 Every retailer required or authorized to collect 145 1 taxes imposed by this chapter and every person using 145 2 in this state tangible personal property, services, or 145 3 the product of services shall keep records, receipts, 145 4 invoices, and other pertinent papers as the director 145 5 shall require, in the form that the director shall 145 6 require, for as long as the director has the authority 145 7 to examine and determine tax due. The director or any 145 8 duly authorized agent of the department may examine 145 9 the books, papers, records, and equipment of any 145 10 person either selling tangible personal property or 145 11 services or liable for the tax imposed by this 145 12 chapter, and investigate the character of the business 145 13 of any person in order to verify the accuracy of any 145 14 return made, or if a return was not made by the 145 15 person, ascertain and determine the amount due under 145 16 this chapter. These books, papers, and records shall 145 17 be made available within this state for examination 145 18 upon reasonable notice when the director deems it 145 19 advisable and so orders. The preceding requirements 145 20 shall likewise apply to users and persons furnishing 145 21 services enumerated in section 423.2. 145 22 Sec. 173. NEW SECTION. 423.42 STATUTES 145 23 APPLICABLE. 145 24 1. The director shall administer the taxes imposed 145 25 by subchapters II and III in the same manner and 145 26 subject to all the provisions of, and all of the 145 27 powers, duties, authority, and restrictions contained 145 28 in, section 422.25, subsection 4, section 422.30, and 145 29 sections 422.67 through 422.75. 145 30 2. All the provisions of section 422.26 shall 145 31 apply in respect to the taxes and penalties imposed by 145 32 subchapters II and III and this subchapter, except 145 33 that, as applied to any tax imposed by subchapters II 145 34 and III, the lien provided in section 422.26 shall be 145 35 prior and paramount over all subsequent liens upon any 145 36 personal property within this state, or right to such 145 37 personal property, belonging to the taxpayer without 145 38 the necessity of recording as provided in section 145 39 422.26. The requirements for recording shall, as 145 40 applied to the taxes imposed by subchapters II and 145 41 III, apply only to the liens upon real property. When 145 42 requested to do so by any person from whom a taxpayer 145 43 is seeking credit, or with whom the taxpayer is 145 44 negotiating the sale of any personal property, or by 145 45 any other person having a legitimate interest in such 145 46 information, the director shall, upon being satisfied 145 47 that such a situation exists, inform that person as to 145 48 the amount of unpaid taxes due by such taxpayer under 145 49 the provisions of subchapters II and III. The giving 145 50 of this information under these circumstances shall 146 1 not be deemed a violation of section 422.72 as applied 146 2 to subchapters II and III. 146 3 Sec. 174. NEW SECTION. 423.43 DEPOSIT OF REVENUE 146 4 – APPROPRIATIONS. 146 5 Except as otherwise provided in section 312.2, 146 6 subsection 15, all revenues derived from the use tax 146 7 on motor vehicles, trailers, and motor vehicle 146 8 accessories and equipment as collected pursuant to 146 9 sections 423.26 and 423.27 shall be deposited and 146 10 credited to the road use tax fund and shall be used 146 11 exclusively for the construction, maintenance, and 146 12 supervision of public highways. 146 13 1. Notwithstanding any provision of this section 146 14 which provides that all revenues derived from the use 146 15 tax on motor vehicles, trailers, and motor vehicle 146 16 accessories and equipment as collected pursuant to 146 17 sections 423.26 and 423.27 shall be deposited and 146 18 credited to the road use tax fund, eighty percent of 146 19 the revenues shall be deposited and credited as 146 20 follows: 146 21 a. Twenty-five percent of all such revenue, up to 146 22 a maximum of four million two hundred fifty thousand 146 23 dollars per quarter, shall be deposited into and 146 24 credited to the Iowa comprehensive petroleum 146 25 underground storage tank fund created in section 146 26 455G.3, and the moneys so deposited are a continuing 146 27 appropriation for expenditure under chapter 455G, and 146 28 moneys so appropriated shall not be used for other 146 29 purposes. 146 30 b. Any such revenues remaining shall be credited 146 31 to the road use tax fund. 146 32 2. Notwithstanding any other provision of this 146 33 section that provides that all revenue derived from 146 34 the use tax on motor vehicles, trailers, and motor 146 35 vehicle accessories and equipment as collected 146 36 pursuant to section 423.26 shall be deposited and 146 37 credited to the road use tax fund, twenty percent of 146 38 the revenues shall be credited and deposited as 146 39 follows: one-half to the road use tax fund and one- 146 40 half to the primary road fund to be used for the 146 41 commercial and industrial highway network. 146 42 3. For the fiscal year beginning July 1, 2004, and 146 43 each subsequent fiscal year, revenues arising under 146 44 the operation of this chapter which are derived from 146 45 the tax imposed on remote sales shall be deposited 146 46 into the remote sales tax fund created in section 146 47 423.60 in an amount equal to the excess of the 146 48 revenues derived from the tax imposed on remote sales 146 49 during the fiscal year over the revenues derived from 146 50 the tax imposed on remote sales during the fiscal year 147 1 beginning July 1, 2003. 147 2 4. All other revenue arising under the operation 147 3 of this chapter shall be credited to the general fund 147 4 of the state. 147 5 Sec. 175. NEW SECTION. 423.44 REIMBURSEMENT FOR 147 6 PRIMARY ROAD FUND. 147 7 From moneys deposited into the road use tax fund, 147 8 the department may credit to the primary road fund any 147 9 amount of revenues derived from the use tax on motor 147 10 vehicles, trailers, and motor vehicle accessories and 147 11 equipment as collected pursuant to sections 423.26 and 147 12 423.27 to the extent necessary to reimburse that fund 147 13 for the expenditures not otherwise eligible to be made 147 14 from the primary road fund, which are made for 147 15 repairing, improving, and maintaining bridges over the 147 16 rivers bordering the state. Expenditures for those 147 17 portions of bridges within adjacent states may be 147 18 included when they are made pursuant to an agreement 147 19 entered into under section 313.63, 313A.34, or 314.10. 147 20 Sec. 176. NEW SECTION. 423.45 REFUNDS – 147 21 EXEMPTION CERTIFICATES. 147 22 1. If an amount of tax represented by a retailer 147 23 to a consumer or user as constituting tax due is 147 24 computed upon a sales price that is not taxable or the 147 25 amount represented is in excess of the actual taxable 147 26 amount and the amount represented is actually paid by 147 27 the consumer or user to the retailer, the excess 147 28 amount of tax paid shall be returned to the consumer 147 29 or user upon notification to the retailer by the 147 30 department that an excess payment exists. 147 31 2. If an amount of tax represented by a retailer 147 32 to a consumer or user as constituting tax due is 147 33 computed upon a sales price that is not taxable or the 147 34 amount represented is in excess of the actual taxable 147 35 amount and the amount represented is actually paid by 147 36 the consumer or user to the retailer, the excess 147 37 amount of tax paid shall be returned to the consumer 147 38 or user upon proper notification to the retailer by 147 39 the consumer or user that an excess payment exists. 147 40 "Proper" notification is written notification which 147 41 allows a retailer at least sixty days to respond and 147 42 which contains enough information to allow a retailer 147 43 to determine the validity of a consumer's or user's 147 44 claim that an excess amount of tax has been paid. No 147 45 cause of action shall accrue against a retailer for 147 46 excess tax paid until sixty days after proper notice 147 47 has been given the retailer by the consumer or user. 147 48 3. In the circumstances described in subsections 1 147 49 and 2, a retailer has the option to either return any 147 50 excess amount of tax paid to a consumer or user, or to 148 1 remit the amount which a consumer or user has paid to 148 2 the retailer to the department. 148 3 4. a. The department shall issue or the seller 148 4 may separately provide exemption certificates in the 148 5 form prescribed by the director, including 148 6 certificates not made of paper, which conform to the 148 7 requirements of paragraph "c", to assist retailers in 148 8 properly accounting for nontaxable sales of tangible 148 9 personal property or services to purchasers for a 148 10 nontaxable purpose. The department shall also allow 148 11 the use of exemption certificates for those 148 12 circumstances in which a sale is taxable but the 148 13 seller is not obligated to collect tax from the buyer. 148 14 b. The sales tax liability for all sales of 148 15 tangible personal property and all sales of services 148 16 is upon the seller and the purchaser unless the seller 148 17 takes in good faith from the purchaser a valid 148 18 exemption certificate stating under penalty of perjury 148 19 that the purchase is for a nontaxable purpose and is 148 20 not a retail sale as defined in section 423.1, or the 148 21 seller is not obligated to collect tax due, or unless 148 22 the seller takes a fuel exemption certificate pursuant 148 23 to subsection 5. If the tangible personal property or 148 24 services are purchased tax free pursuant to a valid 148 25 exemption certificate which is taken in good faith by 148 26 the seller, and the tangible personal property or 148 27 services are used or disposed of by the purchaser in a 148 28 nonexempt manner, the purchaser is solely liable for 148 29 the taxes and shall remit the taxes directly to the 148 30 department and sections 423.31, 423.32, 423.37, 148 31 423.38, 423.39, 423.40, 423.41, and 423.42 shall apply 148 32 to the purchaser. 148 33 c. A valid exemption certificate is an exemption 148 34 certificate which is complete and correct according to 148 35 the requirements of the director. 148 36 d. A valid exemption certificate is taken in good 148 37 faith by the seller when the seller has exercised that 148 38 caution and diligence which honest persons of ordinary 148 39 prudence would exercise in handling their own business 148 40 affairs, and includes an honesty of intention and 148 41 freedom from knowledge of circumstances which ought to 148 42 put one upon inquiry as to the facts. In order for a 148 43 seller to take a valid exemption certificate in good 148 44 faith, the seller must exercise reasonable prudence to 148 45 determine the facts supporting the valid exemption 148 46 certificate, and if any facts upon such certificate 148 47 would lead a reasonable person to further inquiry, 148 48 such inquiry must be made with an honest intent to 148 49 discover the facts. 148 50 e. If the circumstances change and as a result the 149 1 tangible personal property or services are used or 149 2 disposed of by the purchaser in a nonexempt manner or 149 3 the purchaser becomes obligated to pay the tax, the 149 4 purchaser is liable solely for the taxes and shall 149 5 remit the taxes directly to the department in 149 6 accordance with this subsection. 149 7 5. a. The department shall issue or the seller 149 8 may separately provide fuel exemption certificates in 149 9 the form prescribed by the director. 149 10 b. For purposes of this subsection: 149 11 (1) "Fuel" includes gas, electricity, water, heat, 149 12 steam, and any other tangible personal property 149 13 consumed in creating heat, power, or steam. 149 14 (2) "Fuel consumed in processing" means fuel used 149 15 or consumed for processing including grain drying, for 149 16 providing heat or cooling for livestock buildings or 149 17 for greenhouses or buildings or parts of buildings 149 18 dedicated to the production of flowering, ornamental, 149 19 or vegetable plants intended for sale in the ordinary 149 20 course of business, for use in aquaculture production, 149 21 or for generating electric current, or in implements 149 22 of husbandry engaged in agricultural production. 149 23 (3) "Fuel exemption certificate" means an 149 24 exemption certificate given by the purchaser under 149 25 penalty of perjury to assist retailers in properly 149 26 accounting for nontaxable sales of fuel consumed in 149 27 processing. 149 28 (4) "Substantial change" means a change in the use 149 29 or disposition of tangible personal property and 149 30 services by the purchaser such that the purchaser pays 149 31 less than ninety percent of the purchaser's actual 149 32 sales tax liability. A change includes a misstatement 149 33 of facts in an application made pursuant to paragraph 149 34 "d" or in a fuel exemption certificate. 149 35 c. The seller may accept a completed fuel 149 36 exemption certificate, as prepared by the purchaser, 149 37 for three years unless the purchaser files a new 149 38 completed exemption certificate. If the fuel is 149 39 purchased tax free pursuant to a fuel exemption 149 40 certificate which is taken by the seller, and the fuel 149 41 is used or disposed of by the purchaser in a nonexempt 149 42 manner, the purchaser is solely liable for the taxes, 149 43 and shall remit the taxes directly to the department 149 44 and sections 423.31, 423.32, 423.37, 423.38, 423.39, 149 45 423.40, 423.41, and 423.42 shall apply to the 149 46 purchaser. 149 47 d. The purchaser may apply to the department for 149 48 its review of the fuel exemption certificate. In this 149 49 event, the department shall review the fuel exemption 149 50 certificate within twelve months from the date of 150 1 application and determine the correct amount of the 150 2 exemption. If the amount determined by the department 150 3 is different than the amount that the purchaser claims 150 4 is exempt, the department shall promptly notify the 150 5 purchaser of the determination. Failure of the 150 6 department to make a determination within twelve 150 7 months from the date of application shall constitute a 150 8 determination that the fuel exemption certificate is 150 9 correct as submitted. A determination of exemption by 150 10 the department is final unless the purchaser appeals 150 11 to the director for a revision of the determination 150 12 within sixty days after the date of the notice of 150 13 determination. The director shall grant a hearing, 150 14 and upon the hearing, the director shall determine the 150 15 correct exemption and notify the purchaser of the 150 16 decision by mail. The decision of the director is 150 17 final unless the purchaser seeks judicial review of 150 18 the director's decision under section 423.38 within 150 19 sixty days after the date of the notice of the 150 20 director's decision. Unless there is a substantial 150 21 change, the department shall not impose penalties 150 22 pursuant to section 423.40 both retroactively to 150 23 purchases made after the date of application and 150 24 prospectively until the department gives notice to the 150 25 purchaser that a tax or additional tax is due, for 150 26 failure to remit any tax due which is in excess of a 150 27 determination made under this section. A 150 28 determination made by the department pursuant to this 150 29 subsection does not constitute an audit for purposes 150 30 of section 423.37. 150 31 e. If the circumstances change and the fuel is 150 32 used or disposed of by the purchaser in a nonexempt 150 33 manner, the purchaser is solely liable for the taxes 150 34 and shall remit the taxes directly to the department 150 35 in accordance with paragraph "c". 150 36 f. The purchaser shall attach documentation to the 150 37 fuel exemption certificate which is reasonably 150 38 necessary to support the exemption for fuel consumed 150 39 in processing. If the purchaser files a new exemption 150 40 certificate with the seller, documentation shall not 150 41 be required if the purchaser previously furnished the 150 42 seller with this documentation and substantial change 150 43 has not occurred since that documentation was 150 44 furnished or if fuel consumed in processing is 150 45 separately metered and billed by the seller. 150 46 6. Nothing in this section authorizes any cause of 150 47 action by any person to recover sales or use taxes 150 48 directly from the state or extends any person's time 150 49 to seek a refund of sales or use taxes which have been 150 50 collected and remitted to the state. 151 1 Sec. 177. NEW SECTION. 423.46 RATE AND BASE 151 2 CHANGES. 151 3 The department shall make a reasonable effort to 151 4 provide sellers with as much advance notice as 151 5 practicable of a rate change and to notify sellers of 151 6 legislative changes in the tax base and amendments to 151 7 sales and use tax rules. Failure of a seller to 151 8 receive notice or failure of this state to provide 151 9 notice or limit the effective date of a rate change 151 10 shall not relieve the seller of its obligation to 151 11 collect sales or use taxes for this state. 151 12 Sec. 178. NEW SECTION. 423.47 REFUNDS AND 151 13 CREDITS. 151 14 If it shall appear that, as a result of mistake, an 151 15 amount of tax, penalty, or interest has been paid 151 16 which was not due under the provisions of this 151 17 chapter, such amount shall be credited against any tax 151 18 due, or to become due, on the books of the department 151 19 from the person who made the erroneous payment, or 151 20 such amount shall be refunded to such person by the 151 21 department. A claim for refund or credit that has not 151 22 been filed with the department within three years 151 23 after the tax payment for which a refund or credit is 151 24 claimed became due, or one year after such tax payment 151 25 was made, whichever time is the later, shall not be 151 26 allowed by the director. 151 27 SUBCHAPTER VI 151 28 SALES AND USE TAX ACT – ADMINISTRATION OF 151 29 RETAILERS REGISTERED VOLUNTARILY UNDER THE 151 30 AGREEMENT 151 31 Sec. 179. NEW SECTION. 423.48 RESPONSIBILITIES 151 32 AND RIGHTS OF SELLERS REGISTERED UNDER THE AGREEMENT. 151 33 1. By registering under the agreement, the seller 151 34 agrees to collect and remit sales and use taxes for 151 35 all its taxable Iowa sales. Iowa's withdrawal from 151 36 the agreement or revocation of its membership in the 151 37 agreement shall not relieve a seller from its 151 38 responsibility to remit taxes previously collected on 151 39 behalf of this state. 151 40 2. The following provisions apply to any seller 151 41 who registers under the agreement: 151 42 a. The seller may register on-line. 151 43 b. Registration under the agreement and the 151 44 collection of Iowa sales and use taxes shall not be 151 45 used as factors in determining whether the seller has 151 46 nexus with Iowa for any tax. 151 47 c. If registered under the agreement with any 151 48 other member state, the seller is considered to be 151 49 registered in Iowa. 151 50 d. The seller is not required to pay registration 152 1 fees or other charges. 152 2 e. A written signature from the seller is not 152 3 required. 152 4 f. The seller may register by way of an agent. 152 5 The agent's appointment shall be in writing and 152 6 submitted to the department if requested by the 152 7 department. 152 8 g. The seller may cancel its registration at any 152 9 time under procedures adopted by the governing board 152 10 established pursuant to the agreement. Cancellation 152 11 does not relieve the seller of its liability for 152 12 remitting any Iowa taxes collected. 152 13 3. The following additional responsibilities and 152 14 rights apply to model sellers: 152 15 a. A model 1 seller's obligation to calculate, 152 16 collect, and remit sales and use taxes shall be 152 17 performed by its certified service provider, except 152 18 for the seller's obligation to remit tax on its own 152 19 purchases. As the seller's agent, the certified 152 20 service provider is liable for its model 1 seller's 152 21 sales and use tax due Iowa on all sales transactions 152 22 it processes for the seller except as set out in this 152 23 section. A seller that contracts with a certified 152 24 service provider is not liable to the state for sales 152 25 or use tax due on transactions processed by the 152 26 certified service provider unless the seller 152 27 misrepresents the types of items or services it sells 152 28 or commits fraud. In the absence of probable cause to 152 29 believe that the seller has committed fraud or made a 152 30 material misrepresentation, the seller is not subject 152 31 to audit on the transactions processed by the 152 32 certified service provider. A model 1 seller is 152 33 subject to audit for transactions not processed by the 152 34 certified service provider. The director is 152 35 authorized to perform a system check of the model 1 152 36 seller and review the seller's procedures to determine 152 37 if the certified service provider's system is 152 38 functioning properly and the extent to which the 152 39 seller's transactions are being processed by the 152 40 certified service provider. 152 41 b. A model 2 seller shall calculate the amount of 152 42 tax due on a transaction by the use of a certified 152 43 automated system, but shall collect and remit tax on 152 44 its own sales. A person that provides a certified 152 45 automated system is responsible for the proper 152 46 functioning of that system and is liable to this state 152 47 for underpayments of tax attributable to errors in the 152 48 functioning of the certified automated system. A 152 49 seller that uses a certified automated system remains 152 50 responsible and is liable to the state for reporting 153 1 and remitting tax. 153 2 c. A model 3 seller shall use its own proprietary 153 3 automated system to calculate tax due and collect and 153 4 remit tax on its own sales. A model 3 seller is 153 5 liable for the failure of its proprietary automated 153 6 system to meet the applicable performance standard. 153 7 Sec. 180. NEW SECTION. 423.49 RETURNS. 153 8 1. All model 1, 2, or 3 sellers are subject to all 153 9 of the following return requirements: 153 10 a. The seller is required to file only one return 153 11 per month for this state and for all taxing 153 12 jurisdictions within this state. 153 13 b. The date for filing returns shall be determined 153 14 under rules adopted by the director. However, in no 153 15 case shall the return be due earlier than the 153 16 twentieth day of the following month. 153 17 c. The director shall request additional 153 18 information returns. These returns shall not be 153 19 required more frequently than every six months. 153 20 2. Any registered seller which does not have a 153 21 legal obligation to register in this state and is not 153 22 a model 1, 2, or 3 seller is subject to all of the 153 23 following return requirements: 153 24 a. The seller is required to file a return within 153 25 one year of the month of initial registration and 153 26 shall file a return on an annual basis in succeeding 153 27 years. 153 28 b. In addition to the return required in paragraph 153 29 "a", if the seller accumulates more than one thousand 153 30 dollars in total state and local tax, the seller is 153 31 required to file a return in the following month. 153 32 c. The format of the return and the due date of 153 33 the initial return and the annual return shall be 153 34 determined under rules adopted by the department. 153 35 Sec. 181. NEW SECTION. 423.50 REMITTANCE OF 153 36 FUNDS. 153 37 1. Only one remittance of tax per return is 153 38 required except as provided in this subsection. 153 39 Sellers that collect more than thirty thousand dollars 153 40 in sales and use taxes for this state during the 153 41 preceding calendar year shall be required to make 153 42 additional remittances as required under rules adopted 153 43 by the director. The filing of a return is not 153 44 required with an additional remittance. 153 45 2. All remittances shall be remitted 153 46 electronically. 153 47 3. Electronic payments may be made either by 153 48 automated clearinghouse credit or automated 153 49 clearinghouse debit. Any data accompanying a 153 50 remittance must be formatted using uniform tax type 154 1 and payment codes approved by the governing board 154 2 established pursuant to the agreement. An alternative 154 3 method for making same-day payments shall be 154 4 determined under rules adopted by the director. 154 5 4. If a due date falls on a legal banking holiday 154 6 in this state, the taxes are due on the succeeding 154 7 business day. 154 8 Sec. 182. NEW SECTION. 423.51 ADMINISTRATION OF 154 9 EXEMPTIONS. 154 10 1. The following provisions shall apply when a 154 11 purchaser claims an exemption: 154 12 a. The seller shall obtain identifying information 154 13 of the purchaser and the reason for claiming a tax 154 14 exemption at the time of the purchase as determined by 154 15 the member states acting jointly. 154 16 b. A purchaser is not required to provide a 154 17 signature to claim an exemption from tax unless a 154 18 paper certificate is used. 154 19 c. The seller shall use the standard form for 154 20 claiming an exemption electronically as adopted 154 21 jointly by the member states. 154 22 d. The seller shall obtain the same information 154 23 for proof of a claimed exemption regardless of the 154 24 medium in which the transaction occurred. 154 25 e. The department may authorize a system wherein 154 26 the purchaser exempt from the payment of the tax is 154 27 issued an identification number which shall be 154 28 presented to the seller at the time of the sale. 154 29 f. The seller shall maintain proper records of 154 30 exempt transactions and provide them to the department 154 31 when requested. 154 32 g. The department shall administer entity-based 154 33 and use-based exemptions when practicable through a 154 34 direct pay tax permit, an exemption certificate, or 154 35 another means that does not burden sellers. For the 154 36 purposes of this paragraph: 154 37 (1) An "entity-based exemption" is an exemption 154 38 based on who purchases the product or who sells the 154 39 product. 154 40 (2) A "use-based exemption" is an exemption based 154 41 on the purchaser's use of the product. 154 42 2. Sellers that follow the requirements of this 154 43 section are relieved from any tax otherwise applicable 154 44 if it is determined that the purchaser improperly 154 45 claimed an exemption and that the purchaser is liable 154 46 for the nonpayment of tax. This relief from liability 154 47 does not apply to a seller who fraudulently fails to 154 48 collect the tax or solicits purchasers to participate 154 49 in the unlawful claim of an exemption. 154 50 Sec. 183. NEW SECTION. 423.52 RELIEF FROM 155 1 LIABILITY FOR SELLERS AND CERTIFIED SERVICE PROVIDERS. 155 2 Sellers and certified service providers are 155 3 relieved from liability to this state or its local 155 4 taxing jurisdictions for having charged and collected 155 5 the incorrect amount of sales or use tax resulting 155 6 from the seller or certified service provider relying 155 7 on erroneous data provided by this state on tax rates, 155 8 boundaries, or taxing jurisdiction assignments. If 155 9 this state provides an address-based system for 155 10 assigning taxing jurisdictions whether or not pursuant 155 11 to the federal Mobile Telecommunications Sourcing Act, 155 12 the director is not required to provide liability 155 13 relief for errors resulting from reliance on the 155 14 information provided by this state. 155 15 Sec. 184. NEW SECTION. 423.53 BAD DEBTS AND 155 16 MODEL 1 SELLERS. 155 17 A certified service provider may claim, on behalf 155 18 of a model 1 seller, any bad debt deduction as 155 19 provided in section 423.21. The certified service 155 20 provider must credit or refund the full amount of any 155 21 bad debt deduction or refund received to the seller. 155 22 Sec. 185. NEW SECTION. 423.54 AMNESTY FOR 155 23 REGISTERED SELLERS. 155 24 1. Subject to the limitations in subsections 2 155 25 through 6, the following provisions apply: 155 26 a. Amnesty is provided for uncollected or unpaid 155 27 sales or use tax to a seller who registers to pay or 155 28 to collect and remit applicable sales or use tax on 155 29 sales made to purchasers in this state in accordance 155 30 with the terms of the agreement, provided the seller 155 31 was not so registered in this state in the twelve- 155 32 month period preceding the commencement of Iowa's 155 33 participation in the agreement. 155 34 b. Amnesty precludes assessment of the seller for 155 35 uncollected or unpaid sales or use tax together with 155 36 penalty or interest for sales made during the period 155 37 the seller was not registered in this state, provided 155 38 registration occurs within twelve months of the 155 39 commencement of Iowa's participation in the agreement. 155 40 c. Amnesty shall be provided to any seller 155 41 lawfully registered under the agreement by any other 155 42 member state prior to the date of the commencement of 155 43 Iowa's participation in the agreement. 155 44 2. Amnesty is not available to a seller with 155 45 respect to any matter or matters for which the seller 155 46 received notice of the commencement of an audit and 155 47 which audit is not yet finally resolved, including any 155 48 related administrative and judicial processes. 155 49 3. Amnesty is not available for sales or use taxes 155 50 already paid or remitted or to taxes collected by the 156 1 seller. 156 2 4. Amnesty is fully effective absent the seller's 156 3 fraud or intentional misrepresentation of a material 156 4 fact as long as the seller continues registration and 156 5 continues payment or collection and remittance of 156 6 applicable sales or use taxes for a period of at least 156 7 thirty-six months. The statute of limitations 156 8 applicable to asserting a tax liability is tolled 156 9 during this thirty-six month period. 156 10 5. Amnesty is applicable only to sales or use 156 11 taxes due from a seller in its capacity as a seller 156 12 and not to sales or use taxes due from a seller in its 156 13 capacity as a buyer. 156 14 6. The director may allow amnesty on terms and 156 15 conditions more favorable to a seller than the terms 156 16 required by this section. 156 17 Sec. 186. NEW SECTION. 423.55 DATABASES. 156 18 The department shall provide and maintain databases 156 19 required by the agreement for the benefit of sellers 156 20 registered under the agreement. 156 21 Sec. 187. NEW SECTION. 423.56 CONFIDENTIALITY 156 22 AND PRIVACY PROTECTIONS UNDER MODEL 1. 156 23 1. As used in this section: 156 24 a. "Anonymous data" means information that does 156 25 not identify a person. 156 26 b. "Confidential taxpayer information" means all 156 27 information that is protected under this state's laws, 156 28 rules, and privileges. 156 29 c. "Personally identifiable information" means 156 30 information that identifies a person. 156 31 2. With very limited exceptions, a certified 156 32 service provider shall perform its tax calculation, 156 33 remittance, and reporting functions without retaining 156 34 the personally identifiable information of consumers. 156 35 3. A certified service provider may perform its 156 36 services in this state only if the certified service 156 37 provider certifies that: 156 38 a. Its system has been designed and tested to 156 39 ensure that the fundamental precept of anonymity is 156 40 respected. 156 41 b. Personally identifiable information is only 156 42 used and retained to the extent necessary for the 156 43 administration of model 1 sellers with respect to 156 44 exempt purchasers. 156 45 c. It provides consumers clear and conspicuous 156 46 notice of its information practices, including what 156 47 information it collects, how it collects the 156 48 information, how it uses the information, how long, if 156 49 at all, it retains the information, and whether it 156 50 discloses the information to member states. This 157 1 notice shall be satisfied by a written privacy policy 157 2 statement accessible by the public on the official web 157 3 site of the certified service provider. 157 4 d. Its collection, use, and retention of 157 5 personally identifiable information is limited to that 157 6 required by the member states to ensure the validity 157 7 of exemptions from taxation that are claimed by reason 157 8 of a consumer's status or the intended use of the 157 9 goods or services purchased. 157 10 e. It provides adequate technical, physical, and 157 11 administrative safeguards so as to protect personally 157 12 identifiable information from unauthorized access and 157 13 disclosure. 157 14 4. The department shall provide public 157 15 notification of its practices relating to the 157 16 collection, use, and retention of personally 157 17 identifiable information. 157 18 5. When any personally identifiable information 157 19 that has been collected and retained by the department 157 20 or certified service provider is no longer required 157 21 for the purposes set forth in subsection 3, paragraph 157 22 "d", that information shall no longer be retained by 157 23 the department or certified service provider. 157 24 6. When personally identifiable information 157 25 regarding an individual is retained by or on behalf of 157 26 this state, this state shall provide reasonable access 157 27 by such individual to his or her own information in 157 28 the state's possession and a right to correct any 157 29 inaccurately recorded information. 157 30 7. This privacy policy is subject to enforcement 157 31 by the department and the attorney general. 157 32 8. This state's laws and rules regarding the 157 33 collection, use, and maintenance of confidential 157 34 taxpayer information remain fully applicable and 157 35 binding. Without limitation, the agreement does not 157 36 enlarge or limit the state's or department's authority 157 37 to: 157 38 a. Conduct audits or other review as provided 157 39 under the agreement and state law. 157 40 b. Provide records pursuant to its examination of 157 41 public records law, disclosure laws of individual 157 42 governmental agencies, or other regulations. 157 43 c. Prevent, consistent with state law, disclosures 157 44 of confidential taxpayer information. 157 45 d. Prevent, consistent with federal law, 157 46 disclosures or misuse of federal return information 157 47 obtained under a disclosure agreement with the 157 48 internal revenue service. 157 49 e. Collect, disclose, disseminate, or otherwise 157 50 use anonymous data for governmental purposes. 158 1 9. This privacy policy does not preclude the 158 2 certification of a certified service provider whose 158 3 privacy policy is more protective of confidential 158 4 taxpayer information or personally identifiable 158 5 information than is required by the agreement. 158 6 Sec. 188. NEW SECTION. 423.57 STATUTES 158 7 APPLICABLE. 158 8 The director shall administer this subchapter as it 158 9 relates to the taxes imposed in this chapter in the 158 10 same manner and subject to all the provisions of, and 158 11 all of the powers, duties, authority, and restrictions 158 12 contained in sections 423.14, 423.15, 423.16, 423.17, 158 13 423.18, 423.19, 423.20, 423.21, 423.22, 423.23, 158 14 423.24, 423.25, 423.28, 423.29, 423.31, 423.32, 158 15 423.33, 423.34, 423.35, 423.37, 423.38, 423.39, 158 16 423.40, 423.41, and 423.42, section 423.43, subsection 158 17 3, and sections 423.45, 423.46, and 423.47. 158 18 Sec. 189. NEW SECTION. 423.60 REMOTE SALES TAX 158 19 FUND – APPROPRIATIONS. 158 20 1. A remote sales tax fund is created as a 158 21 separate fund in the state treasury under the control 158 22 of the department of revenue and finance consisting of 158 23 the state sales and use tax revenues collected from 158 24 remote sales and deposited as provided in section 158 25 423.43, subsection 3. 158 26 2. There is appropriated from the remote sales tax 158 27 fund for the fiscal year beginning July 1, 2005, and 158 28 each succeeding fiscal year to the general fund of the 158 29 state the following: 158 30 a. The first sixty million dollars deposited into 158 31 the fund during each fiscal year. 158 32 b. An amount to offset the projected loss during 158 33 the fiscal year to the general fund of the state 158 34 resulting from a state tax relief Act enacted during 158 35 the period beginning four and one-half years prior to 158 36 the start of the fiscal year. However, any state tax 158 37 relief Act enacted prior to July 1, 2004, shall not be 158 38 covered under this subsection. 158 39 3. For purposes of subsection 2, "state tax relief 158 40 Act" means an Act that was projected by the 158 41 legislative fiscal bureau to result in a loss in 158 42 revenue to the general fund of the state of at least 158 43 five million dollars in the first full fiscal year 158 44 during which the Act is effective and that contains 158 45 any of the following: 158 46 a. A state sales or use tax exemption. 158 47 b. A deduction for any state tax. 158 48 c. A reduction in any state tax rate. 158 49 Sec. 190. 158 50 1. Sections 422.42 through 422.59, Code 2003, are 159 1 repealed. 159 2 2. Chapter 423, Code 2003, is repealed. 159 3 COORDINATING AMENDMENTS 159 4 Sec. 191. Section 15.331A, Code 2003, is amended 159 5 to read as follows: 159 6 15.331A SALES, SERVICES, AND USE TAX REFUND – 159 7 CONTRACTOR OR SUBCONTRACTOR. 159 8 The eligible business or a supporting business 159 9 shall be entitled to a refund of the sales and use 159 10 taxes paid underchapters 422 andchapter 423 for gas, 159 11 electricity, water, or sewer utility services, goods, 159 12 wares, or merchandise, or on services rendered, 159 13 furnished, or performed to or for a contractor or 159 14 subcontractor and used in the fulfillment of a written 159 15 contract relating to the construction or equipping of 159 16 a facility within the economic development area of the 159 17 eligible business or a supporting business. Taxes 159 18 attributable to intangible property and furniture and 159 19 furnishings shall not be refunded. 159 20 To receive the refund a claim shall be filed by the 159 21 eligible business or a supporting business with the 159 22 department of revenue and finance as follows: 159 23 1. The contractor or subcontractor shall state 159 24 under oath, on forms provided by the department, the 159 25 amount of the sales of goods, wares, or merchandise or 159 26 services rendered, furnished, or performed including 159 27 water, sewer, gas, and electric utility services for 159 28 use in the economic development area upon which sales 159 29 or use tax has been paid prior to the project 159 30 completion, and shall file the forms with the eligible 159 31 business or supporting business before final 159 32 settlement is made. 159 33 2. The eligible business or a supporting business 159 34 shall, not more than one year after project 159 35 completion, make application to the department for any 159 36 refund of the amount of the sales and use taxes paid 159 37 pursuant to chapter422 or423 upon any goods, wares, 159 38 or merchandise, or services rendered, furnished, or 159 39 performed, including water, sewer, gas, and electric 159 40 utility services. The application shall be made in 159 41 the manner and upon forms to be provided by the 159 42 department, and the department shall audit the claim 159 43 and, if approved, issue a warrant to the eligible 159 44 business or supporting business in the amount of the 159 45 sales or use tax which has been paid to the state of 159 46 Iowa under a contract. A claim filed by the eligible 159 47 business or a supporting business in accordance with 159 48 this section shall not be denied by reason of a 159 49 limitation provision set forth in chapter 421, 422,or 159 50 423. 160 1 3. A contractor or subcontractor who willfully 160 2 makes a false report of tax paid under the provisions 160 3 of this section is guilty of a simple misdemeanor and 160 4 in addition is liable for the payment of the tax and 160 5 any applicable penalty and interest. 160 6 Sec. 192. Section 15.334A, Code 2003, is amended 160 7 to read as follows: 160 8 15.334A SALES AND USE TAX EXEMPTION. 160 9 An eligible business may claim an exemption from 160 10 sales and use taxation under section422.45423.3, 160 11 subsection2746, for property which is exempt from 160 12 taxation under section 15.334, notwithstanding the 160 13 requirements of section422.45423.3, subsection27160 14 46, or any other provision of the Code to the 160 15 contrary. 160 16 Sec. 193. Section 15A.9, subsections 5, 6, and 7, 160 17 Code 2003, are amended to read as follows: 160 18 5. PROPERTY TAX EXEMPTION. 160 19 a. All property, as defined in section 427A.1, 160 20 subsection 1, paragraphs "e" and "j", Code 1993, used 160 21 by the primary business or a supporting business and 160 22 located within the zone, shall be exempt from property 160 23 taxation for a period of twenty years beginning with 160 24 the year it is first assessed for taxation. In order 160 25 to be eligible for this exemption, the property shall 160 26 be acquired or leased by the primary business or a 160 27 supporting business or relocated by the primary 160 28 business or a supporting business to the zone from 160 29 outside the state prior to project completion. 160 30 b. Property which is exempt for property tax 160 31 purposes under this subsection is eligible for the 160 32 sales and use tax exemption under section422.45160 33 423.3, subsection2746, notwithstanding that 160 34 subsection or any other provision of the Code to the 160 35 contrary. 160 36 6. SALES, SERVICES, AND USE TAX REFUND. Taxes 160 37 paid pursuant to chapter422 or423 on thegross160 38receiptssales price or rental price of property 160 39 purchased or rented by the primary business or a 160 40 supporting business for use by the primary business or 160 41 a supporting business within the zone or on gas, 160 42 electricity, water, and sewer utility services prior 160 43 to project completion shall be refunded to the primary 160 44 business or supporting business if the item was 160 45 purchased or the service was performed or received 160 46 prior to project completion. Claims under this 160 47 section shall be submitted on forms provided by the 160 48 department of revenue and finance not later than six 160 49 months after project completion. The refund in this 160 50 subsection shall not apply to furniture or 161 1 furnishings, or intangible property. 161 2 7. SALES, SERVICES, AND USE TAX REFUND – 161 3 CONTRACTOR OR SUBCONTRACTOR. The primary business or 161 4 a supporting business shall be entitled to a refund of 161 5 the sales and use taxes paid underchapters 422 and161 6 chapter 423 for gas, electricity, water, or sewer 161 7 utility services, goods, wares, or merchandise, or on 161 8 services rendered, furnished, or performed to or for a 161 9 contractor or subcontractor and used in the 161 10 fulfillment of a written contract relating to the 161 11 construction or equipping of a facility within the 161 12 zone of the primary business or a supporting business. 161 13 Taxes attributable to intangible property and 161 14 furniture and furnishings shall not be refunded. 161 15 To receive the refund a claim shall be filed by the 161 16 primary business or a supporting business with the 161 17 department of revenue and finance as follows: 161 18 a. The contractor or subcontractor shall state 161 19 under oath, on forms provided by the department, the 161 20 amount of the sales of goods, wares, or merchandise or 161 21 services rendered, furnished, or performed including 161 22 water, sewer, gas, and electric utility services for 161 23 use in the zone upon which sales or use tax has been 161 24 paid prior to the project completion, and shall file 161 25 the forms with the primary business or supporting 161 26 business before final settlement is made. 161 27 b. The primary business or a supporting business 161 28 shall, not more than six months after project 161 29 completion, make application to the department for any 161 30 refund of the amount of the sales and use taxes paid 161 31 pursuant to chapter422 or423 upon any goods, wares, 161 32 or merchandise, or services rendered, furnished, or 161 33 performed, including water, sewer, gas, and electric 161 34 utility services. The application shall be made in 161 35 the manner and upon forms to be provided by the 161 36 department, and the department shall audit the claim 161 37 and, if approved, issue a warrant to the primary 161 38 business or supporting business in the amount of the 161 39 sales or use tax which has been paid to the state of 161 40 Iowa under a contract. A claim filed by the primary 161 41 business or a supporting business in accordance with 161 42 this subsection shall not be denied by reason of a 161 43 limitation provision set forth in chapter 421, 422, or 161 44 423. 161 45 c. A contractor or subcontractor who willfully 161 46 makes a false report of tax paid under the provisions 161 47 of this subsection is guilty of a simple misdemeanor 161 48 and in addition is liable for the payment of the tax 161 49 and any applicable penalty and interest. 161 50 Sec. 194. Section 28A.17, unnumbered paragraph 1, 162 1 Code 2003, is amended to read as follows: 162 2 If an authority is established as provided in 162 3 section 28A.6 and after approval of a referendum by a 162 4 simple majority of votes cast in each metropolitan 162 5 area in favor of the sales and services tax, the 162 6 governing board of a county in this state within a 162 7 metropolitan area which is part of the authority shall 162 8 impose, at the request of the authority, a local sales 162 9 and services tax at the rate of one-fourth of one 162 10 percent ongross receiptsthe sales price taxed by 162 11 this state underchapter 422, division IVsection 162 12 423.2, within the metropolitan area located in this 162 13 state. The referendum shall be called by resolution 162 14 of the board and shall be held as provided in section 162 15 28A.6 to the extent applicable. The ballot 162 16 proposition shall contain a statement as to the 162 17 specific purpose or purposes for which the revenues 162 18 shall be expended and the date of expiration of the 162 19 tax. The local sales and services tax shall be 162 20 imposed on the same basis, with the same exceptions, 162 21 and following the same administrative procedures as 162 22 provided for a county under sections 422B.8 and 162 23 422B.9. The amount of the sale, for the purposes of 162 24 determining the amount of the local sales and services 162 25 tax under this section, does not include the amount of 162 26 any local sales and services tax imposed under 162 27 sections 422B.8 and 422B.9. 162 28 Sec. 195. Section 29C.15, Code 2003, is amended to 162 29 read as follows: 162 30 29C.15 TAX-EXEMPT PURCHASES. 162 31 All purchases under the provisions of this chapter 162 32 shall be exempt from the taxes imposed by sections 162 33422.43423.2 and423.2423.5. 162 34 Sec. 196. Section 99E.10, subsection 1, paragraph 162 35 b, Code 2003, is amended to read as follows: 162 36 b. An amount equal to the product of the state 162 37 sales tax rate under section422.43423.2 multiplied 162 38 by the gross sales price of each ticket or share sold 162 39 shall be deducted as the sales tax on the sale of that 162 40 ticket or share, remitted to the treasurer of state 162 41 and deposited into the state general fund. 162 42 Sec. 197. Section 123.187, subsection 2, Code 162 43 2003, is amended to read as follows: 162 44 2. A winery licensed or permitted pursuant to laws 162 45 regulating alcoholic beverages in a state which 162 46 affords this state an equal reciprocal shipping 162 47 privilege may ship into this state by private common 162 48 carrier, to a person twenty-one years of age or older, 162 49 not more than eighteen liters of wine per month, for 162 50 consumption or use by the person. Such wine shall not 163 1 be resold. Shipment of wine pursuant to this 163 2 subsection is not subject to sales tax under section 163 3422.43423.2, use tax under section423.2423.5, or 163 4 the wine gallonage tax under section 123.183, and does 163 5 not require a refund value for beverage container 163 6 control purposes under chapter 455C. 163 7 Sec. 198. Section 262.54, Code 2003, is amended to 163 8 read as follows: 163 9 262.54 COMPUTER SALES. 163 10 Sales, by an institution under the control of the 163 11 board of regents, of computer equipment, computer 163 12 software, and computer supplies to students and 163 13 faculty at the institution are retail sales under 163 14 chapter422, division IV423. 163 15 Sec. 199. Section 303.9, subsection 2, Code 2003, 163 16 is amended to read as follows: 163 17 2. The department may sell mementos and other 163 18 items relating to Iowa history and historic sites on 163 19 the premises of property under control of the 163 20 department and at the state capitol. Notwithstanding 163 21 sections 18.12 and 18.16, the department may directly 163 22 and independently enter into rental and lease 163 23 agreements with private vendors for the purpose of 163 24 selling mementos. All fees and income produced by the 163 25 sales and rental or lease agreements shall be credited 163 26 to the account of the department. The mementos and 163 27 other items sold by the department or vendors under 163 28 this subsection are exempt from section 18.6.The163 29department is not a retailer under chapter 422 and the163 30sale of such mementos and other items by the163 31department is not a retail sale under chapter 422 and163 32is exempt from the sales tax.163 33 Sec. 200. Section 312.1, subsection 4, Code 2003, 163 34 is amended to read as follows: 163 35 4. To the extent provided in section423.24163 36 423.43, subsection 1, paragraph "b", from revenue 163 37 derived from the use tax, under chapter 423 on motor 163 38 vehicles, trailers, and motor vehicle accessories and 163 39 equipment. 163 40 Sec. 201. Section 312.2, subsections 14 and 16, 163 41 Code 2003, are amended to read as follows: 163 42 14. The treasurer of state, before making the 163 43 allotments provided for in this section, shall credit 163 44 monthly from the road use tax fund to the general fund 163 45 of the state from revenue credited to the road use tax 163 46 fund under section423.24423.43, subsection 1, 163 47 paragraph "b", an amount equal to one-twentieth of 163 48 eighty percent of the revenue from the operation of 163 49 section423.7423.26. 163 50 There is appropriated from the general fund of the 164 1 state for each fiscal year to the state department of 164 2 transportation the amount of revenues credited to the 164 3 general fund of the state during the fiscal year under 164 4 this subsection to be used for purposes of public 164 5 transit assistance under chapter 324A. 164 6 16. The treasurer of state, before making the 164 7 allotments provided for in this section, shall credit 164 8 monthly from the road use tax fund to the motorcycle 164 9 rider education fund established in section 321.180B, 164 10 an amount equal to one dollar per year of license 164 11 validity for each issued or renewed driver's license 164 12 which is valid for the operation of a motorcycle. 164 13 Moneys credited to the motorcycle rider education fund 164 14 under this subsection shall be taken from moneys 164 15 credited to the road use tax fund under section423.24164 16 423.43. 164 17 Sec. 202. Section 321.20, subsection 5, Code 2003, 164 18 is amended to read as follows: 164 19 5. The amount of tax to be paid under section 164 20423.7423.26. 164 21 Sec. 203. Section 321.24, subsections 1 and 3, 164 22 Code 2003, are amended to read as follows: 164 23 1. Upon receipt of the application for title and 164 24 payment of the required fees for a motor vehicle, 164 25 trailer, or semitrailer, the county treasurer or the 164 26 department shall, when satisfied as to the 164 27 application's genuineness and regularity, and, in the 164 28 case of a mobile home or manufactured home, that taxes 164 29 are not owing under chapter 435, issue a certificate 164 30 of title and, except for a mobile home or manufactured 164 31 home, a registration receipt, and shall file the 164 32 application, the manufacturer's or importer's 164 33 certificate, the certificate of title, or other 164 34 evidence of ownership, as prescribed by the 164 35 department. The registration receipt shall be 164 36 delivered to the owner and shall contain upon its face 164 37 the date issued, the name and address of the owner, 164 38 the registration number assigned to the vehicle, the 164 39 amount of the fee paid, the amount of tax paid 164 40 pursuant to section423.7423.26, the type of fuel 164 41 used, and a description of the vehicle as determined 164 42 by the department, and upon the reverse side a form 164 43 for notice of transfer of the vehicle. The name and 164 44 address of any lessee of the vehicle shall not be 164 45 printed on the registration receipt or certificate of 164 46 title. Up to three owners may be listed on the 164 47 registration receipt and certificate of title. 164 48 3. The certificate of title shall contain upon its 164 49 face the identical information required upon the face 164 50 of the registration receipt. In addition, the 165 1 certificate of title shall contain a statement of the 165 2 owner's title, the title number assigned to the owner 165 3 or owners of the vehicle, the amount of tax paid 165 4 pursuant to section423.7423.26, the name and address 165 5 of the previous owner, and a statement of all security 165 6 interests and encumbrances as shown in the 165 7 application, upon the vehicle described, including the 165 8 nature of the security interest, date of notation, and 165 9 name and address of the secured party. 165 10 Sec. 204. Section 321.34, subsection 7, paragraph 165 11 c, Code 2003, is amended to read as follows: 165 12 c. The fees for a collegiate registration plate 165 13 are as follows: 165 14 (1) A registration fee of twenty-five dollars. 165 15 (2) A special collegiate registration fee of 165 16 twenty-five dollars. 165 17 These fees are in addition to the regular annual 165 18 registration fee. The fees collected by the director 165 19 under this subsection shall be paid monthly to the 165 20 treasurer of state and credited by the treasurer of 165 21 state to the road use tax fund. Notwithstanding 165 22 section423.24423.43 and prior to the revenues being 165 23 credited to the road use tax fund under section423.24165 24 423.43, subsection 1, paragraph "b", the treasurer of 165 25 state shall credit monthly from those revenues 165 26 respectively, to Iowa state university of science and 165 27 technology, the university of northern Iowa, and the 165 28 state university of Iowa, the amount of the special 165 29 collegiate registration fees collected in the previous 165 30 month for collegiate registration plates designed for 165 31 the university. The moneys credited are appropriated 165 32 to the respective universities to be used for 165 33 scholarships for students attending the universities. 165 34 Sec. 205. Section 321.34, subsection 11, paragraph 165 35 c, Code 2003, is amended to read as follows: 165 36 c. The special natural resources fee for letter 165 37 number designated natural resources plates is thirty- 165 38 five dollars. The fee for personalized natural 165 39 resources plates is forty-five dollars which shall be 165 40 paid in addition to the special natural resources fee 165 41 of thirty-five dollars. The fees collected by the 165 42 director under this subsection shall be paid monthly 165 43 to the treasurer of state and credited to the road use 165 44 tax fund. Notwithstanding section423.24423.43, and 165 45 prior to the crediting of revenues to the road use tax 165 46 fund under section423.24423.43, subsection 1, 165 47 paragraph "b", the treasurer of state shall credit 165 48 monthly from those revenues to the Iowa resources 165 49 enhancement and protection fund created pursuant to 165 50 section 455A.18, the amount of the special natural 166 1 resources fees collected in the previous month for the 166 2 natural resources plates. 166 3 Sec. 206. Section 321.34, subsection 11A, 166 4 paragraph c, Code 2003, is amended to read as follows: 166 5 c. The special fee for letter number designated 166 6 love our kids plates is thirty-five dollars. The fee 166 7 for personalized love our kids plates is twenty-five 166 8 dollars, which shall be paid in addition to the 166 9 special love our kids fee of thirty-five dollars. The 166 10 fees collected by the director under this subsection 166 11 shall be paid monthly to the treasurer of state and 166 12 credited to the road use tax fund. Notwithstanding 166 13 section423.24423.43, and prior to the crediting of 166 14 revenues to the road use tax fund under section423.24166 15 423.43, subsection 1, paragraph "b", the treasurer of 166 16 state shall transfer monthly from those revenues to 166 17 the Iowa department of public health the amount of the 166 18 special fees collected in the previous month for the 166 19 love our kids plates. Notwithstanding section 8.33, 166 20 moneys transferred under this subsection shall not 166 21 revert to the general fund of the state. 166 22 Sec. 207. Section 321.34, subsection 11B, 166 23 paragraph c, Code 2003, is amended to read as follows: 166 24 c. The special fee for letter number designated 166 25 motorcycle rider education plates is thirty-five 166 26 dollars. The fee for personalized motorcycle rider 166 27 education plates is twenty-five dollars, which shall 166 28 be paid in addition to the special motorcycle rider 166 29 education fee of thirty-five dollars. The fees 166 30 collected by the director under this subsection shall 166 31 be paid monthly to the treasurer of state and credited 166 32 to the road use tax fund. Notwithstanding section 166 33423.24423.43, and prior to the crediting of revenues 166 34 to the road use tax fund under section423.24423.43, 166 35 subsection 1, paragraph "b", the treasurer of state 166 36 shall transfer monthly from those revenues to the 166 37 department for use in accordance with section 166 38 321.180B, subsection 6, the amount of the special fees 166 39 collected in the previous month for the motorcycle 166 40 rider education plates. 166 41 Sec. 208. Section 321.34, subsection 13, paragraph 166 42 d, Code 2003, is amended to read as follows: 166 43 d. A state agency may submit a request to the 166 44 department recommending a special registration plate. 166 45 The alternate fee for letter number designated plates 166 46 is thirty-five dollars with a ten dollar annual 166 47 special renewal fee. The fee for personalized plates 166 48 is twenty-five dollars which is in addition to the 166 49 alternative fee of thirty-five dollars with an annual 166 50 personalized plate renewal fee of five dollars which 167 1 is in addition to the special renewal fee of ten 167 2 dollars. The alternate fees are in addition to the 167 3 regular annual registration fee. The alternate fees 167 4 collected under this paragraph shall be paid monthly 167 5 to the treasurer of state and credited to the road use 167 6 tax fund. Notwithstanding section423.24423.43, and 167 7 prior to the crediting of the revenues to the road use 167 8 tax fund under section423.24423.43, subsection 1, 167 9 paragraph "b", the treasurer of state shall credit 167 10 monthly the amount of the alternate fees collected in 167 11 the previous month to the state agency that 167 12 recommended the special registration plate. 167 13 Sec. 209. Section 321.34, subsection 21, paragraph 167 14 c, Code 2003, is amended to read as follows: 167 15 c. The special fees collected by the director 167 16 under this subsection shall be paid monthly to the 167 17 treasurer of state and credited to the road use tax 167 18 fund. Notwithstanding section423.24423.43, and 167 19 prior to the crediting of revenues to the road use tax 167 20 fund under section423.24423.43, subsection 1, 167 21 paragraph "b", the treasurer of state shall credit 167 22 monthly to the Iowa heritage fund created under 167 23 section 303.9A the amount of the special fees 167 24 collected in the previous month for the Iowa heritage 167 25 plates. 167 26 Sec. 210. Section 321.34, subsection 22, paragraph 167 27 b, Code 2003, is amended to read as follows: 167 28 b. The special school transportation fee for 167 29 letter number designated education plates is thirty- 167 30 five dollars. The fee for personalized education 167 31 plates is twenty-five dollars, which shall be paid in 167 32 addition to the special school transportation fee of 167 33 thirty-five dollars. The annual special school 167 34 transportation fee is ten dollars for letter number 167 35 designated registration plates and is fifteen dollars 167 36 for personalized registration plates which shall be 167 37 paid in addition to the regular annual registration 167 38 fee. The fees collected by the director under this 167 39 subsection shall be paid monthly to the treasurer of 167 40 state and credited to the road use tax fund. 167 41 Notwithstanding section423.24423.43, and prior to 167 42 the crediting of revenues to the road use tax fund 167 43 under section423.24423.43, subsection 1, paragraph 167 44 "b", the treasurer of state shall transfer monthly 167 45 from those revenues to the school budget review 167 46 committee in accordance with section 257.31, 167 47 subsection 17, the amount of the special school 167 48 transportation fees collected in the previous month 167 49 for the education plates. 167 50 Sec. 211. Section 321F.9, Code 2003, is amended to 168 1 read as follows: 168 2 321F.9 OPTION TO PURCHASE – DEALER'S LICENSE. 168 3 Any person engaged in business in this state shall 168 4 not enter into any agreement for the use of a motor 168 5 vehicle under the terms of whichsuchthat person 168 6 grants to another an option to purchasesuchthe motor 168 7 vehicle without first having obtained a motor vehicle 168 8 dealer's license under the provisions of chapter 322, 168 9 and all sales of motor vehicles under such options 168 10 shall be subject to sales or use taxes imposed under 168 11 the provisions ofchapters 422 andchapter 423. 168 12 Nothing contained in this section shall require such 168 13 person to have a place of business as provided by 168 14 section 322.6, subsection 8. 168 15 Sec. 212. Section 327I.26, Code 2003, is amended 168 16 to read as follows: 168 17 327I.26 APPROPRIATION TO AUTHORITY. 168 18 Notwithstanding section423.24423.43, and prior to 168 19 the application of section423.24423.43, subsection 168 20 1, paragraph "b", there shall be deposited into the 168 21 general fund of the state and is appropriated to the 168 22 authority from eighty percent of the revenues derived 168 23 from the operation of section423.7423.26, the 168 24 amounts certified by the authority under section 168 25 327I.25. However, the total amount deposited into the 168 26 general fund and appropriated to the Iowa railway 168 27 finance authority under this section shall not exceed 168 28 two million dollars annually. Moneys appropriated to 168 29 the Iowa railway finance authority under this section 168 30 are appropriated only for the payment of principal and 168 31 interest on obligations or the payment of leases 168 32 guaranteed by the authority as provided under section 168 33 327I.25. 168 34 Sec. 213. Section 328.26, unnumbered paragraph 2, 168 35 Code 2003, is amended to read as follows: 168 36 When an aircraft is registered to a person for the 168 37 first time the fee submitted to the department shall 168 38 include the tax imposed by section422.43423.2 or 168 39 section423.2423.5 or evidence of the exemption of 168 40 the aircraft from the tax imposed under section422.43168 41 423.2 or423.2423.5. 168 42 Sec. 214. Section 331.557, subsection 3, Code 168 43 2003, is amended to read as follows: 168 44 3. Collect the use tax on vehicles subject to 168 45 registration as provided in sections423.6, 423.7, and168 46423.7A423.14, 423.26, and 423.27. 168 47 Sec. 215. Section 357A.15, unnumbered paragraph 2, 168 48 Code 2003, is amended to read as follows: 168 49 A rural water district organized under chapter 504A 168 50 shall receive a refund of sales or use taxes upon 169 1 submitting an application to the department of revenue 169 2 and finance forsuchthe refund of taxes imposed upon 169 3 thegross receiptssales price of all sales of 169 4 building materials, supplies, or equipment sold to a 169 5 contractor or used in the fulfillment of a written 169 6 contract for the construction of facilities forsuch169 7 the rural water district to the same extent as a rural 169 8 water district organized under this chapter may obtain 169 9 a refund under section422.45423.4, subsection71. 169 10 Sec. 216. Section 421.10, Code 2003, is amended to 169 11 read as follows: 169 12 421.10 APPEAL PERIOD – APPLICABILITY. 169 13 The appeal period for revision of assessment of 169 14 tax, interest, and penalties set out under section 169 15 422.28,422.54423.37, 437A.9, 437A.22, 452A.64, 169 16 453A.29, or 453A.46 applies to appeals to notices from 169 17 the department denying changes in filing methods, 169 18 denying refund claims, and denying portions of refund 169 19 claims for the tax covered by that section, and 169 20 notices of any department action directed to a 169 21 specific taxpayer, other than licensing, which 169 22 involves a calculation. 169 23 Sec. 217. Section 421.17, subsection 22B, Code 169 24 2003, is amended to read as follows: 169 25 22B.EnterTo enter into agreements or compacts 169 26 with remote sellers, retailers, or third-party 169 27 providers for the voluntary collection of Iowa sales 169 28 or use taxes attributable to sales into Iowaand to169 29enter. The director has the authority to enter into 169 30 and perform all duties required of the office of 169 31 director by multistate agreements or compacts that 169 32 provide for thevoluntarycollection of sales and use 169 33 taxes, including joint audits with other states or 169 34 audits on behalf of other states. The agreements or 169 35 compacts shall generally conform to the provisions of 169 36 Iowa sales and use tax statutes. All fees for 169 37 services, reimbursements, remuneration, incentives, 169 38 and costs incurred by the department associated with 169 39 these agreements or compacts may be paid or reimbursed 169 40 from the additional revenue generated. An amount is 169 41 appropriated from amounts generated to pay or 169 42 reimburse all costs associated with this subsection. 169 43 Persons entering into an agreement or compact with the 169 44 department pursuant to this subsection are subject to 169 45 the requirements and penalties of the confidentiality 169 46 laws of this state regarding tax information. 169 47 Notwithstanding any other provisions of law, the 169 48 contract, agreement, or compact shall provide for the 169 49 registration, collection, report, and verification of 169 50 amounts subject to this subsection. 170 1 Sec. 218. Section 421.17, subsection 29, paragraph 170 2 j, Code 2003, is amended to read as follows: 170 3 j. The department's existing right to credit 170 4 against tax due or to become due under section 422.73 170 5 or 423.47 is not to be impaired by a right granted to 170 6 or a duty imposed upon the department or other state 170 7 agency by this subsection. This subsection is not 170 8 intended to impose upon the department any additional 170 9 requirement of notice, hearing, or appeal concerning 170 10 the right to credit against tax due under section 170 11 422.73 or 423.47. 170 12 Sec. 219. Section 421.17, subsection 34, paragraph 170 13 i, Code 2003, is amended to read as follows: 170 14 i. The director may distribute to credit reporting 170 15 entities and for publication the names, addresses, and 170 16 amounts of indebtedness owed to or being collected by 170 17 the state if the indebtedness is subject to the 170 18 centralized debt collection procedure established in 170 19 this subsection. The director shall adopt rules to 170 20 administer this paragraph, and the rules shall provide 170 21 guidelines by which the director shall determine which 170 22 names, addresses, and amounts of indebtedness may be 170 23 distributed for publication. The director may 170 24 distribute information for publication pursuant to 170 25 this paragraph, notwithstanding sections 422.20, 170 26 422.72, and423.23423.42, or any other provision of 170 27 state law to the contrary pertaining to 170 28 confidentiality of information. 170 29 Sec. 220. Section 421.26, Code 2003, is amended to 170 30 read as follows: 170 31 421.26 PERSONAL LIABILITY FOR TAX DUE. 170 32 If a licensee or other person under section 170 33 452A.65, a retailer or purchaser under chapter 422A or 170 34 422B, or section422.52423.31 or 423.33, or a 170 35 retailer or purchaser under section423.13423.32 or a 170 36 user under section423.14423.34 fails to pay a tax 170 37 under those sections when due, an officer of a 170 38 corporation or association, notwithstanding sections 170 39 490A.601 and 490A.602, a member or manager of a 170 40 limited liability company, or a partner of a 170 41 partnership, having control or supervision of or the 170 42 authority for remitting the tax payments and having a 170 43 substantial legal or equitable interest in the 170 44 ownership of the corporation, association, limited 170 45 liability company, or partnership, who has 170 46 intentionally failed to pay the tax is personally 170 47 liable for the payment of the tax, interest, and 170 48 penalty due and unpaid. However, this section shall 170 49 not apply to taxes on accounts receivable. The 170 50 dissolution of a corporation, association, limited 171 1 liability company, or partnership shall not discharge 171 2 a person's liability for failure to remit the tax due. 171 3 Sec. 221. Section 421.28, Code 2003, is amended to 171 4 read as follows: 171 5 421.28 EXCEPTIONS TO SUCCESSOR LIABILITY. 171 6 The immediate successor to a licensee's or 171 7 retailer's business or stock of goods under chapter 171 8 422A or 422B, or section422.52, 423.13, 423.14,171 9 423.33 or 452A.65, is not personally liable for the 171 10 amount of delinquent tax, interest, or penalty due and 171 11 unpaid if the immediate successor shows that the 171 12 purchase of the business or stock of goods was made in 171 13 good faith that no delinquent tax, interest, or 171 14 penalty was due and unpaid. For purposes of this 171 15 section the immediate successor shows good faith by 171 16 evidence that the department had provided the 171 17 immediate successor with a certified statement that no 171 18 delinquent tax, interest, or penalty is unpaid, or 171 19 that the immediate successor had taken in good faith a 171 20 certified statement from the licensee, retailer, or 171 21 seller that no delinquent tax, interest, or penalty is 171 22 unpaid. When requested to do so by a person with whom 171 23 the licensee or retailer is negotiating the sale of 171 24 the business or stock of goods, the director of 171 25 revenue and finance shall, upon being satisfied that 171 26 such a situation exists, inform that person as to the 171 27 amount of unpaid delinquent tax, interest, or penalty 171 28 due by the licensee or the retailer. The giving of 171 29 the information under this circumstance is not a 171 30 violation of section 422.20, 422.72, or 452A.63. 171 31 Sec. 222. Section 421B.11, unnumbered paragraph 3, 171 32 Code 2003, is amended to read as follows: 171 33 Judicial review of the actions of the director may 171 34 be sought in accordance with the terms of the Iowa 171 35 administrative procedure Act, and section422.55171 36 423.38. 171 37 Sec. 223. Section 422.7, subsection 21, paragraph 171 38 a, subparagraph (1), unnumbered paragraph 1, Code 171 39 2003, is amended to read as follows: 171 40 Net capital gain from the sale of real property 171 41 used in a business, in which the taxpayer materially 171 42 participated for ten years, as defined in section 171 43 469(h) of the Internal Revenue Code, and which has 171 44 been held for a minimum of ten years, or from the sale 171 45 of a business, as defined in section422.42423.1, in 171 46 which the taxpayer was employed or in which the 171 47 taxpayer materially participated for ten years, as 171 48 defined in section 469(h) of the Internal Revenue 171 49 Code, and which has been held for a minimum of ten 171 50 years. The sale of a business means the sale of all 172 1 or substantially all of the tangible personal property 172 2 or service of the business. 172 3 Sec. 224. Section 422.73, subsection 1, Code 2003, 172 4 is amended by striking the subsection. 172 5 Sec. 225. Section 422A.1, unnumbered paragraphs 1, 172 6 3, 7, and 8, Code 2003, are amended to read as 172 7 follows: 172 8 A city or county may impose by ordinance of the 172 9 city council or by resolution of the board of 172 10 supervisors a hotel and motel tax, at a rate not to 172 11 exceed seven percent, which shall be imposed in 172 12 increments of one or more full percentage points upon 172 13 thegross receiptssales price from the renting of 172 14 sleeping rooms, apartments, or sleeping quarters in a 172 15 hotel, motel, inn, public lodging house, rooming 172 16 house, manufactured or mobile home which is tangible 172 17 personal property, or tourist court, or in any place 172 18 where sleeping accommodations are furnished to 172 19 transient guests for rent, whether with or without 172 20 meals; except thegross receiptssales price from the 172 21 renting of sleeping rooms in dormitories and in 172 22 memorial unions at all universities and colleges 172 23 located in the state of Iowa and the guests of a 172 24 religious institution if the property is exempt under 172 25 section 427.1, subsection 8, and the purpose of 172 26 renting is to provide a place for a religious retreat 172 27 or function and not a place for transient guests 172 28 generally. The tax when imposed by a city shall apply 172 29 only within the corporate boundaries of that city and 172 30 when imposed by a county shall apply only outside 172 31 incorporated areas within that county. "Renting" and 172 32 "rent" include any kind of direct or indirect charge 172 33 for such sleeping rooms, apartments, or sleeping 172 34 quarters, or their use. However, the tax does not 172 35 apply to thegross receiptssales price from the 172 36 renting of a sleeping room, apartment, or sleeping 172 37 quarters while rented by the same person for a period 172 38 of more than thirty-one consecutive days. 172 39 A local hotel and motel tax shall be imposed on 172 40 January 1, April 1, July 1, or October 1, following 172 41 the notification of the director of revenue and 172 42 finance. Once imposed, the tax shall remain in effect 172 43 at the rate imposed for a minimum of one year. A 172 44 local hotel and motel tax shall terminate only on 172 45 March 31, June 30, September 30, or December 31. At 172 46 leastforty-fivesixty days prior to the tax being 172 47 effective or prior to a revision in the tax rate, or 172 48 prior to the repeal of the tax, a city or county shall 172 49 provide notice by mail of such action to the director 172 50 of revenue and finance. 173 1 No tax permit other than the state sales tax permit 173 2 required under section422.53423.36 may be required 173 3 by local authorities. 173 4 The tax levied shall be in addition to any state 173 5 sales tax imposed under section422.43423.2. Section 173 6 422.25, subsection 4, sections 422.30,422.48 to173 7422.52, 422.54 to 422.58,422.67, and 422.68, section 173 8 422.69, subsection 1,andsections 422.70 to 422.75, 173 9 section 423.14, subsection 1, and sections 423.23, 173 10 423.24, 423.25, 423.31, 423.33, 423.35, 423.37 to 173 11 423.42, and 423.47, consistent with the provisions of 173 12 this chapter, apply with respect to the taxes 173 13 authorized under this chapter, in the same manner and 173 14 with the same effect as if the hotel and motel taxes 173 15 were retail sales taxes within the meaning of those 173 16 statutes. Notwithstanding this paragraph, the 173 17 director shall provide for quarterly filing of returns 173 18as prescribed in section 422.51and for other than 173 19 quarterly filing of returns both as prescribed in 173 20 section422.51, subsection 2423.31. The director may 173 21 require all persons, as defined in section422.42173 22 423.1, who are engaged in the business of deriving 173 23gross receiptsany sales price subject to tax under 173 24 this chapter, to register with the department. 173 25 Sec. 226. Section 422B.8, Code 2003, is amended to 173 26 read as follows: 173 27 422B.8 LOCAL SALES AND SERVICES TAX. 173 28 A local sales and services tax at the rate of not 173 29 more than one percent may be imposed by a county on 173 30 thegross receiptssales price taxed by the state 173 31 under chapter422423,division IVsubchapter II. A 173 32 local sales and services tax shall be imposed on the 173 33 same basis as the state sales and services tax or in 173 34 the case of the use of natural gas, natural gas 173 35 service, electricity, or electric service on the same 173 36 basis as the state use tax and shall not be imposed on 173 37 the sale of any property or on any service not taxed 173 38 by the state, except the tax shall not be imposed on 173 39 thegross receiptssales price from the sale of motor 173 40 fuel or special fuel as defined in chapter 452A which 173 41 is consumed for highway use or in watercraft or 173 42 aircraft if the fuel tax is paid on the transaction 173 43 and a refund has not or will not be allowed, on the 173 44gross receiptssales price from the rental of rooms, 173 45 apartments, or sleeping quarters which are taxed under 173 46 chapter 422A during the period the hotel and motel tax 173 47 is imposed, on thegross receiptssales price from the 173 48 sale of equipment by the state department of 173 49 transportation, on thegross receiptssales price from 173 50 the sale of self-propelled building equipment, pile 174 1 drivers, motorized scaffolding, or attachments 174 2 customarily drawn or attached to self-propelled 174 3 building equipment, pile drivers, and motorized 174 4 scaffolding, including auxiliary attachments which 174 5 improve the performance, safety, operation, or 174 6 efficiency of the equipment and replacement parts and 174 7 are directly and primarily used by contractors, 174 8 subcontractors, and builders for new construction, 174 9 reconstruction, alterations, expansion, or remodeling 174 10 of real property or structures, and on thegross174 11receiptssales price from the sale of a lottery ticket 174 12 or share in a lottery game conducted pursuant to 174 13 chapter 99E and except the tax shall not be imposed on 174 14 thegross receiptssales price from the sale or use of 174 15 natural gas, natural gas service, electricity, or 174 16 electric service in a city or county where thegross174 17receiptssales price from the sale of natural gas or 174 18 electric energy are subject to a franchise fee or user 174 19 fee during the period the franchise or user fee is 174 20 imposed. A local sales and services tax is applicable 174 21 to transactions within those incorporated and 174 22 unincorporated areas of the county where it is imposed 174 23 and shall be collected by all persons required to 174 24 collect stategross receiptssales taxes. However, a 174 25 person required to collect state retail sales tax 174 26 under chapter422423,division IVsubchapter V or VI, 174 27 is not required to collect local sales and services 174 28 tax on transactions delivered within the area where 174 29 the local sales and services tax is imposed unless the 174 30 person has physical presence in that taxing area. All 174 31 cities contiguous to each other shall be treated as 174 32 part of one incorporated area and the tax would be 174 33 imposed in each of those contiguous cities only if the 174 34 majority of those voting in the total area covered by 174 35 the contiguous cities favor its imposition. 174 36 The amount of the sale, for purposes of determining 174 37 the amount of the local sales and services tax, does 174 38 not include the amount of any stategross receipts174 39taxessales tax. 174 40 A tax permit other than the state sales tax permit 174 41 required under section422.53 or 423.10423.36 shall 174 42 not be required by local authorities. 174 43 If a local sales and services tax is imposed by a 174 44 county pursuant to this chapter, a local excise tax at 174 45 the same rate shall be imposed by the county on the 174 46 purchase price of natural gas, natural gas service, 174 47 electricity, or electric service subject to tax under 174 48 chapter 423, subchapter III, and not exempted from tax 174 49 by any provision of chapter 423, subchapter III. The 174 50 local excise tax is applicable only to the use of 175 1 natural gas, natural gas service, electricity, or 175 2 electric service within those incorporated and 175 3 unincorporated areas of the county where it is imposed 175 4 and, except as otherwise provided in this chapter, 175 5 shall be collected and administered in the same manner 175 6 as the local sales and services tax. For purposes of 175 7 this chapter, "local sales and services tax" shall 175 8 also include the local excise tax. 175 9 Sec. 227. Section 422B.9, subsections 1 and 2, 175 10 Code 2003, are amended to read as follows: 175 11 1. a. A local sales and services tax shall be 175 12 imposed either January 1 or July 1 following the 175 13 notification of the director of revenue and finance 175 14 but not sooner than ninety days following the 175 15 favorable election and not sooner than sixty days 175 16 following notice to sellers, as defined in section 175 17 423.1. However, a jurisdiction which has voted to 175 18 continue imposition of the tax may impose that tax 175 19 without repeal of the prior tax. 175 20 b. A local sales and services tax shall be 175 21 repealed only on June 30 or December 31 but not sooner 175 22 than ninety days following the favorable election if 175 23 one is held. However, a local sales and services tax 175 24 shall not be repealed before the tax has been in 175 25 effect for one year. At least forty days before the 175 26 imposition or repeal of the tax, a county shall 175 27 provide notice of the action by certified mail to the 175 28 director of revenue and finance. 175 29 c. The imposition of or a rate change for a local 175 30 sales and service tax shall not be applied to 175 31 purchases from a printed catalog wherein a purchaser 175 32 computes the local tax based on rates published in the 175 33 catalog unless a minimum of one hundred twenty days' 175 34 notice of the imposition or rate change has been given 175 35 to the seller from the catalog and the first day of a 175 36 calendar quarter has occurred on or after the one 175 37 hundred twentieth day. 175 38c.d. If a local sales and services tax has been 175 39 imposed prior to April 1, 2000, and at the time of the 175 40 election a date for repeal was specified on the 175 41 ballot, the local sales and services tax may be 175 42 repealed on that date, notwithstanding paragraph "b". 175 43 2. a. The director of revenue and finance shall 175 44 administer a local sales and services tax as nearly as 175 45 possible in conjunction with the administration of 175 46 stategross receiptssales tax laws. The director 175 47 shall provide appropriate forms or provide on the 175 48 regular state tax forms for reporting local sales and 175 49 services tax liability. 175 50 b. The ordinance of a county board of supervisors 176 1 imposing a local sales and services tax shall adopt by 176 2 reference the applicable provisions of the appropriate 176 3 sections ofchapter 422, division IV, andchapter 423. 176 4 All powers and requirements of the director to 176 5 administer the stategross receiptssales tax law and 176 6 use tax law are applicable to the administration of a 176 7 local sales and services tax law and the local excise 176 8 tax, including but not limited to, the provisions of 176 9 section 422.25, subsection 4, sections 422.30,422.48176 10to 422.52, 422.54 to 422.58,422.67, and 422.68, 176 11 section 422.69, subsection 1, sections 422.70 to 176 12 422.75,423.6, subsections 2 to 4, and sections 423.11176 13to 423.18, and 423.21section 423.14, subsection 1 and 176 14 subsection 2, paragraphs "b" through "e", and sections 176 15 423.15, 423.23, 423.24, 423.25, 423.31 to 423.35, 176 16 423.37 to 423.42, 423.46, and 423.47. Local officials 176 17 shall confer with the director of revenue and finance 176 18 for assistance in drafting the ordinance imposing a 176 19 local sales and services tax. A certified copy of the 176 20 ordinance shall be filed with the director as soon as 176 21 possible after passage. 176 22 c. Frequency of deposits and quarterly reports of 176 23 a local sales and services tax with the department of 176 24 revenue and finance are governed by the tax provisions 176 25 in section422.52423.31. Local tax collections shall 176 26 not be included in computation of the total tax to 176 27 determine frequency of filing under section422.52176 28 423.31. 176 29 d. The director shall apply a boundary change of a 176 30 county or city imposing or collecting the local sales 176 31 and service tax to the imposition or collection of 176 32 that tax only on the first day of a calendar quarter 176 33 which occurs sixty days or more after the director has 176 34 given notice of the boundary change to sellers. 176 35 Sec. 228. Section 422C.2, subsections 4 and 6, 176 36 Code 2003, are amended to read as follows: 176 37 4. "Person" means person as defined in section 176 38422.42423.1. 176 39 6. "Rental price" means the consideration for 176 40 renting an automobile valued in money, and means the 176 41 same as"gross taxable services""sales price" as 176 42 defined in section422.42423.1. 176 43 Sec. 229. Section 422C.3, Code 2003, is amended to 176 44 read as follows: 176 45 422C.3 TAX ON RENTAL OF AUTOMOBILES. 176 46 1. A tax of five percent is imposed upon the 176 47 rental price of an automobile if the rental 176 48 transaction is subject to the sales and services tax 176 49 under chapter422423,division IVsubchapter II, or 176 50 the use tax under chapter 423, subchapter III. The 177 1 tax shall not be imposed on any rental transaction not 177 2 taxable under the state sales and services tax, as 177 3 provided in section422.45423.3, or the state use 177 4 tax, as provided in section423.4423.6, on automobile 177 5 rental receipts. 177 6 2. The lessor shall collect the tax by adding the 177 7 tax to the rental price of the automobile. 177 8 3. The tax, when collected, shall be stated as a 177 9 distinct item separate and apart from the rental price 177 10 of the automobile and the sales and services tax 177 11 imposed under chapter422423,division IVsubchapter 177 12 II, or the use tax imposed under chapter 423, 177 13 subchapter III. 177 14 Sec. 230. Section 422C.4, Code 2003, is amended to 177 15 read as follows: 177 16 422C.4 ADMINISTRATION AND ENFORCEMENT. 177 17 All powers and requirements of the director of 177 18 revenue and finance to administer the stategross177 19receiptssales tax law under chapter422, division IV,177 20 423 are applicable to the administration of the tax 177 21 imposed under section 422C.3, including but not 177 22 limited to section 422.25, subsection 4, sections 177 23 422.30,422.48 through 422.52, 422.54 through 422.58,177 24 422.67, and 422.68, section 422.69, subsection 1,and177 25 sections 422.70 through 422.75, section 423.14, 177 26 subsection 1, and sections 423.15, 423.23, 423.24, 177 27 423.25, 423.31, 423.33, 423.35 and 423.37 through 177 28 423.42, 423.45, 423.46, and 423.47. However, as an 177 29 exception to the powers specified in section422.52,177 30subsection 1423.31, the director shall only require 177 31 the filing of quarterly reports. 177 32 Sec. 231. Section 422E.1, subsection 1, is amended 177 33 to read as follows: 177 34 1. A local sales and services tax for school 177 35 infrastructure purposes may be imposed by a county on 177 36 behalf of school districts as provided in this 177 37 chapter. 177 38 If a local sales and services tax for school 177 39 infrastructure is imposed by a county pursuant to this 177 40 chapter, a local excise tax for school infrastructure 177 41 at the same rate shall be imposed by the county on the 177 42 purchase price of natural gas, natural gas service, 177 43 electricity, or electric service subject to tax under 177 44 chapter 423, subchapter III, and not exempted from tax 177 45 by any provision of chapter 423, subchapter III. The 177 46 local excise tax for school infrastructure is 177 47 applicable only to the use of natural gas, natural gas 177 48 service, electricity, or electric service within those 177 49 incorporated and unincorporated areas of the county 177 50 where it is imposed and, except as otherwise provided 178 1 in this chapter, shall be collected and administered 178 2 in the same manner as the local sales and services tax 178 3 for school infrastructure. For purposes of this 178 4 chapter, "local sales and services tax for school 178 5 infrastructure" shall also include the local excise 178 6 tax for school infrastructure. 178 7 Sec. 232. Section 422E.3, subsections 1, 2, and 3, 178 8 Code 2003, are amended to read as follows: 178 9 1. If a majority of those voting on the question 178 10 of imposition of a local sales and services tax for 178 11 school infrastructure purposes favors imposition of 178 12 the tax, the tax shall be imposed by the county board 178 13 of supervisors within the county pursuant to section 178 14 422E.2, at the rate specified for a ten-year duration 178 15 on thegross receiptssales price taxed by the state 178 16 under chapter422423,division IVsubchapter II. 178 17 2. The tax shall be imposed on the same basis as 178 18 the state sales and services tax or in the case of the 178 19 use of natural gas, natural gas service, electricity, 178 20 or electric service on the same basis as the state use 178 21 tax and shall not be imposed on the sale of any 178 22 property or on any service not taxed by the state, 178 23 except the tax shall not be imposed on thegross178 24receiptssales price from the sale of motor fuel or 178 25 special fuel as defined in chapter 452A which is 178 26 consumed for highway use or in watercraft or aircraft 178 27 if the fuel tax is paid on the transaction and a 178 28 refund has not or will not be allowed, on thegross178 29receiptssales price from the rental of rooms, 178 30 apartments, or sleeping quarters which are taxed under 178 31 chapter 422A during the period the hotel and motel tax 178 32 is imposed, on thegross receiptssales price from the 178 33 sale of equipment by the state department of 178 34 transportation, on thegross receiptssales price from 178 35 the sale of self-propelled building equipment, pile 178 36 drivers, motorized scaffolding, or attachments 178 37 customarily drawn or attached to self-propelled 178 38 building equipment, pile drivers, and motorized 178 39 scaffolding, including auxiliary attachments which 178 40 improve the performance, safety, operation, or 178 41 efficiency of the equipment, and replacement parts and 178 42 are directly and primarily used by contractors, 178 43 subcontractors, and builders for new construction, 178 44 reconstruction, alterations, expansion, or remodeling 178 45 of real property or structures, and on thegross178 46receiptssales price from the sale of a lottery ticket 178 47 or share in a lottery game conducted pursuant to 178 48 chapter 99E and except the tax shall not be imposed on 178 49 thegross receiptssales price from the sale or use of 178 50 natural gas, natural gas service, electricity, or 179 1 electric service in a city or county where thegross179 2receiptssales price from the sale of natural gas or 179 3 electric energy are subject to a franchise fee or user 179 4 fee during the period the franchise or user fee is 179 5 imposed. 179 6 3. The tax is applicable to transactions within 179 7 the county where it is imposed and shall be collected 179 8 by all persons required to collect stategross179 9receiptssales or local excise taxes. However, a 179 10 person required to collect stateretailsales tax 179 11 under chapter422, division IV,423 is not required to 179 12 collect local sales and services tax on transactions 179 13 delivered within the area where the local sales and 179 14 services tax is imposed unless the person has physical 179 15 presence in that taxing area. The amount of the sale, 179 16 for purposes of determining the amount of the tax, 179 17 does not include the amount of any stategross179 18receiptssales taxes or excise taxes or other local 179 19 option sales or excise taxes. A tax permit other than 179 20 the state tax permit required under section422.53 or179 21423.10423.36 shall not be required by local 179 22 authorities. 179 23 Sec. 233. Section 425.30, Code 2003, is amended to 179 24 read as follows: 179 25 425.30 NOTICES. 179 26 Section422.57423.39, subsection 1, shall apply to 179 27 all notices under this division. 179 28 Sec. 234. Section 425.31, Code 2003, is amended to 179 29 read as follows: 179 30 425.31 APPEALS. 179 31 Any person aggrieved by an act or decision of the 179 32 director of revenue and finance or the department of 179 33 revenue and finance under this division shall have the 179 34 same rights of appeal and review as provided in 179 35 sections 421.1 and422.55423.38 and the rules of the 179 36 department of revenue and finance. 179 37 Sec. 235. Section 452A.66, unnumbered paragraph 1, 179 38 Code 2003, is amended to read as follows: 179 39 The appropriate state agency shall administer the 179 40 taxes imposed by this chapter in the same manner as 179 41 and subject to section 422.25, subsection 4 and 179 42 section422.52, subsection 3423.35. 179 43 Sec. 236. Section 455B.455, Code 2003, is amended 179 44 to read as follows: 179 45 455B.455 SURCHARGE IMPOSED. 179 46 A land burial surcharge tax of two percent is 179 47 imposed on the fee for land burial of a hazardous 179 48 waste. The owner of the land burial facility shall 179 49 remit the tax collected to the director of revenue and 179 50 finance after consultation with the director according 180 1 to rules that the director shall adopt. The director 180 2 shall forward a copy of the site license to the 180 3 director of revenue and finance which shall be the 180 4 appropriate license for the collection of the land 180 5 burial surcharge tax and shall be subject to 180 6 suspension or revocation if the site license holder 180 7 fails to collect or remit the tax collected under this 180 8 section. The provisions ofsectionssection 422.25, 180 9 subsection 4, sections 422.30,422.48 to 422.52,180 10422.54 to 422.58,422.67, and 422.68, section 422.69, 180 11 subsection 1,andsections 422.70 to 422.75, section 180 12 423.14, subsection 1, and sections 423.23, 423.24, 180 13 423.25, 423.31, 423.33, 423.35, 423.37 to 423.42, and 180 14 423.47, consistent with the provisions of this part 6 180 15 of division IV, shall apply with respect to the taxes 180 16 authorized under this part, in the same manner and 180 17 with the same effect as if the land burial surcharge 180 18 tax wereretailsales taxes within the meaning of 180 19 those statutes. Notwithstanding the provisions of 180 20 thisparagraphsection, the director shall provide for 180 21 only quarterly filing of returns as prescribed in 180 22 section422.51423.31. Taxes collected by the 180 23 director of revenue and finance under this section 180 24 shall be deposited in the general fund of the state. 180 25 Sec. 237. Section 455G.3, subsection 1, Code 2003, 180 26 is amended to read as follows: 180 27 1. The Iowa comprehensive petroleum underground 180 28 storage tank fund is created as a separate fund in the 180 29 state treasury, and any funds remaining in the fund at 180 30 the end of each fiscal year shall not revert to the 180 31 general fund but shall remain in the Iowa 180 32 comprehensive petroleum underground storage tank fund. 180 33 Interest or other income earned by the fund shall be 180 34 deposited in the fund. The fund shall include moneys 180 35 credited to the fund under this section, section 180 36423.24423.43, subsection 1, paragraph "a", and 180 37 sections 455G.8, 455G.9, and 455G.11, and other funds 180 38 which by law may be credited to the fund. The moneys 180 39 in the fund are appropriated to and for the purposes 180 40 of the board as provided in this chapter. Amounts in 180 41 the fund shall not be subject to appropriation for any 180 42 other purpose by the general assembly, but shall be 180 43 used only for the purposes set forth in this chapter. 180 44 The treasurer of state shall act as custodian of the 180 45 fund and disburse amounts contained in it as directed 180 46 by the board including automatic disbursements of 180 47 funds as received pursuant to the terms of bond 180 48 indentures and documents and security provisions to 180 49 trustees and custodians. The treasurer of state is 180 50 authorized to invest the funds deposited in the fund 181 1 at the direction of the board and subject to any 181 2 limitations contained in any applicable bond 181 3 proceedings. The income from such investment shall be 181 4 credited to and deposited in the fund. The fund shall 181 5 be administered by the board which shall make 181 6 expenditures from the fund consistent with the 181 7 purposes of the programs set out in this chapter 181 8 without further appropriation. The fund may be 181 9 divided into different accounts with different 181 10 depositories as determined by the board and to fulfill 181 11 the purposes of this chapter. 181 12 Sec. 238. Section 455G.6, subsection 4, Code 2003, 181 13 is amended to read as follows: 181 14 4. Grant a mortgage, lien, pledge, assignment, or 181 15 other encumbrance on one or more improvements, 181 16 revenues, asset of right, accounts, or funds 181 17 established or received in connection with the fund, 181 18 including revenues derived from the use tax under 181 19 section423.24423.43, subsection 1, paragraph "a", 181 20 and deposited in the fund or an account of the fund. 181 21 Sec. 239. Section 455G.8, subsection 2, Code 2003, 181 22 is amended to read as follows: 181 23 2. USE TAX. The revenues derived from the use tax 181 24 imposed under chapter 423, subchapter III. The 181 25 proceeds of the use tax under section423.24423.43, 181 26 subsection 1, paragraph "a", shall be allocated, 181 27 consistent with this chapter, among the fund's 181 28 accounts, for debt service and other fund expenses, 181 29 according to the fund budget, resolution, trust 181 30 agreement, or other instrument prepared or entered 181 31 into by the board or authority under direction of the 181 32 board. 181 33 Sec. 240. Section 455G.9, subsection 2, Code 2003, 181 34 is amended to read as follows: 181 35 2. REMEDIAL ACCOUNT FUNDING. The remedial account 181 36 shall be funded by that portion of the proceeds of the 181 37 use tax imposed under chapter 423, subchapter III, and 181 38 other moneys and revenues budgeted to the remedial 181 39 account by the board. 181 40 Sec. 241. Section 2.67, Code 2003, is repealed. 181 41 Sec. 242. CODE EDITOR DIRECTIVE. The Code editor 181 42 is directed to transfer Code chapter 423A to Code 181 43 chapter 421A and to transfer Code chapters 422A, 422B, 181 44 422C, and 422E to Code chapters 423A, 423B, 423C, and 181 45 423E, respectively. The Code editor is directed to 181 46 correct Code references as required due to the changes 181 47 made in this Act. 181 48 SALES TAX ADVISORY COUNCIL 181 49 Sec. 243. IOWA STREAMLINED SALES TAX ADVISORY 181 50 COUNCIL. 182 1 1. An Iowa streamlined sales tax advisory council 182 2 is created. The advisory council shall review, study, 182 3 and submit recommendations to the Iowa streamlined 182 4 sales and use tax delegation regarding the proposed 182 5 streamlined sales and use tax agreement formalized by 182 6 the project's implementing sales on November 12, 2002, 182 7 the proposed language conforming Iowa's sales and use 182 8 tax to the national agreement, and the following 182 9 issues: 182 10 a. Uniform definitions proposed in the current 182 11 streamlined sales and use tax agreement and future 182 12 proposals. 182 13 b. Effects upon taxability of items newly defined 182 14 in Iowa. 182 15 c. Impacts upon business as a result of the 182 16 streamlined sales and use tax. 182 17 d. Technology implementation issues. 182 18 e. Any other issues that are brought before the 182 19 streamlined sales and use tax implementing state or 182 20 the streamlined sales and use tax governing board. 182 21 2. The department shall provide administrative 182 22 support to the Iowa streamlined sales tax advisory 182 23 council. The advisory council shall be representative 182 24 of Iowa's business community and economy when 182 25 reviewing and recommending solutions to streamlined 182 26 sales and use tax issues. The advisory council shall 182 27 provide the general assembly and the governor with 182 28 final recommendations made to the Iowa streamlined 182 29 sales and use tax delegation upon the conclusion of 182 30 each calendar year. 182 31 3. The director of revenue, in consultation with 182 32 the Iowa taxpayers association and the Iowa 182 33 association of business and industry, shall appoint 182 34 members to the Iowa streamlined sales tax advisory 182 35 council, which shall consist of the following members: 182 36 a. One member from the department of revenue and 182 37 finance. 182 38 b. Three members representing small Iowa 182 39 businesses, at least one of whom must be a retailer, 182 40 and at least one of whom shall be a supplier. 182 41 c. Three members representing medium Iowa 182 42 businesses, at least one of whom shall be a retailer, 182 43 and at least one of whom shall be a supplier. 182 44 d. Three members representing large Iowa 182 45 businesses, at least one of whom shall be a retailer, 182 46 and at least one of whom shall be a supplier. 182 47 e. One member representing taxpayers as a whole. 182 48 f. One member representing the retail community as 182 49 a whole. 182 50 g. Any other member the director of revenue and 183 1 finance deems appropriate. 183 2 Sec. 244. EFFECTIVE DATE. Except for the section 183 3 creating the Iowa streamlined sales tax advisory 183 4 council, this division of this Act takes effect July 183 5 1, 2004. 183 6 DIVISION XXIII 183 7 STATE ASSISTANCE FOR EDUCATIONAL INFRASTRUCTURE 183 8 Sec. 245. NEW SECTION. 292A.1 DEFINITIONS. 183 9 As used in this chapter, unless the context 183 10 otherwise requires: 183 11 1. "Capacity per pupil" means the sum of a school 183 12 district's property tax infrastructure capacity per 183 13 pupil and the sales tax capacity per pupil. 183 14 2. "Committee" means the school budget review 183 15 committee established in section 257.30. 183 16 3. "Department" means the department of education 183 17 established in section 256.1. 183 18 4. "Fund" means the state assistance for 183 19 educational infrastructure fund created in section 183 20 292A.3. 183 21 5. "Local match percentage" means a percentage 183 22 equivalent to either of the following, whichever is 183 23 less: 183 24 a. Fifty percent. 183 25 b. The quotient of a school district's capacity 183 26 per pupil divided by the capacity per pupil of the 183 27 school district at the fortieth percentile, multiplied 183 28 by fifty percent, except that the percentage in this 183 29 paragraph shall not be less than twenty percent. 183 30 6. "Program" means the state assistance for 183 31 educational infrastructure program established in 183 32 section 292A.2. 183 33 7. "Property tax infrastructure capacity per 183 34 pupil" means the sum of a school district's levies 183 35 under sections 298.2 and 298.18 when the levies are 183 36 imposed to the maximum extent allowable under law in 183 37 the budget year divided by the school district's basic 183 38 enrollment for the budget year. 183 39 8. "Sales tax capacity per pupil" means the 183 40 estimated amount of revenues that a school district 183 41 receives or would receive if a local sales and 183 42 services tax for school infrastructure is imposed at 183 43 one percent pursuant to section 422E.2, divided by the 183 44 school district's basic enrollment for the budget 183 45 year. 183 46 9. "School infrastructure" means activities 183 47 initiated on or after July 1, 2003, for which a school 183 48 district is authorized to contract indebtedness and 183 49 issue general obligation bonds under section 296.1, 183 50 except those activities related to a teacher's or 184 1 superintendent's home or homes, to stadiums, to the 184 2 improving of a site for an athletic field, or to the 184 3 improving of a site already owned for an athletic 184 4 field. These activities include the construction, 184 5 reconstruction, repair, demolition work, purchasing, 184 6 or remodeling of schoolhouses and bus garages and the 184 7 procurement of schoolhouse construction sites and the 184 8 making of site improvements and those activities for 184 9 which revenues under section 298.3 or 300.2 may be 184 10 spent. 184 11 Sec. 246. NEW SECTION. 292A.2 STATE ASSISTANCE 184 12 FOR EDUCATIONAL INFRASTRUCTURE PROGRAM. 184 13 1. a. The department shall establish and 184 14 administer a state assistance for educational 184 15 infrastructure program to provide financial assistance 184 16 in the form of grants to school districts with school 184 17 infrastructure needs. 184 18 b. The department of education, in consultation 184 19 with the department of management, shall annually 184 20 compute the property tax infrastructure capacity per 184 21 pupil for each school district in the state. 184 22 c. The department of education, in consultation 184 23 with the department of revenue and the legislative 184 24 services agency, shall annually calculate the 184 25 estimated sales and services tax for school 184 26 infrastructure, if imposed at one percent, that is or 184 27 would be received by each school district in the state 184 28 pursuant to section 422E.3. These calculations shall 184 29 be made on a total tax and on a tax per pupil basis 184 30 for each school district. 184 31 d. The department of education, in consultation 184 32 with the department of revenue and the department of 184 33 management, shall annually compute capacity per pupil 184 34 and the local match percentage for each school 184 35 district in the state. The calculations shall be 184 36 released not later than September 1 of each year. 184 37 2. a. A school district's local match requirement 184 38 is equivalent to the total investment of a project 184 39 multiplied by the school district's local match 184 40 percentage. A school district may submit an 184 41 application to the department for financial assistance 184 42 under the program if the school district meets the 184 43 district's local match requirement through one or more 184 44 of the following sources: 184 45 (1) The issuance of bonds pursuant to section 184 46 298.18. 184 47 (2) Local sales and services tax moneys received 184 48 pursuant to section 422E.3. 184 49 (3) A physical plant and equipment levy under 184 50 chapter 298. 185 1 (4) Other moneys locally obtained by the school 185 2 district excluding other state or federal grant 185 3 moneys. 185 4 b. If the project is in collaboration with other 185 5 public or private entities, the school district shall 185 6 be eligible to apply for only the school district's 185 7 portion of the project. As such, state or federal 185 8 grants received by the other entities cannot be used 185 9 toward the local match requirement under paragraph 185 10 "a", subparagraph (4). 185 11 c. A school district may submit an application for 185 12 a project which includes activities at more than one 185 13 attendance center. However, if the activities relate 185 14 to new construction, the project shall only relate to 185 15 one attendance center. 185 16 d. A school district may submit an application for 185 17 conditional approval to the department for financial 185 18 assistance under the program if the school district 185 19 submits a plan for securing the school district's 185 20 local match requirement under paragraph "a". If a 185 21 school district does not meet the local match 185 22 requirement of paragraph "a" within nine months of 185 23 receiving conditional approval from the department, 185 24 the application for financial assistance shall be 185 25 denied by the department and the financial assistance 185 26 shall be carried forward to be made available under 185 27 the allocation provided under subsection 4, paragraph 185 28 "d", for the next available grant cycle. 185 29 e. For the fiscal year beginning July 1, 2003, and 185 30 every fiscal year thereafter, applications shall be 185 31 submitted to the department by October 15 of each 185 32 year. 185 33 f. For the fiscal year beginning July 1, 2003, and 185 34 every fiscal year thereafter, the department shall 185 35 notify all approved applicants by December 15 of each 185 36 year regarding the approval of the application. 185 37 g. An applicant which is not successful in 185 38 obtaining financial assistance under the program may 185 39 reapply for financial assistance in succeeding years. 185 40 3. The application shall include, but shall not be 185 41 limited to, the following information: 185 42 a. The total capital investment of the project. 185 43 b. The amount and percentage of moneys which the 185 44 school district will be providing for the project. 185 45 c. The infrastructure needs of the school 185 46 district, especially the fire and health safety needs 185 47 of the school district, and including the extent to 185 48 which the project would allow the school district to 185 49 meet the infrastructure needs of the school district 185 50 on a long-term basis. 186 1 d. The financial assistance needed by the school 186 2 district based upon the capacity per pupil. 186 3 e. Any previous efforts by the school district to 186 4 secure infrastructure funding from federal, state, or 186 5 local resources, including any funding received for 186 6 any project under the school infrastructure program 186 7 provided in chapter 292. The previous efforts shall 186 8 be evaluated on a case-by-case basis. 186 9 f. Evidence that the school district meets or will 186 10 meet the local match requirement in subsection 2, 186 11 paragraph "a". 186 12 g. The nature of the proposed project and its 186 13 relationship to improving educational opportunities 186 14 for the students. 186 15 h. Evidence that the school district has 186 16 reorganized on or after July 1, 2002, or that the 186 17 school district has initiated a resolution to 186 18 reorganize by July 1, 2005, or entered into an 186 19 innovative collaboration with another school district 186 20 or school districts. 186 21 i. Evidence that the school district receives 186 22 sales and services tax for school infrastructure 186 23 funding under section 422E.3. 186 24 4. A school district with less than two hundred 186 25 fifty actual enrollment or less than one hundred 186 26 actual enrollment in the high school that submits an 186 27 application for assistance for new construction or for 186 28 payments for bonds issued for new construction shall 186 29 include on the application, in addition to that in 186 30 subsection 3, all of the following: 186 31 a. Enrollment trends in the grades that will be 186 32 served at the new construction site. 186 33 b. The infeasibility of remodeling, 186 34 reconstructing, or repairing existing buildings. 186 35 c. The fire and health safety needs of the school 186 36 district. 186 37 d. The distance, convenience, cost of 186 38 transportation, and accessibility of the new 186 39 construction site to the students to be served at the 186 40 new construction site. 186 41 e. Availability of alternative, less costly, or 186 42 more effective means of serving the needs of the 186 43 students. 186 44 f. The financial condition of the district, 186 45 including the effect of the decline of the budget 186 46 guarantee and unspent balance. 186 47 g. Broad and long-term ability of the district to 186 48 support the facility and the quality of the academic 186 49 program. 186 50 h. Cooperation with other educational entities 187 1 including other school districts, area education 187 2 agencies, postsecondary institutions, and local 187 3 communities. 187 4 5. A school district shall not receive more than 187 5 one grant under the program. The financial assistance 187 6 shall be in the form of grants and shall be allocated 187 7 in the following manner: 187 8 a. Twenty-five percent of the financial assistance 187 9 each year shall be awarded to school districts with an 187 10 enrollment of one thousand one hundred ninety-nine 187 11 students or less. 187 12 b. Twenty-five percent of the financial assistance 187 13 each year shall be awarded to school districts with an 187 14 enrollment of more than one thousand one hundred 187 15 ninety-nine students but not more than four thousand 187 16 seven hundred fifty students. 187 17 c. Twenty-five percent of the financial assistance 187 18 each year shall be awarded to school districts with an 187 19 enrollment of more than four thousand seven hundred 187 20 fifty students. 187 21 d. Twenty-five percent of the financial assistance 187 22 each year, any financial assistance not awarded under 187 23 paragraphs "a" through "c", and financial assistance 187 24 not awarded in previous fiscal years shall be awarded 187 25 to school districts with any size enrollment. 187 26 6. A district shall receive the lesser of one 187 27 million dollars of financial assistance under the 187 28 program, or the total capital investment of the 187 29 project minus the local match requirement. If the 187 30 amount of grants awarded in a fiscal year is less than 187 31 the maximum amount provided for grants for that fiscal 187 32 year, the amount of the difference shall be carried 187 33 forward to subsequent fiscal years for purposes of 187 34 providing grants under the program and the maximum 187 35 amount of grants for each fiscal year shall be 187 36 adjusted accordingly. 187 37 7. The school budget review committee shall review 187 38 all applications for financial assistance under the 187 39 program and make recommendations regarding the 187 40 applications to the department. The department shall 187 41 make the final determination on grant awards. The 187 42 school budget review committee shall base the 187 43 recommendations on the criteria established pursuant 187 44 to subsections 3 and 8 and subsection 4, if 187 45 applicable. 187 46 8. The department shall form a task force to 187 47 review applications for financial assistance and 187 48 provide recommendations to the school budget review 187 49 committee. The task force shall include, at a 187 50 minimum, representatives from the kindergarten through 188 1 grade twelve education community, the state fire 188 2 marshal, and individuals knowledgeable in school 188 3 infrastructure and construction issues. The 188 4 department, in consultation with the task force, shall 188 5 establish the parameters and the details of the 188 6 criteria for awarding grants based on the information 188 7 listed in subsection 3, including greater priority to 188 8 the following: 188 9 a. A school district with a lower capacity per 188 10 pupil. 188 11 b. A school district whose plans address specific 188 12 occupant safety issues. 188 13 c. A school district reorganizing or collaborating 188 14 as described in subsection 3, paragraph "h". 188 15 d. A school district for which a sales and 188 16 services tax for school infrastructure has not been 188 17 imposed pursuant to section 422E.2 or a school 188 18 district receiving minimal revenues under section 188 19 422E.3 when the total enrollment of the school 188 20 district is considered. 188 21 9. An applicant receiving financial assistance 188 22 under the program shall submit a progress report to 188 23 the department as requested by the department which 188 24 shall include a description of the activities under 188 25 the project, the status of the implementation of the 188 26 project, and any other information required by the 188 27 department. 188 28 10. A school district located in whole or in part 188 29 in a county which has imposed the maximum rate of 188 30 sales and services tax for school infrastructure 188 31 pursuant to section 422E.2 and has sales and services 188 32 tax for school infrastructure revenue of more than the 188 33 statewide average of sales tax capacity per pupil, as 188 34 defined in section 292.1, subsection 8, shall not be 188 35 eligible for financial assistance under the program. 188 36 For purposes of this subsection, an individual school 188 37 district's sales tax capacity per pupil is the 188 38 estimated total sales and services tax for 188 39 infrastructure revenue to be actually received by the 188 40 school district divided by the school district's 188 41 enrollment as specified in section 292.1, subsection 188 42 8. 188 43 Sec. 247. NEW SECTION. 292A.3 STATE ASSISTANCE 188 44 FOR EDUCATIONAL INFRASTRUCTURE FUND. 188 45 A state assistance for educational infrastructure 188 46 fund is created as a separate and distinct fund in the 188 47 state treasury under the control of the department. 188 48 Moneys in the fund include revenues credited to the 188 49 fund pursuant to this chapter, appropriations made to 188 50 the fund, and other moneys deposited into the fund. 189 1 Any amounts disbursed from the fund shall be utilized 189 2 for school infrastructure purposes as provided in this 189 3 chapter. 189 4 Sec. 248. NEW SECTION. 292A.4 RULES. 189 5 The department shall adopt rules, pursuant to 189 6 chapter 17A, necessary for administering the state 189 7 assistance for educational infrastructure program and 189 8 fund." 189 9 #2. Title page, by striking lines 1 and 2 and 189 10 inserting the following: "An Act concerning 189 11 regulatory, taxation, and statutory requirements 189 12 affecting individuals and business relating to 189 13 taxation of property, income and sales and use, 189 14 liability reform, workers' compensation, financial 189 15 services, unemployment compensation employer 189 16 surcharges, economic development, and school 189 17 infrastructure assistance, and including effective 189 18 date, applicability, and retroactive applicability 189 19 provisions." 189 20 #3. By renumbering as necessary. 189 21 189 22 189 23 189 24 COMMITTEE ON WAYS AND MEANS 189 25 LARRY McKIBBEN, CHAIRPERSON 189 26 HF 692.312 80 189 27 sc/cf
Text: S03390 Text: S03392 Text: S03300 - S03399 Text: S Index Bills and Amendments: General Index Bill History: General Index
© 2003 Cornell College and League of Women Voters of Iowa
Comments about this site or page?
webmaster@legis.iowa.gov.
Please remember that the person listed above does not vote on bills. Direct all comments concerning legislation to State Legislators.
Last update: Fri May 30 02:30:30 CDT 2003
URL: /DOCS/GA/80GA/Legislation/S/03300/S03391/030529.html
jhf