AGRICULTURE AND LAND
STEWARDSHIP DEPARTMENT[21]

Filed, Meat and poultry inspection, 1.6,
76.1 to 76.4, 76.13 ARC 8618A 1375

ALL AGENCIES

Schedule for rule making 1308

Publication procedures 1309

Agency identification numbers 1314

CITATION OF ADMINISTRATIVE RULES 1307

environmental protection
commission[567]

NATURAL RESOURCES DEPARTMENT[561]"umbrella"

Notice, Waste management alternatives financial
assistance, 209.1 to 209.3, 209.6 to 209.17
ARC 8622A 1317

Filed, Environmental self-audits, ch 12
ARC 8623A 1375

ETHICS AND CAMPAIGN DISCLOSURE
BOARD, IOWA[351]

Notice, General, 1.4(4), 3.4, 4.1(4), 4.42, 4.70(1),
4.86, 5.1(1), 5.3, 6.2(5), 6.4, 7.2, 7.4, 7.5,
7.8, 7.14, 7.21, 7.22, 9.1 to 9.7, 11.4 to 11.6,
12.1(7) ARC 8610A 1319

EXECUTIVE DEPARTMENT

Special election proclamation 1409

HUMAN SERVICES DEPARTMENT[441]

Notice, Uniform rules, chs 3 to 5
ARC 8614A 1326

Notice, HAWK-I program, 86.1, 86.15
ARC 8616A 1334

Filed Emergency After Notice, HAWK-I program,
76.1, 76.11(4), ch 86 ARC 8615A 1361

Filed Emergency, HAWK-I program, 86.1,
86.15 ARC 8617A 1373

INSURANCE DIVISION[191]

COMMERCE DEPARTMENT[181]"umbrella"

Notice, Limited service organizations, ch 41
ARC 8619A 1335

Filed, Licensing of insurance producers;
continuing education, chs 10 and 11
ARC 8621A 1377

Filed, Life and accident and health self-funded
plans, 35.20(1) ARC 8620A 1387

PERSONNEL DEPARTMENT[581]

Filed, Elimination of personnel commission;
trainee/journey classification; reinstate-
ment; appointments, 1.1, 3.1(2), 3.4(6),
3.5, 3.6(3), 4.6(12), 8.3, 8.10(3), 8.11, 8.13
ARC 8611A 1388

Filed, Deferred compensation, 15.6, rescind
15.13 ARC 8612A 1390

PETROLEUM UST FUND BOARD,
IOWA COMPREHENSIVE[591]

Notice, Installers and inspectors, 15.5(4)
ARC 8606A 1340

PROFESSIONAL LICENSURE DIVISION[645]

PUBLIC HEALTH DEPARTMENT[641]"umbrella"

Notice, Mortuary science examiners,
101.101(8) ARC 8605A 1341

PUBLIC FUNDS--AVAILABILITY

Public Health Department[641]
Drug and violence prevention 1316

PUBLIC HEALTH DEPARTMENT[641]

Notice of Public Funds Availability 1316

Notice, Radiation, 38.1(2), 38.2, 38.5, 38.8(6),
39.1(3), 39.4, 40.1(5), 40.10(4), 40.26(1),
40.28 to 40.34, 40.97, 40.110(1), 41.1 to
41.3, 42.1(2), 42.2(3), 45.1, 46.1, 46.5(6)
ARC 8609A 1341

Notice, Maternal and child health program,
ch 76 ARC 8613A 1347

PUBLIC HEARINGS

Summarized list 1310

PUBLIC SAFETY DEPARTMENT[661]

Filed, Fire safety--small group homes, 5.620
ARC 8602A 1399

SECRETARY OF STATE[721]

Notice, Notarial acts, 43.1 to 43.87
ARC 8603A 1354

SUPREME COURT

Decisions summarized 1411

TRANSPORTATION DEPARTMENT[761]

Notice, Vehicle registration and special registration
plates, 400.17, 401.15 to 401.17 ARC 8607A 1358

Notice, Reopened hearings for OWI revocations,
620.4(5) ARC 8600A 1359

Notice, Aircraft registration, 750.9, 750.10(3)
ARC 8608A 1360

Filed, Vehicle registration; special plates, 400.1,
401.10 to 401.12, 401.21, 401.25
ARC 8604A 1400

UTILITIES DIVISION[199]

COMMERCE DEPARTMENT[181]"umbrella"

Filed, Energy efficiency plans and standards,
35.1 to 35.6, 35.8, 35.9 ARC 8601A 1400

The Iowa Administrative Bulletin is published biweekly in pamphlet form pursuant to Iowa Code chapters 2B and 17A and contains Notices of Intended Action on rules, Filed and Filed Emergency rules by state agencies.

It also contains Proclamations and Executive Orders of the Governor which are general and permanent in nature; Economic Impact Statements to proposed rules and filed emergency rules; Objections filed by Administrative Rules Review Committee, Governor or the Attorney General; and Delay by the Committee of the effective date of filed rules; Regulatory Flexibility Analyses and Agenda for monthly Administrative Rules Review Committee meetings. Other "materials deemed fitting and proper by the Administrative Rules Review Committee" include summaries of Public Hearings, Attorney General Opinions and Supreme Court Decisions.

The Bulletin may also contain Public Funds Interest Rates [12C.6]; Workers' Compensation Rate Filings [515A.6(7)]; Usury [535.2(3)"a"]; Agricultural Credit Corporation Maximum Loan Rates [535.12]; and Regional Banking--Notice of Application and Hearing [524.1905(2)].

PLEASE NOTE: Italics indicate new material added to existing rules; strike through letters indicate deleted material.

KATHLEEN K. BATES, Administrative Code Editor Telephone: (515)281-3355

ROSEMARY DRAKE, Deputy Editor (515)281-7252

Fax: (515)281-4424

The Iowa Administrative Bulletin is sold as a separate publication and may be purchased by subscription or single copy. All subscriptions will expire on June 30 of each year. Subscriptions must be paid in advance and are prorated quarterly as follows:

First quarter July 1, 1998, to June 30, 1999 $244.10 plus $12.21 sales tax

Second quarter October 1, 1998, to June 30, 1999 $185.00 plus $9.25 sales tax

Third quarter January 1, 1999, to June 30, 1999 $125.00 plus $6.25 sales tax

Fourth quarter April 1, 1999, to June 30, 1999 $ 65.00 plus $3.25 sales tax

Single copies may be purchased for $19.00 plus $0.95 tax. Back issues may be purchased if the issues are available.

The Iowa Administrative Code and Supplements are sold in complete sets and subscription basis only. All subscriptions for the Supplement (replacement pages) must be for the complete year and will expire on June 30 of each year.

Prices for the Iowa Administrative Code and its Supplements are as follows:

Iowa Administrative Code - $1,119.00 plus $55.95 sales tax

(Price includes 22 volumes of rules and index, plus a one-year subscription to the Code Supplement and the Iowa Administrative Bulletin. Additional or replacement binders can be purchased for $10.90 plus $0.55 tax.)

Iowa Administrative Code Supplement - $393.50 plus $19.68 sales tax

(Subscription expires June 30, 1999)

All checks should be made payable to the Iowa State Printing Division. Send all inquiries and subscription orders to:

Customer Service Center

Department of General Services

Hoover State Office Building, Level A

Des Moines, IA 50319

Telephone: (515)242-5120

NOTICE SUBMISSION DEADLINE	NOTICE PUB. DATE	HEARING OR COMMENTS 20 DAYS	FIRST POSSIBLE ADOPTION DATE 35 DAYS	ADOPTED FILING DEADLINE	ADOPTED PUB. DATE	FIRST POSSIBLE EFFECTIVE DATE	POSSIBLE EXPIRATION OF NOTICE 180 DAYS
Dec. 25 '98	Jan. 13 '99	Feb. 2 '99	Feb. 17 '99	Feb. 19 '99	Mar. 10 '99	Apr. 14 '99	July 12 '99
Jan. 8	Jan. 27	Feb. 16	Mar. 3	Mar. 5	Mar. 24	Apr. 28	July 26
Jan. 22	Feb. 10	Mar. 2	Mar. 17	Mar. 19	Apr. 7	May 12	Aug. 9
Feb. 5	Feb. 24	Mar. 16	Mar. 31	Apr. 2	Apr. 21	May 26	Aug. 23
Feb. 19	Mar. 10	Mar. 30	Apr. 14	Apr. 16	May 5	June 9	Sept. 6
Mar. 5	Mar. 24	Apr. 13	Apr. 28	Apr. 30	May 19	June 23	Sept. 20
Mar. 19	Apr. 7	Apr. 27	May 12	May 14	June 2	July 7	Oct. 4
Apr. 2	Apr. 21	May 11	May 26	May 28	June 16	July 21	Oct. 18
Apr. 16	May 5	May 25	June 9	June 11	June 30	Aug. 4	Nov. 1
Apr. 30	May 19	June 8	June 23	June 25	July 14	Aug. 18	Nov. 15
May 14	June 2	June 22	July 7	July 9	July 28	Sept. 1	Nov. 29
May 28	June 16	July 6	July 21	July 23	Aug. 11	Sept. 15	Dec. 13
June 11	June 30	July 20	Aug. 4	Aug. 6	Aug. 25	Sept. 29	Dec. 27
June 25	July 14	Aug. 3	Aug. 18	Aug. 20	Sept. 8	Oct. 13	Jan. 10 '00
July 9	July 28	Aug. 17	Sept. 1	Sept. 3	Sept. 22	Oct. 27	Jan. 24 '00
July 23	Aug. 11	Aug. 31	Sept. 15	Sept. 17	Oct. 6	Nov. 10	Feb. 7 '00
Aug. 6	Aug. 25	Sept. 14	Sept. 29	Oct. 1	Oct. 20	Nov. 24	Feb. 21 '00
Aug. 20	Sept. 8	Sept. 28	Oct. 13	Oct. 15	Nov. 3	Dec. 8	Mar. 6 '00
Sept. 3	Sept. 22	Oct. 12	Oct. 27	Oct. 29	Nov. 17	Dec. 22	Mar. 20 '00
Sept. 17	Oct. 6	Oct. 26	Nov. 10	Nov. 12	Dec. 1	Jan. 5 '99	Apr. 3 '00
Oct. 1	Oct. 20	Nov. 9	Nov. 24	Nov. 26	Dec. 15	Jan. 19 '99	Apr. 17 '00
Oct. 15	Nov. 3	Nov. 23	Dec. 8	Dec. 10	Dec. 29	Feb. 2 '99	May 1 '00
Oct. 29	Nov. 17	Dec. 7	Dec. 22	Dec. 24	Jan. 12 '99	Feb. 16 '99	May 15 '00
Nov. 12	Dec. 1	Dec. 21	Jan. 5 '00	Jan. 7 '00	Jan. 26 '00	Mar. 1 '00	May 29 '00
Nov. 26	Dec. 15	Jan. 4 '00	Jan. 19 '00	Jan. 21 '00	Feb. 9 '00	Mar. 15 '00	June 12 '00
Dec. 10	Dec. 29	Jan. 18 '00	Feb. 2 '00	Feb. 4 '00	Feb. 23 '00	Mar. 29 '00	June 26 '00
Dec. 24	Jan. 12 '00	Feb. 1 '00	Feb. 16 '00	Feb. 18 '00	Mar. 8 '00	Apr. 12 '00	July 10 '00
Jan. 7 '00	Jan. 26 '00	Feb. 15 '00	Mar. 1 '00	Mar. 3 '00	Mar. 22 '00	Apr. 26 '00	July 24 '00

PRINTING SCHEDULE FOR IAB
ISSUE NUMBER	SUBMISSION DEADLINE	ISSUE DATE
17	Friday, January 22, 1999	February 10, 1999
18	Friday, February 5, 1999	February 24, 1999
19	Friday, February 19, 1999	March 10, 1999

PLEASE NOTE:

Rules will not be accepted after 12 o'clock noon on the Friday filing deadline days unless prior approval has been received from the Administrative Rules Coordinator's office.

If the filing deadline falls on a legal holiday, submissions made on the following Monday will be accepted.

TO: Administrative Rules Coordinators and Text Processors of State Agencies

FROM: Kathleen K. Bates, Iowa Administrative Code Editor

SUBJECT: Publication of Rules in Iowa Administrative Bulletin

The Administrative Code Division uses Interleaf 6 to publish the Iowa Administrative Bulletin and can import documents directly from most other word processing systems, including Microsoft Word, Word for Windows (Word 7 or earlier), and WordPerfect.

1. To facilitate the processing of rule-making documents, we request a 3.5\ High Density (not Double Density) IBM PC-compatible diskette of the rule making. Please indicate on each diskette the following information: agency name, file name, format used for exporting, and chapter(s) amended. Diskettes may be delivered to the Administrative Code Division, 4th Floor, Lucas State Office Building or included with the documents submitted to the Governor's Administrative Rules Coordinator.

2. Alternatively, if you have Internet E-mail access, you may send your document as an attachment to an E-mail message, addressed to both of the following:

bcarr@legis.state.ia.us

kbates@legis.state.ia.us

Please note that changes made prior to publication of the rule-making documents are reflected on the hard copy returned to agencies by the Governor's office, but not on the diskettes; diskettes are returned unchanged.

Your cooperation helps us print the Bulletin more quickly and cost-effectively than was previously possible and is greatly appreciated.

To All Agencies:

The Administrative Rules Review Committee voted to request that Agencies comply with Iowa Code section 17A.4(1)"b" by allowing the opportunity for oral presentation (hearing) to be held at least twenty days after publication of Notice in the Iowa Administrative Bulletin.

AGENCY	HEARING LOCATION	DATE AND TIME OF HEARING
EDUCATIONAL EXAMINERS BOARD[282]
Social sciences endorsement, 14.21(18)"k" IAB 12/16/98 ARC 8575A	Conference Room 3 North--3rd Floor Grimes State Office Bldg. Des Moines, Iowa	January 14, 1999 3 p.m.
Coaching authorization, 19.1(5), 19.2, 19.5 IAB 12/16/98 ARC 8576A	Conference Room 3 North--3rd Floor Grimes State Office Bldg. Des Moines, Iowa	January 14, 1999 1 p.m.
ENVIRONMENTAL PROTECTION COMMISSION[567]
Livestock feeding operations, 22.1(3), 22.3(2), 23.5(1), amendments to ch 65, 68.1, 68.2, 68.9(2), 70.2, 72.2(9), 72.3(5) IAB 12/30/98 ARC 8595A	Downstairs Meeting Room First National Bank 211 1st Ave. N.W. Hampton, Iowa	January 19, 1999 7 p.m.
	Auditorium Wallace State Office Bldg. Des Moines, Iowa	January 20, 1999 1 p.m.
	Iowa Rooms A, B, C & D--Iowa Hall Kirkwood Community College 6301 Kirkwood Blvd. S.W. Cedar Rapids, Iowa	January 21, 1999 7 p.m.
	Community Center Auditorium 530 W. Bluff St. Cherokee, Iowa	January 22, 1999 7 p.m.
Waste management alternatives financial assistance, 209.1 to 209.3, 209.6 to 209.17 IAB 1/13/99 ARC 8622A	Conference Room--5th Floor Wallace State Office Bldg. Des Moines, Iowa	February 17, 1999 1 p.m.
INSURANCE DIVISION[191]
Limited service organizations, ch 41 IAB 1/13/99 ARC 8619A	Insurance Division 330 E. Maple St. Des Moines, Iowa	February 12, 1999 10 a.m.
Investment advisers and investment adviser representatives, 50.100, 50.101, 50.103 to 50.108 IAB 12/16/98 ARC 8564A	Lobby Conference Room 330 E. Maple St. Des Moines, Iowa	January 14, 1999 10 a.m.
NATURAL RESOURCE COMMISSION[571]
Local recreation infrastructure grants program, 29.7(4), 29.9(8) IAB 12/30/98 ARC 8599A	Conference Room--5th Floor Wallace State Office Bldg. Des Moines, Iowa	January 19, 1999 10 a.m.
NATURAL RESOURCE COMMISSION[571] (Cont'd)
Boating speed zones on West Lake Okoboji, 40.31(5) IAB 12/30/98 ARC 8598A	Conference Room--4th Floor West Wallace State Office Bldg. Des Moines, Iowa	January 20, 1999 1 p.m.
Meandered streams--motor vehicle use, 49.5 IAB 12/2/98 ARC 8527A	Conference Room--4th Floor East Wallace State Office Bldg. Des Moines, Iowa	January 21, 1999 10 a.m.
Nonresident deer hunting, 94.1, 94.6, 94.8 IAB 12/2/98 ARC 8530A	Conference Room--4th Floor Wallace State Office Bldg. Des Moines, Iowa	January 14, 1999 1 p.m.
PETROLEUM UST FUND BOARD, IOWA COMPREHENSIVE[591]
Installers and inspectors, 15.5(4) IAB 1/13/99 ARC 8606A	Conference Room Suite B 1000 Illinois St. Des Moines, Iowa	February 2, 1999 10 a.m.
PROFESSIONAL LICENSURE DIVISION[645]
Cosmetology--salon and school sanitation procedures, 63.4, 63.5(6), 63.12 IAB 12/30/98 ARC 8588A	Conference Room--4th Floor Side One Lucas State Office Bldg. Des Moines, Iowa	January 19, 1999 10 a.m. to 12 noon
PUBLIC HEALTH DEPARTMENT[641]
Radiation, amendments to chs 38 to 42, 45, 46 IAB 1/13/99 ARC 8609A	Conference Room--3rd Floor Side One Lucas State Office Bldg. Des Moines, Iowa	February 2, 1999 9 a.m.
Maternal and child health program, ch 76 IAB 1/13/99 ARC 8613A (ICN Network)	ICN Classroom 1, Room 0210 Scott Community College 500 Belmont Rd. Bettendorf, Iowa	February 2, 1999 1 to 2 p.m.
	ICN Classroom National Guard Armory 2500 Summer St. Burlington, Iowa	February 2, 1999 1 to 2 p.m.
	Schindler Education Center 130C University of Northern Iowa Hudson Rd. & 23rd St. Cedar Falls, Iowa	February 2, 1999 1 to 2 p.m.
	Thomas Jefferson High School 1243 20th St. S.W. Cedar Rapids, Iowa	February 2, 1999 1 to 2 p.m.
	State Room Northern Trails AEA 2 9184B 265th St. Clear Lake, Iowa	February 2, 1999 1 to 2 p.m.
PUBLIC HEALTH DEPARTMENT[641] (ICN Network) (Cont'd)	Turner Room Green Valley AEA 14 1405 N. Lincoln Creston, Iowa	February 2, 1999 1 to 2 p.m.
	Room 115 Trades and Industry Bldg. Northeast Iowa Community College 1625 Hwy. 150 Calmar, Iowa	February 2, 1999 1 to 2 p.m.
	ICN Room--6th Floor Lucas State Office Bldg. Des Moines, Iowa	February 2, 1999 1 to 2 p.m.
	Library Bldg.--Room 22 Iowa Lakes Community College 300 S. 18th St. Estherville, Iowa	February 2, 1999 1 to 2 p.m.
	ICN Classroom 204 Library Bldg.--2nd Floor Arrowhead AEA ICCC Campus 330 Ave. M Fort Dodge, Iowa	February 2, 1999 1 to 2 p.m.
	ICN Classroom AEA 15 2814 N. Court St. Ottumwa, Iowa	February 2, 1999 1 to 2 p.m.
	Room 129 Conference Center NEICC 10250 Sundown Rd. Peosta, Iowa	February 2, 1999 1 to 2 p.m.
	Atlantic Public Library 507 Poplar Atlantic, Iowa	February 2, 1999 1 to 2 p.m.
	Room 209A Western Hills AEA 12 1520 Morningside Ave. Sioux City, Iowa	February 2, 1999 1 to 2 p.m.
SECRETARY OF STATE[721]
Notarial acts, 43.1 to 43.87 IAB 1/13/99 ARC 8603A	Secretary of State's Office--2nd Floor Hoover State Office Bldg. Des Moines, Iowa	February 2, 1999 1:30 p.m.
TRANSPORTATION DEPARTMENT[761]
Vehicle registration and special registration plates, 400.17, 401.15, 401.16(1), 401.17 IAB 1/13/99 ARC 8607A	Conference Room Lower Level Park Fair Mall 100 Euclid Ave. Des Moines, Iowa	February 5, 1999 10 a.m. (If requested)
TRANSPORTATION DEPARTMENT[761] (Cont'd)
Towing wrecked or disabled vehicles, ch 454 IAB 12/30/98 ARC 8586A	Conference Room Upper Level Park Fair Mall 100 Euclid Ave. Des Moines, Iowa	January 21, 1999 3 p.m. (If requested)
Regulations applicable to carriers, 520.1(1), 520.2, 520.4(2), 520.7, 520.8 IAB 12/30/98 ARC 8587A	Conference Room Upper Level Park Fair Mall 100 Euclid Ave. Des Moines, Iowa	January 21, 1999 8 a.m. (If requested)
Reopened hearings for OWI revocations, 620.4(5) IAB 1/13/99 ARC 8600A	Conference Room Lower Level Park Fair Mall 100 Euclid Ave. Des Moines, Iowa	February 4, 1999 10 a.m. (If requested)
Aircraft registration, 750.9, 750.10(3) IAB 1/13/99 ARC 8608A	Conference Room Lower Level Park Fair Mall 100 Euclid Ave. Des Moines, Iowa	February 5, 1999 1 p.m. (If requested)

CITATION of Administrative Rules

The Iowa Administrative Code shall be cited as (agency identification number) IAC
(chapter, rule, subrule, lettered paragraph, or numbered subparagraph).

441 IAC 79 (Chapter)

441 IAC 79.1(249A) (Rule)

441 IAC 79.1(1) (Subrule)

441 IAC 79.1(1)"a" (Paragraph)

441 IAC 79.1(1)"a"(1) (Subparagraph)

The Iowa Administrative Bulletin shall be cited as IAB (volume), (number), (publication
date), (page number), (ARC number).

IAB Vol. XII, No. 23 (5/16/90) p. 2050, ARC 872A

Due to reorganization of state government by 1986 Iowa Acts, chapter 1245, it was necessary to revise the agency identification numbering system, i.e., the bracketed number following the agency name.

"Umbrella" agencies and elected officials are set out below at the left-hand margin in CAPITAL letters.

Divisions (boards, commissions, etc.) are indented and set out in lowercase type under their statutory "umbrellas."

Other autonomous agencies which were not included in the original reorganization legislation as "umbrella" agencies are included alphabetically in small capitals at the left-hand margin, e.g., BEEF INDUSTRY COUNCIL, IOWA[101].

The following list will be updated as changes occur:

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Agricultural Development Authority[25]

Soil Conservation Division[27]

ATTORNEY GENERAL[61]

AUDITOR OF STATE[81]

BEEF INDUSTRY COUNCIL, IOWA[101]

BLIND, DEPARTMENT FOR THE[111]

CITIZENS' AIDE[141]

CIVIL RIGHTS COMMISSION[161]

COMMERCE DEPARTMENT[181]

Alcoholic Beverages Division[185]

Banking Division[187]

Credit Union Division[189]

Insurance Division[191]

Professional Licensing and Regulation Division[193]

Accountancy Examining Board[193A]

Architectural Examining Board[193B]

Engineering and Land Surveying Examining Board[193C]

Landscape Architectural Examining Board[193D]

Real Estate Commission[193E]

Real Estate Appraiser Examining Board[193F]

Savings and Loan Division[197]

Utilities Division[199]

CORRECTIONS DEPARTMENT[201]

Parole Board[205]

CULTURAL AFFAIRS DEPARTMENT[221]

Arts Division[222]

Historical Division[223]

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

City Development Board[263]

Iowa Finance Authority[265]

EDUCATION DEPARTMENT[281]

Educational Examiners Board[282]

College Student Aid Commission[283]

Higher Education Loan Authority[284]

Iowa Advance Funding Authority[285]

Libraries and Information Services Division[286]

Public Broadcasting Division[288]

School Budget Review Committee[289]

EGG COUNCIL[301]

ELDER AFFAIRS DEPARTMENT[321]

EMPLOYMENT SERVICES DEPARTMENT[341]

Job Service Division[345]

EMPOWERMENT BOARD, IOWA[349]

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

EXECUTIVE COUNCIL[361]

FAIR BOARD[371]

GENERAL SERVICES DEPARTMENT[401]

HUMAN INVESTMENT COUNCIL[417]

HUMAN RIGHTS DEPARTMENT[421]

Community Action Agencies Division[427]

Criminal and Juvenile Justice Planning Division[428]

Deaf Services Division[429]

Persons With Disabilities Division[431]

Latino Affairs Division[433]

Status of Blacks Division[434]

Status of Women Division[435]

HUMAN SERVICES DEPARTMENT[441]

INSPECTIONS AND APPEALS DEPARTMENT[481]

Employment Appeal Board[486]

Foster Care Review Board[489]

Racing and Gaming Commission[491]

State Public Defender[493]

LAW ENFORCEMENT ACADEMY[501]

LIVESTOCK HEALTH ADVISORY COUNCIL[521]

MANAGEMENT DEPARTMENT[541]

Appeal Board, State[543]

City Finance Committee[545]

County Finance Committee[547]

NARCOTICS ENFORCEMENT ADVISORY COUNCIL[551]

NATIONAL AND COMMUNITY SERVICE, IOWA COMMISSION ON[555]

NATURAL RESOURCES DEPARTMENT[561]

Energy and Geological Resources Division[565]

Environmental Protection Commission[567]

Natural Resource Commission[571]

Preserves, State Advisory Board[575]

PERSONNEL DEPARTMENT[581]

PETROLEUM UNDERGROUND STORAGE TANK FUND
BOARD, IOWA COMPREHENSIVE[591]

PREVENTION OF DISABILITIES POLICY COUNCIL[597]

PUBLIC DEFENSE DEPARTMENT[601]

Emergency Management Division[605]

Military Division[611]

PUBLIC EMPLOYMENT RELATIONS BOARD[621]

PUBLIC HEALTH DEPARTMENT[641]

Substance Abuse Commission[643]

Professional Licensure Division[645]

Dental Examiners Board[650]

Medical Examiners Board[653]

Nursing Board[655]

Pharmacy Examiners Board[657]

PUBLIC SAFETY DEPARTMENT[661]

RECORDS COMMISSION[671]

REGENTS BOARD[681]

Archaeologist[685]

REVENUE AND FINANCE DEPARTMENT[701]

Lottery Division[705]

SECRETARY OF STATE[721]

SEED CAPITAL CORPORATION, IOWA[727]

SHEEP AND WOOL PROMOTION BOARD, IOWA[741]

TELECOMMUNICATIONS AND TECHNOLOGY COMMISSION, IOWA[751]

TRANSPORTATION DEPARTMENT[761]

Railway Finance Authority[765]

TREASURER OF STATE[781]

UNIFORM STATE LAWS COMMISSION[791]

VETERANS AFFAIRS COMMISSION[801]

VETERINARY MEDICINE BOARD[811]

VOTER REGISTRATION COMMISSION[821]

WORKFORCE DEVELOPMENT DEPARTMENT[871]

Labor Services Division[875]

Workers' Compensation Division[876]

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

ARC 8622A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 455B.103, 455B.304 and 455E.9, the Environmental Protection Commission hereby gives Notice of Intended Action to amend Chapter 209, "Landfill Alternatives Financial Assistance Program," Iowa Administrative Code.

These amendments are intended to update the existing financial assistance program to better meet today's solid waste management needs while developing an integrated financial assistance program with established investment objectives to provide the best possible service. An advisory committee was established to be a part of revising the current program by providing feedback and recommendations. The advisory committee consisted of numerous clients and stakeholders that utilize the program and would be impacted by any changes to the current program.

Any interested person may make written suggestions or comments on the proposed amendments on or before February 17, 1999. Written comments should be directed to Thomas Anderson, Waste Management Assistance Division, Department of Natural Resources, Wallace State Office Building, 900 East Grand Avenue, Des Moines, Iowa 50319-0034; fax (515)281-8895.

Also, there will be a public hearing on February 17, 1999, at 1 p.m. in the Fifth Floor Conference Room of the Wallace State Office Building at which time persons may present their views either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the amendments.

Any persons who intend to attend a public hearing and have special requirements such as hearing or mobility impairments should contact the Department of Natural Resources and advise of specific needs.

These amendments are intended to implement Iowa Code chapters 455B and 455E.

The following amendments are proposed.

ITEM 1. Amend 567--Chapter 209, title, as follows:

ITEM 2. Amend rule 567--209.1(455B,455E) as follows:

567--209.1(455B,455E) Goal. The goal of this program is to reduce the amount of solid waste being generated and the amount of solid waste being landfilled through implementation of solid waste management projects. This goal will be achieved utilizing the following hierarchy of waste management priorities in descending order of preference:

1. Waste reduction;

2. Recycling and reuse;

3. Combustion with energy recovery; and

4. Combustion for volume reduction.

ITEM 3. Amend rule 567--209.2(455B,455E) as follows:

567--209.2(455B,455E) Purpose. The purpose of this program is to provide financial assistance to eligible applicants for the purpose of implementing education programs and solid waste management best practices, education and market development projects, to achieve a reduction in solid waste generation and a reduction in solid waste landfilling. Projects receiving financial assistance must address the program's goal as described in 209.1(455B,455E). Emphasis for selected projects will be placed on tonnage avoided, sustainability, and replicability.

ITEM 4. Amend rule 567--209.3(455B,455E) as follows:

Amend the following definitions:

"Eligible projects" means any project which, when implemented, will address a reduction in reduce the amount of solid waste being generated or the amount of solid waste being landfilled.

"Energy recovery" means the direct conversion of solid wastes into useful process heat or electricity.

"Grants" means financial assistance in the form of cash payments to recipients.

"Loans" means an award of financial assistance with the requirement that the award be repaid including interest as identified in the written agreement between the department and the recipient.

Adopt the following new definition in alphabetical order:

"Forgivable loan" means financial assistance in the form of cash payments to recipients for reimbursement of eligible project expenses. Repayment of loan moneys awarded will be forgiven if the recipient has met all identified project goals, milestones and conditions identified in the written agreement between the department and the recipient or as amended by written agreement.

ITEM 5. Amend rule 567--209.6(455B,455E) as follows:

567--209.6(455B,455E) Eligible projects. The department may provide financial assistance to applicants for the following types of projects that are consistent with the goal and purpose of this program:

1. Public education;

2. Waste reduction;

3. Recycling and reuse;

4. Research and development;

5. Demonstration;

6. Market development for recyclable materials;

7. Projects that manufacture products with recycled content;

8. Environmental testing related to various landfill alternatives for solid waste. Such projects shall include, but are not limited to, testing air emissions generated by the combustion of municipal solid waste, analysis of the ash generated as a result of the combustion of municipal solid waste, analysis of alternative materials to be used in leachate control;

9. Production of energy through combustion, including production of tire-derived fuels and refuse-derived fuels; and

10. Combustion for volume reduction.

1. Best practices--practices and programs that will move Iowa toward long-term pollution prevention, waste reduction and recycling sustainability;

2. Education--practices and programs that are consistent with a coordinated statewide message on pollution prevention, waste reduction, and recycling to ensure ongoing support of these integrated solid waste management activities; and

3. Market development--practices and programs that develop a demand for value-added recyclables sufficient to provide increased and stable commodity markets.

ITEM 6. Amend rule 567--209.7(455B,455E) as follows:

567--209.7(455B,455E) Type of financial assistance. The type of financial assistance offered to an applicant (forgivable loan, zero interest loan, low interest loan) is dependent on the type of project and application proposal submitted.: The department reserves the right to offer any combination of financial assistance types to any selected project.

209.7(1) Grants will be offered to applicants for waste reduction projects; public education projects; research and development projects; and demonstration projects that are innovative or new to the state of Iowa.

209.7(2) Loans will be offered to applicants for all other eligible projects and may be offered to applicants requesting grant assistance.

ITEM 7. Amend rule 567--209.8(455B,455E) as follows:

567--209.8(455B,455E) Loans. The term of all loans, executed under these rules, shall vary be determined on a case-by-case basis and shall be based on the specific capital costs financed, as well as the terms of other financing provided for the project. The written agreement between the department and the recipient will establish other conditions or terms needed to manage or implement the project.

ITEM 8. Amend subrule 209.9(2) as follows:

209.9(2) The applicant could implement the project at a reduced level of financial assistance and achieve project objectives and this program's goals of this program.

ITEM 9. Amend rule 567--209.10(455B,455E) as follows:

567--209.10(455B,455E) Fund disbursement limitations. No funds shall be disbursed until the department has:

1. Determined the total estimated cost of the project;

2. Determined that financing for the cost share amount is ensured by the recipient;

3. Received final design plans from the recipient, if applicable;

4. Received confirmation that all permits or permit amendments have been obtained by the recipient;

4 5. Received commitments from the recipient to implement the project;

5 6. Executed a written agreement with the recipient; and

6 7. Determined that the recipient is currently in compliance with all applicable federal, state, and local statutes and regulations.

ITEM 10. Amend rule 567--209.11(455B,455E) as follows:

567--209.11(455B,455E) Minimum applicant cost share. An applicant for financial assistance shall agree to provide a minimum cost share of funds committed to the project. Financial assistance moneys received by the applicant under these rules or through the landfill alternatives grant program or the landfill alternatives financial assistance program are ineligible to be utilized for any portion of the required applicant cost share. Minimum applicant cost share of funds shall be in accordance with the following schedule: the schedule outlined in the application guideline manual.

209.11(1) Grants.

a. Waste reduction--35 percent.

b. Public education--35 percent.

c. Research and development--35 percent.

d. Demonstration--35 percent.

209.11(2) Loans.

a. Recycling and reuse--35 percent.

b. Combustion with energy recovery--50 percent.

c. Combustion for volume reduction--60 percent.

ITEM 11. Amend rule 567--209.12(455B,455E) as follows:

567--209.12(455B,455E) Eligible costs. Applicants may request financial assistance in the implementation and operation of a project which includes, but is not limited to, funds for the purpose of:

1. Waste reduction equipment purchase and installation;

2. Collection, processing, or hauling equipment including labor for installation;

3. Development, printing and distribution of educational materials;

4. Planning and implementation of educational forums including, but not limited to, workshops;

5. Materials and labor for construction or renovation of buildings;

6. Salaries directly related to implementation and operation of the project;

7. Laboratory analysis costs; and

8. Engineering or consulting fees.

ITEM 12. Amend rule 567--209.13(455B,455E) as follows:

567--209.13(455B,455E) Ineligible costs. Financial assistance shall not be provided or used for costs including, but not limited to, the following:

1. Taxes;

2. Vehicle registration;

3. Overhead expenses;

4. Indirect costs;

5. Legal costs;

6. Contingency funds;

7. Application Proposal preparation;

8. Contractual project administration;

9. Land acquisition;

10. Office furniture, office computers, fax machines and other office furnishings and equipment;

10 11. Costs for which payment has or will be received under another federal, state or private financial assistance program; and

11 12. Costs incurred before a written agreement has been executed between the applicant and the department.

ITEM 13. Amend rule 567--209.14(455B,455E), intro-ductory paragraphs, as follows:

567--209.14(455B,455E) Selection criteria. To receive consideration under these rules, applications proposals submitted to the department for financial assistance must be provided to the agency responsible for submitting an approved solid waste comprehensive plan or subsequent plan for agency review and comment. Responsible agency review and comments are required from the area in which the proposed project is located or the area or areas in which the proposed project will be implemented.

Separate selection criteria and separate application proposal forms will be used to evaluate projects based on the type of project proposal being submitted and are provided in the application guideline manual. The separate selection criteria are identified below for the four applications: education projects; waste volume reduction projects; research and development and demonstration projects; and projects eligible for loans as identified in 209.7(2). For each application project type, points assigned to the selection criteria total 100 points. The department shall evaluate coordinate evaluation of applications proposals and applicants will be awarded financial assistance based on the following selection criteria: contained in the application guideline manual.

Applicants submitting preproposals deemed viable after review will be required to submit additional information as requested by the department. Additional information submitted will be reviewed for project viability prior to receiving a financial assistance commitment from the department.

ITEM 14. Rescind subrules 209.14(1) through 209.14(4).

ITEM 15. Amend rule 567--209.15(455B,455E) as follows:

567--209.15(455B,455E) Written agreement. Recipients shall enter into a contract with the department for the purposes of implementing the project for which financial assistance has been awarded. The contract shall be signed by the department director, the administrator of the waste management assistance division, and the authorized officer of the recipient. In cases where the department has awarded a other than a forgivable loan, the recipient will be required to make regularly scheduled installment payments to retire the loan and any interest assigned to the loan as identified in the executed contract. The recipient will be required to submit periodic progress reports as identified in the executed contract. Progress reports are considered part of the public record. The department may terminate any contract and seek the return of any funds released under the contract for failure by the recipient to perform under the terms and conditions of the contract. Amendments to contracts may be adopted by written consent of the department director, the administrator of the waste management assistance division, and the authorized officer of the recipient.

ITEM 16. Amend rule 567--209.16(455B,455E) as follows:

567--209.16(455B,455E) Applications Proposals. Applicants shall submit applications proposals on forms provided by the department. The proposals are considered part of the public record. Applications will be due the first Monday in June and the first Monday in December each year at 4:30 p.m., Proposals will be accepted during normal business hours throughout the year by the department unless otherwise designated by the waste management assistance division. Applications received by the waste management assistance division after the stated deadline will not be considered for funding during the current funding period, will not be retained for future consideration, and will not be returned to the applicant. It is the applicant's responsibility to resubmit a completed application for funding consideration during a subsequent funding period. Applications must be submitted on forms supplied by the department and applications submitted are considered part of the public record.

ITEM 17. Amend subrule 209.17(5) as follows:

209.17(5) An applicant does not provide sufficient information requested in the application forms on forms provided by the department pursuant to rules 209.8(455B,455E) to 209.14 16(455B,455E);

ITEM 18. Amend subrule 209.17(7) as follows:

209.17(7) The project goals or scope is not consistent with rule rules 209.1(455B,455E), 209.2(455B,455E), 209.6 (455B,455E), and 209.14(455B,455E) 209.8(455B,455E), 209.9(455B,455E), or 209.13(455B,455E).

ARC 8610A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 17A.3 and 68B.32A, the Iowa Ethics and Campaign Disclosure Board proposes to amend Chapter 1, "Complaint, Investigation, and Resolution Procedure"; Chapter 4, "Campaign Disclosure Procedures"; Chapter 5, "Ethics and Campaign Disclosure Board"; Chapter 6, "Civil Penalties"; Chapter 7, "Contested Case Procedures"; Chapter 9, "Declaratory Rulings"; Chapter 11, "Personal Financial Disclosure"; and Chapter 12, "Codes of Conduct," Iowa Administrative Code.

Item 1 would allow the board to treat a contested case proceeding, requested by an individual contesting administrative resolution of a routine enforcement matter, the same as any other contested case proceeding as far as the possible imposition of sanctions.

Item 2 rescinds a rule that implemented a statute that was repealed by the 1997 General Assembly. Thus, the rule is no longer supported by statute.

Item 3 substitutes the words "expressly advocate" for "support or oppose". This change is necessary to comply with a recent federal court ruling in which it was determined that the phrase "support or oppose" was overbroad and unconstitutional.

Items 4 and 5 enumerate additional items that may be purchased with campaign funds.

Item 7 clarifies the "paid for by" disclaimer statement that is required for candidates' committees and political committees.

Item 8 amends the definition of a "political corporation" to bring the rule into line with the Day v. Holahan case and a recent federal court ruling in which the current rule was determined to be unconstitutional due to the holding of that case.

Items 9 and 10 amend the current board policy by requiring an affirmative vote of four board members for a motion to pass, including the issuance of an advisory opinion.

Item 11 changes "declaratory ruling" to "declaratory order" as required by 1998 Iowa Acts, chapter 1202, which amends Iowa Code chapter 17A.

Item 12 makes a technical change to reflect a previous change in Chapter 4. It also puts into rule a current board policy concerning the definition of "date of the contribution."

Item 13 provides that in addition to the automatically assessed civil penalties for the late filing of a disclosure report, additional sanctions may be imposed if the matter goes to a contested case proceeding and a violation is proven.

Items 14 through 20 reflect the changes required by 1998 Iowa Acts, chapter 1202, which amends Iowa Code chapter 17A, and adopt language from the uniform rules as they apply to contested cases.

Item 21 reflects the changes required by 1998 Iowa Acts, chapter 1202, which amends Iowa Code chapter 17A, and adopts language from the uniform rules as they apply to changing "declaratory rulings" to "declaratory orders." Also, the word "agency" is changed to "board" when appropriate for reading ease.

Items 22 through 24 clarify the filing of personal financial disclosure statements by executive branch employees. In addition, penalties for the late filing and procedures for requesting waivers are set out.

Item 25 prohibits board members and employees from attending a political party or candidate event except for those of federal candidates. This is to remove even the appearance of impropriety on the part of board members and staff.

Any interested person may make written comments on these proposed amendments on or before February 2, 1999. Written comments should be addressed to Kay Williams, Executive Director, Iowa Ethics and Campaign Disclosure Board, 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309.

These amendments are intended to implement Iowa Code chapter 17A as amended by 1998 Iowa Acts, chapter 1202.

The following amendments are proposed.

ITEM 1. Amend subrule 1.4(4) as follows:

1.4(4) Upon timely receipt of a request for a contested case proceeding to challenge administrative resolution of a routine enforcement matter, the board shall provide for the issuance of a statement of charges and notice of hearing. The contested case shall be conducted in accordance with the provisions of 351--Chapter 7. The burden shall remain on board staff to prove that a violation has occurred. Failure to challenge the administrative resolution through a request for a contested case proceeding is a failure to exhaust administrative remedies. If, after a determination that a violation did occur, any sanctions under Iowa Code section 68B.32D may be imposed. These sanctions would be in addition to the original administrative resolution challenged.

ITEM 2. Rescind rule 351--3.4(56) as follows:

351--3.4(56) Ballot information provided. Each time a county commissioner of elections prints a ballot for an election, the commissioner shall submit to the board either:

3.4(1) A copy of the sample ballot if it includes all candidates and ballot issues to be considered by the electorate in that particular election, or

3.4(2) A list of all candidates and offices sought and ballot issues to be considered by the electorate in that particular election, or

3.4(3) A copy of the ballot and election information as published by the county commissioner of elections pursuant to Iowa Code section 49.53.

ITEM 3. Adopt new subrule 4.1(4) as follows:

4.1(4) Substitution of definition. Anywhere in this chapter that the term "support or oppose" appears, insert the phrase "expressly advocates". Anywhere in this chapter that either the word "support" or "oppose" appears, insert the phrase "expressly advocates". As used in this chapter, "expressly advocates" means "express advocacy" as defined in subrule 4.100(1). If it is determined that paragraph 4.100(1)"b" is unconstitutional by a court of law, then "expressly advocates" will mean "express advocacy" as that term is defined in paragraph 4.100(1)"a."

ITEM 4. Amend subrule 4.42(1) by adopting the following new paragraph "aa":

aa. Expenses incurred with respect to an election recount as provided in Iowa Code section 50.48.

ITEM 5. Amend subrule 4.42(2) by adopting the following new paragraphs "c" to "f":

c. Expenses incurred in connection with attending a local meeting to which the incumbent is invited due to officeholder status.

d. Purchases of small, incidental items such as pencils, pens, rulers and bookmarks provided to members of the public touring the offices of the state or a political subdivision. However, such items distributed on public property shall not expressly advocate the election or defeat of a candidate or the adoption or defeat of a ballot issue as prohibited in Iowa Code section 56.12A. For example, a bookmark bearing the state seal could be distributed on public property, while a bookmark that identified the donor as a candidate for office could not be distributed on public property.

e. Gifts purchased for foreign dignitaries when the officeholder is part of an official trip out of the country such as a trade mission or exchange program.

f. Printing of additional stationery and supplies above the standard allotment of the state or political subdivision.

ITEM 6. Amend subrule 4.42(3) by adopting the following new paragraph "d":

d. Holiday and other greeting cards sent to constituents.

ITEM 7. Rescind subrule 4.70(1) and adopt new subrule 4.70(1) in lieu thereof:

4.70(1) Short form statement. If the advertisement or other material is paid for by the candidate or candidate's committee, who has filed a statement of organization under Iowa Code chapter 56, and the specific name and address are available to the public, the statement will be acceptable if it contains the words, "Paid for by the Candidate", "Paid for by (candidate's name), Candidate" or "Paid for by the Candidate's Committee", whichever is applicable. If the advertisement or other material is paid for by a political committee, which has filed a statement of organization under Iowa Code chapter 56, and the specific name and address are available to the public, the statement will be acceptable if it contains the words, "Paid for by the (name of the committee)".

ITEM 8. Amend rule 351--4.86(56,68B) as follows:

351--4.86(56,68B) Political corporations. The prohibitions applicable to corporate entities shall not apply to political corporations which meet all parts of the following tests based on the following factors:

1. The corporation was organized solely for political purposes and cannot engage in business activities engages in minor business activities that generate minimal income and are incidental to its political purposes.

2. The corporation is not sponsored by a business corporation or labor union, and has a policy of refusing contributions from corporations or unions accepting only an insignificant and insubstantial amount of contributions from business corporations or labor unions.

3. The corporation has no shareholders or others which have claims on its assets or earnings.

A corporate entity may apply for status as a political corporation under Iowa Code chapter 56 by submitting a letter signed by a corporate officer which affirms the above requirements factors and provides other pertinent details of the corporation's activities. A letter of approval or denial from the board will be provided to the corporation. The acceptance of contributions from a corporation seeking status as a political corporation is subject to the letter of approval and, if approval is not granted, any corporate contributions received shall be refunded by the candidates' committees or other political committees.

This rule is intended to implement Iowa Code section 56.15.

ITEM 9. Amend subrule 5.1(1) as follows:

5.1(1) The ethics and campaign disclosure board consists of six members appointed by the governor and confirmed by the senate. At the first meeting in each calendar year the members elect a chair and a vice chair, each to serve a one-year term. Meetings of the board are held, usually in alternate months, at the call of the chair at the time, place and date set by the chair. Meetings may occasionally be conducted by electronic means. When possible, meetings are announced at least one week in advance; however, when one week's notice is not possible, meetings shall be announced at least 24 hours prior to the commencement of the meeting, in conformance with Iowa Code section 21.4. Notice of meetings shall be given by public notice to the media and also posted in the lobby of the board's offices and in the office of the Governor, Statehouse, Des Moines, Iowa. The notice contains the tentative agenda of the meeting. Four board members constitute a quorum for conducting business of the board. It takes an affirmative vote of four board members for a motion to pass. Any interested party may attend and observe board meetings except for the portion that may be closed in accordance with Iowa Code section 21.5. Observers may use cameras or recording devices during the course of a meeting so long as the use of the devices does not materially hinder the proceedings. The meetings shall be generally conducted according to rules of parliamentary procedure. If possible, open session proceedings shall be electronically recorded by the board, and closed session proceedings shall be electronically recorded by the board. Minutes of meetings are available for viewing at the board offices. Copies may be obtained pursuant to the applicable copy fee schedule.

ITEM 10. Amend subrule 5.3(2) as follows:

5.3(2) An opinion request which qualifies under these rules shall be reviewed by board staff, who shall determine whether to recommend to the board that the question posed presents such a fundamental issue that formal board review and resolution is necessary. If formal board review is conducted and a conclusion is determined by a majority vote of a quorum of the board four members of the board, the board will issue a written formal opinion containing advice which will, if followed, constitute a defense to a complaint filed with the board. A person who receives a formal board opinion may, within 30 days after the issuance of the opinion, request modification or reconsideration of the opinion, which shall be deemed denied unless the board acts upon the request within 30 days of the receipt of the request.

ITEM 11. Amend subrule 5.3(5) as follows:

5.3(5) Nothing in this rule precludes a person who has received an informal board opinion or routine administrative advice from petitioning for a declaratory ruling order regarding a question which qualifies under 351--Chapter 9. The board will refuse to issue a declaratory ruling order to a person who has previously received a formal board opinion on the same question, unless the requester demonstrates a significant change in circumstances from those underlying the formal board opinion.

ITEM 12. Amend subrule 6.2(5) as follows:

6.2(5) Late-filed verified statements of registration. The board shall routinely assess and collect monetary penalties against committees which are organized in a jurisdiction other than Iowa and which choose to file a verified statement of registration (VSR) as provided in Iowa Code section 56.5 and rule 351--4.13(56) 351--4.48(56,68B), but are delinquent in filing the VSR. A VSR is considered delinquent if it is not received on or before the tenth day after the date of the contribution, or mailed bearing a United States Postal Service postmark dated on or before the tenth day after the contribution. A flat late penalty of $25 shall be assessed for late-filed VSRs, except that if it is a repeat delinquency by the same committee in a 12-month period, the flat late penalty shall be $50. However, if the VSR is not filed within ten days after notice of the delinquency is sent to the committee by the board, the amount of the late-filing penalty shall increase to $100 for a first-time delinquency, or to $200 for a repeat delinquency by the same committee within a 12-month period. A VSR which is not filed within 45 days after the notice is sent by the board shall be referred to as an extreme delinquency and shall be subject to the provisions of subrule 6.2(4). In addition, a committee which has received a contribution from a committee which has failed to file a VSR may be required to return the contribution.

For purposes of this subrule, "date of the contribution" means the day, month and year the contribution check is dated. If the board deems it necessary, a copy of any check may be required to be filed with the board. When a copy of a check is required to be filed with the board, said copy shall be filed within ten days of notice by the board.

ITEM 13. Amend rule 351--6.4(56) as follows:

351--6.4(56) Payment of penalty. The remittance shall be made payable and forwarded to: Iowa Ethics and Campaign Disclosure Board, 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309.

After recording, the remittance shall be deposited in the general fund of the state of Iowa and, if the committee has provided a self-addressed, stamped envelope, a receipt will be issued by the board to the committee.

Payment may be made at the discretion of the delinquent committee, from the funds of the committee or from personal funds of an officer of the committee, or, in the case of a candidate, from the candidate's personal funds. If payment is made from a source other than committee funds, the fine payment shall be listed as an in-kind contribution to the committee. Fine payments from corporate entities as described in Iowa Code section 56.29 56.15 are prohibited, except in the case of ballot issue committees.

The penalties in this chapter shall be in addition to any civil penalties imposed pursuant to Iowa Code section 68B.32D(1)"h" after a contested case proceeding held under Iowa Code section 68B.32C.

This rule is intended to implement Iowa Code section 56.10 56.6.

ITEM 14. Amend rule 351--7.2(17A,68B) as follows:

351--7.2(17A,68B) Definitions. Except where otherwise specifically defined by law:

"Contested case" means a proceeding defined by Iowa Code section 17A.2(2) 17A.2(5) and includes any matter defined as a no factual dispute contested case under Iowa Code section 17A.10A.

"Issuance" means the date of mailing of a decision or order or date of delivery if service is by other means unless another date is specified in the order.

"Party" means each person or agency named or admitted as a party or properly seeking and entitled as of right to be admitted as a party.

"Presiding officer" means the board chairperson, the board member designated as chair of a hearing panel; or the administrative law judge, if any, assisting the board or a hearing panel or the administrative law judge assigned by the division of administrative hearings; except that, with regard to substantive or dispositive motions, "presiding officer" means all participating members of the board.

"Proposed decision" means the presiding officer's recommended findings of fact, conclusions of law, decision, and order in a contested case in which the Iowa ethics and campaign disclosure board did not preside.

ITEM 15. Amend rule 351--7.4(17A,68B) as follows:

351--7.4(17A,68B) Requests for contested case proceeding. Any person claiming an entitlement to a contested case proceeding shall file a written request for such a proceeding within the time specified by the particular rules or statutes governing the subject matter or, in the absence of such law, the time specified in the agency board action in question.

Upon petition by any party in a matter that would be a contested case if there was a dispute over the existence of material facts, all of the provisions of this chapter, except those relating to presentation of evidence, shall be applicable even though there is no factual dispute in the particular case.

The request for a contested case proceeding should state the name and address of the requester, identify the specific agency board action which is disputed, and where the requester is represented by a lawyer identify the provisions of law or precedent requiring or authorizing the holding of a contested case proceeding in the particular circumstances involved, and include a short and plain statement of the issues of material fact in dispute.

ITEM 16. Amend rule 351--7.5(17A,68B) as follows:

351--7.5(17A,68B) Notice of hearing.

7.5(1) Delivery. Delivery of the notice of hearing constitutes the commencement of the contested case proceeding. Delivery may be executed by:

a. Personal service as provided in the Iowa Rules of Civil Procedure; or

b. Certified mail, return receipt requested; or

c. Publication, as provided in the Iowa Rules of Civil Procedure.

7.5(2) Contents. The notice of hearing shall contain the following information:

a. A statement of the time, place, and nature of the hearing;

b. A statement of the legal authority and jurisdiction under which the hearing is to be held;

c. A reference to the particular sections of the statutes and rules involved;

d. A short and plain statement of the matters asserted. If the agency board or other party is unable to state the matters in detail at the time the notice is served, the initial notice may be limited to a statement of the issues involved. Thereafter, upon application, a more definite and detailed statement shall be furnished;

e. Identification of all parties including the name, address and telephone number of the person who will act as advocate for the agency board or the state and of parties' counsel where known;

f. Reference to the procedural rules governing conduct of the contested case proceeding; and

g. Reference to the procedural rules governing informal settlement.;

h. Identification of the presiding officer; and

i. Notification of the time period in which a party may request, pursuant to Iowa Code section 17A.11(1) and subrule 7.8(3), that the presiding officer be an administrative law judge.

7.5(3) Time. The notice of hearing shall be served upon all parties at least 45 days before the scheduled hearing date.

ITEM 17. Amend rule 351--7.8(17A,68B) as follows:

351--7.8(17A,68B) Disqualification.; request for administrative law judge.

7.8(1) A presiding officer or other person shall withdraw from participation in the making of any proposed or final decision in a contested case if that person:

a. to c. No change.

d. Has personally investigated the pending contested case by taking affirmative steps to interview witnesses directly or to obtain documents directly. The term "personally investigated" means taking affirmative steps to interview witnesses directly or to obtain documents or other information directly. It does not include either direction and supervision of assigned investigators or unsolicited receipt of oral information or documents which are relayed to assigned investigators, review of another person's investigative work product in the course of determining whether there is probable cause to initiate a proceeding, or exposure to factual information while performing other board functions, including fact gathering for purposes other than investigation of the matter which culminates in a contested case. Factual information relevant to the merits of a contested case received by a person who later serves as presiding officer in that case shall be disclosed if required by Iowa Code section 17A.17(3) and rules in this chapter;

e. to h. No change.

7.8(2) No change.

7.8(3) A party may, within ten days of delivery of a notice of hearing under subrule 7.5(1), request that the presiding officer be an administrative law judge assigned by the division of administrative hearings. This request shall be sent to the board's executive director who shall then notify the board. Except as otherwise provided by statute, the board shall grant such a request unless the board finds, and states the reasons for such finding, that any of the following conditions exist:

a. There is a compelling need to expedite issuance of a final decision in order to protect the public health, safety, or welfare;

b. A qualified administrative law judge is unavailable to hear the case within a reasonable time;

c. The case involves significant policy issues of first impression that are inextricably intertwined with the factual issues presented;

d. The demeanor of the witnesses is likely to be dispositive in resolving the disputed factual issues;

e. Funds are unavailable to pay the costs of an administrative law judge and an intra-agency appeal;

f. The request was not timely filed;

g. The request is not consistent with a specified statute.

7.8(4) The board shall issue a written ruling specifying the grounds for the decision within ten days after a request for an administrative law judge is filed. If the ruling is contingent upon the availability of an administrative law judge, the parties shall be notified at least ten days prior to hearing if an administrative law judge will not be available.

7.8(5) All rulings by an administrative law judge acting as presiding officer are subject to appeal to the board pursuant to rules 7.24(17A,68B) and 7.25(17A,68B). A party must seek intra-agency appeal in order to exhaust administrative remedies.

7.8(6) Unless otherwise provided by law, the board, when reviewing a proposed decision upon intra-agency appeal, shall have the powers of, and shall comply with, the provisions of this chapter which apply to presiding officers.

ITEM 18. Amend rule 351--7.14(17A,68B) as follows:

351--7.14(17A,68B) Motions.

7.14(1) No technical form for motions is required. However, prehearing motions must be in writing, state the grounds for relief, and state the relief sought. Any motion for summary judgment shall comply with the Iowa Rules of Civil Procedure and is subject to disposition according to the requirements of those rules.

7.14(2) and 7.14(3) No change.

7.14(4) Motions pertaining to the hearing, including except motions for summary judgment, must be filed and served at least ten days (or other time period designated by the agency) prior to the date of hearing unless there is good cause for permitting later action or the time for such action is lengthened or shortened by rule of the agency board or an order of the presiding officer.

7.14(5) Motions for summary judgment. Motions for summary judgment shall comply with the requirements of Iowa Rule of Civil Procedure 237 and shall be subject to disposition according to the requirements of that rule to the extent such requirements are not inconsistent with the provisions of this rule or any other provision of law governing the procedure in contested cases.

Motions for summary judgment must be filed and served at least 30 days prior to the scheduled hearing date, or other time period determined by the presiding officer. Any party resisting the motion shall file and serve a resistance within 15 days, unless otherwise ordered by the presiding officer, from the date a copy of the motion was served. The time fixed for hearing or nonoral submission shall not be less than 10 days after the filing of the motion, unless a shorter time is ordered by the presiding officer. A summary judgment order rendered on all issues in a contested case is subject to appeal and rehearing pursuant to rules 7.26(17A,68B) and 7.27(17A,68B).

ITEM 19. Amend rule 351--7.21(17A,68B) as follows:

351--7.21(17A,68B) Default.

7.21(1) If a party fails to appear or participate in a contested case proceeding after proper service of notice, the presiding officer may, if no adjournment is granted, enter a default decision or proceed with the hearing and render a decision in the absence of the party.

7.21(2) Where appropriate and not contrary to law, any party may move for default against a party who has requested the contested case proceeding and has failed to file a required pleading or has failed to appear after proper service.

7.21(3) Default decisions or decisions rendered on the merits after a party has failed to appear or participate in a contested case proceeding become final agency action unless, within 14 days after the date of notification or mailing of the decision, a motion to vacate is filed and served on all parties or an appeal of a decision on the merits is timely initiated within the time provided by rule 7.26(17A,68B). A motion to vacate must state all facts relied upon by the moving party which establish that good cause existed for that party's failure to appear or participate at the contested case proceeding. Each fact so stated must be substantiated by at least one sworn affidavit of a person with personal knowledge of each such fact, which affidavit(s) must be attached to the motion.

7.21(4) The time for further appeal of a decision for which a timely motion to vacate has been filed is stayed pending a decision on the motion to vacate.

7.21(5) Properly substantiated and timely filed motions to vacate shall be granted only for good cause shown. The burden of proof as to good cause is on the moving party. Adverse parties shall have ten days to respond to a motion to vacate. Adverse parties shall be allowed to conduct discovery as to the issue of good cause and to present evidence on the issue prior to a decision on the motion, if a request to do so is included in that party's response.

7.21(6) "Good cause" for purposes of this rule shall have the same meaning as "good cause" for setting aside a default judgment under Iowa Rule of Civil Procedure 236.

7.21(7) A decision denying a motion to vacate is subject to further appeal within the time limit allowed for further appeal of a decision on the merits in the contested case proceeding. A decision granting a motion to vacate is subject to interlocutory appeal by the adverse party pursuant to rule 7.24(17A,68B).

7.21(8) If a motion to vacate is granted and no timely interlocutory appeal has been taken, the presiding officer shall issue another notice of hearing and the contested case shall proceed accordingly.

7.21(9) A default decision may award any relief consistent with the request for relief made in the petition and embraced in its issues but, unless the defaulting party has appeared, it cannot exceed the relief demanded.

7.21(10) A default decision may provide either that the default decision is to be stayed pending a timely motion to vacate or that the default decision is to take effect immediately, subject to a request for stay.

ITEM 20. Amend subrules 7.22(2) and 7.22(3) and adopt new subrule 7.22(4) as follows:

7.22(2) Disclosure of prohibited communications. Any person who receives a communication prohibited by subrule 7.22(1) shall disclose that communication to all parties. A copy of any prohibited written communication or a summary of any prohibited oral communication shall be submitted for inclusion in the record. Any party desiring to rebut the prohibited ex parte communication must be allowed to do so, upon requesting the opportunity for rebuttal within ten days after notice of the communication. If the effect of an ex parte communication is so prejudicial that it cannot be cured by disclosure and rebuttal, a presiding officer who receives the communication shall be disqualified and the portions of the record pertaining to the communication shall be sealed by protective order.

7.22(3) The board and any party may report any violation of this rule to appropriate authorities for any disciplinary proceedings provided by law. The presiding officer or the agency board may impose appropriate sanctions for violations of this rule. Possible sanctions include a decision against the offending party; censure, suspension, or revocation of the privilege to practice before the agency board; and censure, suspension, dismissal, or other disciplinary action against agency board personnel.

7.22(4) A party to a contested case proceeding may file a timely and sufficient affidavit alleging a violation of any provision of this rule. The board shall determine the matter as part of the record in the case. When the board makes such a determination with respect to a board member or board employee, that determination shall be subject to de novo judicial review in any subsequent review proceeding of the case.

ITEM 21. Amend 351--Chapter 9 as follows:

351--9.1(56) Petition for declaratory ruling order. Any person or agency may file a petition with the agency board for a declaratory ruling order concerning the applicability of any statute, rule, policy, decision, or order, administered by the agency board, at 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309. A petition is deemed filed when it is received by that office. The agency board must shall provide the petitioner with a file-stamped copy of the petition if the petitioner provides the agency board an extra copy for this purpose. Within 15 days after receipt of a petition for a declaratory order, the board shall give notice of the petition to all persons to whom notice is required by any provision of law and may give notice to any other persons. Persons who qualify under any applicable provision of law as an intervenor, and who file timely petitions for intervention, may intervene in proceedings for declaratory orders. The petition must be typewritten or legibly handwritten in ink and must substantially conform to the following form:

IOWA ETHICS AND CAMPAIGN DISCLOSURE BOARD
Petition by (Name of Petitioner) for a Declaratory Ruling Order on (Cite provisions of law involved)	}	PETITION FOR DECLARATORY RULING ORDER

The petition must provide the following information:

1. A clear and concise statement of all relevant facts on which the ruling order is requested.

2. A citation and the relevant language of the specific statutes, rules, policies, decisions, or orders, whose applicability is questioned, and any other relevant law.

3. The questions petitioner wants answered, stated clearly and concisely.

4. If applicable and desirable to the petitioner, the answers desired by the petitioner to these questions and a summary of the reasons urged by the petitioner in support of those answers.

5. The reasons for requesting the declaratory ruling order and disclosure of the petitioner's interest in the outcome.

6. A statement indicating whether the petitioner is currently a party to another proceeding involving the questions at issue, or whether to the petitioner's knowledge, those questions have not been decided by, are not pending determination by, or are not under investigation by, any governmental entity.

7. The names and addresses of other persons, or a description of any class of persons, known by petitioner to be affected by, or interested in, the questions presented in the petition.

8. Any request by petitioner for a meeting provided for by rule 351--9.4(56).

The petition must be dated and signed by the petitioner or the petitioner's representative. It must also include the name, mailing address, and telephone number of the petitioner and petitioner's representative (if one is involved), and a statement indicating the person to whom communications concerning the petition should be directed.

351--9.2(56) Briefs. The petitioner may attach a brief to the petition in support of the position urged in the petition. The agency board may request a brief from the petitioner or from any other person concerning the questions raised in the petition. A requested brief shall be filed within ten days of receipt of notice from the board.

351--9.3(56) Inquiries. Inquiries concerning the status of a petition for a declaratory ruling order may be made to the Executive Director, Iowa Ethics and Campaign Disclosure Board, 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309.

351--9.4(56) Agency consideration. Upon request by petitioner in the petition, the agency board must shall schedule a brief and informal meeting between the petitioner and the agency, a member of the agency, or a member of the staff of the agency, board's executive director or legal counsel to discuss the petition. The agency board may request the petitioner to submit additional information or argument concerning the petition. The agency board may solicit comments from any person on the questions presented in the petition. Also, comments on those questions may be submitted to the agency board by any person.

Within 60 30 days after the filing of the petition, or 5 days following a regular meeting of the board in which the petition has been received and discussed, whichever comes earlier, or within any longer period agreed to by the petitioner, the agency board must, shall, in writing, issue a ruling an order on the petition or refuse to do so., set the matter for specified proceedings, agree to issue a declaratory order by a specified time or decline to issue the order and state the reasons for doing so. An agency The board is deemed to have issued a ruling an order or to have refused to do so on the date the ruling order or refusal is mailed or delivered to petitioner. If the board does not issue a declaratory order within 60 days after receipt of a petition therefor, or such later time as agreed by the parties, the petition is deemed to have been denied.

351--9.5(56) Refusal to issue ruling order. The agency board may refuse to issue a declaratory ruling order for good cause. Good cause includes, but is not limited to, the following reasons:

1. The petition does not substantially comply with the required form.

2. The petition does not contain facts sufficient to demonstrate that the petitioner will be aggrieved or adversely affected by the failure of the agency board to issue a ruling an order.

3. The agency board does not have jurisdiction over the questions presented in the petition.

4. The questions presented by the petition are also presented in a current rule making, contested case, or other agency or judicial proceeding, that may definitively resolve them.

5. The questions presented by the petition would more properly be resolved in a different type of proceeding or by another body with jurisdiction over the matter.

6. The facts or questions presented in the petition are unclear, overbroad, insufficient, or otherwise inappropriate as a basis upon which to issue a ruling an order.

7. There is no need to issue a ruling an order because the questions raised in the petition have been settled due to a change in circumstances.

8. The petition is not based upon facts calculated to aid in the planning of future conduct but is, instead, based solely upon prior conduct in an effort to establish the effect of that conduct or to challenge an agency a board decision already made.

9. The petition requests a declaratory ruling order that would necessarily determine the legal rights, duties, or responsibilities of other persons who have not joined in the petition or filed a similar petition and whose position on the questions presented may fairly be presumed to be adverse to that of petitioner.

10. The petitioner requests the agency board to determine whether a statute is unconstitutional on its face.

9.5(1) A refusal to issue a declaratory ruling order must indicate the specific grounds for the refusal and constitutes final agency action on the petition. Once the board declines to issue a declaratory order, or if the petition is deemed to have been denied because such an order has not been entered within 60 days, a party to the proceeding may either seek judicial review or await further board action with respect to its petition.

9.5(2) Refusal to issue a declaratory ruling order pursuant to this provision does not preclude the filing of a new petition that seeks to eliminate the grounds for the agency's board's refusal to issue a ruling an order.

351--9.6(56) Contents of declaratory ruling order--effective date. In addition to the ruling order itself, a declaratory ruling order must contain the date of its issuance, the name of petitioner, the specific statutes, rules, policies, decisions, or orders involved, the particular facts upon which it is based, and the reasons for its conclusion.

A declaratory ruling order is effective on the date of issuance.

351--9.7(56) Effect of a declaratory ruling order. A declaratory ruling order is binding on the agency board and the petitioner and is applicable only in circumstances where the relevant facts and the law involved are indistinguishable from those contained in the petition. As to all other persons, a declaratory ruling order serves only as precedent and is not binding on the agency board. The issuance of a declaratory ruling order constitutes final agency action on the petition.

These rules are intended to implement Iowa Code chapters 17A and 56.

ITEM 22. Adopt new rule 351--11.4(68B) as follows:

351--11.4(68B) Disclosure statement.

11.4(1) Late if not received or postmarked with a United States Postal Service postmark. A personal financial disclosure statement is deemed to be delinquent if it is not physically received in the office of the board or mailed bearing a United States Postal Service postmark dated on or before the report due date. Private postage meters are not acceptable as proof of timely mailing.

11.4(2) Extension for holidays. If the due date falls on a Saturday, Sunday, or holiday on which the board office is closed, the filing due date is extended to the first working day following, and personal financial disclosure statements received or properly postmarked on that day will not be considered to be delinquent. If the due date falls on a date on which the board's office is open, even though it is on a day that the United States Postal Service is not postmarking deposited mail, a disclosure statement is deemed to be delinquent if it is not received in the board's office on or before the due date or mailed bearing a United States Postal Service postmark dated before the due date.

11.4(3) Facsimile filing. Filing by electronic facsimile is acceptable to prevent a disclosure statement from being deemed delinquent. However, the original statement must be filed to replace the facsimile filing within ten days of the date the facsimile was transmitted.

ITEM 23. Adopt new rule 351--11.5(68B) as follows:

351--11.5(68B) Penalties.

11.5(1) Penalties for late personal financial disclosure statements. Any affected member of the executive branch, or candidate for statewide office, that fails to timely file a required personal financial disclosure statement shall be subject to an automatic civil penalty according to the following schedule:

Days Delinquent Penalty Amount

1 to 14 $ 25

15 to 30 $ 50

31 and over $ 100

11.5(2) Requests for waiver or reduction of assessed penalties. Any person who is assessed a penalty under this chapter may apply to the Iowa ethics and campaign disclosure board for consideration of a waiver or reduction of the assessed amount.

11.5(3) Additional penalty. If an affected member of the executive branch, or a candidate for statewide office, fails to file a personal financial disclosure statement within 45 days of the required filing date, a contested case proceeding may be held to determine whether or not a violation has occurred. If, after notice and opportunity to be heard, it is determined that a violation occurred, any of the sanctions under Iowa Code section 68B.32D may be imposed. Any sanction under Iowa Code section 68B.32D would be in addition to an automatically assessed penalty under this chapter.

11.5(4) Payment of penalty. The remittance shall be made payable and forwarded to the Iowa Ethics and Campaign Disclosure Board, 514 E. Locust Street, Suite 104, Des Moines, Iowa 50309.

After recording, the remittance shall be deposited in the general fund of the state of Iowa and, if the person has provided a self-addressed, stamped envelope, a receipt will be issued by the board to the person.

ITEM 24. Adopt new rule 351--11.6(68B) as follows:

351--11.6(68B) Failure to file true statement. It shall be a violation of this rule for any affected member of the executive branch, or candidate for statewide office, to file a disclosure statement containing false or fraudulent information. Complaints concerning the filing of a false or fraudulent disclosure statement shall be governed by the provisions of Iowa Code chapter 68B. If it is determined after a contested case proceeding that a false or fraudulent disclosure statement was filed, the board may impose any of the actions under Iowa Code section 68B.32D.

ITEM 25. Amend subrule 12.1(7) as follows:

12.1(7) Attendance at a political party or candidate event is permitted prohibited except for the attendance at events for a federal candidate since the board has no jurisdiction over a federal candidate.

ARC 8614A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code paragraph 17A.3(1)"b," the Department of Human Services proposes to rescind Chapter 3, "Agency Procedure for Rule Making," Chapter 4, "Petition for Rule Making," and Chapter 5, "Declaratory Rulings," appearing in the Iowa Administrative Code and to adopt Chapter 3, "Department Procedure for Rule Making," Chapter 4, "Petitions for Rule Making," and Chapter 5, "Declaratory Orders," Iowa Administrative Code.

These amendments revise the Department's rules governing procedures for rule making, petitions for rule making, and declaratory orders.

The Seventy-seventh General Assembly passed amendments to the Iowa Administrative Procedure Act in 1998 Iowa Acts, chapter 1202. A task force from the Attorney General's Office has drafted amendments to the Uniform Rules of Administrative Procedure to implement the amendments to the Administrative Procedure Act. The Department's proposed amendments to its rules are based on the amendments of the Attorney General's task force, with some omissions and modifications to fit the Department. The task force's amendments are available at the State Law Library, Capitol Building, Des Moines, Iowa, or on the AttorneyGeneral's web site at http://www.state.ia.us/government/ag/deptdir.htm.

With these revisions, the Department's rules will be in compliance with 1998 Iowa Acts, chapter 1202. The major changes governing the rule-making process in chapter 1202 which are to be effective July 1, 1999, are as follows:

* The requirement for an economic impact statement if requested by members of the Administrative Rules Review Committee (ARRC) is deleted and replaced with a requirement for a regulatory analysis if requested by the ARRC or the Administrative Rules Coordinator. In addition, if the rule would have a substantial impact on small business, a request for a fiscal impact statement may also be made by at least 25 persons provided that each represents a small business, or an organization representing at least 25 small businesses.

* The ARRC, the Administrative Rules Coordinator, a political subdivision, a state agency, 25 persons signing one request, or an association having not less than 25 members may request the Department to conduct a formal review of a specified rule to determine whether the rule should be repealed or amended or a new rule adopted instead. If the Department has not conducted such a review of the specified rule within a period of five years prior to the filing with the Department of that written request, the Department shall prepare within a reasonable time a written report with respect to the rule summarizing the Department's findings, its supporting reasons, and any proposed course of action. The report must include a concise statement of the rule's effectiveness, including a summary of data supporting the conclusions reached; written criticisms of the rule received during the previous five years, including a summary of any petitions for waiver of the rule (i.e., requests for exceptions to policy) tendered to the Department or granted by the Department; and alternative solutions regarding the subject matter of the criticisms and the reasons they were rejected or the changes made in the rule in response to those criticisms and the reasons for the changes. A copy of the report is sent to the ARRC and the Administrative Rules Coordinator.

* The current law regarding declaratory rulings is deleted and replaced with declaratory orders. The purpose is the same, but requirements are more specific than in current law. Rules are added to provide for petitions for intervention.

Consideration will be given to all written data, views, and arguments thereto received by the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114, on or before February 3, 1999.

These amendments are intended to implement Iowa Code chapter 17A as amended by 1998 Iowa Acts, chapter 1202, and Iowa Code section 25B.6.

The following amendments are proposed.

ITEM 1. Rescind 441--Chapter 3 and insert the following new 441--Chapter 3 in lieu thereof:

441--3.1(17A) Applicability. Except to the extent otherwise expressly provided by statute, all rules adopted by the department are subject to the provisions of Iowa Code chapter 17A, the Iowa administrative procedure Act, and the provisions of this chapter.

441--3.2(17A) Advice on possible rules before notice of proposed rule adoption. In addition to seeking information by other methods, the department may, before publication of a Notice of Intended Action under Iowa Code section 17A.4(1)"a," solicit comments from the public on a subject matter of possible rule making by the department by causing notice to be published in the Iowa Administrative Bulletin of the subject matter and indicating where, when, and how persons may comment.

441--3.3(17A) Public rule-making docket.

3.3(1) Docket maintained. The department shall maintain a current public rule-making docket.

3.3(2) Anticipated rule making. The rule-making docket shall list each anticipated rule-making proceeding. A rule-making proceeding is deemed "anticipated" from the time a draft of proposed rules is distributed by the department's bureau of policy analysis for internal discussion within the department. For each anticipated rule-making proceeding the docket shall contain a listing of the precise subject matter which may be submitted for consideration by the council on human services, mental health and developmental disabilities commission, or the HAWK-I board for subsequent proposal under the provisions of Iowa Code section 17A.4(1)"a," the name and address of department personnel with whom persons may communicate with respect to the matter, and an indication of the present status within the department of that possible rule. The department may also include in the docket other subjects upon which public comment is desired.

3.3(3) Pending rule-making proceedings. The rule-making docket shall list each pending rule-making proceeding. A rule-making proceeding is pending from the time it is commenced, by publication in the Iowa Administrative Bulletin of a Notice of Intended Action pursuant to Iowa Code section 17A.4(1)"a," to the time it is terminated, by publication of a Notice of Termination in the Iowa Administrative Bulletin or the rule's becoming effective. For each rule-making proceeding, the docket shall indicate:

a. The subject matter of the proposed rule.

b. A citation to all published notices relating to the proceeding.

c. Where written submissions on the proposed rule may be inspected.

d. The time during which written submissions may be made.

e. The names of persons who have made written requests for an opportunity to make oral presentations on the proposed rule, where those requests may be inspected, and where and when oral presentations may be made.

f. Whether a written request for the issuance of a regulatory analysis or a concise statement of reasons has been filed, whether such an analysis or statement or a fiscal impact statement has been issued, and where any such written request, analysis, or statement may be inspected.

g. The current status of the proposed rule and any department determinations with respect thereto.

h. Any known timetable for department decisions or other action in the proceeding.

i. The date of the rule's adoption.

j. The date of the rule's filing, indexing, and publication.

k. The date on which the rule will become effective.

l. Where the rule-making record may be inspected.

441--3.4(17A) Notice of proposed rule making.

3.4(1) Contents. At least 35 days before the adoption of a rule the department shall cause Notice of its Intended Action to be published in the Iowa Administrative Bulletin. The Notice of Intended Action shall include:

a. A brief explanation of the purpose of the proposed rule.

b. The specific legal authority for the proposed rule.

c. Except to the extent impracticable, the text of the proposed rule.

d. Where, when, and how persons may present their views on the proposed rule.

e. Where, when, and how persons may demand an oral proceeding on the proposed rule if the notice does not already provide for one.

Where inclusion of the complete text of a proposed rule in the Notice of Intended Action is impracticable, the department shall include in the notice a statement fully describing the specific subject matter of the omitted portion of the text of the proposed rule, the specific issues to be addressed by that omitted text of the proposed rule, and the range of possible choices being considered by the department for the resolution of each of those issues.

3.4(2) Copies of notices by mail. Persons desiring to receive copies of future Notices of Intended Action by subscription shall complete Form 470-2250, Notice Subscription, which is available from the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114, indicating the name and address to which the notices shall be sent. Persons may subscribe to all notices of the department, or only to notices pertaining to the service, income maintenance, or medical programs. Within seven days after submission of a Notice of Intended Action to the administrative rules coordinator for publication in the Iowa Administrative Bulletin, the department shall mail a copy of the notice to subscribers who have completed Form 470-2250 and paid the subscription price. The subscription price includes the cost of labor and supplies for copying and mailing of the notices. At the end of each calendar year, subscribers will be sent Form 470-2250 to complete if they wish to continue on the mailing list.

3.4(3) Notices electronically transmitted. Persons desiring to receive Notices of Intended Action via electronic transmission shall either write the bureau of policy analysis at the address listed in subrule 3.4(2) or E-mail the department's rules coordinator at dhsrules@dhs.state.ia.us indicating the E-mail address to which the notices shall be sent, whether they wish to receive all notices of the department or only income maintenance, service, or medical rules, and the format in which they wish the notices mailed, e.g., Microsoft Word or Acrobat pdf files. Within seven days after submission of a Notice of Intended Action to the Administrative Rules Coordinator for publication in the Iowa Administrative Bulletin, the department shall E-mail a copy of the notice to the persons who have requested the service. This service shall be available without charge.

441--3.5(17A) Public participation.

3.5(1) Written comments. For at least 20 days after publication of the Notice of Intended Action, persons may submit argument, data, and views, in writing or via electronic transmission, on the proposed rule. These submissions should identify the proposed rule to which they relate and should be submitted to the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114, or to the department's rules coordinator at dhsrules@dhs.state.ia.us.

3.5(2) Oral proceedings. The department may, at any time, schedule an oral proceeding on a proposed rule. The department shall schedule an oral proceeding on a proposed rule if, within 20 days after the published Notice of Intended Action, a written request for an opportunity to make oral presentations is submitted to the department by the administrative rules review committee, a governmental subdivision, a state agency, an association having not less than 25 members, or at least 25 persons. That request must also contain the following additional information:

1. A request by one or more individual persons must be signed by each of them and include the address and telephone number of each of them.

2. A request by an association must be signed by an officer or designee of the association and must contain a statement that the association has at least 25 members and the address and telephone number of the person signing that request.

3. A request by a state agency or governmental subdivision must be signed by an official having authority to act on behalf of the entity and must contain the address and telephone number of the person signing that request.

The department may waive technical compliance with these procedures.

Oral proceedings scheduled by the department regarding rules directly affecting indigent clients shall be held in each of the five regions defined in rule 441--1.4(17A) and in the Mason City, Davenport, and Ottumwa area offices.

In the case of rules not directly affecting indigent clients, the department shall determine for each rule for which oral proceedings are scheduled whether it will be necessary to hold presentations in all eight locations. Anyone may object to the department's decision prior to the date of the proceedings by writing the same addressee specified in the Notice of Intended Action for receiving written data, views, or arguments. The department shall review the adequacy of the number of locations in light of the comments received.

3.5(3) Conduct of oral proceedings.

a. Applicability. This subrule applies only to those oral rule-making proceedings in which an opportunity to make oral presentations is authorized or required by Iowa Code section 17A.4(1)"b."

b. Scheduling and notice. An oral proceeding on a proposed rule may be held in one or more locations and shall not be held earlier than 20 days after notice of its location and time is published in the Iowa Administrative Bulletin. That notice shall also identify the proposed rule by ARC number and citation to the Iowa Administrative Bulletin.

c. Presiding officer. An employee of the department shall preside at the oral proceeding on the proposed rules and shall present a prepared statement on the substance of the rules. The presiding officer shall transcribe the proceeding or prepare a written summary of the presentations made.

d. Conduct of proceeding. At an oral proceeding on a proposed rule, persons may make oral statements and make documentary and physical submissions, which may include data, views, comments or arguments concerning the proposed rule. Persons wishing to make oral presentations at the proceeding are encouraged to notify the department at least one business day prior to the proceeding and indicate the general subject of their presentations. At the proceeding, those who participate shall indicate their names and addresses, identify any persons or organizations they represent, and provide any other information relating to their participation deemed appropriate by the presiding officer. Oral proceedings shall be open to the public and shall be recorded by stenographic or electronic means.

(1) At the beginning of the oral proceeding, the presiding officer shall give a brief synopsis of the proposed rule, a statement of the statutory authority for the proposed rule, and the reasons for the department decision to propose the rule. The presiding officer may place time limitations on individual oral presentations when necessary to ensure the orderly and expeditious conduct of the oral proceeding. To encourage joint oral presentations and to avoid repetition, additional time may be provided for persons whose presentations represent the views of other individuals as well as their own views.

(2) Whenever possible, persons making oral presentations should submit their testimony in writing.

(3) To facilitate the exchange of information, the presiding officer may, where time permits, open the floor to questions or general discussion.

(4) The presiding officer shall have the authority to take any reasonable action necessary for the orderly conduct of the meeting.

(5) Physical and documentary submissions presented by participants in the oral proceeding shall be submitted to the presiding officer. These submissions become the property of the department.

(6) The oral proceeding may be continued by the presiding officer to a later time without notice other than by announcement at the hearing.

(7) Participants in an oral proceeding shall not be required to take an oath or to submit to cross-examination. However, the presiding officer in an oral proceeding may question participants and permit the questioning of participants by other participants about any matter relating to that rule-making proceeding, including any prior written submissions made by those participants in that proceeding; but no participant shall be required to answer any question.

(8) The presiding officer in an oral proceeding may permit rebuttal statements and request the filing of written statements subsequent to the adjournment of the oral presentations.

3.5(4) Additional information. In addition to receiving written comments and oral presentations on a proposed rule according to the provisions of this rule, the department may obtain information concerning a proposed rule through any other lawful means deemed appropriate under the circumstances.

The department may send notices of proposed rule making and a request for comments to any agency, organization, or association known to it to have a direct interest or expertise pertaining to the substance of the proposed rule.

3.5(5) Accessibility. The department shall schedule oral proceedings in rooms accessible to and functional for persons with physical disabilities. Persons who have special requirements should contact the bureau of policy analysis at (515)281-8440 in advance to arrange access or other needed services.

441--3.6(17A) Regulatory analysis.

3.6(1) Definition of small business. A "small business" is defined in 1998 Iowa Acts, chapter 1202, section 10, subsection 7.

3.6(2) Distribution list. Small businesses or organizations of small businesses may be registered on the department's small business impact list by making a written application addressed to the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114. The application for registration shall state:

a. The name of the small business or organization of small businesses.

b. Its address.

c. The name of a person authorized to transact business for the applicant.

d. A description of the applicant's business or organization. An organization representing 25 or more persons who qualify as a small business shall indicate that fact.

e. Whether the registrant desires copies of Notices of Intended Action at cost or via electronic transmission, or desires advance notice of the subject of all or some specific category of proposed rule making affecting small business.

The department may at any time request additional information from the applicant to determine whether the applicant is qualified as a small business or as an organization of 25 or more small businesses. The department may periodically send a letter to each registered small business or organization of small businesses asking whether that business or organization wishes to remain on the registration list. The name of a small business or organization of small businesses shall be removed from the list if a negative response is received, or if no response is received within 30 days after the letter is sent.

3.6(3) Time of distribution. Within seven days after submission of a Notice of Intended Action to the administrative rules coordinator for publication in the Iowa Administrative Bulletin, the department shall mail or electronically transmit to all registered small businesses or organizations of small businesses, in accordance with their request, either a copy of the Notice of Intended Action or notice of the subject of that proposed rule making. In the case of a rule that may have an impact on small business adopted in reliance upon Iowa Code section 17A.4(2), the department shall mail notice of the adopted rule to registered businesses or organizations prior to the time the adopted rule is published in the Iowa Administrative Bulletin.

3.6(4) Qualified requestors for regulatory analysis--economic impact. The department shall issue a regulatory analysis of a proposed rule that conforms to the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsection 2, paragraph "a," after a proper request from:

a. The administrative rules coordinator.

b. The administrative rules review committee.

3.6(5) Qualified requestors for regulatory analysis--business impact. The department shall issue a regulatory analysis of a proposed rule that conforms to the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsection 2, paragraph "b," after a proper request from:

a. The administrative rules review committee.

b. The administrative rules coordinator.

c. At least 25 or more persons who sign the request provided that each represents a different small business.

d. An organization representing at least 25 small businesses. That organization shall list the name, address and telephone number of not less than 25 small businesses it represents.

3.6(6) Time period for analysis. Upon receipt of a timely request for a regulatory analysis, the agency shall adhere to the time lines described in 1998 Iowa Acts, chapter 1202, section 10, subsection 4.

3.6(7) Contents of request. A request for a regulatory analysis is made when it is mailed or delivered to the department. The request shall be in writing and satisfy the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsection 1.

3.6(8) Contents of concise summary. The contents of the concise summary shall conform to the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsections 4 and 5.

3.6(9) Publication of a concise summary. The department shall make available, to the maximum extent feasible, copies of the published summary in conformance with 1998 Iowa Acts, chapter 1202, section 10, subsection 5.

3.6(10) Regulatory analysis contents--rules review committee or rules coordinator. When a regulatory analysis is issued in response to a written request from the administrative rules review committee or the administrative rules coordinator, the regulatory analysis shall conform to the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsection 2, paragraph "a," unless a written request expressly waives one or more of the items listed therein.

3.6(11) Regulatory analysis contents--substantial impact on small business. When a regulatory analysis is issued in response to a written request from the administrative rules review committee, the administrative rules coordinator, at least 25 persons signing that request who each qualify as a small business or by an organization representing at least 25 small businesses, the regulatory analysis shall conform to the requirements of 1998 Iowa Acts, chapter 1202, section 10, subsection 2, paragraph "b."

441--3.7(17A,25B) Fiscal impact statement. A rule that mandates additional combined expenditures exceeding $100,000 by all affected political subdivisions, or agencies and entities which contract with political subdivisions to provide services must be accompanied by a fiscal impact statement outlining the costs associated with the rule. A fiscal impact statement must satisfy the requirements of Iowa Code section 25B.6.

If the department determines at the time it adopts a rule that the fiscal impact statement upon which the rule is based contains errors, the department shall, at the same time, issue a corrected fiscal impact statement and publish the corrected fiscal impact statement in the Iowa Administrative Bulletin.

441--3.8(17A) Time and manner of rule adoption.

3.8(1) Time of adoption. The department shall not adopt a rule until the period for making written submissions and oral presentations has expired. Within 180 days after the later of the publication of the Notice of Intended Action, or the end of oral proceedings thereon, the department shall adopt a rule pursuant to the rule-making proceeding or terminate the proceeding by publication of a notice to that effect in the Iowa Administrative Bulletin.

3.8(2) Consideration of public comment. Before the adoption of a rule, the department shall consider fully all of the written submissions and oral submissions received in that rule-making proceeding or any written summary of the oral submissions and any regulatory analysis or fiscal impact statement issued in that rule-making proceeding.

3.8(3) Reliance on department expertise. Except as otherwise provided by law, the department may use its own experience, technical competence, specialized knowledge, and judgment in the adoption of a rule.

441--3.9(17A) Variance between adopted rule and published notice of proposed rule adoption.

3.9(1) Allowable variances. The department shall not adopt a rule that differs from the rule proposed in the Notice of Intended Action on which the rule is based unless:

a. The differences are within the scope of the subject matter announced in the Notice of Intended Action and are in character with the issues raised in that notice; and

b. The differences are a logical outgrowth of the contents of that Notice of Intended Action or the comments submitted in response thereto; and

c. The Notice of Intended Action provided fair warning that the outcome of that rule-making proceeding could be the rule in question.

3.9(2) Fair warning. In determining whether the Notice of Intended Action provided fair warning that the outcome of that rule-making proceeding could be the rule in question, the department shall consider the following factors:

a. The extent to which persons who will be affected by the rule should have understood that the rule-making proceeding on which it is based could affect their interests.

b. The extent to which the subject matter of the rule or the issues determined by the rule are different from the subject matter or issues contained in the Notice of Intended Action.

c. The extent to which the effects of the rule differ from the effects of the proposed rule contained in the Notice of Intended Action.

3.9(3) Petition for rule making. The department shall commence a rule-making proceeding within 60 days of its receipt of a petition for rule making seeking the amendment or repeal of a rule that differs from the proposed rule contained in the Notice of Intended Action upon which the rule is based, unless the department finds that the differences between the adopted rule and the proposed rule are so insubstantial as to make such a rule-making proceeding wholly unnecessary. A copy of any such finding and the petition to which it responds shall be sent to petitioner, the administrative rules coordinator, and the administrative rules review committee, within three days of its issuance.

3.9(4) Concurrent rule-making proceedings. Nothing in this rule disturbs the discretion of the department to initiate, concurrently, several different rule-making proceedings on the same subject with several different published Notices of Intended Action.

441--3.10(17A) Exemptions from public rule-making procedures.

3.10(1) Omission of notice and comment. To the extent the department for good cause finds that public notice and participation are unnecessary, impracticable, or contrary to the public interest in the process of adopting a particular rule, the department may adopt that rule without publishing advance Notice of its Intended Action in the Iowa Administrative Bulletin and without providing for written or oral public submissions prior to its adoption. The department shall incorporate the required finding and a brief statement of its supporting reasons in each rule adopted in reliance upon this subrule.

3.10(2) Categories exempt. The following narrowly tailored category of rules is exempted from the usual public notice and participation requirements because those requirements are unnecessary, impracticable, or contrary to the public interest with respect to each and every member of the defined class: rules mandated by state or federal law, including federal statutes or regulations establishing conditions for federal funding of departmental programs under Titles IV, XIX, XX, or XXI to the Social Security Act, or under the federal Food Stamp Act, where the department is not exercising any options under federal law.

3.10(3) Public proceedings on rules adopted without them. The department may, at any time, commence a standard rule-making proceeding for the adoption of a rule that is identical or similar to a rule it adopts in reliance upon subrule 3.10(1). Upon written petition by a governmental subdivision, the administrative rules review committee, a state agency, the administrative rules coordinator, an association having not less than 25 members, or at least 25 persons, the department shall commence a standard rule-making proceeding for any rule specified in the petition that was adopted in reliance upon subrule 3.10(1). This petition must be filed within one year of the publication of the specified rule in the Iowa Administrative Bulletin as an adopted rule. The rule-making proceeding on that rule must be commenced within 60 days of the receipt of the petition. After a standard rule-making proceeding commenced pursuant to this subrule, the department may either readopt the rule it adopted without benefit of all usual procedures on the basis of subrule 3.10(1) or may take any other lawful action, including the amendment or repeal of the rule in question, with whatever further proceedings are appropriate.

441--3.11(17A) Concise statement of reasons.

3.11(1) General. When requested by a person, either prior to the adoption of a rule or within 30 days after its publication in the Iowa Administrative Bulletin as an adopted rule, the department shall issue a concise statement of reasons for the rule. Requests for such a statement must be in writing and be delivered to the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114. The request should indicate whether the statement is sought for all or only a specified part of the rule. Requests shall be considered made on the date received.

3.11(2) Contents. The concise statement of reasons shall contain:

a. The reasons for adopting the rule.

b. An indication of any change between the text of the proposed rule contained in the published Notice of Intended Action and the text of the rule as finally adopted, with the reasons for any change.

c. The principal reasons urged in the rule-making proceeding for and against the rule, and the department's reasons for overruling the arguments made against the rule.

3.11(3) Time of issuance. After a proper request, the department shall issue a concise statement of reasons by the later of the time the rule is adopted or 35 days after receipt of the request.

441--3.12(17A) Contents, style, and form of rule.

3.12(1) Contents. Each rule adopted by the department shall contain the text of the rule and, in addition:

a. The date the department adopted the rule.

b. A brief explanation of the principal reasons for the rule-making action if the reasons are required by Iowa Code section 17A.4(1)"b" or the department in its discretion decides to include the reasons.

c. A reference to all rules repealed, amended, or suspended by the rule.

d. A reference to the specific statutory or other authority authorizing adoption of the rule.

e. Any findings required by any provision of law as a prerequisite to adoption or effectiveness of the rule.

f. A brief explanation of the principal reasons for the failure to provide for waivers to the rule if no waiver provision is included and a brief explanation of any waiver or special exceptions provided in the rule if the reasons are required by Iowa Code section 17A.4(1)"b" or the department in its discretion decides to include the reasons.

g. The effective date of the rule.

3.12(2) References to materials not published in full. When the administrative code editor decides to omit the full text of a proposed or adopted rule because publication of the full text would be unduly cumbersome, expensive, or otherwise inexpedient, the department shall prepare and submit to the administrative code editor for inclusion in the Iowa Administrative Bulletin and Iowa Administrative Code a summary statement describing the specific subject matter of the omitted material. This summary statement shall include the title and a brief description sufficient to inform the public of the specific nature and subject matter of the proposed or adopted rules and of significant issues involved in these rules. The summary statement shall also describe how a copy of the full text of the proposed or adopted rule, including any unpublished matter and any matter incorporated by reference, may be obtained from the department. The department shall provide a copy of that full text at actual cost upon request and shall make copies of the full text available for review either electronically or at the state law library.

At the request of the administrative code editor, the department shall provide a proposed statement explaining why publication of the full text would be unduly cumbersome, expensive, or otherwise inexpedient.

3.12(3) Style and form. In preparing its rules, the department shall follow the uniform numbering system, form, and style prescribed by the administrative rules coordinator.

441--3.13(17A) Department rule-making record.

3.13(1) Requirement. The department shall maintain an official rule-making record for each rule it proposes by publication in the Iowa Administrative Bulletin of a Notice of Intended Action, or adopts. The rule-making record and materials incorporated by reference shall be available for public inspection.

3.13(2) Contents. The department rule-making record shall contain:

a. Copies of or citations to all publications in the Iowa Administrative Bulletin with respect to the rule or the proceeding upon which the rule is based and any file-stamped copies of department submissions to the administrative rules coordinator concerning that rule or the proceeding upon which it is based.

b. Copies of Form 470-0096, Rule Log, containing dates of actions and Iowa Administrative Bulletin references relating to the rule or the proceeding upon which the rule is based.

c. All written petitions, requests, and submissions received by the department, and all other written materials of a factual nature as distinguished from opinion that are relevant to the merits of the rule and that were created or compiled by the department and considered by the council of human services, mental health and developmental disabilities commission, or HAWK-I board in connection with the formulation, proposal, or adoption of the rule or the proceeding upon which the rule is based, except to the extent the department is authorized by law to keep them confidential; provided, however, that when any materials are deleted because they are authorized by law to be kept confidential, the department shall identify in the record the particular materials deleted and state the reasons for that deletion.

d. Any official transcript of oral presentations made in the proceeding upon which the rule is based or, if not transcribed, the stenographic record or electronic recording of those presentations, and any memorandum prepared by a presiding officer summarizing the contents of those presentations.

e. A copy of any regulatory analysis or fiscal impact statement prepared for the proceeding upon which the rule is based.

f. A copy of the rule and any concise statement of reasons prepared for that rule.

g. All petitions for amendment or repeal or suspension of the rule.

h. A copy of any objection to the issuance of that rule without public notice and participation that was filed pursuant to Iowa Code section 17A.4(2) by the administrative rules review committee, the governor, or the attorney general.

i. A copy of any objection to the rule filed by the administrative rules review committee, the governor, or the attorney general pursuant to Iowa Code subsection 17A.4(4), and any department response to that objection.

j. A copy of any significant written criticism of the rule, including a summary of any requests for an exception to policy for the rule.

k. A copy of any executive order concerning the rule.

3.13(3) Effect of record. Except as otherwise required by a provision of law, the department rule-making record required by this rule need not constitute the exclusive basis for department action on that rule.

3.13(4) Maintenance of record. The department shall maintain the rule-making record for a period of not less than five years from the later of the date the rule to which it pertains became effective or the date of the Notice of Intended Action.

441--3.14(17A) Filing of rules. The department shall file each rule it adopts in the office of the administrative rules coordinator. The filing shall be executed as soon after adoption of the rule as is practicable. At the time of filing, each rule shall have attached to it any fiscal impact statement and any concise statement of reasons that was issued with respect to that rule. If a fiscal impact statement or statement of reasons for that rule was not issued until a time subsequent to the filing of that rule, the note or statement must be attached to the filed rule within five working days after the fiscal impact statement or concise statement is issued. In filing a rule, the department shall use the standard form prescribed by the administrative rules coordinator.

441--3.15(17A) Effectiveness of rules prior to publication.

3.15(1) Grounds. The department may make a rule effective after its filing at any stated time prior to 35 days after its indexing and publication in the Iowa Administrative Bulletin if it finds that a statute so provides, the rule confers a benefit or removes a restriction on some segment of the public, or that the effective date of the rule is necessary to avoid imminent peril to the public health, safety, or welfare. The department shall incorporate the required finding and a brief statement of its supporting reasons in each rule adopted in reliance upon this subrule.

3.15(2) Special notice. When the department makes a rule effective prior to its indexing and publication in reliance upon the provisions of Iowa Code section 17A.5(2)"b"(3), the department shall employ all reasonable efforts to make its contents known to the persons who may be affected by that rule prior to the rule's indexing and publication. The term "all reasonable efforts" requires the department to employ the most effective and prompt means of notice rationally calculated to inform potentially affected parties of the effectiveness of the rule that is justified and practical under the circumstances considering the various alternatives available for this purpose, the comparative costs to the department of utilizing each of those alternatives, and the harm suffered by affected persons from any lack of notice concerning the contents of the rule prior to its indexing and publication. The means that may be used for providing notice of such rules prior to their indexing and publication include, but are not limited to, any one or more of the following means: radio, newspaper, television, signs, mail, telephone, personal notice, or electronic means.

A rule made effective prior to its indexing and publication in reliance upon the provisions of Iowa Code section 17A.5(2)"b"(3) shall include in that rule a statement describing the reasonable efforts that will be used to comply with the requirements of subrule 3.15(2).

441--3.16(17A) Review by department of rules.

3.16(1) Request for review. Any interested person, association, agency, or political subdivision may submit a written request to the administrative rules coordinator for the department to conduct a formal review of a specified rule. Upon approval of that request by the administrative rules coordinator, the department shall conduct a formal review of a specified rule to determine whether a new rule should be adopted instead or the rule should be amended or repealed. The department may refuse to conduct a review if it has conducted a review of the specified rule within five years prior to the filing of the written request.

3.16(2) Conduct of review. In conducting the formal review, the department shall prepare within a reasonable time a written report summarizing its findings, its supporting reasons, and any proposed course of action. The report shall include a concise statement of the department's findings regarding the rule's effectiveness in achieving its objectives, including a summary of any available supporting data. The report shall also concisely describe significant written criticisms of the rule received during the previous five years, including a summary of any requests for exceptions to the rule received by the department or granted by the department. The report shall describe alternative solutions to resolve the criticisms of the rule, the reasons any were rejected, and any changes made in the rule in response to the criticisms as well as the reasons for the changes. A copy of the department's report shall be sent to the administrative rules review committee and the administrative rules coordinator. The report shall also be available for public inspection.

These rules are intended to implement Iowa Code chapter 17A as amended by 1998 Iowa Acts, chapter 1202, and Iowa Code section 25B.6.

ITEM 2. Rescind 441--Chapter 4 and insert the following new 441--Chapter 4 in lieu thereof:

441--4.1(17A) Petition for rule making. Any person or state agency may file a petition for rule making with the department at the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114. A petition is deemed filed when it is received by that office. The department must provide the petitioner with a file-stamped copy of the petition if the petitioner provides the department an extra copy for this purpose. The petition must be typewritten, or legibly handwritten in ink, and must substantially conform to the following form:

BEFORE THE DEPARTMENT OF HUMAN SERVICES
Petition by (Name of Petitioner) for the (adoption, amendment, or repeal) of rules relating to (state subject matter).	}	PETITION FOR RULE MAKING

The petition must provide the following information:

1. A statement of the specific rule-making action sought by the petitioner including the text or a summary of the contents of the proposed rule or amendment to a rule and, if it is a petition to amend or repeal a rule, a citation and the relevant language to the particular portion or portions of the rule proposed to be amended or repealed.

2. A citation to any law deemed relevant to the department's authority to take the action urged or to the desirability of that action.

3. A brief summary of petitioner's arguments in support of the action urged in the petition.

4. A brief summary of any data supporting the action urged in the petition.

5. The names and addresses of other persons, or a description of any class of persons, known by petitioner to be affected by, or interested in, the proposed action which is the subject of the petition.

6. Any request by petitioner for a meeting provided for by subrule 4.4(1).

4.1(1) The petition must be dated and signed by the petitioner or the petitioner's representative. It must also include the name, mailing address, and telephone number of the petitioner and petitioner's representative, and a statement indicating the person to whom communications concerning the petition should be directed.

4.1(2) The department may deny a petition because it does not substantially conform to the required form.

441--4.2(17A) Briefs. The petitioner may attach a brief to the petition in support of the action urged in the petition. The department may request a brief from the petitioner or from any other person concerning the substance of the petition.

441--4.3(17A) Inquiries. Inquiries concerning the status of a petition for rule making may be made to Rules Coordinator, Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114.

441--4.4(17A) Agency consideration.

4.4(1) Forwarding of petition and meeting. Within five working days after the filing of a petition, the department shall submit a copy of the petition and any accompanying brief to the administrative rules coordinator and to the administrative rules review committee. Upon request by the petitioner in the petition, the department shall schedule a brief and informal meeting between the petitioner and a member of the staff of the department to discuss the petition. The department may request the petitioner to submit additional information or argument concerning the petition. The department may also solicit comments from any person on the substance of the petition. Also, comments on the substance of the petition may be submitted to the department by any person.

4.4(2) Action on petition. Within 60 days after the filing of the petition, or within any longer period agreed to by the petitioner, the department shall, in writing, deny the petition, and notify petitioner of its action and the specific grounds for the denial, or grant the petition and notify petitioner that it has instituted rule-making proceedings on the subject of the petition. Petitioner shall be deemed notified of the denial or grant of the petition on the date when the department mails or delivers the required notification to petitioner.

4.4(3) Denial of petition for nonconformance with form. Denial of a petition because it does not substantially conform to the required form does not preclude the filing of a new petition on the same subject that seeks to eliminate the grounds for the department's rejection of the petition.

These rules are intended to implement Iowa Code section 17A.7 as amended by 1998 Iowa Acts, chapter 1202, section 11.

ITEM 3. Rescind 441--Chapter 5 and insert the following new 441--Chapter 5 in lieu thereof:

441--5.1(17A) Petition for declaratory order. Any person may file a petition with the department for a declaratory order as to the applicability to specified circumstances of a statute, rule, or order within the primary jurisdiction of the department at the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114. A petition is deemed filed when it is received by that office. The department shall provide the petitioner with a file-stamped copy of the petition if the petitioner provides the department an extra copy for this purpose. The petition must be typewritten or legibly handwritten in ink and should substantially conform to the following form:

BEFORE THE DEPARTMENT OF HUMAN SERVICES
Petition by (Name of Petitioner) for a Declaratory Order on (cite provisions of law involved).	}	PETITION FOR DECLARATORY ORDER

The petition must provide the following information:

1. A clear and concise statement of all relevant facts on which the order is requested. For public assistance policy rulings, the request should state facts such as the amount of income and resources of a person who may be affected by the policy.

2. A citation and the relevant language of the specific statutes, rules, or orders, whose applicability is questioned, and any other relevant law.

3. The questions petitioner wants answered, stated clearly and concisely.

4. The answers to the questions desired by the petitioner and a summary of the reasons urged by the petitioner in support of those answers. A request which seeks to change rather than to declare or determine policy will be denied.

5. The reasons for requesting the declaratory order and disclosure of the petitioner's interest in the outcome.

6. A statement indicating whether the petitioner is currently a party to another proceeding involving the questions at issue and whether, to the petitioner's knowledge, those questions have been decided by, are pending determination by, or are under investigation by, any governmental entity.

7. The names and addresses of other persons, or a description of any class of persons, known by the petitioner to be affected by, or interested in, the questions presented in the petition.

8. Any request by the petitioner for a meeting provided for by rule 441--5.7(17A).

9. The petitioner's state identification number, if applicable.

The petition must be dated and signed by the petitioner or the petitioner's representative. It must also include the name, mailing address, and telephone number of the petitioner and petitioner's representative and a statement indicating the person to whom communications concerning the petition should be directed.

441--5.2(17A) Notice of petition. Within five working days of receipt of a petition for a declaratory order, the department shall give notice of the petition to all persons not served by the petitioner pursuant to rule 441--5.6(17A) to whom notice is required by any provision of law.

441--5.3(17A) Intervention.

5.3(1) Nondiscretionary intervention. Persons who qualify under any applicable provision of law as an intervenor and who file a petition for intervention within 15 working days of the filing of a petition for declaratory order and before the 30-day time for department action under rule 441--5.8(17A) shall be allowed to intervene in a proceeding for a declaratory order.

5.3(2) Discretionary intervention. Any person who files a petition for intervention at any time prior to the issuance of an order may be allowed to intervene in a proceeding for a declaratory order at the discretion of the department.

5.3(3) Filing and form of petition for intervention. A petition for intervention shall be filed at the bureau of policy analysis. A petition is deemed filed when it is received by that office. The department shall provide the petitioner with a file-stamped copy of the petition for intervention if the petitioner provides an extra copy for this purpose. A petition for intervention must be typewritten or legibly handwritten in ink and should substantially conform to the following form:

BEFORE THE DEPARTMENT OF HUMAN SERVICES
Petition by (Name of Original Petitioner) for a Declaratory Order on (cite provisions of law cited in Original Petition).	}	PETITION FOR INTERVENTION

The petition for intervention must provide the following information:

1. Facts supporting the intervenor's standing and qualifications for intervention.

2. The answers urged by the intervenor to the question or questions presented and a summary of the reasons urged in support of those answers.

3. Reasons for requesting intervention and disclosure of the intervenor's interest in the outcome.

4. A statement indicating whether the intervenor is currently a party to any proceeding involving the questions at issue and whether, to the intervenor's knowledge, those questions have been decided by, are pending determination by, or are under investigation by, any governmental entity.

5. The names and addresses of any additional persons, or a description of any additional class of persons, known by the intervenor to be affected by, or interested in, the questions presented.

6. Whether the intervenor consents to be bound by the determination of the matters presented by the declaratory order proceeding.

The petition must be dated and signed by the intervenor or the intervenor's representative. It must also include the name, mailing address, and telephone number of the intervenor and the intervenor's representative, and a statement indicating the person to whom communications should be directed.

441--5.4(17A) Briefs. The petitioner or any intervenor may file a brief in support of the position urged. The department may request a brief from the petitioner, any intervenor, or any other person concerning the questions raised.

441--5.5(17A) Inquiries. Inquiries concerning the status of a declaratory order proceeding may be made to the Rules Coordinator, Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114.

441--5.6(17A) Service and filing of petitions and other papers.

5.6(1) Service. Except where otherwise provided by law, every petition for declaratory order, petition for intervention, brief, or other paper filed in a proceeding for a declaratory order shall be served by mailing or personal delivery upon each of the parties of record to the proceeding, and on all other persons identified as affected by or interested in the questions presented, simultaneously with their filing. The party filing a document is responsible for service on all parties and other affected or interested persons. All documents filed shall indicate all parties or other persons served and the date and method of service.

5.6(2) Filing. All petitions for declaratory orders, petitions for intervention, briefs, or other papers in a proceeding for a declaratory order shall be filed with the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114. All documents are considered filed upon receipt.

441--5.7(17A) Consideration. Upon request by the petitioner, the department shall schedule a brief and informal meeting between the original petitioner, all intervenors, and a member of the staff of the department, to discuss the questions raised. The department may solicit comments from any person on the questions raised. Also, comments on the questions raised may be submitted to the department by any person.

441--5.8(17A) Action on petition.

5.8(1) Time frames for action. Within 30 days after receipt of a petition for a declaratory order, the director or the director's designee shall take action on the petition as required by 1998 Iowa Acts, chapter 1202, section 13, subsection 5.

5.8(2) Date of issuance of order. The date of issuance of an order or of a refusal to issue an order is the date of mailing of the order or refusal or date of delivery if service is by other means unless another date is specified in the order.

441--5.9(17A) Refusal to issue order.

5.9(1) Reasons for refusal to issue order. The department shall not issue a declaratory order where prohibited by 1998 Iowa Acts, chapter 1202, section 13, subsection 1, and may refuse to issue a declaratory order on some or all questions raised for the following reasons:

1. The petition does not substantially comply with the required form.

2. The petition does not contain facts sufficient to demonstrate that the petitioner will be aggrieved or adversely affected by the failure of the department to issue an order.

3. The department does not have jurisdiction over the questions presented in the petition.

4. The questions presented by the petition are also presented in a current rule making, contested case, or other department or judicial proceeding, that may definitively resolve them.

5. The questions presented by the petition would more properly be resolved in a different type of proceeding or by another body with jurisdiction over the matter.

6. The facts or questions presented in the petition are unclear, overbroad, insufficient, or otherwise inappropriate as a basis upon which to issue an order.

7. There is no need to issue an order because the questions raised in the petition have been settled due to a change in circumstances.

8. The petition is not based upon facts calculated to aid in the planning of future conduct but is, instead, based solely upon prior conduct in an effort to establish the effect of that conduct or to challenge a department decision already made.

9. The petition requests a declaratory order that would necessarily determine the legal rights, duties, or responsibilities of other persons who have not joined in the petition, intervened separately, or filed a similar petition and whose position on the questions presented may fairly be presumed to be adverse to that of petitioner.

10. The petitioner requests the department to determine whether a statute is unconstitutional on its face.

5.9(2) Action on refusal. A refusal to issue a declaratory order must indicate the specific grounds for the refusal and constitutes final department action on the petition.

5.9(3) Filing of new petition. Refusal to issue a declaratory order pursuant to this provision does not preclude the filing of a new petition that seeks to eliminate the grounds for the department's refusal to issue a ruling.

441--5.10(17A) Contents of declaratory order--effective date. In addition to the ruling itself, a declaratory order must contain the date of its issuance, the name of petitioner and all intervenors, the specific statutes, rules, or orders involved, the particular facts upon which it is based, and the reasons for its conclusion.

A declaratory order is effective on the date of issuance.

441--5.11(17A) Copies of orders. A copy of all orders issued in response to a petition for a declaratory order shall be mailed promptly to the original petitioner and all intervenors.

441--5.12(17A) Effect of a declaratory order. A declaratory order has the same status and binding effect as a final order issued in a contested case proceeding. It is binding on the department, the petitioner, and any intervenors who consent to be bound and is applicable only in circumstances where the relevant facts and the law involved are indistinguishable from those on which the order was based. As to all other persons, a declaratory order serves only as precedent and is not binding on the department. The issuance of a declaratory order constitutes final agency action on the petition.

These rules are intended to implement 1998 Iowa Acts, chapter 1202, section 13.

ARC 8616A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of 1998 Iowa Acts, chapter 1196, section 6, subsection 8, and section 14, the Department of Human Services proposes to amend Chapter 86, "Healthy and Well Kids in Iowa (HAWK-I) Program," appearing in the Iowa Administrative Code.

Rules implementing the HAWK-I program were adopted by the HAWK-I Board and are published herein as ARC 8615A to be effective January 1, 1999. Those rules were noticed as ARC 8450A in the November 4, 1998, Iowa Administrative Bulletin.

Subrules 86.15(7) and 86.15(8) of those rules establish the appeal process for health plans. Subrule 86.15(7) establishes procedures which must be followed by the health plans and subrule 86.15(8) provides that an enrollee shall exhaust the established grievance procedure of the participating health plan before appealing the issue to the Department in accordance with 441--Chapter 7.

Public comments were received on those subrules from client advocates and from health plans. Client advocates felt that enrollees should be able to appeal directly to the Department and wanted clarification of which issues can be appealed. They asked that expedited time frames be established for emergency medical conditions. Health plans felt that there should be no further appeal to the Department on service and medical necessity issues and wanted the 30-day time frame for resolution of appeals changed to 60 days.

The Department has reviewed both points of view and believes that the HAWK-I program is to operate as a private insurance program, rather than a governmental entitlement program and there should be no appeal of coverage issues to the Department. The time limit for appeals should be extended to 60 days.

It is believed, however, that these are substantive changes from the rules that were published under Notice of Intended Action as ARC 8450A in the November 4, 1998, Iowa Administrative Bulletin. Therefore, the Department is revising these subrules in a separate rule making using the emergency authority set forth in 1998 Iowa Acts, chapter 1196, section 14, and is also placing this rule making under Notice of Intended Action to obtain public comments.

The Department has also revised subrule 86.15(7) to clarify what may be appealed, to require the health plan to establish time frames appropriate to the situations for emergency medical conditions, and to require the decision on the appeal be made by a physician or clinical peer not previously involved in the case. Other changes are made throughout the rules to reflect changes in terminology.

The substance of these amendments is also Adopted and Filed Emergency and is published herein as ARC 8617A. The purpose of this Notice is to solicit comment on that submission, the subject matter of which is incorporated by reference.

Consideration will be given to all written data, views, and arguments thereto received by the Bureau of Policy Analysis, Department of Human Services, Hoover State Office Building, Des Moines, Iowa 50319-0114, on or before February 3, 1999.

These amendments are intended to implement 1998 Iowa Acts, chapter 1196.

ARC 8619A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code Supplement section 514B.33, the Insurance Division proposes to adopt Chapter 41, "Limited Service Organizations," Iowa Administrative Code.

The proposed rules set forth the provisions and requirements for licensure of limited service organizations in the state. Included in the proposed rules are definitions, application requirements, governing body and enrollee representation, quality of care requirements, complaint procedures, cancellation of enrollee requirements, application for certificate of authority, net equity and deposit requirements, fidelity bond and annual report requirements, cash or asset management agreements, reinsurance, provider contracts, emergency services and reimbursement provisions, provider requirements and disclosure requirements.

Any interested person may submit written comments on the proposed rules on or before February 16, 1999. These comments should be directed to Susan E. Voss, Projects Director, Insurance Division, 330 E. Maple Street, Des Moines, Iowa 50319. Comments may also be transmitted byE-mail to susan.voss@comm6.state.ia.us or by fax to (515) 281-3059.

A public hearing will be held on Friday, February 12, 1999, at 10 a.m. at the offices of the Insurance Division, 330 E. Maple Street, Des Moines, Iowa 50319. Persons wishing to speak should contact Susan E. Voss no later than February 10, 1999.

These rules are intended to implement Iowa Code Supplement section 514B.33.

The following new chapter is proposed.

191--41.1(514B) Definitions.

"Act" when used in these rules shall mean Iowa Code chapter 514B.

"Complaint" means a written communication expressing a grievance concerning a limited service organization.

"Governing body" means the persons in which the ultimate responsibility and authority for the conduct of the LSO is vested.

"Limited health services" include dental care services, vision care services, mental health services, behavioral health care services, substance abuse services, pharmaceutical services, podiatric care services, chiropractic services, nursing services, services of a licensed dietitian, physical therapy services, or any other category of services approved by the commissioner. "Limited health services" do not include employee assistance programs which provide only assessment and referral services or intermediate or long-term care facilities.

"Limited service organization (LSO)" means any corporation or limited liability company or other entity which, in return for prepayment, undertakes to provide or arrange for the provision of one or more limited health services to enrollees. Entities authorized to do business pursuant to Iowa Code chapters 508, 512B, 514, 514B (health maintenance organizations), 515, 520 and organized delivery systems shall not be required to obtain separate licensure as an LSO.

"Outpatient provider services" means outpatient provider services provided within or outside of a hospital. These services shall include, but not be limited to, laboratory and diagnostic X-ray with emphasis directed toward primary care.

"Producer" means a person engaged in solicitation or enrollment for an LSO and who ultimately delivers the certificate of membership or policy to a member.

"Provider" means any person or institution duly licensed or otherwise authorized to deliver or furnish limited health services.

191--41.2(514B) Application. An application on forms provided by the insurance division accompanied by a filing fee of $100 payable to State Treasurer, State of Iowa, shall be completed by an officer or authorized representative of the LSO. The application with copies in duplicate shall be executed in conformance with rule 41.10(514B) and shall be accompanied by the information found in Iowa Code sections 514B.3(1) to 514B.3(14). An application shall not be deemed to be filed until all information necessary to properly process said application has been received by the commissioner, as indicated in rule 41.10(514B). Amendments to the application form shall be filed in the same manner as the application and approved by the commissioner before the change proposed by the amendment is effective.

191--41.3(514B) Inspection of evidence of coverage. Except for groups which maintain a cafeteria plan pursuant to Section 125 of the Internal Revenue Code (28 U.S.C.A.§ 125), an enrollee may, if evidence of coverage is not satisfactory for any reason, return evidence of coverage within ten days of receipt of same and receive full refund of the deposit paid, if any. This right shall not act as a cure for misleading or deceptive advertising or marketing methods, nor may it be exercised if the enrollee utilizes the services of the LSO within the ten-day period. Enrollees in cafeteria plans must adhere to the plan provisions concerning termination or changes in coverage.

191--41.4(514B) Governing body and enrollee representation. An LSO shall have a basic written organizational document setting forth its scheme of organization and establishing a governing body appropriate to its form of organization. The governing body shall be responsible for matters of policy and operation.

The LSO shall develop bylaws or guidelines which describe the scope of the health care services the LSO renders to enrollees directly by a provider. Initial articles of incorporation, bylaws, guidelines of the LSO and revisions thereto shall be submitted to the commissioner of insurance for review and approval.

The articles of incorporation, bylaws, guidelines, or similar document shall provide for "reasonable representation" on the governing body by enrollees. "Reasonable representation" as used in Iowa Code section 514B.7 shall require that not less than 30 percent of the governing board members be enrollees who are not providers or are not associated with a provider. Enrollees shall have the opportunity to nominate said enrollee representatives.

The LSO may provide upon its initial formation that all representatives on the governing board shall be selected by the organizers of the LSO. Such members shall serve until the first annual meeting or election. If there are no enrollee representatives on the initial governing board, they shall be elected at the first annual meeting or election. The nomination procedures for enrollee representatives should provide for the following to ensure an adequate opportunity for participation by enrollees:

41.4(1) An opportunity for adult enrollees to nominate candidates for the governing body.

41.4(2) Notice to all adult enrollees of the nomination and elective procedures. The LSO shall be deemed to have complied with these requirements if it provides notice in its regular newsletter to enrollees of the opportunity to and the procedures for nomination of enrollee representatives. Nomination procedures may be waived by the commissioner for a period of up to three years from the LSO's commencement of delivery of services to enrollees.

191--41.5(514B) Quality of care. Each LSO shall:

41.5(1) Advise the insurance division annually of the ratio of full-time providers and ancillary health personnel to enrollees to ensure an adequate network. Changes in the provider ratios shall be immediately reported together with action taken to correct any deficiencies in the ratios.

41.5(2) Provide assurance that all personnel engaged in the provision of health services to enrollees are currently licensed or certified by the appropriate state agency where the providers are located to practice their respective professions. These personnel shall be no less qualified in their respective professions than the current level of qualification, which is maintained in the providers' communities.

41.5(3) Provide assurance that any health care facilities utilized by the LSO are licensed by the appropriate state agency where the facilities are located. These facilities shall be accredited by the Joint Commission on Accreditation of Hospitals or the American Osteopathic Association; or they shall be certified as a provider for Medicare or Medicaid; or as otherwise accredited or licensed in accordance with state or federal law.

41.5(4) Have a qualified administrator designated by the governing body who shall be responsible for the management of the LSO.

41.5(5) Provide for an ongoing internal peer review program.

41.5(6) Maintain a provider records system which includes at a minimum the following information:

a. Documentation of utilization rates for every enrollee.

b. Patient's name, identification number, age, sex, and place of residence, and place of employment, if applicable.

c. Services provided, when provided, where provided, and by whom.

d. Provider diagnosis, treatment prescribed, therapy prescribed and drugs administered.

e. Statement in regard to the status of the patient's health, as appropriate.

41.5(7) Provide by contract or other arrangement for peer review. The plans for internal and external peer review shall be submitted to the commissioner of insurance for approval.

a. Internal peer review shall be conducted by the LSO staff on a continuing basis using standards adopted by the applicable accrediting body as a general guide. Internal peer review shall be structured to review the specific type of services for which the LSO is responsible. This review shall include but not be limited to the following:

(1) Utilization review and evaluation of the quality of services provided enrollees.

(2) The process or method by which services are provided.

(3) The outcome of services.

b. External review may be satisfied either by NCQA certification or meeting the requirements of the external review group appointed by the commissioner. The criteria and methodology for selection of an external review group (ERG) are as follows:

(1) The commissioner will appoint an ERG based on the following criteria:

1. The group's experience in evaluating the quality of service provided.

2. The degree to which the group is representative of the LSOs to be reviewed.

3. The degree to which the group is knowledgeable about the delivery of the services provided by the LSO in Iowa.

4. The group's ability to coordinate its activities with other review groups and with practitioners and providers of health services in Iowa.

5. The group's knowledge of current and accepted provider opinion and its ability to make qualitative evaluations of clinical practice.

(2) No provider shall review an LSO of which the provider is a member.

(3) Appointment of an ERG will be for a four-year period, and only one ERG will be appointed at a time. Applications for appointment or reappointment will be accepted between 180 days and 90 days before the expiration of the acting ERG's four-year term.

c. The following are criteria and methodology by which an ERG will evaluate the effectiveness of an LSO's peer review program:

(1) The ERG will conduct an on-site inspection of each Iowa-certified LSO every two years.

(2) The inspection will consist of an interview with LSO staff and providers and a review of records (including clinical records of LSO patients) the ERG determines are necessary to conduct its inspection. The records may include any records or parts thereof maintained by the LSO or any of its provider members which pertain to LSO quality assurance operations or LSO patients, excluding financial records.

(3) The function of the ERG will be to make a qualitative evaluation of the effectiveness of an LSO's internal peer review program and to report its findings to the insurance division.

(4) The following items will be considered by the ERG in making its determination:

1. The extent and acuity of the LSO's peer review program in evaluating the clinical management of enrollees provided by LSO providers.

2. The ability of the LSO's program to identify aberrant practices in clinical management and to take appropriate disciplinary action.

3. The method within the LSO by which the peer review program reports its findings to the provider staff and the governing body.

4. The authority within the LSO to correct practices which the peer review program has found to be detrimental.

5. The system developed within the LSO to facilitate the work of the peer review program.

6. The commitment on the part of the LSO governing body and provider staff toward an active peer review program with a goal of quality assurance.

d. The following are procedures to be followed upon completion of an ERG's inspection:

(1) Within 30 days of the completion of its inspection, the ERG will submit a written report of its findings to the LSO.

(2) The LSO will have 45 days to respond to the ERG.

(3) The ERG must file its final report with the insurance division within 90 days of the completion of its inspection. The final report must include any comments received from the LSO.

(4) The insurance division may extend the time periods referred to in 41.5(7)"d"(1) to (3).

(5) After considering the report of the ERG, the insurance commissioner shall determine if the LSO's certificate of authority is to be continued, suspended or revoked.

191--41.6(514B) Change of name. No name other than that certified by the division may be used. The name of the LSO may not be changed without prior approval of the division.

191--41.7(514B) Change of ownership. Each LSO which desires to transfer ownership of more than 10 percent of the stock or ownership interest in the LSO shall not do so without first submitting a proposed plan to the division for review and approval or disapproval.

191--41.8(514B) Complaints.

41.8(1) Each LSO shall provide in its bylaws for a system to resolve and record complaints.

41.8(2) The complaint system shall provide for the resolution of the following kinds of complaints and the recording of the information required to be reported to the commissioner.

a. Complaints about the quality of health care services provided by the LSO.

b. Complaints about the availability of such services.

c. Complaints relating to enrollee participation in the operation of the LSO.

41.8(3) The complaints record shall be included in the annual report to the commissioner.

41.8(4) All complaint files shall be retained by the LSO until the examination for the period during which the complaint was received has been completed.

191--41.9(514B) Cancellation of enrollees.

41.9(1) Membership of an enrollee in an LSO may be terminated by the LSO for the following reasons and no other:

a. Nonpayment of charges when due.

b. Termination of the conditions, other than a change in the health of the enrollee, under which the enrollee became eligible to be enrolled under a group contract.

c. Termination of the group contract under which the enrollee was enrolled.

d. Change of place of residence of the enrollee from the geographic area served by the LSO.

e. Failure of the enrollee to pay deductible or coinsurance charges permitted under Iowa Code section 514B.5(3).

f. Unreasonable refusal of the enrollee to follow a prescribed course of treatment.

g. A materially false statement or misrepresentation by the enrollee in an application for membership or benefits.

h. Withdrawal of licensure by the LSO from the state. Upon withdrawal, an LSO has no obligation to secure replacement coverage for enrollees.

41.9(2) Membership of an enrollee in an LSO may be terminated only upon giving a notice of cancellation not less than 30 days before the date of termination. Such notice shall:

a. Be given by delivery of the notice in duplicate to the enrollee in person or by certified mail addressed to the enrollee at the last address known to the LSO.

b. State the date and hour upon which the enrollment shall terminate.

c. State the reason for cancellation.

d. If cancellation is for nonpayment of charges, state the amount of charges due, the cost of preparing and serving the notice, and the total cost of charges and preparing the notice, and that if the enrollee pays the amount of charges due plus the cost of preparing and serving the notice at any time before the cancellation date, the coverage will remain in force.

e. State that the enrollee has the right to a hearing before the commissioner if requested by the enrollee within 20 days after receipt of notice of cancellation.

f. Provide for the enrollee to indicate on the notice that the enrollee requests such hearing.

g. State that the enrollee may request such hearing by forwarding one copy of the notice of cancellation, marked to request a hearing, to the Commissioner of Insurance, 330 E. Maple Street, Des Moines, Iowa 50319.

41.9(3) When a hearing is requested, the commissioner may require the LSO to continue to provide coverage during the pendency of the hearing and a period of not more than ten days after the decision is made known. The commissioner may require the enrollee, as a condition of granting continued coverage, to pay the LSO the charges for such period of coverage.

41.9(4) The hearing shall be held before the commissioner or the delegated administrative law judge in the following manner:

a. Upon receipt of a request for hearing, the commissioner shall notify the LSO and the enrollee of the time and place of hearing.

b. Formal rules of evidence need not be observed, but no evidence shall be received which does not relate to the issue.

c. The burden of proof shall be upon the LSO to show by a preponderance of the evidence that it had good cause for cancellation for one or more of the reasons stated in the notice and provided herein, except that when the cancellation is for nonpayment of charges, the burden of proof shall be upon the enrollee to show a tender of payment before the date of cancellation.

d. At the close of the hearing, or as soon thereafter as possible, the commissioner shall advise the parties of the commissioner's decision.

191--41.10(514B) Application for certificate of authority. The application for certificate of authority shall be in the following form:

Organized as __________________________________ under the laws of the state of ________________________, makes application to the commissioner of insurance for a certificate of authority to establish and operate a limited service organization in compliance with Iowa Code chapter 514B.

Attached and made a part of this application are exhibits bearing numbers corresponding to the following:

1. A copy of the basic organizational document of the applicant, such as the articles of incorporation, articles of association or other applicable documents and all of its amendments.

2. A copy of the bylaws, rules or similar document regulating the conduct of the internal affairs of the applicant.

3. A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers if a corporation and the partners or members if a partnership or association.

3.1 A list of the names and addresses of each owner of 5 percent or more of the LSO.

4. A copy of any contract made or to be made between any providers and the applicant.

4.1 A copy of any contract made or to be made between the applicant and any person listed in paragraph "3" above.

4.2 A copy of any contract made or to be made between the applicant and any person for management services.

5. A statement generally describing the LSO including, but not limited to, a description of its facilities and personnel.

6. A copy of the form of evidence of coverage.

7. A copy of the form of the group contract, if any, which is to be issued to employers, unions, trustees or other organizations.

8. Financial statements showing the applicant's assets, liabilities, and sources of financial support. If the applicant's financial affairs are audited by an independent certified public accountant, a copy of the applicant's most recent regular certified financial statement is attached.

8.1 A copy of any contract made or to be made between the applicant and its reinsurer.

8.2 A copy of any contract made or to be made between the applicant and any person for cash or asset management services.

9. A description of the proposed method of marketing the plan, a financial plan which includes a three-year projection of operating results anticipated, and a statement as to the sources of funding.

10. A power of attorney executed by the applicant, if not domiciled in this state, appointing the commissioner, the commissioner's successors in office and deputies as the true and lawful attorney of the applicant for this state upon whom all lawful process in any legal action or proceeding against the LSO on a cause of action arising in this state may be served.

11. A statement reasonably describing the geographic area to be served and assessing in detail the economic feasibility of the LSO's projected operation.

12. A description of the complaint procedures to be utilized as required under Iowa Code section 514B.14.

13. A description of the procedures and programs to be implemented to meet the requirements for quality of health care as determined by the commissioner of insurance under Iowa Code section 514B.4.

14. A description of the mechanism by which enrollees shall be allowed to participate in matters of policy and operation as required by Iowa Code section 514B.7.

14.1 A copy of the notice to be given to enrollees of the procedure for nomination and election of members of the governing body.

15. A schedule of the liability and workers' compensation insurance to be maintained in force by the LSO.

The undersigned deposes and states that deponent has duly executed the attached application, dated ______, ____,

(Year)

for and on behalf of________________________________;

(Name of Applicant)

that the deponent is the_____________________________ (Title of Officer)

of such company, and that deponent is authorized to execute and file such instrument. Deponent further states that deponent is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of deponent's knowledge, information and belief.

(Signature)

(type or print name beneath)

Subscribed and sworn to before me by _______________on this ________ day of _________________, ____.

(Year)

(Notary Public)

191--41.11(514B) Net equity and deposit requirements.

41.11(1) Net equity requirements.

a. Each LSO shall, at all times, have and maintain a tangible net equity at least equal to the greater of:

(1) $100,000 at the inception of the first year of operation, $200,000 at the inception of the second year of operation and thereafter; or

(2) Two percent of the organization's annual gross premium income, up to a maximum of the required capital and surplus of an accident and health insurer.

b. An LSO that has uncovered expenses in excess of $500,000, as reported on the most recent annual financial statement filed with the commissioner, shall maintain tangible net equity equal to 25 percent of the uncovered expense in excess of $500,000 in addition to the tangible net equity required by paragraph 41.11(1)"a."

c. For the purpose of this rule, "net equity" shall mean the excess of total assets over total liabilities, excluding liabilities which have been subordinated in a manner acceptable to the commissioner; and "net equity" shall mean net equity reduced by the value assigned to intangible assets, including, but not limited to:

(1) Goodwill;

(2) Going-concern value;

(3) Organizational expense;

(4) Start-up costs;

(5) Obligations of officers, directors or affiliates, except short-term obligations of affiliates for goods or services arising in the normal course of business which are payable on the same terms as equivalent transactions with nonaffiliates and which are not past due;

(6) Long-term prepayments of deferred charges; and

(7) Nonreturnable deposits.

41.11(2) a. Each LSO shall deposit with the commissioner or with any organization or trustee meeting the requirements of rule 191--32.4(508) cash, securities or any combination of these that is acceptable to the commissioner having a fair market value equal to the minimum net worth of the LSO as determined by paragraph 41.11(1)"a." The amount on deposit shall remain as an admitted asset of the organization in the determination of its net worth.

b. All income from deposits shall be an asset of the LSO. An LSO may withdraw a deposit or any part thereof, first having deposited, in lieu thereof, a deposit of cash, securities, or any combination of these in an amount and value equal to that to be withdrawn. Securities shall be approved by the commissioner before being substituted.

41.11(3) No LSO organized under the laws of another state shall, directly or indirectly, assume risks or provide the services of an LSO, as defined in Iowa Code Supplement section 514B.33, subsection (3), unless it first obtains licensure from the commissioner and complies with the requirements of rule 191--41.11(514B).

41.11(4) As deemed necessary by the division, each LSO that is a subsidiary of another person shall file with the division, in a form satisfactory to the division, a guarantee of the LSO's obligations issued by the ultimate controlling parent or such other person satisfactory to the division.

41.11(5) Each LSO shall, at the time of application, pay to the division a one-time, nonrefundable fee of $10,000 to be used by the division to create a special fund solely for the payment of administrative expenses in connection with the insolvency of an LSO.

191--41.12(514B) Fidelity bond. An LSO shall maintain in force a fidelity bond on employees and officers in an amount not less than $100,000 or such other sum as may be prescribed by the commissioner. All such bonds shall be written with at least a one-year discovery period and if written with less than a three-year discovery period shall contain a provision that no cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, shall take effect prior to the expiration of 90 days after written notice of cancellation or termination has been filed with the commissioner unless an earlier date of cancellation or termination is approved by the commissioner.

191--41.13(514B) Annual report. An LSO shall annually, on or before the first day of March, file with the commissioner of insurance a report verified by at least two of its principal officers and covering the preceding calendar year. The report shall be on the form designated by the National Association of Insurance Commissioners (NAIC) as the report form for LSOs. The report shall be completed using statutory accounting practices (SAP), and shall include any other information required under law or rule.

The commissioner of insurance may request additional reports and information from an LSO as often as is deemed necessary to enable the commissioner to carry out the duties of Iowa Code chapter 514B.

191--41.14(514B) Cash or asset management agreements. If an LSO utilizes a cash or asset management arrangement with its parent, affiliate, or any other person, the arrangement shall be written and subject to prior approval by the commissioner. Cash or asset management agreements shall meet the following minimum requirements:

1. Cash receipts shall be under the direct control of the LSO that generated the receipts. If the system is under the control of the LSO's parent or affiliate, then receipts shall be transferred to the LSO within five working days.

2. Securities purchased shall be in the name of the LSO generating the funds for the security purchase.

3. An LSO's investments shall not be pooled with other entities' investments unless there is an agreement which vests an undivided interest in the pooled arrangement to the LSO. Such an agreement shall be subject to prior approval by the commissioner.

4. An LSO's cash or investments shall not be commingled with the cash or investments of any other person.

5. Investments made on behalf of an LSO shall be subject to the limitations imposed by Iowa Code sections 511.8 and 514B.15.

6. The agreement shall provide for prompt notice and verification of investments, establish responsibility for brokerage and other fees and provide for periodic reports on earnings and expenses.

7. A parent, affiliate, person, and employees thereof providing cash or asset management services shall be bonded and responsible for any physical loss of investments.

191--41.15(514B) Reinsurance. Reinsurance contracts and stop-loss agreements entered into by an LSO shall be subject to prior approval and shall meet the following minimum requirements:

1. Reinsurance contracts and stop-loss agreements shall provide that the commissioner of insurance be given notice of termination by certified mail at least 30 days prior to the effective date of termination of the reinsurance contract or stop-loss agreement.

2. Retention levels shall be reasonable in light of the LSO's financial condition and potential liabilities.

191--41.16(514B) Provider contracts. An LSO's arrangements for health care services shall be by written contract. Initial provider contracts shall be subject to prior approval. Thereafter, any provider contract deviating from previously submitted or approved contracts shall be submitted to the division for approval. In all instances, all provider contracts shall include the following provision:

(Provider), or its assignee or subcontractor, hereby agrees that in no event, including, but not limited to, nonpayment by the LSO, LSO insolvency or breach of this agreement, shall (Provider), or its assignee or subcontractor, bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against subscriber/enrollee or persons other than the LSO acting on the providers' behalf for services provided pursuant to this agreement. This provision shall not prohibit collection of supplemental charges or copayments on LSO's behalf made in accordance with terms of (applicable agreement) between LSO andsubscriber/enrollee.

(Provider), or its assignee or subcontractor, further agrees that (1) this provision shall survive the termination of this agreement regardless of the cause giving rise to termination and shall be construed to be for the benefit of the LSOsubscriber/enrollee and that (2) this provision supersedes any oral or written contrary agreement now existing orhereafter entered into between (Provider) and subscriber/enrollee or persons acting on their behalf.

191--41.17(514B) Producers' duties. In order to qualify for solicitation, enrollment, or delivery of a certificate of membership or policy in an LSO, a producer must comply with the licensing rules set forth in 191--Chapter 10 of the Iowa Administrative Code and in particular submit to an examination to determine the applicant's competence to sell accident and health insurance as described in rule 191-- 10.7(522), qualification 6.

191--41.18(514B) Emergency services. "Emergency services" (inpatient and outpatient), as defined in rule 191-- 40.20(514B), shall be provided by the LSO, either through its own facilities or through guaranteed arrangements with other providers, on a 24-hour basis unless a waiver from such services is approved by the commissioner. A provider and sufficient other licensed and ancillary personnel shall be readily available at all times to render such services. Since LSOs may not contract with every emergency care provider in an area, LSOs shall make every effort to inform members of participating providers.

191--41.19(514B) Reimbursement. Reimbursement to a provider of "emergency services," as defined in rule 191-- 40.20(514B), shall not be denied by any LSO without that organization's review of the patient's provider history, presenting symptoms, and admitting or initial as well as final diagnosis, submitted by the provider, in determining whether, by definition, emergency services could reasonably have been expected to be provided. Reimbursement for emergency services shall not be denied solely on the grounds that services were performed by a noncontracted provider. If reimbursement for emergency services is denied, the enrollee may file a complaint with the LSO as outlined in rule 191--40.9(514B). Upon denial of reimbursement for emergency services, the LSO shall notify the enrollee and the provider that they may register a complaint with the commissioner of insurance.

191--41.20(514B) Limited service organization requirements. An LSO shall not prohibit or otherwise restrict a participating provider from advising a covered person about the health status of the covered person or medical care or treatment of the covered person's condition or disease, regardless of whether benefits for such care or treatment are provided under the plan, if the provider is acting within the lawful scope of practice.

An LSO shall not penalize a provider because the provider, in good faith, reports to state or federal authorities any act or practice by the LSO that, in the opinion of the provider, jeopardizes patient health or welfare.

191--41.21(514B) Disclosure requirements. All LSOs shall include in contracts and evidence of coverage forms a statement disclosing the existence of any prescription drug formularies. Upon request, all LSOs offering policies under this chapter that include a prescription drug formulary shall inform policyholders, and prospective policyholders at time of issuance, whether a prescription drug specified in the request is included in such formulary.

All LSOs shall also disclose the existence of any contractual arrangements providing rebates received by them for drugs or durable medical equipment. Durable medical equipment means equipment that can stand repeated uses and is primarily and customarily used to serve a medical purpose and is generally not useful to a person who is not sick or injured or used by other family members and is appropriate for home use for the purpose of improving bodily function or preventing further deterioration of the medical condition caused by sickness or injury.

ARC 8606A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 455G.4, 455G.6, and 455G.11, the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board (Board) hereby proposes to amend Chapter 15, "Installers and Inspectors," Iowa Administrative Code.

Chapter 15 describes the guidelines for licensed individuals conducting installation and inspection services associated with underground storage tank systems which utilize program services. A portion of this chapter provides for insurance coverage provided by the Board for installers, liners, testers, and inspectors.

Iowa Code section 455G.11(6) as amended by 1998 Iowa Acts, chapter 1068, states "the Board may cease offering insurance coverage under this subsection if the Board determines that competitive private market alternatives exist." Pursuant to this provision, the Board directed the Administrator to conduct an evaluation of the installer and inspector commercial insurance markets. A copy of that report is on file with the Board. The report indicated that the program had 46 policies in effect, covering 31 firms and 45 individuals. This represented coverage to only 35 percent of the licensed individuals and 49 percent of the companies. The report indicated that individuals and companies who also worked outside of the state of Iowa currently utilize the private market for coverage in other states. The report concluded that the majority of licensed companies and individuals currently utilize commercial insurance available in the private marketplace. A viable private market exists which appears capable of absorbing the program's current insured population and providing comparable insurance coverage.

These amendments will rescind the installer/inspector insurance program currently offered by the Board. These amendments are intended to become effective December 31, 1999. As a result of these amendments, the Board will not be able to provide insurance coverage under the installer/inspector insurance program after December 1999. These amendments will require that all licensed companies and individuals obtain their insurance coverage from the private market for work which occurs on or after January 1, 2000.

Any interested person may make written suggestions or comments on these proposed amendments on or before February 2, 1999. Such written comments should be directed to the Administrator, Iowa Comprehensive Petroleum Underground Storage Tank Fund Board, 1000 Illinois Street, Suite B, Des Moines, Iowa 50314.

Persons who want to orally convey their views should contact Patrick Rounds, Administrator, Iowa Comprehensive Petroleum Underground Storage Tank Fund Board, at (515)284-1616, during regular business hours.

There will be a public hearing on February 2, 1999, at10 a.m. in the Conference Room of the Administrator's Office, 1000 Illinois Street, Suite B, Des Moines, Iowa. Persons may present their views at this public hearing either orally or in writing.

These amendments will not necessitate additional annual expenditures exceeding $100,000 by political subdivisions or agencies and entities which contract with political subdivisions. Therefore, no fiscal note accompanies this Notice.

These amendments are intended to implement Iowa Code sections 455G.4, 455G.6, and 455G.11 as amended by 1998 Iowa Acts, chapter 1068.

This rescission is intended to become effective December 31, 1999.

The following amendments are proposed.

Rescind subparagraph 15.5(4)"a"(1) and paragraphs 15.5(4)"b" to "g" effective December 31, 1999.

ARC 8605A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 147.76, the Board of Mortuary Science Examiners hereby gives Notice of Intended Action to amend Chapter 101, "Board of Mortuary Science Examiners," Iowa Administrative Code.

This proposed amendment allows licensees to apply continuing education credits earned from January 1, 1999, to June 30, 1999, either for the 1999 renewal or the following renewal of their funeral director's licenses. This will be allowed only during this transitional period of converting renewals to the licensee's birth month.

Any interested person may make written suggestions or comments on the proposed amendment on or before February 3, 1999.

This amendment is intended to implement Iowa Code chapters 156 and 272C.

The following amendment is proposed.

Adopt new subrule 101.101(8) as follows:

101.101(8) Continuing education credit earned from January 1, 1999, through June 30, 1999, may be used for either the July 1999 compliance or the following biennium period. The licensee may use the continuing education credit hours earned only once. Credit may not be duplicated for both compliance periods. This subrule applies only for the renewal biennium of 1999 and the following renewal biennium.

ARC 8609A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 136C.3, the Department of Public Health hereby gives Notice of Intended Action to amend Chapter 38, "General Provisions"; Chapter 39, "Registration of Radiation Machine Facilities, Licensure of Radioactive Materials and Transportation of Radioactive Materials"; Chapter 40, "Standards for Protection Against Radiation"; Chapter 41, "Safety Requirements for the Use of Radiation Machines and Certain Uses of Radioactive Materials"; Chapter 42, "Minimum Certification Standards for Diagnostic Radiographers, Nuclear Medicine Technologists, and Radiation Therapists"; Chapter 45, "Radiation Safety Requirements for Industrial/Non-medical Use of Radioactive Material and Radiation Producing Machines"; and Chapter 46, "Minimum Requirements for Tanning Facilities," Iowa Administrative Code.

These amendments incorporate changes in references for clarification and changes made at the federal level, which establish national radiation protection standards.

Acronyms used in this document are as follows:

ALARA - as low as reasonably achievable

TEDE - total effective dose equivalent

Any interested person may make written suggestions or comments on these proposed amendments prior to close of business on February 2, 1999. Such written materials should be directed to Donald A. Flater, Chief, Bureau of Radiological Health, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319; fax (515)242-6284 orE-mail at dflater@idph.state.ia.us.

A public hearing will be held on February 2, 1999, at9 a.m., Third Floor Conference Room, Side 1, Lucas State Office Building, Des Moines, Iowa 50319, at which time persons may present their views orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the rules.

Any persons who intend to attend a public hearing and have special requirements such as hearing or mobility impairments should contact the Department of Public Health and advise of specific needs.

The proposed amendments are intended to implement Iowa Code chapter 136C.

The following amendments are proposed.

ITEM 1. Amend subrule 38.1(2) as follows:

38.1(2) All references to Code of Federal Regulations (CFRs) in this chapter are those in effect as of July 1, 1998 1999.

ITEM 2. Amend rule 641--38.2(136C), definition of "Individual monitoring devices," as follows:

"Individual monitoring devices" means devices designed to be worn by a single individual for the assessment of dose equivalent. For purposes of these rules, "personnel dosimeter" and "dosimeter" are equivalent terms. Examples of individual monitoring devices are film badges, thermoluminescent dosimeters (TLDs), pocket ionization chambers, optically stimulated luminescent (OSL) devices, and personal air sampling devices.

ITEM 3. Amend rule 641--38.5(136C) as follows:

641--38.5(136C) Enforcement requirements Administrative actions.

38.5(1) Enforcement requirements. Upon determination by the agency that Iowa Code chapter 136C or any rule adopted pursuant to that chapter has been or is being violated, the agency may implement the policies and procedures specified in Bureau of Radiological Health Enforcement Program (BRH-EP-1).

38.5(2) Impounding. Sources of radiation shall be subject to impoundment pursuant to the Bureau of Radiological Health Enforcement Program (BRH-EP-1).

ITEM 4. Amend subrule 38.8(6) as follows:

38.8(6) Certification fees. Diagnostic radiographers, radiation therapists, and nuclear medicine technologists, other than licensed practitioners of the healing arts, are required to pay fees sufficient to defray the cost of administering 641--Chapter 42. Fees are as follows:

a. Annual fee. Each individual must submit a $45 initial fee for the first year and $35 annually.

b. Examination fee.

(1) Each individual making application to take an examination given by the agency as a general diagnostic radiographer, general nuclear medicine technologist, or general radiation therapist as defined in 641--Chapter 42 must pay a nonrefundable fee of $25 each time the individual takes the examination required by 641--Chapter 42. Effective January 1, 2000, each individual must pay a nonrefundable fee of $80 each time the individual takes the examination.

(2) Each individual making application to take an examination given by the agency as a limited diagnostic radiographer, limited nuclear medicine technologist, or limited radiation therapist as defined in 641--Chapter 42 must pay a nonrefundable fee of $35 each time the individual takes the examination required by 641--Chapter 42. Effective January 1, 2001, each individual must pay a nonrefundable fee of $85 each time the individual takes the examination.

(3) Each individual making application to take an examination given by the agency as a general nuclear medicine technologist as defined in 641--Chapter 42 must pay a nonrefundable fee of either $80 or $145, depending upon the testing facility chosen, effective January 1, 2000.

c. Recertification fees. Once certification has been terminated for failure to complete continuing education requirements, any individual who requests permission to reestablish certification within six months of the initial continuing education due date must meet the training and testing requirements of 641--Chapter 42, submit proof of continuing education hours and shall submit a late fee of $30 in addition to the annual fee in order to obtain reinstatement of certification.

ITEM 5. Amend subrule 39.1(3) as follows:

39.1(3) All references to any Code of Federal Regulations (CFRs) in this chapter are those in effect as of July 1, 1998 1999.

ITEM 6. Amend subrule 39.4(3), paragraph "c," by adopting the following new subparagraph (5):

(5) Radioactive drug: capsules containing carbon-14 urea for "in vivo" diagnostic use for humans.

1. Except as provided in paragraphs "b" and "c" of this subrule, any person is exempt from the requirements for a license set forth in this chapter and in 641--41.2(136C) provided that such person receives, possesses, uses, transfers, owns, or acquires capsules containing 37 kBq 1mCi carbon-14 urea (allowing for nominal variation that may occur during the manufacturing process) each, for "in vivo" diagnostic use for humans.

2. Any person who desires to use the capsules for research involving human subjects shall apply for and receive a specific license pursuant to 641--41.2(136C).

3. Any person who desires to manufacture, prepare,process, produce, package, repackage, or transfer for commercial distribution such capsules shall apply for and receive a specific license pursuant to 39.4(20) of this rule.

4. Nothing in this subrule relieves persons from complying with applicable FDA or other federal or state requirements governing receipt, administration, and use of drugs.

ITEM 7. Amend 39.4(22)"d"(3)"9" as follows:

9. Shall comply with the provisions of 641-- 40.95(136C) and 40.96(136C) for reporting radiation incidents, theft, or loss of licensed material, but shall be exempt from the other requirements of 641--Chapter 40.

ITEM 8. Amend subrule 39.4(33) by adopting the following new paragraphs:

l. Prior to license termination, each licensee authorized to possess radioactive material with a half-life greater than 120 days, in an unsealed form, shall forward the following records to the agency:

(1) Disposal of licensed material (including burials authorized before January 28, 1981), made under 641-- 40.71(136C) through 40.74(136C); and

(2) Records required by 641--paragraph 40.82(2)"d."

m. If licensed activities are transferred or assigned in accordance with 39.4(32)"b," each licensee authorized to possess radioactive material with a half-life greater than 120 days, in an unsealed form, shall transfer the following rec-ords to the new licensee and the new licensee will be responsible for maintaining these records until the license is terminated:

(1) Records of disposal of licensed material (including burials authorized before January 28, 1981), made under 641--40.71(136C) through 40.74(136C); and

(2) Records required by 641--paragraph 40.82(2)"d."

n. Prior to license termination, each licensee shall forward the records required by 39.4(26)"g" to the agency.

ITEM 9. Amend subrule 40.1(5) as follows:

40.1(5) All references to Code of Federal Regulations (CFR) in this chapter are those in effect as of July 1, 1998 1999.

ITEM 10. Amend rule 641--40.10(136C) by adopting new subrule 40.10(4) as follows:

40.10(4) To implement the ALARA requirements of 40.10(2), and notwithstanding the requirements in 641-- 40.26(136C), a constraint on air emissions of radioactive material to the environment, excluding Radon-222 and its daughters, shall be established by licensees such that the individual member of the public likely to receive the highest dose will not be expected to receive a total effective dose equivalent in excess of 10 mrem (0.1 mSv) per year from these emissions. If a licensee subject to this requirement exceeds this dose constraint, the licensee shall report the ex-ceedance as provided in 641--40.97(136C) and promptly take appropriate corrective action to ensure against recurrence.

ITEM 11. Rescind subrule 40.26(1) and adopt the following new subrule in lieu thereof:

40.26(1) Each licensee shall conduct operations so that:

a. The total effective dose equivalent to individual members of the public from the licensed operation does not exceed 0.1 rem (1 millisievert) in a year, exclusive of the dose contributions from background radiation, from any medical administration the individual has received, from exposure to individuals administered radioactive material and released in accordance with 641--subrule 41.2(27), from voluntary participation in medical research programs, and from the licensee's disposal of radioactive material into sanitary sewerage in accordance with 641--40.72(136C); and

b. The dose in any unrestricted area from external sources, exclusive of the dose contributions from patients administered radioactive material and released in accordance with 641--subrule 41.2(27), does not exceed 0.002 rem (0.02 millisievert) in any one hour.

ITEM 12. Adopt the following new rules:

641--40.28(136C) Radiological criteria for license termination.

40.28(1) The criteria in this rule apply to the decommissioning of facilities licensed under 641--Chapter 39 as well as other facilities subject to the agency's jurisdiction under Iowa Code chapter 136C.

40.28(2) The criteria in this rule do not apply to sites which:

a. Have been decommissioned prior to the effective date of this rule in accordance with criteria identified in 641-- subrule 39.4(33).

b. Have previously submitted and received agency approval on a license termination plan (LTP) or decommissioning plan that is compatible with the United States Nuclear Regulatory Commission (NRC) Site Decommissioning Management Plan (SDMP) Action Plan criteria; or

c. Submit a sufficient LTP or decommissioning plan prior to July 1, 1999, and such LTP or decommissioning plan is approved by the agency prior to July 1, 1999, except that if an environmental impact statement is required in the submittal, there will be a provision for day-to-day extension.

40.28(3) After a site has been decommissioned and the license terminated in accordance with the criteria in this chapter, the agency will require additional cleanup only if, based on new information, it determines that the criteria of this chapter were not met and residual radioactivity remaining at the site could result in significant threat to public health and safety.

40.28(4) When calculating TEDE to the average member of the critical group the licensee shall determine the peak annual TEDE dose expected within the first 1000 years after decommissioning.

641--40.29(136C) Radiological criteria for unrestricted use. A site will be considered acceptable for unrestricted use if the residual radioactivity that is distinguishable from background radiation results in a TEDE to an average member of the critical group that does not exceed 25 mrem (0.25 mSv) per year, including that from groundwater sources of drinking water, and the residual radioactivity has been reduced to levels that are ALARA. Determination of the levels which are ALARA must take into account consideration of any detriments, such as deaths from transportation accidents, expected to potentially result from decontamination and waste disposal.

641--40.30(136C) Criteria for license termination under restricted conditions. A site will be considered acceptable for license termination under restricted conditions if:

40.30(1) The licensee can demonstrate that reductions in residual radioactivity necessary to comply with the provisions of 40.29(136C) would result in net public or environmental harm or were not being made because the residual levels associated with restricted conditions are ALARA. Determination of the levels which are ALARA must take into account consideration of any detriments, such as traffic accidents, expected to potentially result from decontamination and waste disposal;

40.30(2) The licensee has made provisions for legally enforceable institutional controls that provide reasonable assurance that the TEDE from residual radioactivity distinguishable from background to the average member of the critical group will not exceed 25 mrem (0.25 mSv) per year;

40.30(3) The licensee has provided sufficient financial assurance to enable an independent third party, including a governmental custodian of a site, to assume and carry out responsibilities for any necessary control and maintenance of the site. Acceptable financial assurance mechanisms are:

a. Funds placed into an account segregated from the licensee's assets and outside the licensee's administrative control as described in 641--subparagraph 39.4(26)"f"(1);

b. Surety method, insurance or other guarantee method as described in 641--subparagraph 39.4(26)"f"(2);

c. A statement of intent in the case of federal, state,or local government licensees, as described in 641--subparagraph 39.4(26)"f"(4); or

d. When a governmental entity is assuming custody and ownership of a site, an arrangement that is deemed acceptable by such governmental entity.

40.30(4) The licensee has submitted a decommissioning plan or license termination plan (LTP) to the agency indicating the licensee's intent to decommission in accordance with 641--paragraph 39.4(33)"d" and specifying that the licensee intends to decommission by restricting use of the site. The licensee shall document in the LTP or decommissioning plan how the advice of individuals and institutions in the community, who may be affected by the decommissioning, has been sought and incorporated, as appropriate, following analysis of that advice. Licensees proposing to decommission by restricting use of the site shall seek advice from such affected parties regarding the following matters concerning the proposed decommissioning:

a. Whether provisions for institutional controls proposed by the licensee:

(1) Will provide reasonable assurance that the TEDE from residual radioactivity distinguishable from background to the average member of the critical group will not exceed 25 mrem (0.25 mSv) per year;

(2) Will be enforceable; and

(3) Will not impose undue burdens on the local community or other affected parties.

b. Whether the licensee has provided sufficient financial assurance to enable an independent third party, including a governmental custodian of a site, to assume and carry out responsibilities for any necessary control and maintenance of the site;

c. In seeking advice on the issues identified in 40.30(4)"a," the licensee shall provide for:

(1) Participation by representatives of a broad cross section of community interests who may be affected by the decommissioning;

(2) An opportunity for a comprehensive, collective discussion of the issues by the participants represented; and

(3) A publicly available summary of the results of all such discussions, including a description of the individual viewpoints of the participants on the issues and the extent of agreement and disagreement among the participants and the issues; and

40.30(5) Residual radioactivity at the site has been reduced so that if the institutional controls were no longer in effect, there is reasonable assurance that the TEDE from residual radioactivity distinguishable from background to the average member of the critical group is as low as reasonably achievable and would not exceed either:

a. 100 mrem (1 mSv) per year; or

b. 500 mrem (5 mSv) per year provided the licensee:

(1) Demonstrates that further reductions in residual radioactivity necessary to comply with the 100 mrem/yr (1 mSv/yr) value of 40.30(5)"a" are not technically achievable, would be prohibitively expensive, or would result in net public or environmental harm;

(2) Makes provisions for durable institutional controls; and

(3) Provides sufficient financial assurance to enable a responsible government entity or independent third party, including a governmental custodian of a site, both to carry out periodic rechecks of the site no less frequently than every five years to ensure that the institutional controls remain in place as necessary to meet the criteria of 40.30(2) and to assume and carry out responsibilities for any necessary controls and maintenance of those controls. Acceptable financial assurance mechanisms are those in subrule 40.30(3).

641--40.31(136C) Alternate criteria for license termination.

40.31(1) The agency may terminate a license using alternate criteria greater than the dose criterion of 641-- 40.29(136C), 40.30(2) and 40.30(4)"a"(1) if the licensee:

a. Provides assurance that public health and safety would continue to be protected and that it is unlikely that the dose from all man-made sources combined, other than medical, would be more than the 100 mrem/yr (1 mSv/yr) by submitting an analysis of possible sources of exposure;

b. Has employed, to the extent practical, restrictions on site use according to the provisions of 641--40.30(136C) in minimizing exposures at the site;

c. Reduces doses to ALARA levels, taking into consideration any detriments such as traffic accidents expected to potentially result from decontamination and waste disposal; and

d. Has submitted a decommissioning plan or license termination plan (LTP) to the agency indicating the licensee's intent to decommission in accordance with 641--paragraph 39.4(33)"d," and specifying that the licensee proposes to decommission by use of alternate criteria. The licensee shall document in the decommissioning plan or LTP how the advice of individuals and institutions in the community, who may be affected by the decommissioning, has been sought and addressed, as appropriate, following analysis of that advice. In seeking such advice, the licensee shall provide for:

(1) Participation by representatives of a broad cross section of community interests who may be affected by the decommissioning;

(2) An opportunity for a comprehensive, collective discussion on the issues by the participants represented; and

(3) A publicly available summary of the results of all such discussions, including a description of the individual viewpoints of the participants on the issues and the extent of agreement and disagreement among the participants on the issues.

40.31(2) The use of alternate criteria to terminate a license requires the approval of the agency after consideration of the staff's recommendations that will address any comments provided by the Environmental Protection Agency and any public comments submitted pursuant to 40.32(136C).

ITEM 13. Renumber 641--40.32(136C) as 641-- 40.34(136C), and adopt the following new rules 641-- 40.32(136C) and 641--40.33(136C):

641--40.32(136C) Public notification and public participation.

40.32(1) Upon the receipt of an LTP or decommissioning plan from the licensee or a proposal by the licensee for release of a site pursuant to 40.30(136C) or 40.31(136C) or whenever the agency deems such notice to be in the public interest, the agency shall:

a. Notify and solicit comments from:

(1) Local and state governments in the vicinity of the site and any Indian nation or other indigenous people that have treaty or statutory rights that could be affected by the decommissioning; and

(2) The Environmental Protection Agency for cases where the licensee proposes to release a site pursuant to 40.31(136C).

b. Publish a notice in the Iowa Administrative Bulletin and in a forum, such as local newspapers, letters to state or local organizations, or other appropriate forum, that is readily accessible to individuals in the vicinity of the site, and solicit comments from affected parties.

40.32(2) Reserved.

641--40.33(136C) Minimization of contamination. Applicants for licenses, other than renewals, after July 1, 1999, shall describe in the application how facility design and procedures for operation will minimize, to the extent practicable, contamination of the facility and the environment, facilitate eventual decommissioning, and minimize, to the extent practicable, the generation of radioactive waste.

ITEM 14. Amend rule 641--40.97(136C), catchwords, as follows:

641--40.97(136C) Reports of exposures, radiation levels, and concentrations of radioactive material exceeding the constraints or limits.

ITEM 15. Amend 40.97(1)"b" by adopting the following new subparagraph:

(6) The ALARA constraints for air emissions established under 641--40.10(136C); or

ITEM 16. Rescind subparagraph 40.97(2)"a"(4) and adopt the following new subparagraph in lieu thereof:

(4) Corrective steps taken or planned to ensure against a recurrence, including the schedule for achieving conformance with applicable limits, ALARA constraints, generally applicable environmental standards, and associated license conditions. Each report filed pursuant to this paragraph must include the name, social security number, and date of birth for each occupationally overexposed individual. The report must be prepared so that this information is stated in a separate and detachable part of the report.

ITEM 17. Amend subrule 40.110(1) as follows:

40.110(1) Each licensee or registrant, except those registrants with diagnostic X-ray systems, shall post current copies of the following documents:

a. This subrule and 641--Chapter 40;

b. The license, certificate of registration, conditions or documents incorporated into the license by reference and amendments thereto;

c. The operating procedures applicable to activities under the license or registration; and

d. Any notice of violation involving radiological working conditions, proposed imposition of civil penalty, or order issued pursuant to 641--Chapter 38, and any response from the licensee or registrant.

ITEM 18. Amend subrule 41.1(1) as follows:

41.1(1) Scope. This rule establishes requirements, for which a registrant is responsible, for use of X-ray equipment by or under the supervision of an individual authorized by and licensed in accordance with state statutes to engage in the healing arts or veterinary medicine. The provisions of this rule are in addition to, and not in substitution for, any other applicable provisions of these rules. The provisions of Chapter 41 are in addition to, and not in substitution for any other applicable portions of 641--Chapters 38 to 42. All references to any Code of Federal Regulations (CFR) in this chapter are those in effect as of July 1, 1998 1999.

ITEM 19. Amend subrule 41.1(3), paragraph "a," introductory paragraph, as follows:

a. Registrant. The registrant shall be responsible for maintaining in accordance with manufacturer specifications and directing the operation of the X-ray system(s) under the registrant's administrative control. and for having the following minimum tests performed every two years by a registered service facility:

(1) Medical/chiropractic: timer accuracy, exposure reproducibility, kVp accuracy as set forth in 41.1(6), and light field/X-ray field alignment as set forth in 41.1(6).

(2) Dental/podiatry: timer accuracy, exposure reproducibility and kVp accuracy as set forth in 41.1(7).

(3) Fluoroscopic: entrance exposure rate (641-- 41.5(5)"c"), minimum SSD(641--41.5(5)"f").

(4) Veterinary systems are exempt from the above testing requirements.

Where no manufacturer specifications are indicated, X-ray systems shall be serviced annually. All service and installation shall be performed by persons registered under 641-- subrule 39.3(3). The registrant or the registrant's agent shall ensure that the requirements of these rules are met in the operation of the X-ray system(s).

ITEM 20. Amend subrule 41.1(3), paragraph "a," by adopting a new subparagraph (12) as follows:

(12) Fluoroscopic equipment shall be used only under the direct supervision of a licensed practitioner.

ITEM 21. Amend subrule 41.1(3), paragraph "c," as follows:

c. X-ray utilization log. Except for veterinary facilities, each facility shall maintain an X-ray log containing the patient's name, the type of examinations, the dates the examinations were performed, the name of the individual performing the X-ray procedure, and the number of exposures and retakes involved. When the patient or film must be provided with human auxiliary support, the name of the human holder shall be recorded.

ITEM 22. Amend subrule 41.1(5), paragraph "c," subparagraph (1), numbered paragraph "4," as follows:

4. Periodic measurement of entrance exposure rate shall be performed by a qualified expert for both typical and maximum values as follows: Such measurements shall be made annually or after any maintenance of the system which might affect the exposure rate; results of these measurements shall be posted where any fluoroscopist may have ready access to such results while using the fluoroscope and in the record required in 41.1(3)"b"(5) (3). The measurement results shall be stated in roentgens per minute and include the technique factors used in determining such results. The name of the individual performing the measurements and the date the measurements were performed shall be included in the results. Conditions of periodic measurements of entrance exposure rate are as follows:

ITEM 23. Amend subrule 41.1(6), paragraph "b," subparagraph (2), numbered paragraph "2," as follows:

2. Each X-ray control shall be located in such a way as to meet the following requirements: Stationary X-ray systems (except podiatry and veterinary units) shall be required to have the X-ray exposure switch permanently mounted in a protected area so that the operator is required to remain in that protected area during the entire exposure; and mobile and portable X-ray systems which are:

* Used for greater than one week in the same location, i.e., a room or suite, shall meet the requirements of 41.1(6)"b"(2)"2"; or

* Used for greater than one hour and less than one week at the same location, i.e., a room or suite, or in a clinical setting for routine extremities only, or where moving the X-ray system from room to room is impractical, shall meet the requirement of the above paragraph or be provided with a 6.5 feet (1.98 m) high protective barrier which is placed at least 2.7 meters (9 feet) from the tube housing assembly.

Stationary podiatric systems which do not meet the above requirements shall be provided with a 9-foot exposure button cord which allows the operator to remain behind a protective barrier during the entire exposure. If the protective barrier is moveable, written procedures must be on file at the facility, which dictate that the operator will remain behind the barrier during the entire exposure.

ITEM 24. Rescind subrule 41.2(27) and adopt the following new subrule in lieu thereof:

41.2(27) Release of patients or human research subjects containing radiopharmaceuticals or permanent implants.

a. The licensee may authorize the release from its control of any individual who has been administered radiopharmaceuticals or permanent implants containing radioactive material if the total effective dose equivalent to any other individual from exposure to the released individual is not likely to exceed 0.5 rem (5 mSv).

b. The licensee shall provide the released individual with instructions, including written instructions, on actions recommended to maintain doses to other individuals as low as is reasonably achievable if the total effective dose equivalent to any other individual is likely to exceed 0.1 rem (1 mSv). If the dose to a breast-feeding infant or child could exceed 0.1 rem (1 mSv) assuming there were no interruption of breast feeding, the instructions shall also include:

(1) Guidance on the interruption or discontinuation of breast feeding, and

(2) Information on the consequences of failure to follow the guidance.

c. The licensee shall maintain a record of the basis for authorizing the release of an individual, for three years after the date of release, if the total effective dose equivalent is calculated by:

(1) Using the retained activity rather than the activity administered,

(2) Using an occupancy factor less than 0.25 at 1 meter,

(3) Using the biological or effective half-life, or

(4) Considering the shielding by tissue.

d. The licensee shall maintain a record for three years after the date of release that instructions were provided to a breast-feeding woman if the radiation dose to the infant or child from continued breast feeding could result in a total effective dose equivalent exceeding 0.5 rem (5 mSv). IDPH Regulatory Guide, Release of Patients Administered Radioactive Materials describes methods for calculating doses to other individuals and contains tables of activities not likely to cause doses exceeding 0.5 rem (5 mSv).

ITEM 25. Amend subrule 41.3(10), paragraph "b," as follows:

b. The registrant maintains copies of all records specified in 41.3(4)"h"(5) for five years from the date of the last visit.

ITEM 26. Amend 41.3(17)"d"(1) as follows:

(1) Periodic quality assurance checks shall be performed on therapeutic radiation machines, subject to 41.3(6) 41.3(17), which are capable of operation at greater than or equal to 50 kV.

ITEM 27. Amend 41.3(18)"e"(2) as follows:

(2) To satisfy the requirement of 41.3(18)"e"(1), full calibration shall include all measurements required for annual calibration by Appendix F D of 641--Chapter 41.

ITEM 28. Amend 41.3(18)"f"(2) as follows:

(2) To satisfy the requirement of 41.3(18)"f"(1), quality assurance checks shall include determination of central axis radiation output and a representative sampling of periodic quality assurance checks contained in Appendix F D of 641--Chapter 41. Representative sampling shall include all referenced periodic quality assurance checks at intervals not to exceed 12 consecutive calendar months;

ITEM 29. Amend subrule 41.3(19), paragraph "b," as follows:

b. Facility design information for all new installations of a therapeutic radiation machine or installations of a therapeutic radiation machine of higher energy into a room not previously approved for that energy shall be submitted for agency approval prior to actual installation of the therapeutic radiation machine. The minimum facility design information that must be submitted is contained in Appendix G E of 641--Chapter 41.

ITEM 30. Amend 641--Chapter 42, title, as follows:

ITEM 31. Amend 42.1(2) as follows:

Rescind the definition of "NRC."

Adopt the following new definitions in alphabetical order:

"Radiation therapist" means a person, other than a licensed physician, who performs radiation therapy technology under the supervision of a radiation oncologist.

"Radiation therapy technology" means the science and art of performing simulation radiography or applying ionizing radiation emitted from X-ray machines, particle accelerators, or radioactive materials to human beings for therapeutic purposes.

ITEM 32. Amend subrule 42.2(3), paragraph "c," as follows:

c. Continuing education credit will be awarded under provisions of 42.2(3) by the department to individuals:

(1) Who have successfully completed a continuing education course which has been approved by the department.

(2) Who present a department-approved continuing education course to individuals certified in the presenter's field. Credit granted shall be at a rate of two times the amount of time it takes to present the course up to a maximum of 50 percent of the total hours required.

(3) Only once during a two-year period for the same continuing education course.

ITEM 33. Amend 641--Chapter 45, title, as follows:

ITEM 34. Amend subrule 45.1(1) as follows:

45.1(1) Purpose and scope. The rules in this chapter establish radiation safety requirements for using sources of radiation for industrial radiography. The requirements of this chapter are in addition to, and not in substitution for, other applicable requirements of 641--Chapters 38, 39, and 40. The rules in this chapter apply to all licensees or registrants who use sources of radiation for industrial radiography. All references to any Code of Federal Regulations (CFR) in this chapter are those in effect as of July 1, 1998 1999.

The provisions of 641--Chapter 38 are in addition to, and not in substitution for, any other applicable portions of 641--Chapters 39 to 45.

ITEM 35. Amend 45.1(10)"a"(2) as follows:

(2) The individual possesses a current agency-issued trainee status card issued after completion of 45.1(10)"a"(1). Trainee status will be granted only once for each individual and is valid for no longer than two years.

ITEM 36. Amend 45.1(10)"c" as follows:

c. Radiographer trainer. No individual shall act as a radiographer trainer unless such individual:

(1) Has met the requirements of 45.1(10)"a"(1) and "b";

(2) Has one year of documented experience as an industrial radiographer; and

(3) Is named on the specific license or certificate of registration issued by the agency and under which an individual is acting as a radiographer trainer., or

(4) Possess a valid radiographer trainer card issued by the agency.

ITEM 37. Amend rule 641--46.1(136D), first unnumbered paragraph, as follows:

References to CFRs in this chapter are those in effect on October 1, 1996, and any additional amendments. All references to Code of Federal Regulations (CFR) in this chapter are those in effect as of July 1, 1999.

ITEM 38. Amend subrule 46.5(6), paragraph "a," as follows:

a. There shall be physical barriers to protect consumers from injury induced by touching or falling against or breaking the lamps.

ARC 8613A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code chapter 17.4, the Department of Public Health hereby gives Notice of Intended Action to rescind Chapter 76, "Maternal and Child Health Program," Iowa Administrative Code, and to adopt a new chapter with the same title.

The purpose of adopting new Chapter 76 is to update the language and definitions for consistency with the federal guidelines for Title V, Maternal and Child Health Program, and the state insurance program for children entitled HAWK-I. The rules include but are not limited to the program explanation, definitions, explanation of services, eligibility and procedures for individuals to become clients.

The Department has provided an opportunity for its local contractors, Medicaid staff of the Department of Human Services, and internal staff of the Department of Public Health to review the proposed new chapter prior to submitting this Notice of Intended Action.

Any interested person may make written or oral suggestions or comments on these proposed rules on or before February 2, 1999. Comments should be directed to Mary L. Weaver, RN, MSN, Division Director, Family and Community Health, Department of Public Health, Lucas State Office Building, Third Floor, Des Moines, Iowa 50319-0075; telephone (515)281-4910 or fax (515)242-6384.

Also, there will be a public hearing on Tuesday, February 2, 1999, from 1 to 2 p.m. utilizing 14 sites on the Iowa Communication Network (ICN). Interested persons should telephone (515)281-8857 to schedule a time to speak at the hearing. The following ICN sites have been requested for the hearing:

LOCATION	ADDRESS	CONTACT
Scott Community College ICN Classroom 1, Room 0210	500 Belmont Road Bettendorf, Iowa	Doug Kutzli (319)344-4137
Burlington National Guard Armory ICN Classroom	2500 Summer Street Burlington, Iowa	Ed Glenn (515)683-9826
University of Northern Iowa Schindler Education Center Schindler 130C	Corner of Hudson Rd. and 23rd Street Cedar Falls, Iowa	Em Pugh (319)273-6294
Thomas Jefferson High School	1243 20th Street SW Cedar Rapids, Iowa	Robert Tesar (319)398-2435
Northern Trails AEA 2 State Room	9184B 265th Street Clear Lake, Iowa	Linda Rourick (515)357-6125
Green Valley AEA 14 Turner Room	1405 North Lincoln Creston, Iowa	Penni Nauman (515)782-8843
Northeast Iowa Community College Trades & Industry Building Room 115	1625 Highway 150 Calmar, Iowa	Deb Hageman (800)728-2256
Department of Public Health ICN Room, 6th Floor	Lucas State Office Bldg. Des Moines, Iowa	Tim Lane (515)281-7883
Iowa Lakes Community College Library Building, Room 22	300 South 18th Street Estherville, Iowa	Gary Feddern (712)362-2604, Ext. 128
Arrowhead AEA, ICCC Campus Library Building, 2nd Floor ICN Classroom 204 Iowa Central Community College	330 Avenue M Fort Dodge, Iowa	Karen Lombard (515)576-0099
AEA 15 ICN Classroom	2814 North Court Street Ottumwa, Iowa	Shirley Walker (515)682-8591
NEICC Conference Center, Room 129	10250 Sundown Road Peosta, Iowa	Mary Casey (319)556-5510
Atlantic Public Library	507 Poplar Atlantic, Iowa	Janie Casteel (712)243-5466
Western Hills AEA 12 Room 209A	1520 Morningside Avenue Sioux City, Iowa	Jim Christensen (712)274-6000

Persons desiring to make oral presentations at the public hearing should contact Mary Weaver at least one day prior to the date of the public hearing. A written copy of comments must be provided and must be received by the day of the hearing. Written comments may be faxed to (515)242-6384.

These rules are intended to implement Iowa Code section 135.11.

The following amendment is proposed.

Rescind 641--Chapter 76 and adopt the following new chapter in lieu thereof:

641--76.1(135) Program explanation. The maternal and child health (MCH) programs are operated by the Iowa department of public health as the designated state agency pursuant to an agreement with the federal government. The majority of the funding available is from the Title V, MCH services block grant, administered by the Health Resources and Services Administration within the United States Department of Health and Human Services.

The purpose of the program is to promote the health of mothers and children by ensuring or providing access to quality maternal and child health services (especially for low-income families or families with limited availability of health services); to reduce infant mortality and the incidence of preventable diseases and handicapping conditions; to increase the number of children appropriately immunized against disease; and to facilitate the development ofcommunity-based systems of health care for children and their families. The program promotes family-centered,community-based coordinated care, including care coordination services for children with special health care needs.

The department's family services bureau enters into contracts with selected private nonprofit or public agencies for the provision of prenatal, postpartum, and child health services. The types of services provided by these contracts are infrastructure building, population-based services, enabling services, and direct health services. The department contracts with the University of Iowa department of pediatrics' child health specialty clinics to provide services to children with special health care needs.

The MCH advisory council assists in the development of the state plan for MCH, including children with special health care needs and family planning. The advisory council assists with assessment of need, prioritization of services, establishment of objectives, and encouragement of public support for MCH and family planning programs. In addition, the advisory council advises the director regarding health and nutrition services for women and children, supports the development of special projects and conferences and advocates for health and nutrition services for women and children. The director appoints the council membership. The council membership shall also include the chairs of the department's advisory committee for perinatal guidelines, the Iowa council on chemically exposed infants and children, and the birth defects advisory committee to ensure coordination of their respective issues and priorities.

The Iowa council on chemically exposed infants and children (CCEIC) defined in Iowa Code chapter 235C serves as a subcommittee to the MCH advisory council. The CCEIC assists in developing and implementing policies to reduce the likelihood that infants will be born chemically exposed and to assist those who are born chemically exposed to grow and develop in a safe environment.

641--76.2(135) Adoption by reference. Federal requirements contained in the Omnibus Reconciliation Act of 1989 (Public Law 101-239), Title V, MCH services block grant, shall be the rules governing the Iowa MCH program and are incorporated by reference herein.

The department finds that certain rules should be exempted from notice and public participation as being a very narrowly tailored category of rules for which notice and public participation are unnecessary as provided in Iowa Code section 17A.4(2). Such rules shall be those that are mandated by federal law governing the Iowa MCH program where the department has no option but to adopt such rules as specified and where federal funding for the MCH programs is contingent upon the adoption of the rules.

Copies of the federal legislation adopted by reference are available from Chief, Family Services Bureau, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

641--76.3(135) Rule coverage. These rules cover agencies contracting with the department to provide community-based MCH public health services and receive funds from the department for that purpose. The contract agencies conduct essential public health services directed toward the maternal and child health populations consistent with the state's MCH services block grant state plan. The state plan is developed and administered by the family services bureau of the department. Other programs funded by the Iowa legislature from MCH services block grant are not included in these rules.

641--76.4(135) Definitions.

"Applicant" means a private nonprofit or public agency that seeks a contract with the department to provide MCH services.

"Care coordination" means a process of linking the service system to the recipient and organizing the various elements in order to achieve a successful outcome.

"Client" means an individual who receives MCH services through a contract agency.

"Contract agency" means a private nonprofit or public agency that has a contract with the department to provide MCH services and receives funds from the department for that purpose.

"Core public health functions" means the functions of community health assessment, policy development, and assurance.

1. Assessment: regular collection, analysis, interpretation, and communication of information about health conditions, risks, and assets in a community.

2. Policy development: development, implementation, and evaluation of plans and policies, for public health in general and priority health needs in particular, in a manner that incorporates scientific information and community values and is in accordance with state public health policy.

3. Assurance: ensuring, by encouragement, regulation, or direct action, that programs and interventions that maintain and improve health are carried out.

"Dental health education" means basic dental health information about dental disease, prevention, oral hygiene and other anticipatory guidance.

"Department" means the Iowa department of public health.

"DHHS" means the United States Department of Health and Human Services.

"DIA" means the Iowa department of inspections and appeals.

"Direct health services" means those services generally delivered one-on-one between a health professional and a client in an office or clinic.

"Director" means the director of the Iowa department of public health.

"Enabling services" means services that allow or provide for access to, and the derivation of benefits from, the array of basic health care services and include activities such as outreach, case management, health education, transportation, translation, home visiting, smoking cessation, nutrition, support services, and others.

"Essential public health services" means those activities carried out by public health entities and their contractors that fulfill the core public health functions in the promotion of maternal and child health.

"Family," for the purpose of establishing eligibility, means a group of two or more persons which is related by birth, marriage or adoption or residing together and which functions as one socioeconomic unit. For the purpose of these rules, a pregnant woman is considered as two individuals when calculating the number of individuals in the family. If a pregnant woman is expecting multiple births, the family size is thereby increased by the number expected in the multiple birth.

"Family planning" means the promotion of reproductive and family health by the prevention of and planning for pregnancy, and reproductive health education.

"HAWK-I" means healthy and well kids in Iowa and is the child health insurance program in Iowa as authorized in Title XXI of the Social Security Act.

"HCFA" means the DHHS, Health Care Finance Administration.

"Health education" means services provided by a health professional to include instruction about normal anatomy and physiology, growth and development, safety and injury prevention, signs or symptoms indicating need for medical care, and other anticipatory guidance topics.

"Health professional" means an individual who possesses specialized knowledge in a health or social science field or is licensed to provide health care.

"Health services" means services provided through MCH contract agencies.

"Informing" means the act of advising families of the services available through the EPSDT/Care for Kids program, explaining what to expect at screening, and providing information about health resources in the community.

"Infrastructure building" means activities directed at improving and maintaining the health status of all clients by providing support for the development and maintenance of comprehensive health services systems including development and maintenance of health services standards or guidelines, training, data, and planning systems.

"MCH services" means essential services provided by MCH contract agencies.

"Medicaid" means the Medicaid program authorized in the Social Security Act and funded through the Iowa department of human services from the DHHS.

"Nutrition counseling" means nutrition screening and education appropriate to the needs of the client, and referral to a licensed dietitian if indicated.

"OMB" means the United States Department of the Treasury, Office of Management and Budget.

"Oral health counseling" means services to assess oral health status and to provide education appropriate to the needs of the client and referral to a dentist if indicated.

"Parenting education" means educational services for parents or expectant parents provided by health professionals to include care of infants and children, normal development, discipline, and other topics as appropriate.

"Performance standards" means criteria or indicators of the quality of service provided or the capability of a contract agency to provide services in a cost-effective or efficient manner as defined in "Performance Standards, Maternal and Child Health Contractors, Family Services Bureau."

"Pharmacist" means a person currently licensed to practice pharmacy under Iowa Code chapter 155.

"Physician" means a person currently licensed to practice medicine and surgery, osteopathic medicine and surgery, or osteopathy under Iowa Code chapters 148 and 150A.

"Population-based services" means preventive interventions and personal health services, developed for and available to the entire MCH population of the state rather than for individuals in a one-on-one situation. Disease prevention, health promotion, and statewide outreach are major components.

"Prenatal and postpartum care" means those types of services as recognized by the American College of Obstetricians and Gynecologists.

"Program income" means gross income earned by the contract agency from activities in which part or all of the cost is either borne as a direct cost by the funds received from the department or counted as a direct cost toward meeting cost-sharing or matching requirements of the contract agency. "Program income" includes but is not limited to such income in the form of fees for services, third-party reimbursements, and proceeds from sales of tangible, personal or real property.

"Psychosocial counseling" means services provided to include individual and family social assessment, counseling, and referral.

"Title V" means Title V of the Social Security Act and the federal requirements contained in the Omnibus Reconciliation Act of 1989 (Public Law 101-239) which address the Maternal and Child Health program.

"Title X" means the program authorized in the federal regulations found in 42 CFR Subpart A, Part 59, published in the Federal Register on June 3, 1980, and the Program Guidelines for Project Grants for Family Planning Services.

"Title XIX" means the Medicaid program authorized in the Social Security Act and funded through the Iowa department of human services from the DHHS.

"Title XXI" means the child health insurance program authorized in the Social Security Act and implemented in Iowa as the HAWK-I program as administered by the Iowa department of human services.

"Well-child health care" means those types of services as recognized by the latest edition of the American Academy of Pediatrics, Guidelines for Health Supervision.

"WIC" means the Special Supplemental Nutrition Program for Women, Infants and Children, funded through the department from the United States Department of Agriculture.

641--76.5(135) MCH services. The following services shall be provided by contract agencies:

76.5(1) Infrastructure building services.

a. Community assessment activities to identifypopulation-based health conditions, risks, and assets in the community.

b. Analysis of health data to determine communitypopulation-based health status, health system utilization and community resources.

c. Support for a method of data collection, analysis, and dissemination.

d. Community planning activities to promote family and community health initiatives based on scientific, economic, and political factors.

e. Promotion of regulations, standards, and contracts that protect the public's health and safety.

f. Monitoring and evaluating the effectiveness, accessibility and quality of personal health and population-based services in the community.

g. Supporting innovative initiatives to gain new insights and solutions to family and community health-related needs.

76.5(2) Population-based services.

a. Immunization.

b. Injury prevention.

c. Outreach and public education.

d. Counseling for families who have lost a child to sudden infant death syndrome.

e. Childhood lead poisoning screening.

76.5(3) Enabling services.

a. Care coordination.

b. Informing.

c. Outreach services to families and children who do not access a regular and continuous source of care (medical home).

d. Coordination of local systems of care for improving access to health services.

e. Access to translation services.

f. Access to transportation.

g. Family support activities.

h. Referral or enrollment of families in health insurance for public insurance plans.

i. Reimbursement of diagnostic and therapeutic services subject to the following conditions.

(1) Eligible services include:

1. Physician services provided for treatment of acute illness and physician-prescribed treatments necessary to treat an acute condition.

2. Physician services provided for diagnosis.

3. Diagnostic tests to include laboratory tests and x-rays.

4. Prescription drugs necessary to treat an acute condition.

(2) Coverage for diagnosis and therapeutic services for children is restricted:

1. To clients eligible for MCH direct care and enabling services as specified in rule 641--76.6(135).

2. By the amount of funds available to the department.

(3) Coverage is not available for the following diagnostic and therapeutic services:

1. Services covered by another private or public funding source.

2. Services provided as a result of an injury or accident.

3. Treatment or follow-up of a chronic disease or condition.

4. Hospital inpatient or surgical services, including surgical diagnostic procedures.

76.5(4) Direct health services may be provided to meet identified community needs. The following preventive direct health services may be supported by MCH program funds to the extent the comprehensive community assessment documents that the services are not otherwise available from health professionals within the community.

a. Child health.

(1) Informing.

(2) Care coordination.

(3) Nutrition counseling.

(4) Psychosocial counseling.

(5) Parenting education.

(6) Health education.

(7) Well-child health services include routine, ambulatory well-child care.

b. Prenatal and postpartum services.

(1) Care coordination.

(2) Risk assessment.

(3) Psychosocial assessment and counseling.

(4) Nutrition assessment and counseling.

(5) Health education.

(6) Routine, ambulatory prenatal medical care, postpartum exams, and family planning services.

c. Dental health--maternal and child.

(1) Dental screening.

(2) Dental treatment services through referral.

(3) Dental health education.

641--76.6(135) Client eligibility criteria. The certification process to determine eligibility for direct health care under the program shall include the following requirements:

76.6(1) Age.

a. Prenatal program--no age restrictions.

b. Child health care services--birth through 20 years of age.

76.6(2) Income.

a. Income guidelines are set at 185 percent of the federal poverty income guidelines published annually by DHHS. Department income guidelines will be adjusted following any change in DHHS guidelines.

b. Income information will be provided by the individual, who will attest in writing to the accuracy of the information contained in the application.

c. Proof of Title XIX or Title XXI (HAWK-I) eligibility will automatically serve in lieu of an application.

d. All income of family members as defined by DHHS poverty guidelines will be used in calculating the individual's gross income for purposes of determining initial and continued eligibility.

e. Income will be calculated as follows:

(1) Annual income will be estimated based on the individual's income for the past three months unless the individual's income will be changing or has changed, or

(2) In the case of self-employed families the past year's income tax return (adjusted gross income) will be used in estimating annual income unless a change has occurred.

(3) Terminated income will not be considered.

f. Individuals will be screened for eligibility for Title XIX and Title XXI (HAWK-I). If an individual's income falls within the eligibility guidelines for Title XIX and Title XXI (HAWK-I), the individual must be referred to the Iowa department of human services or other enrollment source to apply for coverage. Pregnant women shall be considered for Title XIX presumptive eligibility. Children shall be considered for Title XIX eligibility to the extent these activities are approved by the Iowa department of human services.

g. An individual whose income falls between 185 percent and 300 percent of the federal poverty guidelines will qualify for services on a sliding fee scale, as determined by the local agency's cost for the service. The department provides annual guidelines. An individual whose income is at or above 300 percent will qualify for services at full fee.

h. Eligibility determinations must be performed at least once annually. Should the individual's circumstances change in a manner which affects third-party coverage or Title XIX/Title XXI eligibility, eligibility determinations shall be completed more frequently.

76.6(3) Residency. Individuals must be currently residing in Iowa.

76.6(4) Pregnancy. An individual applying for the prenatal program shall have verification of pregnancy either by an independent health provider or by the maternal health contract agency.

641--76.7(135) Client application procedures for MCH services.

76.7(1) A person desiring direct health services under this program or the parent or guardian of a minor desiring such care shall apply to a contract agency using a Health Services Application, Form 470-2927, or the alternate form authorized by the HAWK-I board.

76.7(2) The contract agency shall verify the following information to apply for MCH services under this program:

a. The information requested on the application form under "Household Information."

b. Income information for all family members or proof of eligibility for Title XIX (Medicaid) or Title XXI (HAWK-I).

c. Information about health insurance coverage.

d. The signature of the individual or responsible adult, dated and witnessed.

e. For pregnant women, denial of benefits under Title XIX (Medicaid) due to economic or categorical ineligibility.

76.7(3) If an individual has completed a Health Services Application, Form 470-2927, within the last year and the form accurately documents the current financial and family status, the MCH contract agency shall accept a copy of that application and determine eligibility without requiring completion of any other application form.

76.7(4) If an individual indicates on the Health Services Application, Form 470-2927, that the individual also wishes to apply for WIC or Medicaid or HAWK-I, the contract agency shall forward the appropriate copy to the indicated agency within two working days.

76.7(5) The contract agency shall determine the eligibility of the family and the percent of the cost of care that is the family's responsibility. The individual shall be informed in writing of eligibility status prior to incurring costs for care.

76.7(6) Once an individual has been determined to be eligible, the individual shall report any changes in income, family composition, or residency to the contract agency within 30 days from the date the change occurred.

641--76.8(135) Right to appeal--client.

76.8(1) Right of appeal. Individuals applying for MCH services and clients receiving MCH services shall have the right to appeal whenever a decision or action of the department or contract agency results in the denial of participation, suspension, or termination from the approved MCH program. Notification of the denial of participation, suspension or termination shall be made in writing and shall state the basis for the action. All hearings shall be conducted in accordance with these rules.

76.8(2) Notification of appeal rights and right to hearing. Individuals applying for MCH services shall be notified of the right to appeal and the procedures for requesting a hearing at the time of application for MCH services. Information about the appeal and hearing process shall be provided in writing and shall be immediately available at maternal and child health centers. A health professional shall be available to explain the method by which an appeal or hearing is requested and the manner in which the appeal and hearing will be conducted.

76.8(3) Request for hearing. A request for a hearing is a written expression by an individual or the individual's parent, guardian, or other representative that an opportunity to present the individual's case is desired. The request shall be filed with the contract agency within 60 days from the date the individual receives notice of the decision or action which is the subject of appeal.

76.8(4) Receipt of benefits during appeal. Individual applicants, who are denied program benefits due to a finding of ineligibility, shall not receive benefits during the administrative appeal period. Clients who are involuntarily suspended or terminated from the MCH program shall continue to receive program benefits during the administrative appeal period.

76.8(5) Hearing officer. The hearing officer shall be impartial, shall not have been directly involved in the initial determination of the action being contested, and shall not have a personal stake in the decision. Hearing officers may be contract agency directors, health professionals, community leaders, or any impartial citizen. If prior to the hearing, the appealing party objects to a contract agency director serving as the hearing officer in a case involving the director's own agency, another hearing officer shall be selected and, if necessary, the hearing shall be rescheduled as expeditiously as possible. Contract agencies may seek the assistance of the Chief, Family Services Bureau, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075 in the appointment of a hearing officer.

76.8(6) Notice of hearing. The hearing officer shall schedule the time, place and date of the hearing as expeditiously as possible. Parties shall receive notice of the hearing at least ten days in advance of the scheduled hearing. The hearing shall be accessible to the party requesting the hearing. The hearing shall be scheduled within three weeks from the date the contract agency received the request for a hearing or as soon as possible thereafter, unless a later date is agreed upon by the parties.

76.8(7) Conduct of hearing. The party requesting the hearing or the party's representative shall have the opportunity to:

a. Examine, prior to and during the hearing, the documents and records presented to support the decision under appeal;

b. Be represented by an attorney or other person at the party's own expense;

c. Bring witnesses;

d. Question or refute any testimony or evidence, including an opportunity to confront and cross-examine adverse witnesses;

e. Submit evidence to establish all pertinent facts and circumstances in the case; and

f. Advance arguments without undue interference.

76.8(8) Decision. Decisions of the hearing officer shall be in writing and shall be based on evidence presented at the hearing. The decision shall summarize the facts of the case, specify the reasons for the decision, and identify the supporting evidence and pertinent regulations or policy. The decision shall be issued within 90 days of the receipt of the request for the hearing, unless a longer period is agreed upon by the parties.

76.8(9) Appeal of decision to the department. A party receiving an unfavorable decision may file an appeal with the department. Such appeals must be filed within 15 days of the mailing date of the hearing decision. Appeals shall be sent to the Division Director, Family and Community Health, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

76.8(10) Contested case. Upon receipt of an appeal that meets contested case status, the appeal shall be forwarded within five working days to the DIA pursuant to the rules adopted by the DIA regarding the transmission of contested cases. The information upon which the adverse action is based and any additional information, which may be provided by the aggrieved party, shall also be provided to the DIA.

76.8(11) Hearing. Parties shall receive notice of the hearing in advance. The administrative law judge shall schedule the time, place and date of the hearing so that the hearing is held as expeditiously as possible. The hearing shall be conducted according to the procedural rules of the DIA found in 481--Chapter 10, Iowa Administrative Code.

76.8(12) Decision of administrative law judge. The administrative law judge's decision shall be issued within 60 days from the date of request for hearing. When the administrative law judge makes a proposed decision and order, it shall be served by certified mail, return receipt requested, or delivered by personal service. That proposed decision and order then becomes the department's final decision without further proceedings ten days after it is received by the aggrieved party unless an appeal to the director is taken as provided in subrule 76.8(13).

76.8(13) Appeal to the director. Any appeal to the director for review of the proposed decision and order of the administrative law judge shall be filed in writing and mailed to the director by certified mail, return receipt requested, or delivered by personal service within ten days after the receipt of the administrative law judge's proposed decision and order by the aggrieved party. A copy of the appeal shall also be mailed to the administrative law judge. Any request for an appeal shall state the reason for appeal.

76.8(14) Record of hearing. Upon receipt of an appeal request, the administrative law judge shall prepare the record of the hearing for submission to the director. The record shall include the following:

a. All pleadings, motions and rules.

b. All evidence received or considered and all other submissions by recording or transcript.

c. A statement of all matters officially noticed.

d. All questions and offers of proof, objections and rulings thereon.

e. All proposed findings and exceptions.

f. The proposed decision and order of the administrative law judge.

76.8(15) Decision of director. An appeal to the director shall be based on the record of the hearing before the administrative law judge. The decision and order of the director becomes the department's final decision upon receipt by the aggrieved party and shall be delivered by certified mail, return receipt requested, or by personal service.

76.8(16) Exhausting administrative remedies. It is not necessary to file an application for the rehearing to exhaust administrative remedies when appealing to the director or the district court as provided in Iowa Code section 17A.19. The aggrieved party to the final decision of the department who has exhausted all administrative remedies may petition for judicial review of that action pursuant to Iowa Code chapter 17A.

76.8(17) Petition for judicial review. Any petition for judicial review of a decision and order shall be filed in the district court within 30 days after the decision and order becomes final. A copy of the notice of appeal shall be sent to the director by certified mail, return receipt requested, or by personal service. The address is Director, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

76.8(18) Benefits after decision. If a final decision is in favor of the person requesting a hearing and benefits were denied or discontinued, benefits shall begin immediately and continue pending further review should an appeal to district court be filed. If a final decision is in favor of the contract agency, benefits shall be terminated, if still being received, as soon as administratively possible after the issuance of the decision. Benefits denied during an administrative appeal period may not be awarded retroactively following a final decision in favor of a person applying for MCH services.

641--76.9(135) Grant application procedures for contract agencies. Private nonprofit or public agencies seeking to provide community-based Title V-MCH public health services shall file a letter of intent to make application to the department no later than April 1 of the competitive year. Applications shall be to administer MCH services for a specified project period, as defined in the request for proposal, with an annual continuation application. The contract period shall be from October 1 to September 30 annually. All materials submitted as part of the grant application are considered public records in accordance with Iowa Code chapter 22, after a notice of award is made by the department. Notification of the availability of funds and grant application procedures will be provided in accordance with the department rules found in 641--Chapter 176.

Contract agencies are selected on the basis of the grant applications submitted to the department. The department will consider only applications from private nonprofit or public agencies. In the case of competing applications, the contract will be awarded to the applicant that scores the highest number of points in the review. Copies of review criteria are available from Chief, Family Services Bureau, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

641--76.10(135) Funding levels for contract agencies. The amount of funds available to each contract agency on an annual basis shall be determined by the department using a methodology based upon dollars available, number of clients enrolled, and selected needs criteria. A contract agency will receive four dollars of the available funds from the department for each one dollar of matching funds up to but not to exceed the total available funds for that contract agency.

641--76.11(135) Contract agency performance. Contract agencies are required to provide services in accordance with these rules.

76.11(1) Performance standards. The department shall establish performance standards that contract agencies shall meet in the provision of services. The performance standards are published in the document "Performance Standards, Maternal and Child Health Contractors, Family Services Bureau." The performance standards are included in the contract agency MCH program grant application packet each year. Copies of the performance standards are available from the Chief, Family Services Bureau, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075. Contract agencies that do not meet the performance standards shall not be eligible for continued funding as an MCH contract agency unless the contract agency has secured a waiver.

76.11(2) Contract agency review. The department shall review contract agency operations through the use of reports and documents submitted, state-generated data reports, chart audits, on-site and clinic visits for evaluation and technical assistance.

76.11(3) Exception. A contract agency that does not meet a performance standard may be granted an exception for up to one year in order to improve performance. Such an exception must be requested in writing. If granted, the approval for the exception will include the conditions necessary for the successful completion of the standard, a time frame, and additional reporting requirements. The procedures for applying and approving of an exception are outlined in the "Performance Standards, Maternal and Child Health Contractors, Family Services Bureau."

641--76.12(135) Reporting. Completion of grant applications, budgets, expenditure reports, performance standards reports, and data forms shall be performed by contract agencies in compliance with the contract with the department.

641--76.13(135) Fiscal management. All contract agencies are required to meet fiscal management policies.

76.13(1) Last pay. MCH grant funds are considered last pay. Title XIX and other third-party payers are to be billed first if other resources cover the service.

76.13(2) Program income. Program income shall be used for allowable costs of the MCH program. Program income shall be used before using the funds received from the department. Excess program income may be retained to build a three-month operating capital. Program income shall be used during the current fiscal year or the following fiscal year. Five percent of unobligated program income may be used by the contract agency for special purposes or projects provided such use furthers the mission of the MCH program and does not violate state or federal rules governing the program.

76.13(3) Advances. A contract agency may request an advance up to one-sixth of its contract at the beginning of a contract year. The amount of any advance will be deducted prior to the end of the fiscal year.

76.13(4) Local share. Contract agencies are required to match the MCH funds received from the department at a minimum rate of one dollar of local match for every four dollars received from the department. Sources that may be used for match are reimbursement for service from third parties such as insurance and Title XIX, client fees, local funds from nonfederal sources, or in-kind contributions. In-kind contributions must be documented in accordance with generally accepted accounting principles.

76.13(5) Subcontracts. Contract agencies may subcontract a portion of the project activity to another entity provided such subcontract is approved by the department. Subcontract agencies must follow the same rules, procedures, and policies as required of the contract agency by these rules and contract with the department. The contract agency is responsible for ensuring the compliance of the subcontract. Subcontract agencies may not subcontract these project activities with other entities.

641--76.14(135) Audits. Every two years, each contract agency shall undergo financial audit of the MCH program. The audit shall be conducted in compliance with OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Each audit shall cover all unaudited periods through the end of the previous grant year. The department's audit guide should be followed to ensure an audit which meets federal and state requirements.

641--76.15(135) Diagnosis and therapeutic services for children. Diagnosis and therapeutic services for children are paid directly to the provider following authorization by the contract agency.

76.15(1) Distribution of funds. Funds will be reserved for each contract agency based upon percentage of children eligible for the service, poverty indicators and the contract agency's past utilization of the program. Funds will be reserved at the department to cover services that exceed expected costs.

76.15(2) Restriction on expenditure. If the funds reserved are expended before the end of a contract year, further authorizations for payment cannot be made.

76.15(3) Redistribution of funds. Funds may be redistributed among contract agencies based upon utilization.

76.15(4) Authorization for coverage. Authorization is required before providers submit bills to the department for payment. Contract agencies authorize the use of funds by determining the child's eligibility, if the service meets the definition of coverage and if funds are available.

a. Each authorization is to include specific information about the reason for referral.

b. Prior authorization of the department is needed to authorize payment for services that would constitute extended treatment or treatment exceptions.

76.15(5) Payment to providers. Payments to providers will be made under the following conditions:

a. Authorization information must accompany the claim.

b. Claims must be submitted within 60 days of the date of service on an HCFA 1500, UB92 or Universal Claim Form. When other financial or medical resources are available to the client, the department may approve all or partial payment of an eligible unpaid claim.

c. Payment shall be based upon Title XIX rates to the extent current Title XIX rate information is available to the department.

641--76.16(135) Denial, suspension, revocation or reduction of contracts with contract agencies. The department may deny, suspend, revoke or reduce contracts with contract agencies in accord with applicable federal regulations or contractual relationships. Notice of such action shall be in writing.

641--76.17(135) Right to appeal--contract agency. Contract agencies may appeal the denial of a contract or the suspension, revocation or reduction of an existing contract.

76.17(1) Appeal. The appeal shall be made in writing to the department within ten days of receipt of notification of the adverse action. Notice is to be addressed to the Division Director, Family and Community Health Division, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

76.17(2) Contested case. Upon receipt of an appeal that meets contested case status, the appeal shall be forwarded within five working days to the DIA pursuant to the rules adopted by the DIA regarding the transmission of contested cases. The information upon which the adverse action is based and any additional information, which may be provided by the aggrieved party, shall also be provided to the DIA.

76.17(3) Hearing. Parties shall receive notice of the hearing in advance. The administrative law judge shall schedule the time, place and date of the hearing so that the hearing is held as expeditiously as possible. The hearing shall be conducted according to the procedural rules of the DIA found in 481--Chapter 10.

76.17(4) Decision of administrative law judge. The administrative law judge's decision shall be issued within 60 days from the date of request for hearing. When the administrative law judge makes a proposed decision and order, it shall be served by certified mail, return receipt requested, or delivered by personal service. That proposed decision and order then becomes the department's final decision without further proceedings ten days after it is received by the aggrieved party unless an appeal to the director is taken as provided in subrule 76.17(5).

76.17(5) Appeal to the director. Any appeal to the director for review of the proposed decision and order of the administrative law judge shall be filed in writing and mailed to the director by certified mail, return receipt requested, or delivered by personal service within ten days after the receipt of the administrative law judge's proposed decision and order by the aggrieved party. A copy of the appeal shall also be mailed to the administrative law judge. Any request for an appeal shall state the reason for appeal.

76.17(6) Record of hearing. Upon receipt of an appeal request, the administrative law judge shall prepare the record of the hearing for submission to the director. The record shall include the following:

a. All pleadings, motions and rules;

b. All evidence received or considered and all other submissions by recording or transcript;

c. A statement of all matters officially noticed;

d. All questions and offers of proof, objections and rulings thereon;

e. All proposed findings and exceptions; and

f. The proposed decision and order of the administrative law judge.

76.17(7) Decision of director. An appeal to the director shall be based on the record made at the hearing. The decision and order of the director becomes the department's final decision upon receipt by the aggrieved party and shall be delivered by certified mail, return receipt requested, or by personal service.

76.17(8) Exhausting administrative remedies. It is not necessary to file an application for a rehearing to exhaust administrative remedies when appealing to the director or the district court as provided in Iowa Code section 17A.19. The aggrieved party to the final decision of the department who has exhausted all administrative remedies may petition for judicial review of that action pursuant to Iowa Code chapter 17A. Petition for judicial review must be filed within 30 days after decision becomes final.

These rules are intended to implement Iowa Code section 135.11.

ARC 8603A

Twenty-five interested persons, a governmental subdivision, an agency or association of 25 or more persons may demand an oral presentation hereon as provided in Iowa Code section 17A.4(1)"b."

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code section 9E.17, the Secretary of State hereby gives Notice of Intended Action to amend Chapter 43, "Notarial Acts," Iowa Administrative Code.

These rules describe the policies and procedures for applying for a notary commission or renewal of a notary commission; obtaining and using a notary seal; keeping a notary journal; applying a notary's signature to a notarial certificate; charging fees for notarial services; disqualifying a notary from performing a notarial act due to conflict of interest; acceptable means to establish the identity of a person requesting performance of a notarial act; advising the secretary of changes to information contained on the application for appointment or status of a notary; and imposing disciplinary action for notarial misconduct and for violations of Iowa Code chapter 9E.

The rules require passing a test and taking an oath of office as conditions for obtaining or renewing a notary commission; require completion of three hours of continuing education as a condition of notary commission renewal; establish a minimum size for a notary seal and what components must be included on the seal; require notaries to maintain a notary journal setting forth certain minimum types of information; require a notary to use the signature on notarial certificates that matches the signature on the application form; set a maximum fee for a notarial service of $10; identify types of conflicts of interest that disqualify a notary from performing a notarial act; establish acceptable means to establish the identity of a person requesting performance of a notarial act; and require notaries to advise the secretary of changes to information contained on the notary's application for appointment or if there is a change in the status of a notary.

These rules also establish a procedure for imposing disciplinary action upon a notary and for conducting a contested case hearing when a complaint has been filed against a notary public. If the contested case hearing was presided over by a designee of the Secretary of State, the notary public may ask for review by the Secretary of State. Provisions are also made for informal settlements between the Secretary of State and the notary public.

Any interested person may make written suggestions or comments on the proposed rules on or before Tuesday, February 2, 1999. Written comments should be sent to the Business Services Division, Office of the Secretary of State, Second Floor, Hoover State Office Building, Des Moines, Iowa 50319-0138; fax (515)242-5953. Anyone who wishes to comment orally may telephone Dean Lerner at (515) 281-7550 or visit the office on the second floor of the Hoover State Office Building.

There will be a public hearing on Tuesday, February 2, 1999, at 1:30 p.m. at the office of the Secretary of State, Second Floor, Hoover State Office Building, Des Moines, Iowa. People may comment orally or in writing. All persons who speak at the hearing will be asked to give their names and addresses for the record and to confine their remarks to the subject of the rules.

These rules are intended to implement Iowa Code sections 9E.3, 9E.6, 9E.7, 9E.9, 9E.14, and 9E.15.

The following amendments are proposed.

Renumber 721--43.1(77A) to 721--43.5(77A) as 721-- 43.61(9E) to 721--43.65(9E) and adopt the following new rules:

721--43.1(9E) Grounds for refusal of commission. The secretary of state may refuse to appoint any person as notary public upon any of the following grounds:

43.1(1) Substantial and material misstatement or omission in the application submitted to the secretary of state.

43.1(2) Conviction of a felony or of a lesser offense involving moral turpitude or of a nature incompatible with the duties of a notary public. A conviction after a plea of nolo contendere is deemed to be a conviction within the meaning of this subrule.

43.1(3) Revocation, suspension, restriction or denial of a professional license, if such revocation, suspension, restriction or denial was for misconduct, dishonesty, or any cause substantially relating to the duties or responsibilities of a notary public.

43.1(4) Failure to discharge fully and faithfully any of the duties or responsibilities required of a notary public.

43.1(5) Commission of any act involving dishonesty, fraud, or deceit with the intent to substantially benefit the notary public or another, or substantially injure another.

43.1(6) Failure to complete the acknowledgment at the time the notary's signature is affixed to the document.

43.1(7) Failure to administer the oath or affirmation as required by a verification upon oath or affirmation.

43.1(8) Execution of any certificate as a notary public containing a statement known to the notary public to be false.

43.1(9) Failure to satisfactorily pass the notary application test.

721--43.2(9E) Application process. Before a new notary commission or a renewal is delivered to a person appointed as a notary public, the person shall:

43.2(1) Complete the application form for appointment as a notary public on the form prescribed by the secretary of state.

43.2(2) Execute the oath of office.

43.2(3) Satisfactorily complete a written examination prescribed by the secretary of state to determine the fitness of the person to exercise the functions of the office of notary public. All questions shall be based on the law of this state as set forth in the booklet of the laws of Iowa relating to notaries public distributed by the secretary of state.

721--43.3(9E) Application test procedure.

43.3(1) To pass the test, the applicant must answer eight of the ten questions correctly. All of the answers shall be found in the Iowa Notary Handbook which will be sent out with the application and renewal forms. The handbook may be used when the applicant completes the test.

43.3(2) If the applicant fails the test, the applicant shall be sent a second test. Eight of the ten questions must be answered correctly. Should the applicant fail the second test, the application will be returned and the applicant must wait 30 days before submitting a new application. A notary seeking to renew a commission who fails both tests will have the notary's request for renewal denied and will have to wait 30 days to submit a new application for commission.

721--43.4(9E) Nonresident applicants. A nonresident of the state of Iowa who is a resident of a bordering state may apply for an Iowa notary commission if that person's place of work or business is within the state of Iowa. For purposes of Iowa Code section 9E.3(3), an applicant satisfies the "place of work or business" requirement if:

43.4(1) The applicant maintains a business at a fixed location in the state of Iowa, or

43.4(2) The applicant is employed by a business at the employer's place of business which is at a fixed location in the state of Iowa.

721--43.5(9E) Commission certificate. The secretary of state shall assign a sequential identification number to each notary which shall appear on the notary commission.

721--43.6(9E) Renewal of notary commission. A notary public may apply for reappointment on a form prescribed and provided by the secretary of state, accompanied by a fee of $30, and shall otherwise comply with all requirements for being appointed and serving as a notary public, except the notary public shall also provide evidence that the notary has completed, during the term of the notary's current commission, three hours of continuing notary education offered by an entity approved by the secretary of state.

721--43.7 to 43.9 Reserved.

721--43.10(9E) Seal.

43.10(1) A notary public may provide and keep an official seal, which shall clearly show, when embossed, stamped, impressed or affixed to a document, the name of the notary, the words "State of Iowa" and "Notary Public," the date the notary public's commission expires and the sequential identification number assigned to the notary by the secretary of state. The notary public shall authenticate with the official seal all official notarial acts.

43.10(2) A notary public shall not use the official notarial seal except for the purpose of carrying out the duties and responsibilities as set forth in this chapter. A notary public shall not use the title "notary public" except for the purpose of rendering notarial service.

43.10(3) The seal of every notary public shall be affixed by a seal press or stamp that will print or emboss a seal which legibly reproduces under photographic methods the required elements of the seal. The seal may be circular, not over two inches in diameter, or may be a rectangular form of not more than one inch in width and two and one-half inches in length, with a serrated or milled edge border, and shall contain the information required by this rule.

43.10(4) Failure to secure the seal from use by one other than the notary shall be cause for the secretary of state to take disciplinary action against the notary public pursuant to 721--43.81(9E) et seq.

43.10(5) The official seal of a notary public is the exclusive property of that notary public, and shall not be surrendered to an employer upon the termination of employment, whether or not the employer paid for the seal. The notary, or the notary's representative, shall destroy or deface the seal upon termination, resignation or revocation of the notary's commission, or the notary's death.

721--43.11 to 43.19 Reserved.

721--43.20(9E) Sequential journal--contents.

43.20(1) A notary public shall keep an active sequential journal, one at a time, of all official acts performed as a notary public. The journal shall be kept in a secured area under the control of the notary public. Failure to secure the journal shall be cause for the secretary of state to take administrative action against the commission held by the notary public pursuant to Iowa Code section 9E.3(5).

43.20(2) The journal shall include all of the following:

a. Date, time and type of each official act.

b. Date of the document.

c. Type of document.

d. The signature of each person whose signature is being notarized.

e. The name and address of each signer.

f. The type of identification used to identify the person.

g. The fee charged for the notarial service.

h. Any additional information to clarify important aspects or determinations the notary made in the course of performing the notarial act.

43.20(3) If a sequential journal of official acts performed by a notary public is stolen, lost, misplaced, destroyed, damaged, or otherwise rendered unusable as a record of notarial acts and information, the notary public shall immediately notify the secretary of state by certified mail. The notification shall include the period of the journal entries, the notary public commission number, and the expiration date of the commission, and when applicable, a photocopy of any police report that specifies the theft of the sequential journal of official acts.

43.20(4) The journal of notarial acts of a notary public is the exclusive property of that notary public, and shall not be surrendered to an employer upon termination of employment, whether or not the employer paid for the journal, or at any other time.

721--43.21 to 43.29 Reserved.

721--43.30(9E) Notary's signature. In completing a notarial act, a notary public shall sign on the notarial certificate only the notary's own name, as it appears on the notary's certificate of appointment of commission.

721--43.31 to 43.39 Reserved.

721--43.40(9E) Fees. The fee for any notarial act performed by a notary public in accordance with the provisions of the general statutes shall not exceed $10.

721--43.41 to 43.49 Reserved.

721--43.50(9E) Conflict of interest.

43.50(1) A notary public is disqualified from performing a notarial act if the notary is a signatory of the document that is to be notarized.

43.50(2) A notary public who has a direct financial or beneficial interest in a transaction shall not perform any notarial act in connection with such transaction. For the purpose of this subrule, a notary public has a direct financial or beneficial interest in a transaction if the notary public:

a. With respect to a financial transaction, is named, individually, as a principal to the transaction; or

b. With respect to real property, is named, individually, as a grantee, grantor, mortgagor, mortgagee, trustor, trustee, beneficiary, vendor, vendee, lessor, or lessee to the transaction.

43.50(3) For purposes of this subrule, a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow officer, or lender for a person having a direct financial or beneficial interest in the transaction.

721--43.51 to 43.59 Reserved.

721--43.60(9E) Acknowledgments, verifications, orattestations--requisites.

43.60(1) The acknowledgment, verification or attestation of an instrument shall not be taken unless the notary public taking the acknowledgment, verification or attestation personally knows, or has satisfactory evidence that the person making the acknowledgment, verification or attestation is the individual who is described in and who executed the instrument.

43.60(2) For purposes of this rule, "personally knows" means having an acquaintance, derived from association with the individual in relation to other people and based upon a chain of circumstances surrounding the individual, which establishes the individual's identity with at least reasonable certainty.

43.60(3) For the purposes of this rule, "satisfactory evidence" means the absence of any information, evidence, or other circumstances which would lead a reasonable person to believe that the person making the acknowledgment is not the individual the person claims to be and any one of the following:

a. The oath or affirmation of a credible witness personally known to the notary public that the person making the acknowledgment is personally known to the witness and that each of the following is true:

(1) The person making the acknowledgment, verification or attestation is the person named in the document.

(2) The person making the acknowledgment, verification or attestation is personally known to the witness.

(3) It is the reasonable belief of the witness that the circumstances of the person making the acknowledgment, verification or attestation are such that it would be very difficult or impossible for that person to obtain another form of identification.

(4) The person making the acknowledgment, verification or attestation does not possess any of the identification documents named in 43.60(3)"b" and "c."

(5) The witness does not have a financial interest in the document's being acknowledged and is not named in the document.

b. Reasonable reliance on the presentation to the notary of any one of the following, if the document is current or has been issued within five years of the date of the requested notarization:

(1) An identification card or driver's license issued by the Iowa department of transportation.

(2) A passport issued by the Department of State of the United States.

c. Reasonable reliance on the presentation of any one of the following, provided that a document specified in 43.60(3)"a"(1) to (5), inclusive, shall either be current or have been issued within five years of the date of the requested notarization and shall contain a photograph and description of the person named on it, shall be signed by the person, shall bear a serial or other identifying number, and, in the event that the document is a passport, shall have been stamped by the United States Immigration and Naturalization Service:

(1) A passport issued by a foreign government.

(2) A driver's license issued by a state other than Iowa or by a Canadian or Mexican public agency authorized to issue driver's licenses.

(3) An identification card issued by a state other than Iowa.

(4) An identification card issued by any branch of the armed forces of the United States.

721--43.66 to 43.69 Reserved.

721--43.70(9E) Change in location or address--notice. A notary public shall notify the secretary of state, on a form prescribed and provided by the secretary, by regular mail within 30 days as to any change in the notary's residence address, notary's employer, or employer address. A notary who is not a resident of the state of Iowa shall, within 30 days after a change of address of the notary's place of work or business, file with the secretary a signed, written notice which shall include both the old and new addresses.

721--43.71(9E) Move out of the state--notice. A notary public shall notify the secretary of state, on a form prescribed and provided by the secretary, by regular mail within 30 days if the notary moves out of the state of Iowa and becomes a resident of another state. The notary's commission is revoked upon becoming a resident of another state. If the notary moves to a bordering state but the place of work or business remains in the state of Iowa, the notary may reapply for a notary commission pursuant to Iowa Code section 9E.3(3).

721--43.72(9E) Change of name of notary--notice. Within 30 days after a change in the name of a notary public, the notary shall file a notice of the change with the secretary of state on a form prescribed and provided by the secretary. The notice shall provide the notary's former and new names and the effective date of the new name.

721--43.73(9E) Procedure for resignation of notary.

43.73(1) A notary public may resign as a notary by filing with the secretary of state a signed, written notice of resignation which shall indicate the effective date of such resignation.

43.73(2) A notary public who ceases either to reside within the state or have the notary's principal place of business in the state shall immediately resign as a notary in the manner provided in 43.73(1).

721--43.74(9E) Death of notary. As soon as possible after the death of a notary public, the notary's personal representative shall destroy the notary's official notarial seal, if any, and file a signed, written notice, with the secretary of state, indicating that the notary public has died and the date of death.

721--43.75 to 43.80 Reserved.

721--43.81(9E) Disciplinary action.

43.81(1) The secretary of state may deliver a written, official warning and reprimand to a notary, or may revoke or suspend a notary's appointment, as a result of such notary's official misconduct, or for a violation of any provision of the general statutes.

43.81(2) The termination or lapse of an appointment as a notary, regardless of reason, shall not stop or preclude any investigation into such notary's conduct by the secretary of state, who may pursue any such investigation to a conclusion and issue any finding.

43.81(3) The secretary of state may discipline a notary public upon any of the following grounds:

a. Substantial and material misstatement or omission in the application submitted to the secretary of state.

b. Conviction of a felony or of a lesser offense involving moral turpitude or of a nature incompatible with the duties of a notary public. A conviction after a plea of nolo contendere is deemed to be a conviction within the meaning of this subrule.

c. Revocation, suspension, restriction or denial of a professional license, if such revocation, suspension, restriction or denial was for misconduct, dishonesty, or any cause substantially relating to the duties or responsibilities of a notary public.

d. Failure to discharge fully and faithfully any of the duties or responsibilities required of a notary public.

e. Commission of any act involving dishonesty, fraud, or deceit with the intent to substantially benefit the notary public or another, or substantially injure another.

f. Failure to complete the acknowledgment at the time the notary's signature is affixed to the document.

g. Failure to administer the oath or affirmation as required by a verification upon oath or affirmation.

h. Execution of any certificate as a notary public containing a statement known to the notary public to be false.

721--43.82(9E) Criteria. In evaluating a violation to determine which cases may be appropriate for administrative assessment of disciplinary action, and in determining the type of discipline, the secretary of state or appointed designee shall consider all of the following factors:

43.82(1) Culpability which shall include but not be limited to:

a. The degree of intent, or the willfulness or recklessness of the violation.

b. Whether the case involves false reporting of required information.

43.82(2) Actual or potential danger of injury, caused by the violation, to the client or customer of the notary or to the person named in the document notarized.

43.82(3) Actual or potential cost of injury or damage caused by the violation.

43.82(4) Actual and potential cost incurred by the secretary of state in enforcing the provisions of Iowa Code chapter 9E and rules adopted pursuant to that chapter against the violator.

43.82(5) Remedial action taken by the notary public.

43.82(6) Previous history of notarial misconduct by the notary public.

721--43.83(9E) Notice and hearing. Disciplinary action may be taken against a notary public only after a notice and an opportunity for a contested case hearing unless the parties agree to an informal settlement which assesses some form of disciplinary action. The secretary of state may seek assessment of disciplinary action by serving a complaint upon the notary public. The complaint shall include a statement of the time, place and nature of the hearing, a statement of the legal authority and jurisdiction under which the hearing will be held, a reference to the statute or rules involved, and a statement of the matters asserted. The complaint may be served on the notary public by personal service or by certified mail, return receipt requested. The hearing shall be governed by Iowa Code chapter 17A.

721--43.84(9E) Administrative order. Upon finding that a notary public has violated Iowa Code chapter 9E or rules adopted pursuant to that chapter, an administrative order shall be issued assessing the disciplinary action. The order shall recite the facts, the legal requirements which have been violated, the rationale for the assessment of the civil penalty and the date of issuance. The order shall be served upon the notary public by certified mail, return receipt requested.

721--43.85(9E) Informal settlement. These rules do not apply to any settlement reached between the notary public and the secretary of state prior to the initiation of a contested case proceeding. The secretary of state shall notify the notary public that the secretary has found a probable violation with a proposed penalty and shall provide the notary public an opportunity to attend an informal settlement conference. The secretary of state and the notary public may attend an informal settlement conference and reach an agreement about the assessment of disciplinary action against the notary public. The agreement shall be in writing executed by the secretary and the notary public.

721--43.86(9E) Review period. If the contested case hearing is presided over by a designee of the secretary of state, the notary public may seek review by the secretary of state of the order assessing a civil penalty or other disciplinary action within 14 days following service of the order. The notary public shall submit a short and concise statement of the facts of the case and a statement as to why the amount of the civil penalty or other disciplinary action is inappropriate under the circumstances of the case. The request for review shall be served upon the secretary of state by certified mail, return receipt requested. If the notary public fails to file a request for review within the prescribed time period, the order becomes the final order of the secretary of state.

721--43.87(9E) Review by the secretary of state. The secretary of state shall confine the review to the record of the contested case hearing. The review shall not be a contested case evidentiary hearing. The final order of the secretary of state may include changing the type of disciplinary action, either increasing or decreasing the severity of the action, or modifying any other proposed disciplinary action. The final order shall be served upon the notary public by certified mail, return receipt requested.

These rules are intended to implement Iowa Code sections 9E.3, 9E.6, 9E.7, 9E.9, 9E.14 and 9E.15.

ARC 8607A

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 307.10 and 307.12, the Department of Transportation hereby gives Notice of Intended Action to amend Chapter 400, "Vehicle Registration and Certificate of Title," and Chapter 401, "Special Registration Plates," Iowa Administrative Code.

1998 Iowa Acts, chapter 1073, section 5, specifies that the Department's physical inspection is not to determine whether the vehicle is in a safe condition to operate. Chapter 400 is being amended accordingly.

Iowa Code Supplement section 321.34(13)"d" [1997 Iowa Acts, chapter 104, section 10] provides for state agency-sponsored processed emblem plates and establishes the fees for these plates. Chapter 401 is being amended to establish requirements for the issuance of these plates.

Any person or agency may submit written comments concerning these proposed amendments or may submit a written request to make an oral presentation. The comments or request shall:

1. Include the name, address, and telephone number of the person or agency authoring the comments or request.

2. Reference the number and title of the proposed rule, as given in this Notice, that is the subject of the comments or request.

3. Indicate the general content of a requested oral presentation.

4. Be addressed to the Department of Transportation, Director's Staff Division, 800 Lincoln Way, Ames, Iowa 50010; fax (515)239-1639; Internet E-mail address: rules@iadot.e-mail.com.

5. Be received by the Director's Staff Division no later than February 2, 1999.

A meeting to hear requested oral presentations is scheduled for Friday, February 5, 1999, at 10 a.m. in the conference room of the Motor Vehicle Division, which is located on the lower level of Park Fair Mall, 100 Euclid Avenue, Des Moines, Iowa.

The meeting will be canceled without further notice if no oral presentation is requested.

These amendments are intended to implement Iowa Code sections 321.1, 321.23, and 321.34 and 1998 Iowa Acts, chapter 1073, section 5.

Proposed rule-making actions:

ITEM 1. Amend subrule 400.17(4), introductory paragraph, as follows:

400.17(4) Approval. If the department determines that the motor vehicle is a remanufactured vehicle as defined in Iowa Code section 321.1, that the vehicle is in safe operating condition, that the integral parts and components have been identified as to ownership, that the diesel engine and tires have not been previously put into service and carry manufacturer's warranties, and that the application forms have been properly completed:

ITEM 2. Amend subrule 400.17(5) as follows:

400.17(5) Disapproval. If the department determines that the vehicle does not meet the definition of a remanufactured vehicle under Iowa Code section 321.1, that the vehicle is not in safe operating condition, that the integral parts or components have not been properly identified as to ownership, that the diesel engine or any tire of the vehicle has been previously put into service or is not under a manufacturer's warranty, or that the application forms have not been properly completed, then the department shall not approve the vehicle for titling and registration.

ITEM 3. Amend rule 761--401.15(321), introductory paragraph, as follows:

761--401.15(321) Processed emblem application and approval process. Following is the application and approval process for special plate requests under Iowa Code Supplement subsection 321.34(13) as amended by 1997 Iowa Acts, chapter 104, sections 9 and 10.

ITEM 4. Amend subrule 401.16(1) by adding the following new line at the end of the table:

State Agency-Sponsored $35 $10 $60 $15

ITEM 5. Adopt new rule 761--401.17(321) as follows:

761--401.17(321) State agency-sponsored processed emblem plates.

401.17(1) Application and approval process for a new plate. A state agency recommending a new special registration plate with a processed emblem shall submit its request to the department on a form prescribed by the department. The application and approval process is set out in rule 761-- 401.15(321). The application shall include clear and concise eligibility requirements for plate applicants.

401.17(2) Plate application. Once new state agency-sponsored processed emblem plates have been approved, manufactured and issued, the plates may be ordered as described below.

a. When the plates have no eligibility requirements:

(1) Application for letter-number designated plates shall be submitted to the county treasurer.

(2) Application for personalized plates shall be submitted to the department on a form prescribed by the department.

b. When the plates have eligibility requirements, application for either letter-number designated or personalized plates shall be submitted to the sponsoring state agency for approval on a form prescribed by the department. The sponsoring state agency shall forward approved applications to the department.

401.17(3) Characters. Personalized state agency-sponsored processed emblem plates shall consist of no less than two nor more than five characters and shall be issued in accordance with subrule 401.6(2), paragraphs "a" to "d."

401.17(4) Renewal. If renewal of either letter-number designated or personalized state agency-sponsored processed emblem plates is delinquent for more than one month:

a. A new application and issuance fee are required.

b. The department may issue the combination of characters on personalized plates to another applicant.

401.17(5) Reassignment. A vehicle owner may request reassignment of either letter-number designated or personalized state agency-sponsored processed emblem plates in accordance with subrule 401.6(4). However, plates that have eligibility requirements may not be reassigned.

401.17(6) Gift certificate.

a. When state agency-sponsored processed emblem plates have no eligibility requirements:

(1) A gift certificate for the issuance fee for letter-number designated plates may be purchased from the county treasurer.

(2) A gift certificate for the issuance fee for personalized plates may be purchased by completing a form prescribed by the department and submitting the form to the department.

b. When state agency-sponsored processed emblem plates have eligibility requirements, a request to purchase a gift certificate for either letter-number designated or personalized plates shall be submitted to the sponsoring state agency.

c. A gift certificate is void 90 days after issuance.

ARC 8600A

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 307.10 and 307.12, the Department of Transportation hereby gives Notice of Intended Action to amend Chapter 620, "OWI and Implied Consent," Iowa Administrative Code.

This chapter is being amended to allow hearings to be reopened for OWI revocations when new evidence becomes available that would provide grounds for rescinding the revocation.

Any person or agency may submit written comments concerning this proposed amendment or may submit a written request to make an oral presentation. The comments or request shall:

1. Include the name, address, and telephone number of the person or agency authoring the comments or request.

2. Reference the number and title of the proposed rule, as given in this Notice, that is the subject of the comments or request.

3. Indicate the general content of a requested oral presentation.

4. Be addressed to the Department of Transportation, Director's Staff Division, 800 Lincoln Way, Ames, Iowa 50010; fax (515)239-1639; Internet E-mail address: rules@iadot.e-mail.com.

5. Be received by the Director's Staff Division no later than February 2, 1999.

A meeting to hear requested oral presentations is scheduled for Thursday, February 4, 1999, at 10 a.m. in the conference room of the Motor Vehicle Division, which is located on the lower level of Park Fair Mall, 100 Euclid Avenue, Des Moines, Iowa.

The meeting will be canceled without further notice if no oral presentation is requested.

This amendment is intended to implement Iowa Code chapter 321J.

Proposed rule-making action:

Amend rule 761--620.4(321J) by adopting new subrule 620.4(5) as follows:

620.4(5) Petition to reopen a hearing.

a. A person whose driver's license or operating privilege has been or is being revoked under Iowa Code section 321J.9 or 321J.12 may petition the department to reopen the hearing on the revocation if the petition contains information indicating that new evidence has been discovered which provides grounds for rescinding the revocation. A petition to reopen under this paragraph shall not be considered after the expiration of the revocation period or after one year from the date of the incident which led to the revocation, whichever is the shorter period.

b. A person whose driver's license or operating privilege has been revoked under Iowa Code section 321J.12 and who was subsequently acquitted of operating while intoxicated in the criminal case arising from the incident which led to the revocation may, within 20 days after acquittal, petition the department to reopen the hearing for the purpose of offering new evidence indicating that the person was not operating with an alcohol concentration of .10 or more. At the reopened hearing, any evidence relevant to the question of whether the person was operating with an alcohol concentration of .10 or more is admissible without regard to whether such evidence was, or was not, excluded from the criminal case. If the person proves that the chemical test which led to the revocation was invalid, the revocation shall be rescinded. An acquittal in the criminal case is not binding on the department in determining the outcome of the reopened hearing.

ARC 8608A

Notice is also given to the public that the Administrative Rules Review Committee may, on its own motion or on written request by any individual or group, review this proposed action under section 17A.8(6) at a regular or special meeting where the public or interested persons may be heard.

Pursuant to the authority of Iowa Code sections 307.10 and 307.12, the Department of Transportation hereby gives Notice of Intended Action to amend Chapter 750, "Aircraft Registration," Iowa Administrative Code.

1998 Iowa Acts, chapter 1182, amends the method for calculating aircraft registration fees. Section 2 of the bill states that when an aircraft other than a new aircraft is registered in Iowa, the registration fee shall be based upon the number of years the aircraft was previously registered. Chapter 750 is being amended to specify that the model year of the aircraft shall be used to determine the number of times the aircraft was previously registered.

Any person or agency may submit written comments concerning these proposed amendments or may submit a written request to make an oral presentation. The comments or request shall:

1. Include the name, address, and telephone number of the person or agency authoring the comments or request.

2. Reference the number and title of the proposed rule, as given in this Notice, that is the subject of the comments or request.

3. Indicate the general content of a requested oral presentation.

4. Be addressed to the Department of Transportation, Director's Staff Division, 800 Lincoln Way, Ames, Iowa 50010; fax (515)239-1639; Internet E-mail address: rules@iadot.e-mail.com.

5. Be received by the Director's Staff Division no later than February 2, 1999.

A meeting to hear requested oral presentations is scheduled for Friday, February 5, 1999, at 1 p.m. in the conference room of the Motor Vehicle Division, which is located on the lower level of Park Fair Mall, 100 Euclid Avenue, Des Moines, Iowa.

The meeting will be canceled without further notice if no oral presentation is requested.

These amendments are intended to implement Iowa Code chapter 328 and 1998 Iowa Acts, chapter 1182.

Proposed rule-making actions:

ITEM 1. Adopt new rule 761--750.9(328) as follows:

761--750.9(328) Registration. When a used aircraft is registered in Iowa, the model year of the aircraft shall be used to determine the number of times the aircraft was previously registered, and a reduction of the registration fee shall be computed accordingly. "Model year," except where otherwise specified, means the year of original manufacture or the year certified by the manufacturer. For the purpose of registration, the model year shall advance one year each January 1.

This rule is intended to implement Iowa Code section 328.21.

ITEM 2. Amend rule 761--750.10(328) by amending subrule 750.10(3) and the implementation clause as follows:

750.10(3) Fee. The aircraft registration fee for a new aircraft shall be computed according to Iowa Code section 328.21. The fee for other aircraft shall be computed according to Iowa Code sections 328.21 and 328.22.

This rule is intended to implement Iowa Code sections 328.20, to 328.22 328.21, 328.25 to 328.27, 328.35, 328.37, 328.42, 328.44 to 328.46 and 328.56A.

ARC 8615A

Pursuant to the authority of 1998 Iowa Acts, chapter 1196, section 6, subsection 8, and section 14, the Department of Human Services hereby amends Chapter 76, "Application and Investigation," appearing in the Iowa Administrative Code, and adopts Chapter 86, "Healthy and Well Kids in Iowa (HAWK-I) Program," Iowa Administrative Code.

These amendments implement the Healthy and Well Kids in Iowa (HAWK-I) program. The HAWK-I Board adopted these amendments December 21, 1998. Notice of Intended Action regarding these amendments was published in the Iowa Administrative Bulletin on November 4, 1998, as ARC 8450A.

The Balanced Budget Act of 1997 (Public Law 105-32) added a new Title XXI to the Social Security Act and appropriated $39.6 billion over ten years to provide health care coverage to uninsured targeted low-income children. Iowa's share of the funds is approximately $32.4 million annually.

States have three options in designing their child health program. States may:

* Expand their existing Medicaid program.

* Create a separate child health insurance program.

* Use a combination of these options.

The Seventy-seventh General Assembly passed House File 2517 [1998 Iowa Acts, chapter 1196], which directs the Department of Human Services to implement a combination program. "Phase one" of the program expanded the Medicaid program to 133 percent of the federal poverty level for all children under the age of 19 and was implemented on July 1, 1998.

"Phase two" created a separate child health program called Healthy and Well Kids in Iowa (HAWK-I) to provide health care coverage to children under the age of 19 who are not Medicaid-eligible and who live in families with income below 185 percent of the federal poverty level. The HAWK-I program became effective January 1, 1999.

1998 Iowa Acts, chapter 1196, designated the Department of Human Services as the state agency responsible for the administration of the HAWK-I program and created the HAWK-I Board to adopt rules and provide direction to the department on the administration of the program.

The following children are not eligible for the HAWK-I plan. Children who:

* Are eligible for insurance coverage as the dependents of a state of Iowa employee.

* Are eligible for Medicaid.

* Are inmates in a nonmedical public institution.

* Are inmates in an institution for mental disease at the time of application or annual review.

* Have other health care coverage.

Families whose income is equal to or more than 150 percent of the federal poverty level shall be charged a monthly premium of $10 per child, up to maximum of $30 per month. Failure to pay the premium shall result in disenrollment from the program.

Children living in families who voluntarily droppedemployer-sponsored health insurance coverage are not eligible to participate in the program for six months following the last day of coverage unless the reasons for dropping the coverage were specified in 1998 Iowa Acts, chapter 1196. Once an applicant is approved to participate in the HAWK-I program, coverage will begin on the first day of the month following the month of application for the program.

1998 Iowa Acts, chapter 1196, directed the Department to contract with health plans to provide health care coverage to children who qualify for the program. Due to the limited time available to implement the program, representatives of the insurance industry recommended that the Department not go through an RFP process for the initial implementation of the program, but allow any plan licensed in Iowa to participate if the plan is willing to accept the reimbursement system and offer all covered benefits.

The HAWK-I program is required to provide comprehensive benefits that are at least actuarially equivalent to a benchmark benefit package. At a minimum, health plans shall cover the following medically necessary services: inpatient and outpatient hospital, ambulance, physical therapy, nursing services, speech therapy, durable medical equipment, home health care, hospice care, prescription drugs, dental care (including restorative and preventative services), hearing services, and vision services. There are no copayments for services received under the HAWK-I program except for a $25 copayment that shall be charged for emergency room visits if the enrollee's medical condition does not meet the definition of an emergency medical condition. A child may not be denied coverage due to the presence of a preexisting medical condition.

Participating health plans shall pay claims, provide identification cards verifying enrollment in the plan, provide information about the plan and the provider network so that applicants can make an informed plan choice, establish an appeal process, and provide statistical data to the Department. Participating health plans are prohibited from conducting direct marketing of their plans to HAWK-I applicants and enrollees.

1998 Iowa Acts, chapter 1196, also directs the Department to contract with a third-party administrator to provide administrative services for the program. The third-party administrator shall receive applications, determine initial and ongoing eligibility for the HAWK-I program, assist the family in selecting a health care plan when more than one is available, enroll the child in the health plan, bill and collect the premium, and provide statistical data to the Department. The third-party administrator shall maintain a toll-free 24-hour multilingual dedicated customer service line to answer inquiries regarding the program.

The Department issued a Request for Proposal (RFP) for the third-party administrator. Four bids were received. The HAWK-I Board voted to award the third-party administrator contract to Eligibility Services, Inc.

Once enrolled in the health care plan, the child shall remain enrolled for 12 months unless the child attains the age of 19, the family fails to pay the premium, the child attains Medicaid eligibility, the child attains other health insurance coverage, the child enters a nonmedical public institution (such as a penal institution), the child is eligible for health insurance coverage as a dependent of a state of Iowa employee, or the child relocates to another state. A child may be disenrolled if the child moves to an area of the state in which the plan has no provider network established. If the child is disenrolled, the child shall be enrolled in a participating plan in the new location.

These amendments also establish policy on the coordination of Medicaid and the HAWK-I program. If an application is made for HAWK-I and it appears the child may be eligible for Medicaid, the HAWK-I application shall also be considered an application for Medicaid and the third-party administrator shall refer the application to the county office of the Department. If the family applies for Medicaid and is found ineligible or would be eligible only if they met a spenddown under the Medically Needy program, the Medicaid application shall be considered an application for HAWK-I and referred to the third-party administrator.

The Department finds, pursuant to Iowa Code section 17A.5(2)"b"(1), that the normal effective date of these amendments should be waived and these amendments made effective January 1, 1999, as authorized by 1998 Iowa Acts, chapter 1196, section 14.

The following revisions were made to the Notice of Intended Action in response to public comments unless otherwise stated:

All references to 1998 Iowa Acts, House File 2517, were updated to 1998 Iowa Acts, chapter 1196.

Subrules 76.1(1) and 86.3(3) were clarified to specify that all applications are forwarded to the third-party administrator for the eligibility determination.

Rule 441--86.1(77GA,ch1196), subrule 86.8(7), and subrule 86.15(2), paragraph "b," were revised to add a definition of "emergency medical condition" to incorporate prudent layperson standards and to clarify when the emergency room copayment would be imposed.

The definition of "Good cause" in rule 441-- 86.1(77GA,ch1196) was clarified at the request of the Administrative Rules Review Committee.

A definition of "Physician" was added to rule 441-- 86.1(77GA,ch1196) for clarification.

Subrule 86.2(4) was revised to more accurately reflect legislative language and to add four acceptable reasons for dropping coverage that were in legislation but were inadvertently omitted from the rules. A new reason was also added to cover children who are covered under a Child Health Insurance Program (CHIP) who move to Iowa from another state.

Subrule 86.2(7) was revised to add the criteria of the Balanced Budget Act of 1997 in determining whether a lawfully admitted alien child is eligible to participate.

Subrule 86.2(12) was revised following federal directive to remove the provision which would have allowed members of religious groups or organizations not to furnish social security numbers.

Subrule 86.3(2) was revised to provide that application forms may be obtained through the third-party administrator's toll-free telephone number.

Subrule 86.3(3) was revised to provide that HAWK-I applications may be accepted by a wide variety of sources, but they must be forwarded to the third-party administrator for the eligibility determination.

Subrule 86.3(8) was revised to incorporate legislative language that was inadvertently omitted.

Subrule 86.3(12) was added to specify the process that will be followed if a plan is not available in a county when it became apparent there may not be statewide coverage on January 1, 1999.

Rule 441--86.5(77GA,ch1196) was revised to specify that coverage will not become effective until a plan is available in the applicant's county of residence.

Rule 441--86.6(77GA,ch1196) was revised by changing "child" to "enrollee" in the second sentence for clarification.

The catchwords of subrule 86.7(6) were revised for clarification.

Subrule 86.8(2) was revised to lower the maximum premium amount from $30 to $20 per month per family.

Subrules 86.8(4) and 86.10(4) were revised for clarification.

Subrule 86.13(3) was revised by changing the word "bilingual" to "multilingual."

Subrule 86.13(6) was revised by adding a new paragraph "f" to specify that the third-party administrator is responsible for tracking the language preference indicated by applicants as reflected on the application form and notifying the health plans when the number of enrollees speaking the same non-English language is equal to or greater than 10 percent of the number of enrollees in the plan.

Subrule 86.13(13), paragraph "b," was revised to provide that the account be maintained by the Department rather than by the third-party administrator and to provide that the interest go to the HAWK-I trust fund rather than the state.

Rule 441--86.14(77GA,ch1196) was revised to add "benchmark equivalent" to reflect federal legislation.

Subrule 86.14(1), introductory paragraph, was revised to add the words "medically necessary" and paragraph "m" was revised to remove the words "medically necessary" to specify that all services must be medically necessary, not just hearing services.

Subrule 86.14(1), paragraph "c," was revised by removing the last sentence as it was superfluous.

Subrule 86.14(2), paragraph "a," was revised to change the term "woman" to "enrollee" for clarification.

Subrule 86.15(6), paragraph "c," subparagraph (2), was revised to provide that plans need to provide plan literature and brochures in non-English languages only when the number of enrollees speaking the same non-English language is equal to or greater than 10 percent of the number of enrollees in the plan.

Subrule 86.15(9), paragraph "a," subparagraph (5), numbered paragraph "2," was revised to add an exception to provide that written consent is required for the transmission of medical records relating to substance abuse, HIV, or mental health treatment in accordance with state and federal laws.

Subrule 86.15(9), paragraph "b," was revised to be consistent with the contract.

Subrule 86.15(11), paragraph "b," was revised to provide that the capitation rate shall not be revised until July of 2000 because the statistical data needed will not be available until that time.

These amendments are intended to implement 1998 Iowa Acts, chapter 1196.

These amendments became effective January 1, 1999.

The following amendments are adopted.

ITEM 1. Amend rule 441--76.1(249A) as follows:

Amend the introductory paragraph as follows:

441--76.1(249A) Application. An application for family medical assistance-related Medicaid programs shall be submitted on the Public Assistance Application, Form PA-2207-0 or Form PA-2230-0 (Spanish), the Health Services Application, Form 470-2927, or the Application for Assistance, Part 1, Form 470-3112 or Form 470-3122 (Spanish), or the Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526, and the Supplement to the Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3564. The Medically Needy Recertification/State Supplementary and Medicaid Review, Form 470-3118, shall be used instead of Form 470-3112 or 470-3122 (Spanish) for persons applying for assistance under the medically needy program as provided at 441--subrule 75.1(35) if an interview is not required.

Amend subrule 76.1(1) as follows:

76.1(1) Place of filing. An application should shall be filed in a local or area office of the department or directly with an income maintenance worker at a satellite office of the department or in any disproportionate share hospital, federally qualified health center or other facility in which outstationing activities are provided. The Health Services Application, Form 470-2927, may also be filed at the office of a qualified provider of presumptive Medicaid eligibility for pregnant women, at a WIC office, at a maternal health clinic, or at a well child clinic. The disproportionate share hospital, federally qualified health center or other facility will forward the application to the department office which is responsible for the completion of the eligibility determination. The Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526, shall be filed with the third-party administrator as provided at 441--subrule 86.3(3). If it appears that the family is Medicaid-eligible, the third-party administrator shall forward the application to the county department office where the family resides for a determination of Medicaid eligibility. Those persons eligible for supplemental security income and those who would be eligible if living outside a medical institution may make application at the social security district office.

Amend subrule 76.1(2), introductory paragraph, as follows:

76.1(2) Date and method of filing application. An application is considered filed on the date an identifiable application, Form 470-0442, 470-0462, 470-0466 (Spanish), 470-2927, or Form 470-3112 or 470-3122 (Spanish), is received and date-stamped: (1) in any local or area office of the department, or (2) by an income maintenance worker in any satellite office of the department, or (3) by a designated worker in a disproportionate share hospital, federally qualified health center, or other facility in which outstationing activities are provided, or (4) by the third-party administrator who has contracted with the department to administer the healthy and well kids in Iowa (HAWK-I) program as provided at 441--Chapter 86. An identifiable application, Form 470-2927, which is filed to apply for FMAP or FMAP-related Medicaid at a WIC office, well child health clinic, maternal health clinic, or the office of a qualified provider for presumptive eligibility for pregnant women shall be considered filed on the date received and date-stamped in one of these offices. An application so received shall be forwarded within two working days to the department office responsible for completion of the eligibility determination. When a Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526, is filed with the third-party administrator and subsequently referred to the department for a Medicaid eligibility determination, the date the application is received and date-stamped by the third-party administrator shall be the filing date. A faxed application is considered filed on the date the faxed application is received in one of the places described above, if the fax is received during normal business hours. If the fax is received after normal business hours, such as evenings, weekends or holidays, the faxed application shall be considered received on the next normal business day. Before the faxed application can be approved, the original application with the applicant's original signature must be received by the department.

ITEM 2. Amend rule 441--76.11(249A) by adopting the following new subrule 76.11(4):

76.11(4) Referral for HAWK-I program. When the only coverage group under which a child will qualify for Medicaid is the medically needy program with a spenddown as provided in 441--subrule 75.1(35), a referral to the HAWK-I program shall be made in accordance with 441--subrule 86.4(4) as part of the automatic redetermination process when it appears the child is otherwise eligible.

ITEM 3. Adopt the following new chapter:

These rules define and structure the department of human services healthy and well kids in Iowa (HAWK-I) program. The purpose of this program is to provide transitional health care coverage to children ineligible for Title XIX (Medicaid) assistance or other health insurance. The program is implemented and administered in compliance with Title XXI of the federal Social Security Act. The rules establish requirements for the third-party administrator responsible for the program administration and for the participating health plans which will be delivering services to the enrollees.

441--86.1(77GA,ch1196) Definitions.

"Administrative contractor" shall mean the person or entity with whom the department contracts to administer the healthy and well kids in Iowa (HAWK-I) program.

"Benchmark benefit package" shall mean any of the following:

1. The standard Blue Cross Blue Shield preferred provider option service benefit plan, described in and offered under 5 U.S.C. Section 8903(1).

2. A health benefits coverage plan that is offered and generally available to state employees in this state.

3. The plan of a health maintenance organization, as defined in 42 U.S.C. Section 300e, with the largest insured commercial, nonmedical assistance enrollment of covered lives in the state.

"Capitation rate" shall mean the fee the department pays monthly to a participating health plan for each enrollee for the provision of covered medical services whether or not the enrollee received services during the month for which the fee is intended.

"Contract" shall mean the contract between the department and the person or entity selected as the third-party administrator or the contract between the department and the participating health plan for the provision of medical services to HAWK-I enrollees for whom the participating health plans assume risk.

"Cost sharing" shall mean the payment of a premium or copayment as provided for by Title XXI of the federal Social Security Act and 1998 Iowa Acts, chapter 1196, section 11.

"Covered services" shall mean all or a part of those medical and health services set forth in rule 441--86.14(77GA, ch1196).

"Department" shall mean the Iowa department of human services.

"Director" shall mean the director of the Iowa department of human services.

"Eligible child" shall mean an individual who meets the criteria for participation in the HAWK-I program as set forth in rule 441--86.2(77GA,ch1196).

"Emergency medical condition" shall mean a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in one of the following:

1. Placing the health of the person or, with respect to a pregnant woman, the health of the woman and her unborn child, in serious jeopardy,

2. Serious impairment to bodily functions, or

3. Serious dysfunction of any bodily organ or part.

"Emergency services" shall mean, with respect to an individual enrolled with a plan, covered inpatient and outpatient services which are furnished by a provider qualified to furnish these services and which are needed to evaluate and stabilize an emergency medical condition.

"Enrollee" shall mean a HAWK-I recipient who has been enrolled with a participating health plan.

"Federal poverty level" shall mean the poverty income guidelines revised annually and published in the Federal Register by the United States Department of Health and Human Services.

"Good cause" shall mean the family has demonstrated that one or more of the following conditions exist:

1. There was a serious illness or death of the enrollee or a member of the enrollee's family.

2. There was a family emergency or household disaster, such as a fire, flood, or tornado.

3. There was a reason beyond the enrollee's control.

4. There was a failure to receive the third-party administrator's request for a reason not attributable to the enrollee. Lack of a forwarding address is attributable to the enrollee.

"Grievance" shall mean an incident, complaint, or concern that cannot be resolved in a manner satisfactory to enrollees by the immediate response, verbal or otherwise, of the plan staff member receiving the complaint or any complaint received in writing.

"HAWK-I board" or "board" shall mean the entity that adopts rules, establishes policy, and directs the department regarding the HAWK-I program.

"HAWK-I program" or "program" shall mean the healthy and well kids in Iowa program implemented in this chapter to provide health care coverage to eligible children.

"Health insurance coverage" shall mean health insurance coverage as defined in 42 U.S.C. Section 300gg(c).

"Institution for mental diseases" shall mean a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care and related services as defined at 42 CFR Section 435.1009 as amended November 10, l994.

"Nonmedical public institution" shall mean an institution that is the responsibility of a governmental unit or over which a governmental unit exercises administrative control as defined in 42 CFR Section 435.1009 as amended November 10, l994.

"Participating health plan" shall mean any entity licensed by the division of insurance of the department of commerce to provide health insurance in Iowa or an organized delivery system licensed by the director of public health that has contracted with the department to provide health insurance coverage to eligible children under this chapter.

"Physician" shall be defined as provided in Iowa Code subsection 135.1(4).

"Provider" shall mean an individual, firm, corporation, association, or institution that is providing or has been approved to provide medical care or services to an enrollee pursuant to the HAWK-I program.

"Regions" shall mean the six regions of the state as follows:

* Region 1: Lyon, Osceola, Dickinson, Emmet, Sioux, O'Brien, Clay, Palo Alto, Plymouth, Cherokee, Buena Vista, Woodbury, Ida, Sac, Monona, Crawford, and Carroll.

* Region 2: Kossuth, Winnebago, Worth, Mitchell,Howard, Hancock, Cerro Gordo, Floyd, Pocahontas, Humboldt, Wright, Franklin, Calhoun, Webster, Hamilton, Hardin, Greene, Boone, Story, Marshall, and Tama.

* Region 3: Winneshiek, Allamakee, Chickasaw, Fayette, Clayton, Butler, Bremer, Grundy, Black Hawk, Buchanan, Delaware, Dubuque, Jones, Jackson, Cedar, Clinton, and Scott.

* Region 4: Harrison, Shelby, Audubon, Pottawattamie, Cass, Mills, Montgomery, Fremont, and Page.

* Region 5: Guthrie, Dallas, Polk, Jasper, Adair, Madison, Warren, Marion, Adams, Union, Clarke, Lucas, Taylor, Ringgold, Decatur, and Wayne.

* Region 6: Benton, Linn, Poweshiek, Iowa, Johnson, Muscatine, Mahaska, Keokuk, Washington, Louisa, Monroe, Wapello, Jefferson, Henry, Des Moines, Appanoose, Davis, Van Buren, and Lee.

"Third-party administrator" shall mean the person or entity with which the department contracts to provide administrative services for the HAWK-I program.

441--86.2(77GA,ch1196) Eligibility factors. A child must meet the following eligibility factors to participate in the HAWK-I program.

86.2(1) Age. The child shall be under 19 years of age. Eligibility for the program ends the first day of the month following the month of the child's nineteenth birthday.

86.2(2) Income. Countable income shall not exceed 185 percent of the federal poverty level for a family of the same size when determining initial and ongoing eligibility for the program.

a. Countable income. When determining initial and ongoing eligibility for the HAWK-I program, all earned and unearned income, unless specifically exempted, shall be countable.

(1) Earned income. The earned income of all parents, spouses, and children under the age of 19 who are not students shall be countable. Income shall be countable earned income when an individual produces it as a result of the performance of services. Earned income is income in the form of a salary, wages, tips, bonuses, and commissions earned as an employee, or net profit from self-employment.

1. Earned income from employment. Earned income from employment means total gross income.

2. Earned income from self-employment. Earned income from self-employment means the net profit determined by comparing gross income with the allowable costs of producing the income. The net profit from self-employment income shall be determined according to the provisions of 441--paragraph 75.57(2)"f." A person is considered self-employed when the person:

* Is not required to report to the office regularly except for specific purposes such as sales training meetings, administrative meetings, or evaluation sessions; or

* Establishes the person's own working hours, territory, and methods of work; or

* Files quarterly reports of earnings, withholding payments, and FICA payments to the Internal Revenue Service.

(2) Unearned income. The unearned income of all parents, spouses, and children under the age of 19 shall be counted. Unearned income is any income in cash that is not gained by labor or service. The available unearned income shall be the amount remaining after the withholding of taxes (Federal Insurance Contribution Act, state and federal income taxes). Examples of unearned income include, but are not limited to:

1. Social security benefits. Social security income is the amount of the entitlement before withholding of a Medicare premium.

2. Child support and alimony payments received for a member of the family.

3. Unemployment compensation.

4. Veterans benefits.

(3) Recurring lump sum income. Earned and unearned lump sum income that is received on a regular basis shall be counted and prorated over the time it is intended to cover. These payments may include, but are not limited to:

1. Annual bonuses.

2. Lottery winnings that are paid out annually.

b. Exempt income. The following shall not be counted toward the income limit when establishing eligibility for the HAWK-I program.

(1) Nonrecurring lump sum income. Nonrecurring lump sum income is income that is not expected to be received more than once. These payments may include, but are not limited to:

1. An inheritance.

2. A one-time bonus.

3. Lump sum lottery winnings.

4. Other one-time payments.

(2) Food reserves from home-produced garden products, orchards, domestic animals, and the like, when used by the household for its own consumption.

(3) The value of the coupon allotment in the Food Stamp Program.

(4) The value of the United States Department of Agriculture donated foods (surplus commodities).

(5) The value of supplemental food assistance received under the Child Nutrition Act and the special food service program for children under the National School Lunch Act.

(6) Any benefits received under Title III-C, Nutrition Program for the Elderly, of the Older Americans Act.

(7) Benefits paid to eligible households under the Low Income Home Energy Assistance Act of 1981.

(8) Any payment received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 and the Federal-Aid Highway Act of 1968.

(9) Interest and dividend income.

(10) Any judgment funds that have been or will be distributed per capita or held in trust for members of any Indian tribe.

(11) Payments to volunteers participating in the Volunteers in Service to America (VISTA) program.

(12) Payments for supporting services or reimbursement of out-of-pocket expenses received by volunteers in any of the programs established under Titles II and III of the Domestic Volunteer Services Act.

(13) Tax-exempt portions of payments made pursuant to the Alaskan Native Claims Settlement Act.

(14) Experimental housing allowance program payments.

(15) The income of a Supplemental Security Income (SSI) recipient.

(16) Income of an ineligible child if the family chooses not to include the child in the eligibility determination in accordance with the provisions of paragraph 86.2(3)"c."

(17) Unearned income in kind.

(18) Family support subsidy program payments.

(19) All earned and unearned educational funds of an undergraduate or graduate student or a person in training. However, any additional amount of educational funds received for the person's dependents that are in the eligible group shall be considered as nonexempt income.

(20) Bona fide loans.

(21) Payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.).

(22) Payment for major disaster and emergency assistance provided under the Disaster Relief Act of 1974 as amended by Public Law 100-707, the Disaster Relief and Emergency Assistance Amendments of 1988.

(23) Payments made to certain United States citizens of Japanese ancestry and resident Japanese aliens under Section 105 of Public Law 100-383, and payments made to certain eligible Aleuts under Section 206 of Public Law 100-383 entitled Wartime Relocation of Civilians.

(24) Payments received from the Radiation Exposure Compensation Act.

(25) Reimbursements from a third party or from an employer for job-related expenses.

(26) Payments received for providing foster care when the family is operating a licensed foster home.

(27) Any payments received as a result of an urban renewal or low-cost housing project from any governmental agency.

(28) Retroactive corrective payments.

(29) The training allowance issued by the division of vocational rehabilitation, department of education.

(30) Payments from the PROMISE JOBS program.

(31) The training allowance issued by the department for the blind.

(32) Payments from passengers in a car pool.

(33) Compensation in lieu of wages received by a child under the Job Training Partnership Act of 1982.

(34) Any amount for training expenses included in a payment issued under the Job Training Partnership Act of 1982.

(35) Earnings of a child aged 19 or younger who is a student.

(36) Incentive payments received from participation in the adolescent pregnancy prevention programs.

(37) Payments received from the comprehensive child development program, funded by the Administration for Children, Youth, and Families, provided the payments are considered complementary assistance by federal regulations.

(38) Incentive allowance payments received from the work force investment project, provided the payments are considered complementary assistance by federal regulation.

(39) Honorarium income and all moneys paid to an eligible family in connection with the welfare reform longitudinal study.

(40) Family investment program (FIP) benefits.

(41) Moneys received through pilot self-sufficiency grants or diversion programs.

c. Verification of income. Earnings from the past 30 days may be used to verify earned income if it is representative of the income expected in future months. Pay stubs or employers' statements are acceptable forms of verification of earned income. Unearned income shall be verified through data matches when possible, award letters, warrant copies, or other acceptable means of verification. Self-employment income shall be verified using business records or income tax returns from the previous year if they are representative of anticipated earnings.

d. Changes in income. Once initial eligibility is established, changes in income during the 12-month enrollment period shall not affect the child's eligibility to participate in the HAWK-I program. However, if income has decreased, the family may request a review of their income to establish whether they are required to continue paying a premium in accordance with rule 441--86.8(77GA,ch1196).

86.2(3) Family size. For purposes of establishing initial and ongoing eligibility under the HAWK-I program, the family size shall consist of all persons living together who are children and who are parents of those children as defined below.

EXCEPTION: Persons who are receiving Supplemental Security Income (SSI) under Title XVI of the Social Security Act or who are voluntarily excluded in accordance with the provisions of paragraph "c" below are not considered in determining family size.

a. Children. A child under the age of 19 and any siblings of whole or half blood or adoptive shall be considered together unless the child is emancipated due to marriage, in which case, the emancipated child is not included in the family size unless the marriage has been annulled. Emancipated children, their spouses, and children who live together shall be considered as a separate family when establishing eligibility for the HAWK-I program.

b. Parents. Any parent living with the child under the age of 19 shall be included in the family size. This includes the biological parent, stepparent, or adoptive parent of the child and is not dependent upon whether the parents are married to each other.

c. Persons who may be excluded when determining family size. If a child is ineligible for coverage under the HAWK-I program because the child has insurance or is on Medicaid, the family may choose not to count the child in the family size if the child also has income. However, this rule shall not apply when the child is receiving Supplemental Security Income (SSI) benefits.

d. Temporary absence from the home. The following policies shall be applied to an otherwise eligible child under the age of 19 who is temporarily absent from the home.

(1) When a child is absent from the home to secure education or training (e.g., the child is attending college), the child shall be included when establishing the size of the family at home.

(2) When a child is absent from the home to secure medical care, the child shall be included when establishing the size of the family at home when the reason for the absence is expected to last less than 12 months.

(3) When the child is absent from the home because the child is an inmate in a nonmedical public institution (e.g., a penal institution) in accordance with the provisions of subrule 86.2(9), the child shall be included when establishing the size of the family at home if the absence is expected to be less than three months.

(4) When a child is absent from the home because the child is in foster care, the child shall not be included when establishing the size of the family at home.

(5) When a child is absent from the home for vacation or visitation of an absent parent, for example, the child shall be included in establishing the size of the family at home if the absence does not exceed three months.

86.2(4) Uninsured status. The child must be uninsured. A child who is currently enrolled in an individual or group health plan is not eligible to participate in the HAWK-I program. However, a child who is enrolled in a plan that provides coverage only for a specific disease or service (e.g., a vision- or dental-only policy or a cancer policy) shall not be considered insured for purposes of the HAWK-I program.

a. A child who has been enrolled in an employer-sponsored health plan in the six months prior to the month of application but who no longer is enrolled in an employer-sponsored health plan is not eligible to participate in the HAWK-I program for six months from the last date of coverage unless the coverage ended for one of the following reasons:

(1) Employment was lost due to factors other than voluntary termination.

(2) Coverage was lost due to the death of a parent.

(3) There was a change in employment to a new employer that does not provide an option for dependent coverage.

(4) The child moved to an area of the state where the plan does not have a provider network established.

(5) The employer discontinued health benefits to all employees.

(6) The coverage period allowed by COBRA expired.

(7) The parent became self-employed.

(8) Health benefits were terminated because of a long-term disability.

(9) Dependent coverage was terminated due to an extreme economic hardship on the part of either the employee or the employer.

(10) There was a substantial reduction in either lifetime medical benefits or benefit category available to an employee and dependents under an employer's health care plan.

(11) Child health insurance program (CHIP) coverage in another state was terminated due to the family's move to Iowa.

b. American Indian and Alaska Native. American Indian and Alaska Native children are eligible for the HAWK-I program on the same basis as other children in the state, regardless of whether or not they may be eligible for or served by Indian Health Services-funded care.

86.2(5) Ineligibility for Medicaid. The child shall not be receiving Medicaid or eligible to receive Medicaid if application were made except when the child would be required to meet a spenddown under the medically needy program in accordance with the provisions of 441--subrule 75.1(35). Additionally, a child who would be eligible for Medicaid except for the parent's failure or refusal to cooperate in establishing initial or ongoing eligibility shall not be eligible for coverage under the HAWK-I program.

86.2(6) Iowa residency. The child shall be a resident of the state of Iowa. A resident of Iowa is a person:

a. Who is living in Iowa voluntarily with the intention of making that person's home in Iowa and not for a temporary purpose; or

b. Who, at the time of application, is not receiving assistance from another state and entered Iowa with a job commitment or to seek employment or who is living with parents or guardians who entered Iowa with a job commitment or to seek employment.

86.2(7) Citizenship and alien status. The child shall be a citizen or lawfully admitted alien. The criteria established under Section 402(a)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of l996 and the Balanced Budget Act of 1997 shall be followed when determining whether a lawfully admitted alien child is eligible to participate in the HAWK-I program. The citizenship or alien status of the parents or other responsible person shall not be considered when determining the eligibility of the child to participate in the program.

86.2(8) Dependents of state of Iowa employees. The child shall not be eligible for the HAWK-I program if the child is eligible for health insurance coverage as a dependent of a state of Iowa employee.

86.2(9) Inmates of nonmedical public institutions. The child shall not be an inmate of a nonmedical public institution as defined at 42 CFR Section 435.1009 as amended November 10, 1994.

86.2(10) Inmates of institutions for mental disease. At the time of application or annual review of eligibility, the child shall not be an inmate of an institution for mental disease as defined at 42 CFR Section 435.1009 as amended November 10, 1994.

86.2(11) Preexisting medical conditions. The child shall not be denied eligibility based on the presence of a preexisting medical condition.

86.2(12) Furnishing a social security number. The child must furnish a social security number or, if one has not been issued or is not known, proof of application must be provided.

441--86.3(77GA,ch1196) Application process.

86.3(1) Who may apply. Each person wishing to do so shall have the opportunity to apply without delay. When the request is made in person, the requester shall immediately be given an application form. When a request is made that the application form be mailed, it shall be sent in the next outgoing mail.

a. Child lives with parents. When the child lives with the child's parents, including stepparents and adoptive parents, the parent shall file the application on behalf of the child unless the parent is unable to do so.

If the parent is unable to act on the child's behalf because the parent is incompetent or physically disabled, another person may file the application on behalf of the child. The responsible person shall be a family member, friend or other person who has knowledge of the family's financial affairs and circumstances and a personal interest in the child's welfare or a legal representative such as a conservator, guardian, executor or someone with power of attorney. The responsible person shall sign the application form and assume the responsibilities of the incompetent or disabled parent in regard to the application process and ongoing eligibility determinations.

b. Child lives with someone other than a parent. When the child lives with someone other than a parent (e.g., another relative, friend, guardian), the person who has assumed responsibility for the care of the child may apply on the child's behalf. This person shall sign the application form and assume responsibility for providing all information necessary to establish initial and ongoing eligibility for the child.

c. Child lives independently or is married. When a child under the age of 19 lives in an independent living situation or is married, the child may apply on the child's own behalf, in which case, the child shall be responsible for providing all information necessary to establish initial and ongoing eligibility. If the child is married, both the child and the spouse shall sign the application form.

86.3(2) Application form. An application for the HAWK-I program shall be submitted on Form 470-3526, Healthy and Well Kids in Iowa (HAWK-I) Application, unless the family applies for the Medicaid program first.

When an application has been filed for the Medicaid program in accordance with the provisions of rule 441-- 76.1(249A) and Medicaid eligibility does not exist in accordance with the provisions of rule 441--75.1(249A), or the family must meet a spenddown in accordance with the provisions of 441--subrule 75.1(35) before the child can attain eligibility, the Medicaid application shall be used to establish eligibility for the HAWK-I program in lieu of the Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526. Applications may be obtained by telephoning the toll-free telephone number of the third-party administrator.

86.3(3) Place of filing. An application for the HAWK-I program shall be filed with the third-party administrator responsible for making the eligibility determination. Any local or area office of the department of human services, disproportionate share hospital, federally qualified health center, other facilities in which outstationing activities are provided, school nurse, Head Start, maternal and child health center, WIC office, or other entity may accept the application. However, all applications shall be forwarded to the third-party administrator.

86.3(4) Date and method of filing. The application is considered filed on the date an identifiable application is received by the third-party administrator unless the family has applied for Medicaid first and a referral is made to the third-party administrator by the county office of the department, in which case, the date the Medicaid application was originally filed with the department shall be the filing date. An identifiable application is an application containing a legible name, address, and signature.

86.3(5) Right to withdraw application. After an application has been filed, the applicant may withdraw the application at any time prior to the eligibility determination. Requests for voluntary withdrawal of the application shall be documented, and the applicant shall be sent a notice of decision confirming the request.

86.3(6) Application not required. An application shall not be required when a child becomes ineligible for Medicaid and the county office of the department makes a referral to the HAWK-I program, in which case, Form 470-3563, HAWK-I Referral, shall be accepted in lieu of an application. The original Medicaid application or the last review form, whichever is more current, shall suffice to meet the signature requirements.

86.3(7) Information and verification procedure. The decision with respect to eligibility shall be based primarily on information furnished by the applicant or enrollee. The third-party administrator shall notify the applicant or enrollee in writing of additional information or verification that is required to establish eligibility. This notice shall be provided to the applicant or enrollee personally or by mail or facsimile. Failure of the applicant or enrollee to supply the information or verification or refusal by the applicant or enrollee to authorize the third-party administrator to secure the information shall serve as a basis for rejection of the application or cancellation of coverage. Five working days shall be allowed for the applicant or enrollee to supply the information or verification requested by the third-party administrator. The third-party administrator may extend the deadline for a reasonable period of time when the applicant or enrollee is making every effort but is unable to secure the required information or verification from a third party.

86.3(8) Time limit for decision. The third-party administrator shall make a decision regarding the applicant's eligibility to participate in the HAWK-I program within ten working days from the date of receiving the completed application and all necessary information and verification unless the application cannot be processed within the period for a reason that is beyond the control of the third-party administrator.

EXCEPTION: When the application is referred to the county office of the department for a Medicaid eligibility determination and the application is denied, the third-party administrator shall determine HAWK-I eligibility no later than ten working days from the date of the notice of Medicaid denial.

86.3(9) Applicant cooperation. An applicant must cooperate with the third-party administrator in the application process, which may include providing verification or signing documents. Failure to cooperate with the application proc-ess shall serve as basis for a denial of the application.

86.3(10) Waiting lists. When funds appropriated for this purpose are obligated, pending applications for HAWK-I coverage shall be denied by the third-party administrator. A notice of decision shall be mailed by the third-party administrator. The notice shall state that the applicant meets eligibility requirements but no funds are available and that the applicant will be placed on a waiting list, or that the person does not meet eligibility requirements.

a. Applicants shall be entered on the waiting list on the basis of the date a completed Form 470-3564 is date-stamped by the third-party administrator. In the event that more than one application is received on the same day, applicants shall be entered on the waiting list on the basis of the day of the month of the oldest child's birthday, the lowest number being first on the list. Any subsequent ties shall be decided by the month of birth of the oldest child, January being month one and the lowest number.

b. If funds become available, applicants shall be selected from the waiting list based on the order of the waiting list and notified by the third-party administrator.

c. The third-party administrator shall establish that the applicant continues to be eligible for HAWK-I coverage.

d. After eligibility is reestablished, the applicant shall have 15 working days to enroll in the program. If the applicant does not enroll in the program within 15 working days, the applicant's name shall be deleted from the waiting list and the third-party administrator shall contact the next applicant on the waiting list.

86.3(11) Falsification of information. A person is guilty of falsification of information if that person, with the intent to gain HAWK-I coverage for which that person is not eligible, knowingly makes or causes to be made a false statement or representation or knowingly fails to report to the third-party administrator or the department any change in circumstances affecting that person's eligibility for HAWK-I coverage in accordance with rule 441--86.2(77GA,ch1196) and rule 441--86.10(77GA,ch1196).

In cases of founded falsification of information, the department may proceed with disenrollment in accordance with rule 441--86.7(77GA,ch1196) and require repayment for the amount that was paid to a health plan by the department and any amount paid out by the plan while the person was ineligible.

86.3(12) Applications pended due to unavailability of a plan. When there is no participating health plan in the applicant's county of residence, the application shall be held until a plan is available. The application shall be processed when a plan becomes available and coverage shall be effective the first day of the month the plan becomes available.

441--86.4(77GA,ch1196) Coordination with Medicaid.

86.4(1) HAWK-I applicant appears eligible for Medicaid. At the time of initial application, if it appears the child may be eligible for Medicaid in accordance with the provisions of rule 441--75.1(249A), with the exception of meeting a spenddown under the medically needy program at 441--subrule 75.1(35), a referral shall be made by the third-party administrator to the county department office for a determination of Medicaid eligibility as follows:

a. The original Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526, and copies of any accompanying information and verification shall be forwarded to the county department office within 24 hours, or the next working day, whichever is sooner. The third-party administrator shall maintain a copy of all documentation sent to the department and a log to track the disposition of all referrals.

b. The third-party administrator shall notify the family that the referral has been made. The notice of the referral to the family shall be accompanied by a Medicaid Supplement to the Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3564, and the third-party administrator shall return to the family any original verification and information that was submitted with the application.

c. The referral shall be considered an application for Medicaid in accordance with the provisions of rule 441-- 76.1(249A). The time limit for processing the referred application begins with the date the Healthy and Well Kids in Iowa (HAWK-I) Application, Form 470-3526, is date-stamped as being received by the third-party administrator.

86.4(2) HAWK-I enrollee appears eligible for Medicaid. At the time of the annual review, if it appears the child may be eligible for Medicaid in accordance with the provisions of rule 441--75.1(249A), with the exception of meeting a spenddown under the medically needy program at 441--subrule 75.1(35), a referral shall be made to the county department office for a determination of Medicaid eligibility as stated in subrule 86.4(1) above. However, the child shall remain eligible for the HAWK-I program pending the Medicaid eligibility determination unless the 12-month certification period expires first.

86.4(3) Medicaid applicant not eligible. If a child is not eligible for Medicaid under the provisions of rule 441-- 75.1(249A), with the exception of meeting a spenddown under the medically needy program at 441--subrule 75.1(35), the department shall make a referral to the third-party administrator for an eligibility determination under the HAWK-I program as follows:

a. A copy of the original application, copies of any accompanying information and verification, and a copy of the notice of decision shall be forwarded to the third-party administrator within 24 hours of the decision to deny Medicaid eligibility or the next working day, whichever is sooner.

b. The third-party administrator shall date-stamp the referral, notify the family of the referral, and proceed with an eligibility determination under the HAWK-I program.

c. The time frame for processing the application begins with the day on which the referred application is date-stamped as having been received by the third-party administrator.

d. If it is apparent that the child will not be eligible for the HAWK-I program (e.g., the child is the dependent of a state of Iowa employee), the referral shall not be made.

86.4(4) Medicaid recipient becomes ineligible. If a child becomes ineligible for Medicaid under the provisions of rule 441--75.1(249A), with the exception of meeting a spenddown under the medically needy program at 441--subrule 75.1(35), a referral shall be made to the third-party administrator for an eligibility determination under the HAWK-I program as follows:

a. The department shall complete a Referral to HAWK-I, Form 470-3563, and send it to the third-party administrator within 24 hours of the determination that the child is no longer eligible for Medicaid or that the child must meet a spenddown under the medically needy program.

b. The third-party administrator shall date-stamp the referral, notify the family of the referral, and proceed with an eligibility determination under the HAWK-I program. Form 470-3563, Referral to HAWK-I, shall be used as an application for the HAWK-I program. If needed, copies of supporting documentation and signatures shall be obtained from the case record at the county office of the department.

c. If it is apparent the child will not be eligible for the HAWK-I program (e.g., the child is the dependent of a state of Iowa employee), the referral shall not be made.

441--86.5(77GA,ch1196) Effective date of coverage. Coverage for children who are determined eligible for the HAWK-I program shall be effective the first day of the month following the month in which the application is filed, regardless of the day of the month the application is filed, or when a plan becomes available in the applicant's county of residence.

441--86.6(77GA,ch1196) Selection of a plan. At the time of initial application, if there is more than one participating plan available in the child's county of residence, the applicant shall select the plan in which the applicant wishes to enroll as part of the eligibility process. The enrollee may change plans only at the time of the annual review unless the provisions of subrule 86.7(1) apply. The applicant shall designate the plan choice in writing by completing Form 470-3574, Selection of Plan.

86.6(1) Coverage in another county's plan. If a child traditionally travels to another county to receive medical care, the applicant may choose to participate in the plan available in the county in which the child receives medical care.

86.6(2) Period of enrollment. Once enrolled in a plan, the child shall remain enrolled in the selected plan for a period of 12 months unless the child is disenrolled in accordance with the provisions of rule 441--86.7(77GA,ch1196). If a child is disenrolled from the plan and subsequently reapplies prior to the end of the original 12-month enrollment period, the child shall be enrolled in the plan from which the child was originally disenrolled unless the provisions of subrule 86.7(1) apply.

86.6(3) Failure to select a plan. When more than one plan is available, if the applicant fails to select a plan within ten working days of the written request to make a selection, the application shall be denied unless good cause exists.

441--86.7(77GA,ch1196) Disenrollment. The child shall be disenrolled from the selected plan prior to the end of the 12-month enrollment period for any of the following:

86.7(1) Child moves from the service area. The child may be disenrolled from the plan when the child moves to an area of the state in which the plan does not have a provider network established. If the child is disenrolled, the child shall be enrolled in a participating plan in the new location. The period of enrollment shall be the number of months remaining in the original certification period.

86.7(2) Age. The child shall be disenrolled from the plan and canceled from the HAWK-I program as of the first day of the month following the month in which the child attained the age of 19.

86.7(3) Nonpayment of premiums. The child shall be disenrolled from the plan and canceled from the program as of the first day of the month in which premiums are not paid in accordance with the provisions of subrules 86.8(3) and 86.8(5).

86.7(4) Iowa residence abandoned. The child shall be disenrolled from the plan and canceled from the program as of the first day of the month following the month in which the child relocated to another state. A child shall not be disenrolled when the child is temporarily absent from the state in accordance with the provisions of subrule 86.2(6).

86.7(5) Eligible for Medicaid. The child shall be disenrolled from the plan and canceled from the program as of the first day of the month following the month in which Medicaid eligibility is established.

86.7(6) Enrolled in other health insurance coverage. The child shall be disenrolled from the plan as of the first day of the month following the month in which the child attained other health insurance coverage.

86.7(7) Admission to a nonmedical public institution. The child shall be disenrolled from the plan and canceled from the program as of the first day of the month following the month in which the child enters a nonmedical public institution unless the temporary absence provisions of paragraph 86.2(3)"d" apply.

86.7(8) Admission to an institution for mental disease. The child shall be disenrolled from the plan and canceled from the program if the child is a patient in an institution for mental disease at the time of annual review.

86.7(9) Employment with the state of Iowa. The child shall be disenrolled from the plan and canceled from the HAWK-I program as of the first day of the month in which the child's parent became eligible to participate in a health plan available to state of Iowa employees.

441--86.8(77GA,ch1196) Premiums and copayments.

86.8(1) Income limit. No premium shall be assessed when countable income is less than 150 percent of the federal poverty level for a family of the same size. When countable income is equal to or greater than 150 percent of the federal poverty level for a family of the same size, participation in the program is contingent upon the payment of a monthly premium.

86.8(2) Premium amount. The premium amount shall be $10 per month per child up to a maximum of $20 per month per family.

86.8(3) Due date. When the third-party administrator notifies the applicant that the applicant is eligible to participate in the program, the applicant shall pay any premiums due within ten working days for the initial month of coverage. When the premium is received, the third-party administrator shall notify the plan of the enrollment. After the initial month of coverage, premiums shall be received no later than the last day of the month prior to the month of coverage. Failure to pay the premium by the last day of the month before the month of coverage shall result in disenrollment from the plan. At the request of the family, premiums may be paid in advance (e.g., on a quarterly or semiannual basis) rather than a monthly basis.

86.8(4) Reinstatement. A child may be reinstated once in a 12-month period when the family fails to pay the premium by the last day of the month prior to the month of coverage. However, the reinstatement must occur within the calendar month following the month of nonpayment and the premium must be paid in full prior to reinstatement.

86.8(5) Method of premium payment. Premiums may be submitted in the form of cash, personal checks, automatic bank account withdrawals, or other methods established by the third-party administrator.

86.8(6) Failure to pay premium. Failure to pay the premium in accordance with subrules 86.8(3) and 86.8(5) shall result in disenrollment from the plan and cancellation from the program unless the reinstatement provisions of subrule 86.8(4) apply. Once a child is disenrolled and canceled from the program due to nonpayment of premiums, the family must reapply for coverage.

86.8(7) Copayment. There shall be a $25 copayment for each emergency room visit if the child's medical condition does not meet the definition of emergency medical condition.

441--86.9(77GA,ch1196) Annual reviews of eligibility. All eligibility factors shall be reviewed at least every 12 months to establish ongoing eligibility for the program. "Month one" shall be the first month in which coverage is provided.

86.9(1) Review form. The family shall complete Form 470-3526, Healthy and Well Kids in Iowa (HAWK-I) Application, and provide information and verification of current income as part of the review process.

86.9(2) Failure to provide information. The child shall not be enrolled for the next 12-month period if the family fails to provide information and verification of income or otherwise fails to cooperate in the annual review process.

86.9(3) Change in plan. At the time of the annual review of eligibility, if more than one plan is available, the family shall designate whether the child is to remain enrolled in the current plan or is to be enrolled in another plan. The plan choice shall be designated in writing by completing Form 470-3574, Healthy and Well Kids in Iowa (HAWK-I) Selection of Plan.

441--86.10(77GA,ch1196) Reporting changes. Changes that may affect eligibility shall be reported to the third-party administrator as soon as possible but no later than ten working days after the change. "Day one" shall begin with the date of the change. The parent, guardian, or other adult responsible for the child shall report the change. If the child is emancipated, married, or otherwise in an independent living situation, the child shall be responsible for reporting the change.

86.10(1) Pregnancy. The pregnancy of a child shall be reported when the pregnancy is diagnosed.

86.10(2) Entry to a nonmedical public institution. The entry of a child into a nonmedical public institution, such as a penal institution, shall be reported following entry to the institution.

86.10(3) Iowa residence is abandoned. The abandonment of Iowa residence shall be reported following the move from the state.

86.10(4) Other insurance coverage. Enrollment of the child in other health insurance coverage shall be reported.

86.10(5) Employment with the state of Iowa. The employment of the child's parent with the state of Iowa shall be reported.

86.10(6) Decrease in income. If the family reports a decrease in income, the third-party administrator shall ascertain whether the change affects the premium obligation of the family. If the change is such that the family is no longer required to pay a premium in accordance with the provisions of rule 441--86.8(77GA,ch1196), premiums will no longer be charged beginning with the month following the month of the report of the change.

86.10(7) Failure to report changes. Any benefits paid during a period of time in which the child was ineligible due to unreported changes will be subject to recoupment.

441--86.11(77GA,ch1196) Notice requirements. The applicant or enrollee shall be notified in writing of the decision of the third-party administrator regarding the applicant or enrollee's eligibility for the HAWK-I program. If the applicant or enrollee has been determined to be ineligible, an explanation of the reason shall be provided.

441--86.12(77GA,ch1196) Appeals and fair hearings. If the applicant or enrollee disputes a decision by the third-party administrator to reduce, cancel or deny participation in the HAWK-I program, the applicant or enrollee may appeal the decision in accordance with 441--Chapter 7.

441--86.13(77GA,ch1196) Third-party administrator. The third-party administrator shall have the following responsibilities:

86.13(1) Determination of eligibility. The third-party administrator shall determine eligibility in accordance with the provisions of rule 441--86.2(77GA,ch1196).

86.13(2) Dissemination of application forms and information. The third-party administrator shall disseminate the following:

a. Application forms to any organization or individual making a request in accordance with the provisions of subrule 86.3(1).

b. Outreach materials to any organization or individual making a request.

c. Participating health plan information.

d. Other materials as specified by the department.

86.13(3) Toll-free dedicated customer services line. The third-party administrator shall maintain a toll-free multilingual dedicated customer service line in accordance with the requirements of the department.

86.13(4) HAWK-I program web site. The third-party administrator shall work in cooperation with the department to maintain a web site providing information about the HAWK-I program.

86.13(5) Application process. The third-party administrator shall process applications in accordance with the provisions of rule 441--86.3(77GA,ch1196).

a. Processing applications and mailing of approvals and denials shall be completed within ten working days of receipt of the application and all necessary information and verification unless the application cannot be processed within this period for a reason beyond the control of the third-party administrator.

b. Original verification information shall be returned to the applicant or enrollee upon completion of review.

86.13(6) Tracking of applications. The third-party administrator shall track and maintain applications. This includes, but is not limited to, the following procedures:

a. Date-stamping all applications with the date of receipt.

b. Screening applications for completeness and requesting in writing any additional information or verification necessary to establish eligibility. All information or verification of information attained shall be logged.

c. Entering all applications received into the data system with an identifier status of pending, approved, or denied.

d. Referring applications to the county office of the department, when appropriate, and receiving application referrals from the department.

e. Tracking any waiting periods before coverage can begin in accordance with subrule 86.2(4).

f. Notifying the plans when the number of enrollees who speak the same non-English language equals or exceeds 10 percent of the number of enrollees in the plan.

86.13(7) Effective date of coverage. The third-party administrator shall establish effective date of coverage in accordance with the provisions of rule 441--86.5(77GA, ch1196).

86.13(8) Selection of plan. The third-party administrator shall provide participating health plan information to families of eligible children by telephone or mail and, if necessary, offer unbiased assistance in the selection of a plan in accordance with the provisions of rule 441--86.6(77GA, ch1196).

86.13(9) Enrollment. The third-party administrator shall notify participating health plans of enrollments.

86.13(10) Disenrollments. The third-party administrator shall disenroll an enrollee in accordance with the provisions of rule 441--86.7(77GA,ch1196). The third-party administrator shall notify the participating health plan when an enrollee is disenrolled.

86.13(11) Annual reviews of eligibility. The third-party administrator shall annually review eligibility in accordance with the provisions of rules 441--86.2(77GA,ch1196) and 86.9(77GA,ch1196).

86.13(12) Acting on reported changes. The third-party administrator shall ensure that all changes reported by the HAWK-I enrollee in accordance with rule 441-- 86.10(77GA,ch1196) are acted upon no later than ten working days from the date the change is reported.

86.13(13) Premiums. The third-party administrator shall:

a. Calculate premiums in accordance with the provisions of rule 441--86.8(77GA,ch1196).

b. Collect HAWK-I premium payments. The funds shall be deposited into an interest-bearing account maintained by the department for periodic transmission of the funds and any accrued interest to the HAWK-I trust fund in accordance with state accounting procedures.

c. Track the status of the enrollee premium payments and provide the data to the department.

d. Mail a reminder notice to the family if the premium is not received by the due date.

86.13(14) Notices to families. The third-party administrator shall develop and provide timely and adequate approval, denial, and cancellation notices to families that clearly explain the action being taken in regard to an application or an existing enrollment. Denial and cancellation notices shall clearly explain the appeal rights of the applicant or enrollee. All notices shall be available in English and Spanish.

86.13(15) Records. The third-party administrator shall at a minimum maintain the following records:

a. All records required by the department and the department of inspections and appeals.

b. Records which identify transactions with or on behalf of each enrollee by social security number or other unique identifier.

c. Application, case and financial records.

d. All other records as required by the department in determining compliance with any federal or state law or rule or regulation promulgated by the United States Department of Health and Human Services or by the department.

86.13(16) Confidentiality. The third-party administrator shall protect and maintain the confidentiality of HAWK-I applicants and enrollees in accordance with 441--Chapter 9.

86.13(17) Reports to the department. The third-party administrator shall submit reports as required by the department.

86.13(18) Systems. The third-party administrator shall maintain data files that are compatible with the department's and the health plans' data files and shall make the system accessible to department staff.

441--86.14(77GA,ch1196) Covered services. The benefits provided under the HAWK-I program shall meet a benchmark, benchmark equivalent, or benefit plan that complies with Title XXI of the federal Social Security Act.

86.14(1) Required services. The participating health plan shall cover at a minimum the following medically necessary services:

a. Inpatient hospital services (including medical, surgical, intensive care unit, mental health, and substance abuse services).

b. Physician services (including surgical and medical, and including office visits, newborn care, well-baby and well-child care, immunizations, urgent care, specialist care, allergy testing and treatment, mental health visits, and substance abuse visits).

c. Outpatient hospital services (including emergency room, surgery, lab, and x-ray services and other services).

d. Ambulance services.

e. Physical therapy.

f. Nursing care services (including skilled nursing facility services).

g. Speech therapy.

h. Durable medical equipment.

i. Home health care.

j. Hospice services.

k. Prescription drugs.

l. Dental services (including restorative and preventative services).

m. Hearing services.

n. Vision services (including corrective lenses).

86.14(2) Abortion. Payment for abortion shall only be made under the following circumstances:

a. The physician certifies that the pregnant enrollee suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would place the enrollee in danger of death unless an abortion is performed.

b. The pregnancy was the result of an act of rape or incest.

441--86.15(77GA,ch1196) Participating health plans.

86.15(1) Licensure. The participating health plan must be licensed by the division of insurance of the department of commerce to provide health care coverage in Iowa or be an organized delivery system licensed by the director of public health to provide health care coverage.

86.15(2) Services. The participating health plan shall provide health care coverage for the services specified in rule 441--86.14(77GA,ch1196) to all children determined eligible by the third-party administrator.

a. The participating health plan shall make services it provides to HAWK-I enrollees at least as accessible to the enrollees (in terms of timeliness, duration and scope) as those services are accessible to other commercial enrollees in the area served by the plan.

b. Participating health plans shall ensure that emergency services (inpatient and outpatient) are available for treatment of an emergency medical condition 24 hours a day, seven days a week, either through the health plan's own providers or through arrangements with other providers.

c. If a participating plan does not provide statewide coverage, the plan shall participate in every county within the region in which the plan has contracted to provide services in which it is licensed and in which a provider network has been established. Regions are specified in rule 441--86.1(77GA, ch1196).

86.15(3) Premium tax. Premiums paid to participating health plans by the third-party administrator are exempt from premium tax.

86.15(4) Provider network. The participating health plan shall establish a network of providers. Providers contracting with the participating health plan shall comply with HAWK-I requirements, which shall include collecting copayments, if applicable.

86.15(5) Medical cards. Medical identification cards shall be issued by the participating health plan to the enrollees for use in securing covered services.

86.15(6) Marketing.

a. Participating health plans may not distribute directly or through an agent or independent contractor any marketing materials.

b. All marketing materials require prior approval from the department.

c. At a minimum, participating health plans must provide the following written material:

(1) A current member handbook that fully explains the services available, how and when to obtain them, and special factors applicable to the HAWK-I enrollees. At a minimum the handbook shall include covered services, network providers, exclusions, emergency services procedures, 24-hour toll-free number for certification of services, daytime number to call for assistance, grievance procedures, and definitions of terms.

(2) All plan literature and brochures shall be available in English and any other language when enrollment in the plan by enrollees who speak the same non-English language equals or exceeds 10 percent of all enrollees in the plan and shall be made available to the third-party administrator for distribution.

d. All health plan literature and brochures shall be approved by the department.

e. The participating health plans shall not, directly or indirectly, conduct door-to-door, telephonic, or other "cold-call" marketing.

f. The participating health plan may make marketing presentations at the discretion of the department.

86.15(7) Conflict management system. The participating health plan shall have a written procedure by which enrollees may express grievances, complaints, concerns, or recommendations, either individually or as a class and which:

a. Is approved by the department prior to use.

b. Acknowledges receipt of a grievance to the grievant.

c. Sets time frames for resolution including emergency procedures which are appropriate to the nature of the grievance and which require that all grievances be resolved within 30 days.

d. Ensures the participation of persons with authority to require corrective action.

e. Includes at least one level of appeal.

f. Ensures the confidentiality of the grievant.

g. Ensures issuance of a departmentally approved notice of decision for each adverse action. These notices shall contain the enrollee's appeal rights and shall contain an adequate explanation of the action taken and the reason for the decision.

h. Maintains a log of the grievances and which is made available at the department's request.

i. Ensures that the participating health plan's written grievance procedures be provided to each newly covered enrollee.

j. Requires that the participating health plan make quarterly reports to the department summarizing grievances and resolutions.

86.15(8) Appeals to the department. An enrollee shall exhaust the established grievance procedure of the participating health plan before appealing the issue to the department in accordance with 441--Chapter 7.

86.15(9) Records and reports. The participating health plan shall maintain records and reports as follows:

a. The plan shall comply with the provisions of rule 441--79.3(249A) regarding maintenance and retention of clinical and fiscal records and shall file a letter with the commissioner of insurance as described in Iowa Code section 228.7. In addition, the plan must maintain a medical records system that:

(1) Identifies each medical record by HAWK-I enrollee identification number.

(2) Maintains a complete medical record for each enrollee.

(3) Provides a specific medical record on demand.

(4) Meets state and federal reporting requirements applicable to the HAWK-I program.

(5) Maintains the confidentiality of medical records information and releases the information only in accordance with established policy below:

1. All medical records of the enrollee shall be confidential and shall not be released without the written consent of the enrollee or responsible party.

2. Written consent is not required for the transmission of medical records information to physicians, other practitioners, or facilities that are providing services to enrollees under a subcontract with the plan. This provision also applies to specialty providers who are retained by the plan to provide services which are infrequently used, which provide a support system service to the operation of the plan, or which are of an unusual nature. This provision is also intended to waive the need for written consent for department staff and the third-party administrator assisting in the administration of the program, reviewers from the peer review organization (PRO), monitoring authorities from the Health Care Financing Administration (HCFA), the plan itself, and other subcontractors which require information as described under numbered paragraph "5" below.

EXCEPTION: Written consent is required for the transmission of medical records relating to substance abuse, HIV, or mental health treatment in accordance with state and federal laws.

3. Written consent is not required for the transmission of medical records information to physicians or facilities providing emergency care pursuant to paragraph 86.15(2)"b."

4. Written consent is required for the transmission of the medical records information of a former enrollee to any physician not connected with the plan.

5. The extent of medical records information to be released in each instance shall be based upon a test of medical necessity and a "need to know" on the part of the practitioner or a facility requesting the information.

6. Medical records maintained by subcontractors shall meet the requirements of this rule.

b. Each plan shall provide at a minimum reports and plan information to the third-party administrator as follows:

(1) A list of providers of medical services under the plan.

(2) Information regarding the plan's conflict management system.

(3) A plan for a health improvement program.

(4) Periodic financial, utilization and statistical reports as required by the department.

(5) Encounter data on a monthly basis as required by the department.

(6) Time-specific reports which define activity for child health care, grievances, and other designated activities which may, at the department's discretion, vary among plans, depending on the services covered and other differences.

(7) Other information as directed by the department.

86.15(10) Systems. The participating health plan shall maintain data files that are compatible with the department's and third-party administrator's systems.

86.15(11) Payment to the participating health plan.

a. In consideration for all services rendered by a plan, the plan shall receive a payment each month for each enrollee. This capitation rate represents the total obligation of the department with respect to the costs of medical care and services provided to the enrollees.

b. The capitation rate shall be actuarially determined by the department July of 2000 and each fiscal year thereafter using statistics and data assumptions and relevant experience derived from similar populations.

c. The capitation rate does not include any amounts for the recoupment of losses suffered by the plan for risks assumed under the current or any previous contract. The plan accepts the rate as payment in full for the contracted services. Any savings realized by the plan due to lower utilization from a less frequent incidence of health problems among the enrolled population shall be wholly retained by the plan.

d. If an enrollee has third-party coverage or a responsible party other than the HAWK-I program available for purposes of payment for medical expenses, it is the right and responsibility of the plan to investigate these third-party resources and attempt to obtain payment. The plan shall retain all funds collected through third-party sources. A complete record of all income from these sources must be maintained and made available to the department.

86.15(12) Quality assurance. The plan shall have in effect an internal quality assurance system.

These rules are intended to implement 1998 Iowa Acts, chapter 1196.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8617A

Pursuant to the authority of 1998 Iowa Acts, chapter 1196, section 6, subsection 8, and section 14, the Department of Human Services hereby amends Chapter 86, "Healthy and Well Kids in Iowa (HAWK-I) Program," appearing in the Iowa Administrative Code.

Rules implementing the HAWK-I program were adopted by the HAWK-I Board and are published herein as ARC 8615A to be effective January 1, 1999. Those rules were noticed as ARC 8450A in the November 4, 1998, Iowa Administrative Bulletin.

Subrules 86.15(7) and 86.15(8) of those rules establish the appeal process for health plans. Subrule 86.15(7) establishes procedures which must be followed by the health plans and subrule 86.15(8) provides that an enrollee shall exhaust the established grievance procedure of the participating health plan before appealing the issue to the Department in accordance with 441--Chapter 7.

Public comments were received on those subrules from client advocates and from health plans. Client advocates felt that enrollees should be able to appeal directly to the Department and wanted clarification of which issues can be appealed. They asked that expedited time frames be established for emergency medical conditions. Health plans felt that there should be no further appeal to the Department on service and medical necessity issues and wanted the 30-day time frame for resolution of appeals changed to 60 days.

The Department has reviewed both points of view and believes that the HAWK-I program is to operate as a private insurance program, rather than a governmental entitlement program, and there should be no appeal of coverage issues to the Department. The time limit for appeals should be extended to 60 days.

It is believed, however, that these are substantive changes from the rules that were published under Notice of Intended Action as ARC 8450A in the November 4, 1998, Iowa Administrative Bulletin. Therefore, the Department is revising these subrules in a separate rule making using the emergency authority set forth in 1998 Iowa Acts, chapter 1196, section 14, and is also placing this rule making under Notice of Intended Action to obtain public comments.

The Department has also revised subrule 86.15(7) to clarify what may be appealed, to require the health plan to establish time frames appropriate to the situations for emergency medical conditions, and to require the decision on the appeal be made by a physician or clinical peer not previously involved in the case. Other changes are made throughout the rules to reflect changes in terminology.

In compliance with Iowa Code section 17A.4(2), the Department of Human Services finds that notice and public participation are unnecessary because these amendments implement 1998 Iowa Acts, chapter 1196, section 14, which authorizes the Department to adopt rules without notice and public participation.

The Department also finds, pursuant to Iowa Code section 17A.5(2)"b"(1), that the normal effective date of these amendments should be waived and these amendments made effective January 1, 1999, as authorized by 1998 Iowa Acts, chapter 1196, section 14.

These amendments are also published herein under Notice of Intended Action as ARC 8616A to allow for public comment.

The HAWK-I Board adopted these amendments December 21, 1998.

These amendments are intended to implement 1998 Iowa Acts, chapter 1196.

These amendments became effective January 1, 1999.

The following amendments are adopted.

ITEM 1. Amend rule 441--86.1(77GA,ch1196) by deleting the definition of "Grievance."

ITEM 2. Amend rule 441--86.15(77GA,ch1196) as follows:

Amend subrule 86.15(6), paragraph "c," subparagraph (1), as follows:

(1) A current member handbook that fully explains the services available, how and when to obtain them, and special factors applicable to the HAWK-I enrollees. At a minimum the handbook shall include covered services, network providers, exclusions, emergency services procedures, 24-hour toll-free number for certification of services, daytime number to call for assistance, grievance appeal procedures, enrollee rights and responsibilities, and definitions of terms.

Amend subrule 86.15(7) as follows:

86.15(7) Conflict management system Appeal process. The participating health plan shall have a written procedure by which enrollees may express grievances, complaints, concerns, or recommendations, either individually or as a class appeal issues concerning the health care services provided through providers contracted with the plan and which:

a. Is approved by the department prior to use.

b. Acknowledges receipt of a grievance the appeal to the grievant enrollee.

c. Sets time frames for resolution including emergency procedures which are appropriate to the nature of the grievance and which require that all grievances be resolved within 30 days. Establishes time frames which ensure that appeals be resolved within 60 days, except for appeals which involve emergency medical conditions, which shall be resolved within time frames appropriate to the situations.

d. Ensures the participation of persons with authority to require take corrective action.

e. Includes at least one level of appeal. Ensures that the decision be made by a physician or clinical peer not previously involved in the case.

f. Ensures the confidentiality of the grievant enrollee.

g. Ensures issuance of a departmentally approved notice of written decision to the enrollee for each adverse action. These notices appeal which shall contain the enrollee's appeal rights and shall contain an adequate explanation of the action taken and the reason for the decision.

h. Maintains a log of the grievances and appeals which is made available to the department at the department's its request.

i. Ensures that the participating health plan's written grievance appeal procedures be provided to each newly covered enrollee.

j. Requires that the participating health plan make quarterly reports to the department summarizing grievances appeals and resolutions.

Rescind and reserve subrule 86.15(8).

Amend subrule 86.15(9), paragraph "b," subparagraphs (2) and (6), as follows:

(2) Information regarding the plan's conflict management system appeals process.

(6) Time-specific reports which define activity for child health care, grievances appeals, and other designated activities which may, at the department's discretion, vary among plans, depending on the services covered and other differences.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8618A

Pursuant to the authority of Iowa Code section 159.5(11), the Department of Agriculture and Land Stewardship amends Chapter 1, "Administration," and Chapter 76, "Meat and Poultry Inspection," Iowa Administrative Code.

These amendments implement a minor change in the rules relating to the organization of the Department's regulatory division by establishing the meat and poultry inspection unit as a bureau rather than a unit in the animal industry bureau. These amendments bring the departmental rules into conformity with the longtime practice within the Department of treating the meat and poultry inspection unit as a bureau. In addition, the amendments update references in the rules relating to federal regulations which have been adopted by reference to the current versions of those regulations.

The Iowa Department of Agriculture and Land Stewardship maintains a cooperative agreement with the United States Department of Agriculture/Food Safety and Inspection Service to provide for a mandatory meat and poultry inspection program that regulates intrastate commerce. The federal Acts require the state programs to maintain systems of inspection that are "equal to" the provisions found in the federal Acts. USDA/FSIS noted in the Federal Register that the state inspection programs will be required to implement the provisions found in these regulations.

Notice of Intended Action was published in the November 4, 1998, Iowa Administrative Bulletin as ARC 8445A. No comments concerning the amendments were received from the public. These amendments are identical to the ones published under Notice of Intended Action.

These amendments shall become effective February 17, 1999.

These amendments are intended to implement Iowa Code chapters 159 and 189A.

The following amendments are adopted.

ITEM 1. Amend subrule 1.6(1) by rescinding paragraph "c."

ITEM 2. Adopt the following new subrule:

1.6(6) Meat and poultry inspection bureau. This bureau enforces and administers Iowa Code chapter 189A, meat and poultry inspection Act. It is a cooperative program with the United States Department of Agriculture. The program must maintain an "equal to" status with the federal Wholesome Meat and Poultry Products Inspection Acts. This bureau conducts inspections of facilities, animals, products, and labeling and exercises processing controls and reinspection of meat and poultry products for intrastate commerce.

ITEM 3. Amend rule 21--76.1(189A), introductory paragraph, as follows:

21--76.1(189A) Federal Wholesome Meat Act regulations adopted. Part 301 of Title 9, Chapter III, of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, is hereby adopted in its entirety by reference; and in addition thereto, the following subsections shall be expanded to include:

ITEM 4. Amend rule 21--76.2(189A) as follows:

21--76.2(189A) Federal Wholesome Meat Act regulations adopted. Part 303, Part 304, Part 305, Part 306, Parts 308 through 320, Part 329, Part 416, and Part 417 of Title 9, Chapter III of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, are hereby adopted in their entirety by reference. Part 307 except Sections 307.5 and 307.6 and Part 325 except Sections 325.3 and 325.12 of Title 9, Chapter III, of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, are hereby adopted in their entirety by reference.

ITEM 5. Amend rule 21--76.3(189A), introductory paragraph, as follows:

21--76.3(189A) Federal Poultry Products Inspection Act regulations adopted. Part 381, Title 9, Chapter III, of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, is hereby adopted in its entirety with the following exceptions: 381.96, 381.97, 381.99, 381.101, 381.102, 381.104, 381.105, 381.106, 381.107, 381.128, Subpart R, Subpart T, Subpart V, Subpart W; and, in addition thereto, the following subsections shall be expanded to include:

ITEM 6. Amend rule 21--76.4(189A) to read as follows:

21--76.4(189A) Inspection required. Every establishment except as provided in Section 303.1 (a), (b), (c) and (d) of Title 9, Chapter III, Subchapter A, of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, in which slaughter of livestock or poultry, or the preparation of livestock products or poultry products is maintained for transportation or sale in commerce, shall be subject to the inspection and other requirements of those parts of Title 9, Chapter III, Subchapter A, of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, enumerated in rules 21--76.1(189A), 21--76.2(189A) and 21--76.3(189A).

This rule is intended to implement Iowa Code sections 189A.4 and 189A.5.

ITEM 7. Amend rule 21--76.13(189A) as follows:

21--76.13(189A) Voluntary inspections of exotic animals. Every person wishing to obtain voluntary inspection of exotic animals shall comply with the regulations adopted in this rule.

Part 352 of Title 9, Chapter III of the Code of Federal Regulations, revised as of November 1, 1996 October 1, 1998, is hereby adopted in its entirety by reference.

This rule is intended to implement Iowa Code chapter 189A.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8623A

Pursuant to the authority of 1998 Iowa Acts, chapter 1109, section 12, the Environmental Protection Commission adopts Chapter 12, "Environmental Self-Audits," Iowa Administrative Code.

1998 Iowa Acts, House File 681 [chapter 1109], known as the "Environmental Audit Privilege and Immunity Act," provides that under certain conditions, owners or operators of facilities may conduct voluntary evaluations of their facilities to determine compliance or noncompliance with environmental regulations and be afforded some protection that the information derived cannot be used against them. This chapter establishes procedural rules necessary to administer the Act, related to Notice of Audit, Request for Extension, and Disclosure of Violation.

Notice of Intended Action was published in the Iowa Administrative Bulletin on October 21, 1998, as ARC 8419A. A public hearing was held on November 10, 1998. Oral comments from two sources and written comments from four sources were received during the public comment period. As a result of the public comments, changes to the proposed rules have been made.

1. The word "anticipated" was added in subrule 12.2(1), paragraph "d."

2. A sentence was added at the end of subrule 12.2(1), paragraph "e."

3. The phrase "before it is" was added in subrule 12.4(1), paragraph "d," to clarify the meaning.

4. The words "or result" replace "resulting" in subrule 12.4(1), paragraph "e," to make clear that either condition makes disclosure nonvoluntary.

5. The phrase "from administrative or civil penalties" was added in subrule 12.4(2), introductory paragraph, to clarify the meaning.

6. The phrase "unless specifically requested in writing by the department" was added at the end of subrule 12.4(4).

This amendment is intended to implement 1998 Iowa Acts, chapter 1109.

This amendment will become effective February 17, 1999.

The following new chapter is adopted.

567--12.1(77GA,ch1109) General.

12.1(1) Scope. This chapter sets forth rules governing voluntary disclosure of environmental noncompliance discovered as a result of an environmental self-audit conducted by or on behalf of a facility owner or operator under provisions of 1998 Iowa Acts, chapter 1109.

12.1(2) Definitions. As used in this chapter, the following terms shall have the following meanings:

"Act" means the environmental audit privilege and immunity Act, 1998 Iowa Acts, chapter 1109.

"Department" means the Iowa department of natural resources.

"Disclosure of violation" means the notice or disclosure made by a person to the department promptly upon discovery of a violation as a result of an environmental audit.

"Environmental audit" means a voluntary evaluation of a facility or operation, of an activity at a facility or operation, or of an environmental management system at a facility or operation, when the facility, operation, or activity is regulated under state or federal environmental laws, rules or permit conditions, conducted by an owner or operator, an employee of the owner or operator, or an independent contractor retained by an owner or operator that is designed to identify historical or current noncompliance with environmental laws, rules, ordinances, or permit conditions, discover environmental contamination or hazards, remedy noncompliance or improve compliance with environmental laws, or improve an environmental management system.

"Environmental audit report" means a document or set of documents generated and developed for the primary purpose and in the course of or as a result of conducting an environmental audit.

"Notice of audit" means the notice an owner or operator provides to the department before the owner or operator begins an environmental audit.

"Owner or operator" means the person or entity who caused the environmental audit to be undertaken.

"Request for extension" means a letter requesting an extension of the time period allowed for the completion of an environmental audit.

567--12.2(77GA,ch1109) Notice of audit. Owners or operators are not required to give the department notice of audit before beginning an environmental audit; however, they are encouraged to do so. Owners or operators may not be able to take advantage of immunity provisions under the Act if they fail to give notice to the department that they are planning to commence an environmental audit and the department initiates an inspection or investigation prior to the person's filing a disclosure of violation with the department. If notice of audit is given to the department, the audit must be completed within a reasonable time not to exceed six calendar months from the date the notice of audit is received by the department unless a request for extension has been filed with and granted by the department.

12.2(1) If a notice of audit is provided to the department, it must be submitted in writing by certified mail. A notice of audit should include the following information:

a. The name of the facility to be audited;

b. The location of the facility to be audited (address and city);

c. The description of the facility or portion of the facility, activity, operation or management system to be audited, including applicable department permit and registration numbers;

d. The date of anticipated initiation of audit (day, month, and year);

e. The general scope of audit, with sufficient detail to enable a determination of whether subsequently discovered violations are included. If the scope of the audit changes before it is completed, an amended notice shall be submitted promptly after this fact becomes known;

f. The names of the persons conducting the audit; and

g. The anticipated date of completion of the audit not to exceed six calendar months.

12.2(2) If, after providing notice of audit, an owner or operator determines the audit will not be completed by the initial anticipated completion date but within six calendar months from the date of the original notice of audit, the owner or operator should provide the department a written amendment to the notice of audit with the revised anticipated completion date, not to exceed six calendar months from the date of the original notice of audit. Amendments to the anticipated date of completion should be filed with the department prior to the expiration of the original listed anticipated date of completion. If the anticipated date of completion will go beyond six calendar months from the date of the original notice of audit, the owner/operator must file a request for extension pursuant to rule 12.3(77GA,ch1109) of this chapter.

12.2(3) A notice of audit is not privileged information and is considered public information subject to provisions of state open records laws in Iowa Code chapter 22.

12.2(4) If a notice of audit is provided to the department, the department will provide written acknowledgment of receipt with an assigned identification number for reference and tracking purposes.

567--12.3(77GA,ch1109) Request for extension. If notice of audit is given to the department, the audit must be completed within a reasonable time not to exceed six calendar months from the date the notice of audit is received by the department unless a written request for extension has been filed with and granted by the department based on reasonable grounds. Owners or operators are cautioned that continuation of an audit after the initial six-month period without prior written approval from the department may limit the availability of immunity under the Act.

12.3(1) A request for extension must be filed in writing with the department at least 30 calendar days prior to expiration of the initial six-month period and provide sufficient information for the department to determine whether reasonable grounds exist to grant an extension. Written requests for extension must be sent by certified mail. Failure to provide sufficient information could result in delay of approval or denial of the extension, which could jeopardize availability of immunity under the Act.

12.3(2) The department will provide written determination either granting or denying the request for extension within 15 calendar days of receipt of the written request for extension.

12.3(3) Requests for extension will be considered as amendments to the notice of audit and as such will not be considered privileged information. Requests for extension will be considered public information subject to the provisions of state open records laws in Iowa Code chapter 22.

567--12.4(77GA,ch1109) Disclosure of violation. An owner or operator wishing to take advantage of the immunity provisions of the Act must make a prompt voluntary disclosure to the department regarding an environmental violation which is discovered through an environmental audit.

12.4(1) A disclosure will be deemed voluntary if the following conditions apply:

a. The disclosure arises out of an environmental audit and relates to information considered privileged under the Act;

b. The disclosure is not otherwise required by federal or state law, rule, permit condition, or an order issued by the department;

c. If no current notice of audit covering the facility, activity, operation or management system is on file with the department, the disclosure is made prior to a violation being independently detected by the department or the initiation of an inspection or investigation by the department;

d. The violation is identified and disclosed to the department before there is notice of a citizen suit or a legal complaint filed by a third party; or before it is reported to the department by any person not involved in conducting the environmental audit or to whom the environmental audit was disclosed;

e. The violation does not involve intentional violation of state or federal law, rule, or permit condition, or result in substantial actual injury or imminent and substantial risk of injury to persons, property, or the environment; and

f. The owner or operator making the disclosure uses reasonable efforts to pursue compliance and to correct the noncompliance within a reasonable period of time after completion of the audit in accordance with a remediation schedule submitted to and approved in writing by the department.

12.4(2) An owner or operator may not be able to take advantage of the immunities under the Act from administrative or civil penalties if:

a. Violations are intentional;

b. Violations resulted in substantial actual injury or imminent and substantial risk of injury to persons, property, or the environment;

c. Violations resulted in a substantial economic benefit which gives an owner or operator a clear advantage over business competitors; or

d. The owner or operator has been found to have committed serious violations that constitute a pattern of continuous or repeated violations or is classified as a habitual violator as set forth in 1998 Iowa Acts, chapter 1109, section 8, subsection (7a).

12.4(3) A disclosure of violation must be sent to the department in writing by certified mail and include the following information:

a. Reference to the date of the relevant notice of audit and assigned reference number, if one was provided;

b. Time of initiation and completion of the audit, if applicable;

c. The names of the person or persons conducting the audit;

d. Affirmative assertion that a violation has been discovered;

e. Description of the violation discovered and reason for believing a violation exists;

f. Date of discovery of the violation and interim measures taken to abate the violation;

g. Duration of the violation if that can be determined; and

h. The status and schedule of proposed final corrective measures, if applicable.

12.4(4) A disclosure of violation is not an environmental audit report and is not privileged information under the Act. A disclosure of violation is public information subject to provisions of state open records laws in Iowa Code chapter 22. Owners or operators should not send copies of environmental audit reports to the department, unless specifically requested in writing by the department.

12.4(5) The department will acknowledge receipt of a disclosure of violation in writing which will include either concurrence or rejection of the proposed final corrective measures and schedule. This written acknowledgment will be sent to the owner or operator within 15 calendar days of receipt of the disclosure of violation.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8621A

Pursuant to the authority of Iowa Code section 505.8, the Insurance Division hereby rescinds Chapter 10, "Licensing of Insurance Producers," and Chapter 11, "Continuing Education for Insurance Producers," Iowa Administrative Code, and adopts new Chapters 10 and 11 with the same titles.

Notice of Intended Action was published in the Iowa Administrative Bulletin on November 4, 1998, as ARC 8439A. A public hearing was held on November 24, 1998. Chapter 10 is unchanged from the Notice. Chapter 11 was revised to reinstate the use of self-study courses for completion of a producer's continuing education requirement and establish limits on the number of credits that can be earned through self-study courses. The amendments also impose a requirement that a producer complete a monitored examination as a part of a self-study course.

These rules will become effective February 17, 1999.

These rules are intended to implement Iowa Code section 505.8 and Iowa Code chapters 252J, 272C, and 522.

The following rules are adopted.

ITEM 1. Rescind 191--Chapter 10 and adopt the following new chapter in lieu thereof:

191--10.1(522) Purpose and authority.

10.1(1) The purpose of these rules is to govern the qualifications and procedures for the licensing of insurance producers and to set out the requirements, procedures and fees relating to the qualification, licensure and appointment of insurance producers.

10.1(2) These rules are authorized by Iowa Code section 505.8 and are intended to implement Iowa Code chapters 252J and 522.

191--10.2(522) Definitions.

"Amended license" means an insurance producer license that has had qualifications added or deleted since the issue date of the prior insurance producer license.

"Appointment" means a request by a licensed insurance company to register a licensed insurance producer as a representative of that company. A company filing such a request must have or intend to have a contractual relationship with the producer and must verify that the producer is licensed for the appropriate qualification(s).

"Appointment form" means the NAIC Midwest Zone Uniform Request for Company Appointment/Cancellation form or such other form as designated by the division.

"CE" means continuing education.

"CE term" means the three-year period ending on the December 31 prior to the producer's renewal year.

"CSAC" means college student aid commission.

"Division" means the Iowa insurance division.

"Duplicate license" means an insurance producer license reissued due to name change, address change or loss of license.

"Individual" means a private or natural person, as distinguished from a partnership, corporation or association.

"Insurance" means any of the lines of insurance listed in subrule 10.7(1).

"Insurance agency" means any partnership, corporation, or limited liability company, or other entity that has been issued a federal tax identification number for whom producers transact or do business with the public or insurance companies, but shall not mean a natural person.

"Insurance producer license application form" means the form prescribed by the division to be used to apply for an insurance producer license.

"Letter of certification" means a letter or electronic verification obtained through the National Association of Insurance Commissioners (NAIC) Producer Database system (PDB) issued by the insurance commissioner of a producer's resident state which certifies the status, current qualifications and continuing education compliance of the producer's insurance license in the resident state.

"Letter of clearance" means a letter or electronic verification issued by a commissioner which certifies that the named producer was formerly licensed in that state, lists the qualifications previously held by the producer and states that the producer is clear to obtain a resident producer license in the state of the producer's new residence.

"License" means a document issued by the division which authorizes a person to act as an insurance producer for the lines of insurance specified in the document. The license itself does not provide the producer with any authority to represent or bind an insurance carrier.

"License information bulletin" means a brochure issued annually which describes the insurance license application and testing process and which can be obtained from the outside testing service on contract with the division.

"Nonresident" means a person residing permanently in a state other than Iowa.

"Person" means a natural person, corporation, association, partnership or other legal entity as distinguished from an individual.

"Producer" means a person required to obtain an insurance license under Iowa Code section 522.1.

"Producer renewal report" includes:

1. The form issued by the division with which producers apply for renewal of a producer license and verify CE credits on file with the division;

2. The continuing education fee described in rule 191-- 11.14(272C);

3. The license fee set forth in rule 10.25(522); and

4. A letter of certification (nonresidents only).

"Renewal year" means the third year following the issuance or last renewal of an insurance producer license.

"Resident" means a person residing permanently in Iowa.

"Resident state" means the state or district in which a producer resides.

"Retaliatory fee" means a fee equal to the fee which a nonresident person would be charged by such person's state of residence if that person were a resident of Iowa making application for a license in that state.

"Termination" means cancellation of the relationship between the producer and the insurer or the end of the insurance producer license term.

191--10.3(522) Requirement to hold a license.

10.3(1) No person may solicit insurance in Iowa until that person has been issued an Iowa insurance producer license.

10.3(2) A person shall not, for a fee, engage in the business of offering advice, counsel, opinion or service with respect to the benefits, advantages or disadvantages under a policy of insurance that could be issued in Iowa, unless that person holds an Iowa insurance producer license.

10.3(3) A person shall not advise an Iowa resident to cancel, not renew, or otherwise change an existing insurance policy unless that person holds an Iowa insurance producer license regarding the line of insurance for which the advice is given.

10.3(4) This rule does not apply to:

a. A licensed attorney providing surety bonds incident to the attorney's practice.

b. A producer appointed to represent a fraternal benefit society as stipulated under Iowa Code section 512B.31.

c. A person selling a ticket for transportation by a common carrier when the person also sells, in connection with and related to the transportation ticket, a trip accident insurance policy or an insurance policy on personal effects being carried as luggage.

191--10.4(522) Licensing of resident producers.

10.4(1) A person residing in the state of Iowa who desires to sell insurance in Iowa must satisfy the following requirements to obtain an Iowa resident insurance producer license:

a. Be at least 18 years of age,

b. Be of good character and competency,

c. Submit a completed insurance license application form,

d. Pass an examination in the area of qualification sought,

e. Pay the appropriate insurance producer license fee, and

f. If the person was previously licensed as an insurance producer in another state within the past five years, submit a letter of clearance from the last state in which the person held an insurance license.

10.4(2) Any Iowa-licensed nonresident insurance producer who moves to this state and wishes to obtain an Iowa resident insurance producer license must:

a. Comply with the requirements set out in subrule 10.4(1);

b. Submit to the division a letter of clearance or certification from the most recent state in which the applicant held a resident license; and

c. Pass an Iowa laws and regulations examination or other appropriate examination as determined by the division for each of the qualifications for which the producer wishes to obtain a license.

A producer holding only the surety, crop or credit accident, health and life qualification shall not be required to complete an examination.

10.4(3) Examinations are conducted by the outside testing service on contract with the division. Applications and fees for examinations and for initial producer licensing are submitted to the outside testing service. An applicant may request express processing of the application with payment of the appropriate fee set forth in rule 10.25(522).

10.4(4) An application is valid for 90 days after the date the outside testing service receives a properly completed application. If an applicant is unable to pass the necessary examinations within the 90 days, all but $10 of the license fee will be returned.

10.4(5) Examination results are valid for 90 days after the date of the test. Failure to apply for licensure within 90 days after the examination is passed voids the examination results.

10.4(6) Any licensed insurance producer desiring to become licensed in an additional qualification shall:

a. Submit a completed insurance producer license application form to the division's outside testing service specifying the qualifications requested to be added;

b. Pass an examination for each of the qualifications requested to be added; and

c. Pay the fee to amend an insurance producer license.

10.4(7) Qualification in personal lines is a prerequisite for obtaining the commercial lines qualification.

10.4(8) To receive a license for the variable contracts qualification, the applicant must:

a. Hold an active Iowa insurance license with a life insurance qualification;

b. Provide proof of an active Iowa securities license; and

c. File an application with the division to amend the license to add the variable contracts qualification.

If a producer's Iowa securities license terminates, the variable contract qualification automatically terminates effective the day the securities license terminates.

10.4(9) The division may require any documents reasonably necessary to verify the information contained in the application or to verify that the individual making application has the character and competency required to receive an insurance producer license.

10.4(10) A person who resides in an adjacent state and who desires to obtain an Iowa insurance producer license for use solely while working in Iowa and selling insurance to Iowa residents may apply for a special resident license. Applications are filed directly with the division. Applicants must comply with all provisions of this rule. Producers licensed under this subrule are not eligible to receive a letter of certification and may be placed under special supervision restrictions by the division.

191--10.5(522) Licensing of nonresident producers.

10.5(1) A producer not residing in the state of Iowa who desires to sell insurance in Iowa shall satisfy the following requirements to obtain an Iowa nonresident insurance producer license:

a. Be at least 18 years of age;

b. Be of good character and competency;

c. Submit a completed nonresident insurance license application form to the division;

d. Submit a letter of certification; and

e. Pay the appropriate fee.

10.5(2) Any licensed nonresident producer desiring to become licensed in an additional qualification shall submit to the division:

a. A completed application form specifying the qualifications requested to be added;

b. A letter of certification; and

c. The appropriate fee.

10.5(3) An Iowa nonresident insurance producer license is contingent on proper licensure in the nonresident insurance producer's resident state. Termination of the producer's resident license will be deemed the automatic termination of the Iowa nonresident insurance producer license unless the producer timely files a change of address pursuant to subrule 10.14(3).

10.5(4) Qualifications will not be issued to a nonresident producer if the producer's resident state does not issue those qualifications to Iowa resident producers applying for nonresident producer qualifications in that state or if the producer's resident state restricts Iowa resident producers' nonresident activities in that state.

10.5(5) The division may require any documents reasonably necessary to verify the information contained in the application or to verify that the individual making application has the character and competency required to receive an insurance producer license.

191--10.6(522) Issuance of license.

10.6(1) An insurance producer license shall remain in effect for a term of three years, unless revoked or suspended, and may be continually renewed as long as the proper fees are paid and continuing education requirements are met.

10.6(2) An individual insurance producer whose license has lapsed may seek reinstatement as set forth in rule 10.9(522).

10.6(3) The license shall contain the producer's name, address, license number, date of issuance, date of expiration, the qualifications held and any other information the division deems necessary.

191--10.7(522) License qualifications.

10.7(1) The following qualifications are available for issuance in Iowa:

Qualification Number	Qualification
4	Crop
5	Surety
6	Accident and health (insurance coverage for sickness, bodily injury, or accidental death and may include benefits for disability income)
7	Life (insurance coverage on human lives including benefits of endowment, annuities, equity indexed products, may include benefits in event of death or dismemberment by accident and benefits for disability income)
9	Variable life/variable annuity products (insurance coverage provided under variable life insurance contracts, variable annuities, or any other life insurance or annuity product that reflects the investment experience of a separate account)
16	Personal lines (fire, casualty and auto insurance sold to individuals or families)
17	Commercial lines (fire, casualty and auto insurance sold to businesses) (prerequisite is qualification 14 or 16)
18	Credit accident and health and credit life
19	Legal expense
20	Excess and surplus lines (prerequisite is qualification 14 or 16 and 17)
30	Nonresident property (nonresident producers who sell insurance coverage for the direct or consequential loss of or damage to property of every kind)
31	Nonresident casualty (nonresident producers who sell insurance coverage against legal liability, including that for death, injury, or disability, or damage to real or personal property)

10.7(2) The following qualifications are no longer issued in Iowa but shall remain valid so long as renewal requirements are met:

1	Fire only
2	Casualty only
3	Auto only
8	County mutual
11	All but life and variable contracts
12	Life and accident and health
14	Personal lines (fire, casualty, auto, and crop insurance sold to individuals or families)
15	All but variable contracts

191--10.8(522) License renewal.

10.8(1) Effective January 1, 1999, all new or renewed individual insurance producer licenses will be issued with an expiration date of March 31. All licensees with an expiration date of March 31 must submit a completed producer renewal report on or before March 31 of the year in which the license expires. All licensees currently holding an insurance producer license with an expiration date of April 30 will have until April 30 of the year in which the license expires to renew that license.

10.8(2) The division shall send a producer renewal report form to each licensed producer at the producer's last-known address as it appears in division records. If the division has received notification from the post office that the address of record is no longer valid for any reason, no renewal report form will be mailed.

10.8(3) Failure to renew a license and pay appropriate fees prior to the expiration date printed on the license will result in termination of the license.

191--10.9(522) License reinstatement.

10.9(1) A resident producer may reinstate an expired license until September 30 of the renewal year by proving that during the CE term the producer met the CE requirements found in 191--Chapter 11, and by paying a reinstatement fee and license fees.

10.9(2) A nonresident producer may reinstate a terminated license until September 30 of the renewal year by filing a completed producer renewal report and by paying a reinstatement fee and license renewal fee.

10.9(3) A previously licensed resident producer who does not prove compliance with the CE requirements by September 30 of the renewal year must successfully complete an examination in all qualifications for which license renewal is sought and apply for a new license. If a producer holds both a personal lines and a commercial lines qualification, the producer shall take and pass only the commercial lines examination. If a producer holds an excess and surplus lines designation, the producer shall take and pass both the commercial lines and the excess and surplus lines examinations. If a producer holds both the accident and health and the life insurance qualification, the producer may take the combined life/health examination.

10.9(4) A previously licensed nonresident producer who cannot prove compliance with the CE requirements may either take and successfully complete the appropriate Iowa examination(s) in all qualifications for which license renewal is sought prior to September 30 of the renewal year or may wait until October 1 of the renewal year and apply for a new license.

10.9(5) A producer who surrenders a license and states an intent to exit the insurance business may file a request to reactivate the license. The request must be received at the division within 90 days of the date the license was placed on inactive status. The request will be granted if the former producer is otherwise eligible to receive the license. A fee will be charged for this service.

191--10.10(522) Licensing after revocation or voluntary surrender of license.

10.10(1) A producer who wishes to reactivate a license following a suspension, revocation or voluntary surrender due to a disciplinary matter must satisfactorily complete all terms of the order or agreement which caused the license to become inactive.

10.10(2) To obtain an active license, the producer must apply for a new license and pay all appropriate license fees. If the license has been inactive more than 90 days, the producer will, at a minimum, be required to successfully complete the appropriate examinations before a license will be issued.

191--10.11(522) Exemptions from examination requirement.

10.11(1) An applicant for a resident producer license who previously held a valid Iowa resident license and has since continuously held a resident license in another state is not required to complete Iowa examinations. This exemption applies only to a producer who seeks to return to Iowa as a resident producer within three years from the date the producer surrendered the Iowa resident license.

10.11(2) The examination requirement may be waived for an applicant for a resident producer license who files a request for waiver which states some extenuating circumstance. Upon a finding of good cause, the division may determine that a license should be granted. Licenses granted under this provision may be limited in scope or duration.

191--10.12(522) Letter of clearance.

10.12(1) A resident producer may request a letter of clearance by submitting the following items to the division:

a. A written request, signed by the producer, including the producer's name, insurance producer license number, and the name of the state for which a letter of clearance is sought;

b. The producer's Iowa insurance license, or a signed statement that it has been lost or destroyed;

c. A self-addressed stamped envelope; and

d. The appropriate fee.

10.12(2) Upon issuance of the letter of clearance, the division will cancel all of the producer's company appointments and the license status will be changed from active to inactive.

191--10.13(522) Letter of certification. A resident producer may request a letter of certification by submitting the following items to the division:

1. A written request including the producer's name, insurance producer license number, and the name of the state for which the letter of certification is sought;

2. A self-addressed stamped envelope; and

3. The appropriate fee.

191--10.14(522) Change in name or address.

10.14(1) If a producer's name is changed, the producer must file written notification with the division within 30 days of the change. If the change of name is by court order, a copy of the order must be submitted to the division within 30 days of the change.

10.14(2) Address change. If a resident or nonresident producer's address is changed, the producer must file written notification signed by the producer within 30 days of the address change, stating:

a. Producer's name;

b. License number;

c. Previous resident address; and

d. The new resident address.

10.14(3) If a nonresident producer moves from one state to another state, the producer must file a change of address and a letter of certification from the new resident state within 60 days. No fee or license application is required.

10.14(4) The division will not automatically issue a new license with the producer's new address. A license will be issued upon written request and payment of the fee for a duplicate license.

10.14(5) If a licensed Iowa resident producer moves from Iowa to another state and wishes to become licensed as a nonresident producer in Iowa, the producer may file a change of address and a letter of certification from the new resident state within 60 days of the date the producer established residency in the new resident state.

10.14(6) If a nonresident producer moves into Iowa and wishes to obtain a resident license, the producer must comply with subrule 10.4(1).

191--10.15(522) Reporting of actions.

10.15(1) A producer shall report to the division any administrative action taken against the producer in another jurisdiction or by another Iowa governmental agency within 30 days of the final disposition of the matter. This report shall include a copy of the order, consent to order or other legal document.

10.15(2) Within 30 days of the initial pretrial hearing date, a producer shall report to the division any criminalprosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal document.

10.15(3) A producer shall report to the division all court actions and all CSAC actions taken under or in connection with Iowa Code chapter 261 and shall provide the division copies, within seven days of filing or issuance, of all applications filed with the district court pursuant to 1998 Iowa Acts, chapter 1081, section 7, all court orders entered in such actions, and withdrawals of certificates of noncompliance by the CSAC.

191--10.16(522) Commissions.

10.16(1) An insurance company shall not pay, directly or indirectly, any commission, service fee, brokerage or other valuable consideration to any individual or person for services as an insurance producer unless the individual or person performing the service held a valid license regarding the class of insurance for which the service was rendered at the time the service was performed. A producer may not receive commissions for insurance written with a company until that producer has been appointed with such company. Nothing herein is intended to alter the requirements of Iowa Code section 522.4.

10.16(2) A producer may assign commissions to an entity organized for the purpose of operating that producer's insurance business so long as all of the entity's representatives who personally engage in solicitation activities in Iowa are individually licensed as producers under Iowa law.

10.16(3) A person who is not directly engaged in any activities in Iowa that require an insurance producer license in Iowa is not required to maintain an active insurance producer license in order to receive override commissions or to receive renewal commissions earned while the producer was actively engaged in activities that did require an insurance producer license.

191--10.17(522) Appointments.

10.17(1) Any insurance company admitted to do business in Iowa may file an appointment form to request an appointment.

10.17(2) Appointment fees are set forth in rule 10.25(522). A billing statement will be submitted to insurance companies on a monthly basis and payment is due within 45 days. The failure to timely pay appointment billing statements may subject an insurer to late fees or other sanctions.

10.17(3) When an insurance company terminates its relationship with a producer, the company shall promptly notify the division by submitting an appointment form. The company shall also notify the producer that the producer's appointment has been canceled.

10.17(4) Appointments and cancellations are effective when processed by the division.

10.17(5) When a company loses its identity in a new company by merger, acquisition, or otherwise, the new company must contact the licensing bureau to arrange for reappointment of the producers to the remaining company.

191--10.18(522) Appointment renewal.

10.18(1) On or about May 1 of each year, the division shall provide a list of the producers currently appointed with each insurance company and a billing statement. No amendments may be made to the billing statement.

10.18(2) Payment is due at the division on or before June 30 and must include the billing statement. Renewals filed after June 30 will be subject to a late filing fee.

10.18(3) Failure to pay renewal appointment fees by July 15 will result in cancellation of a company's appointments. Appointments that are canceled due to nonpayment of renewal fees may be reinstated upon payment of a reinstatement fee.

10.18(4) Effective January 1, 2002, appointment renewal reports will be sent to insurance companies on April 1 and payment will be due on or before May 31. Appointments that are not renewed by June 15 will be canceled and may be reinstated only upon payment of renewal and reinstatement fees.

10.18(5) By special arrangement with the division, the appointment renewal process may be conducted via electronic processes.

191--10.19(522) Licensing of an insurance agency.

10.19(1) Application. An insurance agency may apply for an Iowa insurance license. For purposes of this rule, upon approval of an application by the division, the insurance agency shall be classified as a producer and shall be subject to all standards of conduct applicable to producers.

10.19(2) Requirements. To qualify for such a license, the insurance agency must:

a. File a completed license application on the form prescribed by the division;

b. Designate one officer, owner, partner, or member of the insurance agency, which person also is a producer licensed by the division, as the person who will have full responsibility for the conduct of all business transactions of the insurance agency or of insurance producers affiliated with the insurance agency;

c. File a report of all Iowa-licensed insurance producers affiliated or employed with the insurance agency;

d. For a nonresident insurance agency, file a current certification of insurance agency licensure from the insurance commissioner for the insurance agency's resident state or, if the resident state does not license insurance agencies, file a request for a waiver of this requirement;

e. Pay the insurance agency license fee or the appropriate retaliatory fee;

f. Provide the legal or trade name of the insurance agency and all business names, trade names, service marks, marketing names or other names under which the insurance agency may operate.

10.19(3) License term. An insurance agency license issued under this rule shall be effective for three calendar years, including the year of application; and all insurance agency licenses shall expire on December 31 of the third calendar year.

10.19(4) License renewal. The division shall mail a renewal notice to the address of the insurance agency on file with the division on or before December 1. The renewal notice will include a current listing of all producers affiliated with that agency. The designated responsible producer shall strike through the names of the insurance producers no longer affiliated with the insurance agency and add the names of any affiliated insurance producers not on the list. The renewal notice form and renewal fee must be received by the division on or before December 31. By arrangement with the division, renewal notices may be issued and submitted electronically.

10.19(5) License reinstatement. Insurance agency licenses may be reinstated through January 31 following the third calendar year by payment of the renewal fee and a $100 reinstatement fee. Insurance agencies that fail to complete the reinstatement process by January 31 must submit an application for a new insurance agency license.

10.19(6) Insurance agency appointments. Any insurance company admitted to do business in Iowa may appoint an Iowa-licensed insurance agency.

10.19(7) Business address. Insurance agencies licensed under this rule must maintain a current business address with the division. If an insurance agency's address is changed, written notification signed by the designated responsible producer must be submitted to the division within 30 days of the address change, stating:

a. The name of the insurance agency;

b. The federal tax identification number of the insurance agency;

c. The previous address of the insurance agency; and

d. The new address of the insurance agency.

10.19(8) Business name. Insurance agencies licensed under this rule must maintain a current business name with the division. If an insurance agency changes the name under which it is operating, written notification signed by the designated responsible producer must be submitted to the division within 30 days of the name change on the form prescribed by the division.

191--10.20(522) Violations and penalties.

10.20(1) A producer who sells insurance, directly or indirectly, in violation of this chapter shall be deemed to be in violation of Iowa Code section 522.1 and subject to the penalties provided in Iowa Code section 522.5.

10.20(2) Any company or company representative who aids and abets a producer in the above-described violation shall be deemed to be in violation of Iowa Code section 522.1 and subject to the penalties provided in Iowa Code sections 522.5, 507B.7 and 507B.11.

10.20(3) The commissioner may place on probation, suspend, revoke, or refuse to issue or renew a producer's license or may levy a civil penalty, in accordance with Iowa Code sections 522.3 and 522.5 or any combination of actions, for any one or more of the following causes:

a. Providing incorrect, incomplete or materially untrue information on an application for an insurance producer license;

b. Obtaining or attempting to obtain an insurance producer license by fraud, misrepresentation or material misstatement;

c. Improperly using notes, or any other reference material, to complete an examination for an insurance producer license;

d. Submitting a check to the division or to the outside testing service on contract with the division which is returned to the division by a bank without payment, or submitting a payment to the division by credit card which the credit card company does not approve, or canceling or refusing amounts charged to a credit card by the outside testing service on contract with the division where services were received by the producer;

e. Failing to report any administrative action or criminal prosecution taken against the producer or failure to report the termination of a resident insurance producer license;

f. Having an insurance producer's license or its equivalent suspended or revoked by any other state, district or territory of the U.S. or any province of Canada or state of Mexico;

g. Acting as an insurance producer through persons not licensed as insurance producers;

h. Having been convicted of a felony;

i. Failing to timely respond to division inquiries;

j. Refusing to cooperate with division employees in an investigation;

k. Misappropriating, converting, or improperly withholding money or property received in the conduct of insurance business;

l. Intentionally misrepresenting the terms of any actual or proposed insurance policy;

m. Demonstrating incompetence, untrustworthiness or financial irresponsibility in the transaction of insurance business;

n. Using fraudulent, coercive or dishonest practices in the conduct of affairs under the license;

o. Taking any action to circumvent the spirit of these rules and the Iowa insurance statutes or any other action that shows noncompliance with the requirements of Iowa Code chapter 522 or these rules.

10.20(4) In the event that the division denies a request to renew an insurance producer license or denies an application for an insurance producer license, the commissioner shall notify the producer or applicant of the denial or failure to renew in writing, including the reason therefor. The producer or applicant may request a hearing within 30 days of receipt of the notice to determine the reasonableness of the division's action. The hearing shall be held within 30 days of the date of the receipt of the written demand by the applicant and shall be held pursuant to 191--Chapter 3.

10.20(5) The license of an agency may be suspended, revoked or refused if the commissioner finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the insurance division nor was corrective action taken.

191--10.21(252J) Suspension for failure to pay child support.

10.21(1) Upon receipt of a certificate of noncompliance from the child support recovery unit (CSRU), the commissioner shall issue a notice to the producer that the producer's pending application for licensure, pending request for renewal, or current license will be suspended 30 days after the date of the notice. Notice shall be sent to the producer's last-known address by regular mail.

10.21(2) The notice shall contain the following items:

a. A statement that the commissioner intends to suspend the producer's application, request for renewal or current insurance license in 30 days;

b. A statement that the producer must contact the CSRU to request a withdrawal of the certificate of noncompliance;

c. A statement that the producer's application, request for renewal or current license will be suspended if the certificate of noncompliance is not withdrawn;

d. A statement that the producer does not have a right to a hearing before the division, but that the producer may file an application for a hearing in district court pursuant to Iowa Code section 252J.9;

e. A statement that the filing of an application with the district court will stay the proceedings of the division;

f. A copy of the certificate of noncompliance.

10.21(3) The filing of an application for hearing with the district court will stay all suspension proceedings until the division is notified by the district court of the resolution of the application.

10.21(4) If the division does not receive a withdrawal of the certificate of noncompliance from the CSRU or a notice from a clerk of court that an application for hearing has been filed, the division shall suspend the producer's application, request for renewal or current license 30 days after the notice is issued.

10.21(5) Upon receipt of a withdrawal of the certificate of noncompliance from the CSRU, suspension proceedings shall halt and the named producer shall be notified that the proceedings have been halted. If the producer's license has already been suspended, the license shall be reinstated if the producer is otherwise in compliance with division rules.

191--10.22(261) Suspension for failure to pay student loan.

10.22(1) The division shall deny the issuance or renewal of an insurance producer license upon receipt of a certificate of noncompliance from the college student aid commission (CSAC) according to the procedures set forth in 1998 Iowa Acts, chapter 1081. In addition to the procedures contained in those sections, this rule shall apply.

10.22(2) Upon receipt of a certificate of noncompliance from the CSAC according to the procedures set forth in 1998 Iowa Acts, chapter 1081, the commissioner shall issue a notice to the producer that the producer's pending application for licensure, pending request for renewal, or current license will be suspended 60 days after the date of the notice. Notice shall be sent to the producer's last-known address by restricted certified mail, return receipt requested, or by personal service in accordance with the Iowa Rules of Civil Procedure. Alternatively, the applicant or licensed producer may accept service personally or through authorized counsel.

10.22(3) The notice shall contain the following items:

a. A statement that the commissioner intends to suspend the producer's application, request for renewal or current insurance license in 60 days;

b. A statement that the producer must contact the CSAC to request a withdrawal of the certificate of noncompliance;

c. A statement that the producer's application, request for renewal or current insurance producer license will be suspended if the certificate of noncompliance is not withdrawn or, if the current license is on suspension, a statement that the producer's current insurance producer license will be revoked;

d. A statement that the producer does not have a right to a hearing before the division, but that the producer may file an application for a hearing in district court pursuant to 1998 Iowa Acts, chapter 1081, sections 6 and 7;

e. A statement that the filing of an application with the district court will stay the proceedings of the division;

f. A copy of the certificate of noncompliance.

10.22(4) The effective date of revocation or suspension of an insurance producer license, as specified in the notice required by 1998 Iowa Acts, chapter 1081, section 6, shall be 60 days following service of the notice upon the applicant or registrant.

10.22(5) In the event an applicant or licensed producer timely files a district court action following service of a division notice pursuant to 1998 Iowa Acts, chapter 1081, sections 6 and 7, the division's suspension proceedings will be stayed until the division is notified by the district court of the resolution of the application. Upon receipt of a court order lifting the stay, or otherwise directing the division to proceed, the division shall continue with the intended action described in the notice. For purposes of determining the effective date of the denial of the issuance or renewal of an insurance producer license, the division shall count the number of days before the action was filed and the number of days after the court disposed of the action.

10.22(6) If the division does not receive a withdrawal of the certificate of noncompliance from the CSAC or a notice from a clerk of court that an application for hearing has been filed, the division shall suspend the producer's application, request for renewal or current insurance producer license 60 days after the notice is issued.

10.22(7) Upon receipt of a withdrawal of the certificate of noncompliance from the CSAC, suspension proceedings shall halt and the named producer shall be notified that the proceedings have been halted. If the producer's insurance license has already been suspended, the license shall be reinstated if the producer is otherwise in compliance with division rules. All fees required for license renewal or license reinstatement must be paid by producers and all continuing education requirements must be met before an insurance producer license will be renewed or reinstated after the board has suspended or revoked a license pursuant to 1998 Iowa Acts, chapter 1081.

10.22(8) The division shall notify the producer in writing through regular first-class mail, or such other means as the division deems appropriate in the circumstances, within ten days of the effective date of the suspension or revocation of an insurance producer license, and shall similarly notify the producer when the insurance producer license is reinstated following the division's receipt of a withdrawal of the certificate of noncompliance.

10.22(9) Notwithstanding any statutory confidentiality provision, the division may share information with the CSAC for the sole purpose of identifying producers subject to enforcement under Iowa Code chapter 261.

191--10.23(522) Administration of examinations.

10.23(1) The division will enter into a contractual relationship with an outside testing service to provide the licensing examinations for all of the producers' qualifications where an examination is required.

10.23(2) The outside testing service will administer all examinations for license applicants.

10.23(3) Any contract to implement subrule 10.23(1) shall require the outside testing service to:

a. Update, on a continual basis, the licensing examinations,

b. Ensure that the examinations are job-related,

c. Adequately inform the applicants of the procedures and requirements for taking the licensing examinations,

d. Prepare and administer examinations for all lines listed in subrule 10.7(1), except qualifications 9, 30 and 31, and

e. Conform to division guidelines and report to the division on at least a quarterly basis.

191--10.24(522) Forms. An original of each form necessary for the producer's licensure, appointment and cancellation may be requested from the division or downloaded from the division's web site and exact, readable, high-quality copies may be made therefrom. A self-addressed, stamped envelope must be submitted with each request.

191--10.25(522) Fees.

10.25(1) The fee for an examination shall be set by the outside testing service under contract to the division and approved by the division.

10.25(2) The express processing fee for resident producer license applications shall be set by the outside testing service under contract to the division and approved by the division.

10.25(3) The fee for issuance or renewal of an insurance producer license is $50 for three years or, for a nonresident producer, the greater of $50 or the retaliatory fee.

10.25(4) The fee for issuance or renewal of an insurance agency license is $50 for three years or, for a nonresident producer, the greater of $50 or the retaliatory fee.

10.25(5) The fee for reinstatement of an insurance producer license is a total of the renewal fee plus $100.

10.25(6) The fee for issuance of an amended or duplicate license is $10.

10.25(7) The fee for issuance of a clearance letter is $5.

10.25(8) The fee for issuance of a certification letter is $5.

10.25(9) The fee for an appointment or the renewal of an appointment is $5 per producer or the retaliatory fee. There is no fee for the cancellation of an appointment.

10.25(10) The total late fee for filing appointment renewals shall be double the renewal fee. The fee to reinstate appointments that were canceled for failure to renew shall be the late fee plus $100.

10.25(11) The fee to reactivate an inactive license and receive a new license under subrule 10.9(5) is $10.

10.25(12) The division may charge a fee for other services.

These rules are intended to implement Iowa Code chapters 252J and 522.

ITEM 2. Rescind 191--Chapter 11 and adopt the following new chapter in lieu thereof:

191--11.1(272C) Statutory authority--purpose--applicability.

11.1(1) These rules are adopted pursuant to the general rule-making authority of the insurance commissioner in Iowa Code chapter 505 and the specific authority in Iowa Code chapter 272C to issue rules establishing continuing education requirements for resident and nonresident insurance producers.

11.1(2) The purpose of these rules is to establish requirements by prescribing:

a. The minimum number of continuing education credits that an insurance producer must complete;

b. The procedure and standards that the division will utilize in the approval of continuing education providers and courses;

c. The procedure for establishing that the required continuing education has been completed; and

d. Enforcement criteria and guidelines.

11.1(3) These rules do not apply to:

a. A nonresident producer who resides in a state or district having a continuing education (CE) requirement for insurance producers.

b. A resident producer who holds qualification 18 (credit life, accident and health insurance), 4 (crop insurance) or 19 (legal expense insurance).

c. Licensed attorneys who are also producers who submit proof of completion of continuing legal education for the appropriate calendar years during the CE term, pay the continuing education fee set forth in subrule 11.14(1) and otherwise comply with the producer license renewal procedures set forth in 191--Chapter 10.

d. A producer who serves full-time in the armed forces of the United States of America on active duty during a substantial part of the CE term and who submits evidence of such service.

191--11.2(272C) Definitions.

"Annually" means each calendar year between January 1 and December 31.

"Approved subject" or "approved course" means any educational presentation which has been approved by the division.

"Attendance record" means a record on which a CE provider requires attendees of a CE course to sign in at the time of entrance to the course.

"CE" means continuing education as defined in Iowa Code section 272C.1(1).

"CE provider" means any individual or entity that is approved to offer continuing education courses in Iowa.

"CE term" means the three-year period ending December 31 prior to the producer's renewal year.

"Credit" means continuing education credit. One credit is 50 minutes of instruction or reading material in an acceptable topic.

"License" means a document issued by the division which authorizes a person to act as an insurance producer for the lines of insurance specified in such document. The license itself does not provide the producer with any authority to represent or bind an insurance carrier.

"Monitor" or "approved monitor" means a CE provider or licensed producer who supervises the conduct of a producer while that producer is completing an examination that is part of a self-study CE course.

"Producer" means a person required to obtain an insurance license under Iowa Code section 522.1.

"Renewal year" means the third year following the issuance or last renewal of an insurance producer license.

"Resident" means a person residing permanently in Iowa.

"Roster" means a listing of all licensed attendees at an approved course and includes the Iowa course number, the producer license number, the date the course was completed, and the actual number of credits earned by each producer.

"Self-study course" means an educational program that consists of a self-study manual and comprehensive examination.

191--11.3(272C) Continuing education requirements for producers.

11.3(1) Effective January 1, 1999, every licensed resident producer must complete a minimum of 36 credits for each CE term in courses approved by the division.

11.3(2) Producers who accumulated CE credits in basic, life/health or property/casualty courses completed prior to January 1, 1999, may cumulate those credits and apply them toward the next CE term requirement.

11.3(3) An instructor of an approved subject is entitled to the same credit as a student completing that subject and may receive such credit once during a CE term.

11.3(4) A producer cannot carry over CE credits earned in excess of the producer's CE term requirements from one CE term to the next.

11.3(5) A producer may receive CE credit for self-study courses. A self-study course is considered completed when the examination is received by the CE provider.

a. A producer may receive CE credit for self-study courses that are part of a recognized national designation program as described in subrule 11.5(5).

b. A producer may receive up to 18 CE credits for self-study courses during a CE term that do not meet the definition of paragraph "a" if the producer:

(1) Signs a declaration that the examination was monitored and was completed without any outside assistance, and

(2) Correctly answers at least 70 percent of the questions presented.

11.3(6) A producer may not receive CE credit for courses taken prior to the issuance of an initial license.

11.3(7) A producer cannot receive credit for the same course twice in one CE term. A producer cannot receive CE credit both for the classroom portion and for the examination portion of a national designation program as defined in subrule 11.5(5).

11.3(8) A producer may elect to comply with the CE requirements by taking and passing the appropriate licensing examination for each qualification held by the producer. If a producer holds both a personal lines and a commercial lines qualification, the producer shall take and pass only the commercial lines examination. If a producer holds an excess and surplus lines designation, the producer shall take and pass both the commercial lines and the excess and surplus lines examinations. If a producer holds both the accident and health and the life insurance qualification, the producer may take the combined life/health examination. These examinations must be completed prior to the expiration of the producer's license.

191--11.4(272C) Proof of completion of continuing education requirements.

11.4(1) Producers are required to demonstrate compliance with the CE requirements at the time of license renewal. Procedures for completing the license renewal proc-ess are outlined in 191--Chapter 10.

11.4(2) Producers are required to maintain a record of all CE courses attended by keeping the original certificates of completion for four years after the end of the year of attendance.

11.4(3) Waiver or extension. A producer who wishes to receive a waiver or extension of time to complete the CE requirements must file a written request with the division. A waiver or extension will not be issued to a producer unless the division finds that good cause exists. Good cause shall be defined as an inability to devote sufficient hours to fulfilling the CE requirements during the CE term because of a long-term, severe illness or incapacity evidenced by a doctor's certification, or extenuating circumstances.

191--11.5(272C) Course approval.

11.5(1) To qualify for approval a course must be designed to expand technical insurance skills and knowledge obtained prior to initial licensure or to develop new and relevant skills and knowledge.

11.5(2) Any approved active CE provider may submit a request for approval of any course, program of study, or subject for continuing education credit to the division on a form prescribed by the division. If an outside vendor is retained by the division for course reviews, requests for approval will be filed directly with the vendor.

11.5(3) Requests for course approval which do not include all required information will be returned as incomplete.

11.5(4) Except as provided in subrule 11.5(5), requests for approval shall be submitted at least 30 days prior to the beginning of the course. Requests received later may be disapproved.

11.5(5) A request for approval of any self-study course that is part of a recognized national designation program may be filed within 60 days after the course is completed. This course will be reviewed and may be approved for up to the number of credits awarded for passage of the national examination in topics that are otherwise approvable under these rules. This subrule applies only to national designation programs such as AAI, ARM, CIC, CEBS, ChFC, CFP, CLU, CPCU, FLMI, LUTCF, RHU and similar courses as determined by the division.

11.5(6) An insurance producer who attends a classroom course offered by a college, university or governmental agency that has not been approved by the division may make application for approval of the course for CE credit. The application must be filed within 60 days of attendance at the course and must contain sufficient materials to allow for a thorough evaluation of the course content and instructor qualifications. To be eligible for CE credit, the course must meet all division guidelines for course approval. All course review fees must be paid by the producer.

11.5(7) A CE course must be offered for a minimum of one credit. Fractional credits will not be awarded. The total credit which may be awarded for a CE course is limited to 36 credits, except that credit for a self-study course as defined in 11.3(5)"b" shall be limited to 18 CE credits.

11.5(8) Notification will be sent to the CE provider indicating approval or disapproval. Approved courses will be assigned a course number.

11.5(9) The division may deem the approval of a CE course by another state's insurance division as adequate evidence that a course is eligible for approval in Iowa and award the same number of credits for the course awarded by the other state.

11.5(10) CE courses approved by the division on or after January 1, 1999, may be offered for a 24-month period following the date of approval. CE courses which were approved by the division prior to January 1, 1999, will retain their approved status through May 31, 1999, and will expire on that date if not renewed.

191--11.6(272C) Topic guidelines.

11.6(1) The following course topics are examples of subjects that will qualify for approval:

1. Rating;

2. Tax laws (specifically related to insurance);

3. Policy contents;

4. Proper uses of products;

5. Ethics;

6. Risk management;

7. Iowa insurance laws and administrative rules;

8. Technical information related to the insurance license;

9. Errors and omissions;

10. Estate planning/taxation;

11. Wills and trusts; and

12. Financial planning.

11.6(2) The following course topics are examples of subjects that will not qualify for approval:

1. Sales;

2. Motivation;

3. Prospecting;

4. Psychology;

5. Communication skills;

6. Prelicense training;

7. Supportive office skills (e.g., typing, filing, computers);

8. Personnel management;

9. Recruiting; and

10. Other subjects not related to the insurance license.

191--11.7(272C) CE course renewal. Prior to expiration of the 24-month approval period, a CE provider must apply for renewal of each course with the division or its outside vendor. If a CE provider makes a substantial change to the content of a previously approved course, that course will not be eligible for renewal and must be submitted for a complete review.

191--11.8(272C) Appeals. A CE provider may appeal the amount of CE credit awarded by the division for a course. An appeal must be made in writing to the division within 30 days of the receipt by the CE provider of the notice of CE credit awarded for the course. If the division retains an outside vendor for course reviews, a CE provider must first complete an appeal process with the vendor before filing an appeal with the division.

191--11.9(272C) CE provider approval.

11.9(1) Any school, insurer, industry association or other organization intending to provide a course, program of study, or subject for continuing education credit must submit an application on a form prescribed by the division to become an approved CE provider.

11.9(2) To qualify for approval, a CE provider must demonstrate financial and organizational stability and must agree to comply with the administrative and regulatory constraints set forth by the division.

11.9(3) All CE providers that have been approved in Iowa prior to January 1, 1999, will retain their approved status through May 31, 1999. These CE providers must complete a renewal process by May 31, 1999, to be eligible to continue as a CE provider in Iowa. All new applicants for CE providers approved on or after January 1, 1999, will be eligible to submit courses for approval for the next 24-month period. Each individual course each CE provider intends to offer must be submitted to and approved by the division.

11.9(4) A CE provider must complete the renewal proc-ess to be eligible to continue serving as a CE provider. Failure to complete the renewal process will result in the expiration of the CE provider's approval and all previously approved courses.

11.9(5) If an outside vendor is retained by the division for CE provider reviews, requests for approval will be filed directly with the vendor.

191--11.10(272C) CE provider's responsibilities.

11.10(1) A CE provider must ensure that each classroom course is conducted by a qualified and competent instructor.

11.10(2) A CE provider shall obtain and maintain an attendance record for each course for at least four years from the end of the year in which the course is offered. Upon request by the division, a CE provider must submit copies of attendance records.

11.10(3) A CE provider of an approved course is responsible for both the attendance of the students and their attention. A CE provider must refuse to award CE credit for time periods when the student was absent.

11.10(4) A CE provider must verify that each examination submitted for a self-study course contains a declaration by the producer and an approved monitor that the examination was completed without any outside assistance. A CE provider must refuse to award CE credit to producers who fail to submit a properly completed examination or who fail to correctly answer at least 70 percent of the questions on the examination.

11.10(5) Upon request by the division, a CE provider shall videotape a course and such recording shall be promptly submitted to the division.

11.10(6) Upon request by the division, a CE provider must provide a copy of all course materials.

11.10(7) If an approved course is canceled, a CE provider must notify the division, or its outside vendor, and registrants at least 48 hours prior to the course date.

11.10(8) CE providers must submit rosters of all course attendees to the division. These reports must be received at the division by the tenth day of the month following the month in which the course is completed. Rosters shall be submitted in computer disk format or electronically in a manner prescribed by the division.

11.10(9) Once a course is completed, the CE provider shall issue a certificate of completion to each person who satisfactorily completes a course. The certificate must be issued within 20 days of course completion and must be signed by either the course instructor or the CE provider's authorized representative. The certificate of completion used by the CE provider must be in a form or format prescribed by the division.

11.10(10) CE providers must report to the division any disciplinary action taken against that CE provider by another state licensing authority.

191--11.11(272C) Prohibited conduct--CE providers.

11.11(1) CE providers shall not:

a. Advertise, prior to approval, that a course is approved;

b. Prepare and distribute certificates of completion before the course has been conducted;

c. Issue inaccurate or incomplete certificates of completion;

d. Refuse to issue certificates of completion to any participant who satisfactorily completes an approved course, except when subrule 11.10(3) or subrule 11.10(4) applies.

11.11(2) The division may revoke the approval of a continuing education provider or may discipline a continuing education provider, upon a finding that the CE provider:

a. Committed any one or more of the actions prohibited in subrule 11.11(1);

b. Failed to perform any duties required by these rules; or

c. Committed any other action inconsistent with these rules.

11.11(3) If the division finds that a CE provider has violated Iowa laws or these rules, the division shall give written notification to the CE provider of the alleged improper conduct and any discipline or sanction imposed. The CE provider may make a written request for a hearing within 30 days of receipt of the notice. The hearing shall be held within 30 days of the division's receipt of the written demand by the CE provider unless the parties agree to a later hearing date. The hearing shall be conducted pursuant to 191--Chapter 3.

11.11(4) A fine may be imposed against a CE provider if the commissioner finds, after hearing, that the CE provider knew or should have known that it was in violation of this chapter. The division may take any one or more of the following actions upon a finding of a violation of this rule:

a. Require the CE provider to pay a fine not to exceed $1,000 per violation;

b. Require the CE provider to refund the course admission fee to all participants;

c. Require the CE provider to provide a suitable course to replace the course that was found in violation;

d. Withdraw the approval of courses sponsored by such CE provider; or

e. Take other disciplinary action permitted by statute.

191--11.12(272C) Outside vendor. The division may enter into a contractual arrangement with a qualified outside vendor to assist the division with review and renewal of continuing education providers and courses. Fees charged by the outside vendor will be subject to division approval and will be paid by the CE provider. Course approval fees are nonrefundable.

191--11.13(272C) CE course audits. The division may audit any CE course. The cost of the audit will be charged to the CE provider. Any discrepancies between the materials submitted for approval to the division and the content found at the audit, or any evidence of activity set forth in rule 191-- 11.11(272C), may subject the CE provider or instructor to administrative sanctions. Governmental bodies, such as community colleges and universities, shall not be charged for the cost of an audit.

191--11.14(272C) Fees and costs.

11.14(1) The CE fee that is due with a producer renewal report is $30.

11.14(2) The fee for a report of a producer's CE credits on file with the division is $10.

11.14(3) The fees for approval and renewal of CE providers, CE courses and registration of instructors shall be set by the outside vendor retained by the division and are subject to approval by the division.

11.14(4) The division may charge a fee for other services.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8620A

Pursuant to the authority of Iowa Code section 509A.14, the Insurance Division hereby amends Chapter 35, "Accident and Health Insurance," Iowa Administrative Code.

The amendment exempts the state of Iowa from certain filing requirements for life and accident and health self-funded plans.

The amendment was published in the December 2, 1998, Iowa Administrative Bulletin as ARC 8518A. Written comments were due to the Insurance Division by December 22, 1998. One comment was received by the Division concerning the exemption.

Based upon the comment letter received and further review of the proposed amendment, it was determined that the intent of the rule had not been clearly stated. The rule is intended to exempt the state of Iowa from certain filing provisions, not from certain minimum coverage requirements. Therefore, the adopted amendment has been changed to reflect the correction and clarification.

This amendment will become effective March 3, 1999.

This amendment is intended to implement Iowa Code section 509A.14.

The following amendment is adopted.

Amend subrule 35.20(1) as follows:

35.20(1) Scope. This rule applies to life and accident and health self-funded plans for the state of Iowa, political subdivisions of the state, school corporations, and all other public bodies in the state. Subrule 35.20(2), paragraphs "a" through "g," shall not apply to life and accident and health self-funded plans for the state of Iowa.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8611A

Pursuant to the authority of Iowa Code section 19A.9, the Department of Personnel hereby amends Chapter 1, "Definitions," Chapter 3, "Job Classification," Chapter 4, "Pay," and Chapter 8, "Appointments," Iowa Administrative Code.

Chapters 1 and 3 are revised to reflect the elimination of the personnel commission as mandated by the General Assembly.

In addition, subrule 3.5(6) is amended to clarify trainee/journey class reclassifications. A definition of the term "substantive change" as it relates to a position description questionnaire is found in new subrule 3.5(7).

Chapter 4 is amended to clarify the pay received by an employee who is reinstated pursuant to 581--8.6(19A).

Rule 581--8.3(19A), Project appointment, is being rescinded.

Notice of Intended Action was published in the November 4, 1998, Iowa Administrative Bulletin as ARC 8438A. A public hearing was held on November 24, 1998. Neither verbal nor written comment was received on the amendments. The adopted amendments are identical to those published under Notice.

These amendments were adopted by the Department on December 17, 1998.

The amendments will become effective February 17, 1999.

The amendments are intended to implement Iowa Code Supplement section 19A.9.

The following amendments are adopted.

ITEM 1. Amend rule 581--1.1(19A) by rescinding the definition of "Commission" as follows:

"Commission" means the Iowa personnel commission, composed of five volunteer citizens appointed by the governor and confirmed by the senate for six year terms.

ITEM 2. Amend subrule 3.1(2) as follows:

3.1(2) The director may add, delete, modify, suspend pending deletion or subdivide job classifications to suit the needs of the executive branch of state government. When doing so results in new job classifications being added to the classification plan, they shall be approved by the commission.

ITEM 3. Amend subrule 3.4(6) as follows:

3.4(6) Following a final position classification review decision, any subsequent request for review of the same position must be accompanied by a showing of substantive changes from the position description questionnaire upon which the previous decision was based. A new position description questionnaire must be prepared and all new and substantively changed duties must be identified as such on the new questionnaire. The absence of a showing of substantive changes in duties shall result in the request being returned without further review to the requester. A decision to return a request for failing to show substantive change in duties may be appealed to the classification appeal committee in accordance with rule 581--3.5(19A). The classification appeal committee shall rule only on the issue of whether a substantive change in duties has been demonstrated by the appellant. The appellant has the burden of proof to show by a preponderance of evidence that there has been a substantive change in duties.

ITEM 4. Amend subrule 3.5(2) as follows:

3.5(2) A classification appeal panel committee shall be appointed by the commission director.

ITEM 5. Amend subrule 3.5(4) as follows:

3.5(4) The classification appeal committee hearing shall be scheduled within 30 calendar days following receipt of the request for a hearing unless otherwise mutually agreed to in writing and signed by the parties. All exhibits to be entered into evidence at the hearing shall be exchanged between the parties prior to the hearing and three copies shall be available to be offered into evidence at hearing. The hearing shall be held at the Grimes State Office Building during the regular business hours of the department. The appellant shall carry the burden of proof to show by a preponderance of evidence that the duties of the requested job classification are assigned and carried out on a permanent basis and are performed over 50 percent of the time. The committee shall affirm grant or deny the job classification requested, or remand the request to the director for further review, or decide whether there has been a substantive change in duties pursuant to an appeal under subrule 3.4(6) or 3.5(6). The committee's written decision shall be issued within 30 calendar days following the close of the hearing and the receipt of any posthearing submissions. The written decision of the committee shall constitute final agency action.

ITEM 6. Amend subrule 3.5(6) as follows:

3.5(6) Following a final classification appeal committee decision, any subsequent request for review of the same position must be accompanied by a showing of substantive changes from the position description questionnaire upon which the previous decision was based. A new position description questionnaire must be prepared, and all new and substantively changed duties must be identified as such on the new questionnaire. The absence of such a showing of substantive changes in duties shall result in the request being returned without further review to the requester. A decision to return a request for failing to show substantive change in duties as defined in subrule 3.5(7) may be appealed to the classification appeal committee in accordance with rule 581--3.5(19A). The classification appeal committee shall rule only on the issue of whether a substantive change in duties has been demonstrated by the appellant. The appellant has the burden of proof to show by a preponderance of evidence that there has been a substantive change in duties.

ITEM 7. Adopt new subrule 3.5(7) as follows:

3.5(7) As it relates to 581 IAC subrules 3.4(6) and 3.5(6), the phrase "substantive change" means that sufficient credible evidence exists, in the form of the deletion or addition to the duties in the requester's present classification, that would cause a reasonable person to believe that the duties of the requested classification are assigned and carried out on a permanent basis and are performed over 50 percent of the time.

ITEM 8. Amend subrule 3.6(3) as follows:

3.6(3) An employee in a position covered by merit system provisions shall be required to meet the minimum qualifications for the new job classification when the reclassification is the result of successful completion of an established training period where progression to the next higher level in the job classification series is customary practice, for reasons other than those mentioned in subrule 3.6(2), or when the reclassification is the result of a voluntary or disciplinary demotion. "Completion of an established training period" shall be the period provided for on the class descriptions for the class. In addition, employees with probationary status must be eligible for certification in accordance with 581-- Chapter 9, Iowa Administrative Code.

ITEM 9. Amend subrule 4.6(12) as follows:

4.6(12) Reinstatement. If When an employee is reinstated in accordance with rule 581--8.6(19A), the employee may be paid at the same any step or pay rate as when separated, including any pay grade, pay plan, class or general salary increases, except as provided in subrules 4.6(1), 4.6(2) and 4.6(4) for the class to which reinstated. When the rate of pay is above the minimum, the decision to do so must be in accordance with subrule 4.5(1). For setting eligibility dates, see subrule 4.7(5).

ITEM 10. Rescind and reserve rule 581--8.3(19A) as follows:

581--8.3(19A) Project appointment. The director may approve a project appointment to a position when a particular project, grant, contract, or similar situation is of temporary duration or funding. Certification shall be in accordance with 581--Chapter 7 when applicable. Persons appointed shall be given temporary status and shall be subject to these rules, as they pertain to the rights of temporary employees, and shall acquire benefits in accordance with the number of hours worked. The initial appointment of an individual to any one particular project will be approved for no more than one year. If requested, the director may extend the appointment. At the expiration of the appointment the employee shall be terminated without right of appeal. Project appointees may apply to be on eligible lists in accordance with 581--subrule 5.2(4).

ITEM 11. Amend subrule 8.10(3) as follows:

8.10(3) Successful completion of an internship appointment of at least 120 contact hours 90 calendar days shall authorize the appointee to be certified from a promotional list for any job class for which the appointee has submitted an application and qualifies. Only persons formally enrolled in the department's intern development program are eligible to be on promotional lists. Successful completion shall be as determined by the director at the time of enrollment. An intern's name may remain on the promotional list for up to two years. If an appointment has not been made by the end of the two-year period, the name will be removed from the list. The intern may then reapply through the standard nonpromotional process. After initial selection from a promotional certificate, the intern's name shall be removed from all promotional lists until permanent status has been attained.

ITEM 12. Amend rule 581--8.11(19A) as follows:

581--8.11(19A) Seasonal appointment. The director may authorize appointing authorities to make seasonal appointments to positions. Seasonal appointments may be made to any class and at any rate of pay within the range for the class to which appointed. Seasonal appointments may, however, be made only during the seasonal period approved by the director for the agency requesting to make the appointment, and must be concluded by the end of that period. To be eligible to make seasonal appointments, the appointing authority must first submit a proposed seasonal period to the director for approval. Such period shall not exceed six months in a fiscal year.; however, the appointment may start as early as the beginning of the pay period that includes the first day of the seasonal period and may end as late as the last day of the pay period that includes the last day of the seasonal period.

Persons may be appointed with seasonal status without regard to merit system provisions and shall have no rights of appeal, transfer, promotion, demotion, reinstatement, or other rights of position, nor be entitled to vacation, sick leave, or other benefits.

A person appointed with seasonal status to a classification covered by a collective bargaining agreement shall not work in excess of 700 hours in that status in such a class or classes, nor shall that person accumulate more than 700 hours worked in any combination of temporary statuses in any agency or any combination of agencies during a fiscal year.

ITEM 13. Amend rule 581--8.13(19A) as follows:

581--8.13(19A) Rescinding appointments. If, after being appointed, it is found that an employee should have been disqualified or removed as provided for in 581--subrules 5.2(6), or 5.2(7), 6.5(2)"d," or rule 581--6.5(19A) or 7.7(19A), the director may rescind the appointment. An employee with permanent status may appeal the director's decision to the public employment relations board. The appeal must be filed within 30 calendar days after the date the director's decision was issued. Decisions by the public employment relations board constitute final agency action.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8612A

Pursuant to the authority of Iowa Code section 19A.9, the Department of Personnel hereby amends Chapter 15, "Benefits," Iowa Administrative Code.

Rule 581--15.6(19A) allows employees of the state of Iowa to invest in a deferred compensation program and implements changes required by the Small Business Job Protection Act of 1996 and 1997 Iowa Acts, House File 540. The new rule ensures continued public input by the establishment of an Advisory Committee and Vendor Panel to assist the Department in the administration of the Deferred Compensation Plan.

Notice of Intended Action was published in the November 18, 1998, Iowa Administrative Bulletin as ARC 8472A. A public hearing was held on December 10, 1998. No written comment was received. Verbal comment was received from the Administrative Rules Review Committee. The adopted rules have not been changed in any substantive manner. Subparagraphs 15.6(4)"g"(1), 15.6(4)"g"(2) and 15.6(4)"g"(3) have been revised for purposes of clarity.

These amendments were adopted by the Department on December 23, 1998.

The amendments will become effective February 17, 1999.

The amendments are intended to implement Iowa Code Supplement section 19A.12B and 1998 Iowa Acts, chapter 1039, section 1.

The following amendments are adopted.

ITEM 1. Rescind rule 581--15.6(19A) and adopt the following new rule in lieu thereof:

581--15.6(19A) Deferred compensation.

15.6(1) Definitions. The following definitions shall apply when used in this rule:

"Account" means any fixed annuity contract, variable annuity contract, life insurance contract, documents evidencing mutual funds, variable or guaranteed investments, or combination thereof provided for in the plan.

"Beneficiary" means the person or estate entitled to receive benefits under the plan following the death of the participant.

"Director" means the director of the Iowa department of personnel.

"Employee" means a nontemporary (permanent full-time or permanent part-time) employee of the employer, including full-time elected officials and members of the general assembly, except employees of the board of regents. For the purposes of enrollment, elected officials-elect and members-elect of the general assembly shall be considered employees. Persons in a joint employee relationship with the employer shall not be considered employees eligible to participate in the plan.

"Employer" means the state of Iowa and any other governmental employer that participates in the plan.

"Governing body" means the executive council of the state of Iowa.

"Group" means one or more employees.

"Investment provider" means a company authorized under this rule to issue an account or administer the records of such an account or accounts under the deferred compensation plan authorized by Iowa Code section 509A.12 and chapter 19A.

"Normal retirement age" means 70½ years of age, unless an earlier age is specified by a participating employee pursuant to the plan's catch-up provision.

"Participating employee" means any employee or former employee of the employer who is currently deferring or who has previously deferred compensation under the plan and who retains the right to benefits under the plan.

"Plan" means the state of Iowa deferred compensation 457 plan and trust as set forth in this document, and as it may be amended from time to time, and which has been authorized by Iowa Code section 509A.12 and chapter 19A.

"Plan administrator" means the designee of the director who is authorized to administer the plan.

"Plan year" means a calendar year.

"Trustee" means the director of the Iowa department of personnel.

15.6(2) Plan administration.

a. The director is authorized by the governing body to administer a deferred compensation program for employees of the state of Iowa and to enter into contracts and service agreements with deferred compensation product vendors for the benefit of state of Iowa employees and on behalf of the state of Iowa. This rule shall govern all investment options and participant activity for the funds placed in the program.

b. The trustee may at any time amend, modify, or terminate this plan without the consent of the participant (or any beneficiary thereof). All amendments that are adopted in emergency rule making shall be effective immediately upon filing with the administrative rules coordinator. Amendments that are adopted pursuant to nonemergency rule making shall be effective no sooner than 35 days after publication in the Iowa Administrative Bulletin. The plan administrator shall provide sufficient notice to participating employees and investment providers of all amendments to the plan. No amendment shall deprive participants of any of the benefits to which they are entitled under this plan with respect to deferred amounts credited to their accounts before the effective date of the amendment. If the plan is curtailed or terminated, or the acceptance of additional deferred amounts is suspended permanently, the plan administrator shall nonetheless be responsible for the supervision of the payment of benefits resulting from amounts deferred before the amendment, modification, or termination. Payment of benefits will be deferred until the participant would otherwise have been entitled to a distribution pursuant to the provisions of the plan.

c. Location of account documentation. The investment providers shall send the original annuity policies, contracts or account forms to the plan administrator. Failure to do so may result in termination of an investment provider's service agreement. All such original documents shall be kept by the plan administrator. Participating employees may review their own documentation during normal work hours at the department, but may not under any circumstances remove the documentation from the premises. Each participating employee shall be provided a copy of the documentation establishing the employee's account with an investment provider by the investment provider, subject to the terms and conditions of the investment provider's service agreement with the plan administrator. The copy being furnished to the participating employee shall be clearly marked that it is not the original. Original documents shall be held by the plan administrator until proceeds are disbursed under the terms of the participating employee's or beneficiary's chosen method of disbursement.

d. Participation in this plan by an employee shall not be construed to give a contract of employment to the participant or to alter or amend an existing employment contract of the participant, nor shall participation in this plan be construed as affording to the participant any representation or guarantee regarding the participant's continued employment.

e. The employer, trustee, and the investment providers do not represent or guarantee that any particular federal or state of Iowa income, payroll, personal property or other tax consequences will result because of the participant's participation in the plan. The participant is obligated to consult with the participant's own tax representative regarding all questions of federal or state income, payroll, personal property or other tax consequences arising from participation in the plan.

f. The investment providers shall, subject to the trustee's consent, have the power to appoint agents to act for the investment providers in the administration of accounts according to the terms, conditions, and provisions of their service agreements with the employer. Investment providers are responsible for the conduct of their agents. The plan administrator may require an investment provider to remove the authority of any agent to provide services to the plan or plan participants when cause has been shown that the agent has violated these rules or state or federal law or regulation related to the governance of the plan or agent conduct.

g. Plan expenses. Expenses incurred by the plan administrator while administering the plan, including fees and expenses approved by the plan trustee for investment advisory, custodial, record-keeping, and other plan administration and communication services, and any other reasonable and necessary expenses or charges allocable to the plan that have been incurred for the exclusive benefit of plan participants and that have been approved by the plan trustee may be charged to the short-term interest that has accrued in the Deferred Compensation Trust Fund created by 1998 Iowa Acts, chapter 1039, section 1, prior to the allocation of funds to a participant's chosen investment provider.

h. Advisory committee and vendor panel. There shall be appointed by the plan trustee an advisory committee and vendor panel.

(1) The advisory committee shall consist of representatives appointed by the plan trustee of the legislative, judicial, and executive branches of government, public sector employees through their authorized collective bargaining representatives, and the private sector. Such representatives shall convene in regularly scheduled meetings, in a manner, time and place chosen by the plan trustee or designee to advise in the administration of the plan and the plan investment options. Such meetings shall occur no less than biannually.

(2) The vendor panel shall consist of a representative of each active investment provider under the plan and a representative of the authorized sales agents of the investment providers appointed by the plan trustee. Such representatives shall convene in regularly scheduled meetings in a manner, time and place chosen by the plan trustee or designee to aid in the efficient administration of the investment options under the plan. Such meetings shall occur no less than biannually. An executive committee of the vendor panel may be appointed by the plan trustee to convene at such times as may be necessary to aid in the administration of the investment options under the plan. The executive committee shall consist of the representatives of the sales agents of the investment providers, a representative of the active mutual fund investment provider(s), and a representative of the active fixed and variable annuity provider(s).

i. Time periods. As necessary or desirable to facilitate the proper administration of the plan and consistent with the requirements of Section 457 of the Internal Revenue Code (IRC), the plan administrator may modify the time periods during which a participating employee or beneficiary is required to make any election under the plan, and the time periods for processing these elections by the plan, including the making or amending of a deferral agreement, the making or amending of investment provider selections, the election of distribution commencement dates or distribution forms.

j. Supplementary information and procedures. Any explanatory brochures, pamphlets, or notices distributed by the plan shall be distributed for information purposes and shall not override any provision of this plan or give any person any claim or right not provided for under this plan. Notwithstanding the foregoing, to the extent that the terms of this plan document authorize the adoption of supplementary guidelines or procedures, any publication announcing such guidelines or procedures may be relied upon by the persons to whom it is distributed, unless and until modified by a subsequent publication, or revocation of the publication by the plan administrator. Any procedural requirement described in any such publication shall be binding, as applicable, to the same extent as if such requirement were set forth in this plan document. In the event any form or other document used in administering this plan, including but not limited to enrollment forms and marketing materials, conflicts with the terms of the plan, the terms of the plan shall prevail.

k. This plan, and any properly adopted amendments, shall be binding on the parties hereto and their respective heirs, administrators, trustees, successors and assignees and on all beneficiaries of the participant.

15.6(3) Rights of participating employees.

a. The assets and income of the plan shall be held by the trustee for the exclusive benefit of the participating employee or the participating employee's beneficiary.

b. The rights of a participating employee under this plan shall not be subject to the rights of creditors of the participating employee or any beneficiary and, except as expressly provided herein, shall be exempt from execution, attachment, prior assignment, or any other judicial relief, or order for the benefit of creditors or other third persons.

c. Designation of beneficiary. Upon enrollment, a participating employee must designate a beneficiary or beneficiaries. A participating employee may change the employee's designated beneficiary or beneficiaries at any time thereafter by providing the plan administrator with written notice of the change on the form prescribed by the plan administrator.

d. Neither a participating employee, nor the participating employee's beneficiary, nor any other designee shall have the right, except as expressly provided herein, to commute, sell, assign, transfer, borrow, alienate, use as collateral or otherwise convey the right to receive any payments hereunder which payments and right thereto are expressly declared to be nonassignable and nontransferable.

15.6(4) Trust provisions.

a. Trustee. The trustee shall be the director of the Iowa department of personnel.

b. Investment options. The trustee shall adopt various investment options for the investment of deferred amounts by participating employees or their beneficiaries and shall monitor and evaluate the appropriateness of the investment options offered by the plan. The trustee may remove options if it is deemed to be in the best interest of participants or for other good cause as determined by the trustee. Following such adoption or removal of investment options by the trustee, participating employees or their beneficiaries shall be entitled to select from among the available options for investment of their deferred amounts. In the event options are removed, the trustee may require participating employees or their beneficiaries to move balances to an alternative option offered by the plan. If participating employees or their beneficiaries fail to act in response to the written notice, the trustee shall transfer moneys out of the removed option to an alternative option chosen by the trustee (normally placed into a fixed guaranteed account or, if offered as an investment option offered in the plan, a money market fund). By exercising such right to select investment options or by failing to respond to notice to transfer from a removed option where the trustee moves the money on behalf of participating employees or their beneficiaries, participating employees and their beneficiaries agree that none of the plan fiduciaries will be liable for any investment losses or lost investment opportunities that are experienced by participating employees or their beneficiaries in the investment option(s) they select or that are selected for them if they fail to take appropriate action with regard to a removed fund or that may be implemented by the plan administrator in accordance with the plan.

c. Designation of fiduciaries. The trustee, the plan administrator, and the persons they designate to carry out or help carry out their duties or responsibilities are fiduciaries under the plan. Each fiduciary has only those duties or responsibilities specifically assigned to fiduciaries under the plan, contractual relationship, trust or as delegated to fiduciaries by another fiduciary. Each fiduciary may assume that any direction, information or action of another fiduciary is proper and need not inquire into the propriety of any such action, direction or information. No fiduciary will be responsible for the malfeasance, misfeasance or nonfeasance of any other fiduciary, except where the fiduciary participated in such conduct, or knew or should have known of such conduct in the discharge of the fiduciary's duties under the plan and did not take reasonable steps to compel the cofiduciary to redress the wrong.

d. Fiduciary standards.

(1) All fiduciaries shall discharge their duties with respect to the plan and trust solely in the interest of the participating employees and their beneficiaries and in accord with Iowa Code section 633.123. Such duties shall be discharged for the exclusive purpose of providing benefits to the participating employees and beneficiaries and, if determined applicable, defraying expenses of the plan.

(2) The investment providers shall discharge their duties with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims and as defined by applicable Iowa law.

e. Trustee powers and duties. The trustee may exercise all rights or privileges granted by the provisions of the plan and trust and may agree to any alteration, modification or amendment of the plan. The trustee may take any action respecting the plan or the benefits provided under the plan which the trustee deems necessary or advisable. Persons dealing with the trustee shall not be required to inquire into the authority of the trustee with regard to any dealing in connection with the plan. The trustee may employ persons, including attorneys, auditors, investment advisors or agents, even if they are associated with the trustee, to advise or assist, and may act without independent investigation upon their recommendations. Instead of acting personally, the trustee may employ one or more agents to perform any act of administration, whether or not discretionary.

f. Trust exemption. This trust is intended to be exempt from taxation under § 501(a) of the IRC and is intended to comply with § 457(g) of the IRC. The trustee shall be empowered to submit or designate appropriate agents to submit this plan and trust to the IRS for a determination of the eligibility of the plan under IRC § 457, and the exempt status of the trust under IRC § 501(a), if the trustee concludes that such a determination is desirable.

g. Notwithstanding any contrary provision of the plan, in accordance with Section 457(g) of the Internal Revenue Code, all amounts of compensation deferred pursuant to the plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall be held in trust for the exclusive benefit of participants and beneficiaries under the plan. Any trust under the plan shall be established pursuant to a written agreement that constitutes a valid trust under the law of the state of Iowa. All plan assets shall be held under one or more of the following methods:

(1) Compensation deferred under the plan shall be transferred to a trust established under the plan within a period that is not longer than is reasonable for the proper administration of the accounts of participants. To comply with this requirement, compensation deferred under the plan shall be transferred to a trust established under the plan not later than 15 business days after the end of the month in which the compensation would otherwise have been paid to the employee.

(2) Notwithstanding any contrary provision of the plan, including any annuity contract issued under the plan, in accordance with Section 457(g) of the Internal Revenue Code, compensation deferred pursuant to the plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall be held in one or more annuity contracts, as defined in Section 401(g) of such Code, issued by an insurance company qualified to do business in the state where the contract was issued, for the exclusive benefit of participants and beneficiaries under the plan. For this purpose, the term "annuity contract" does not include a life, health or accident, property, casualty, or liability insurance contract. Amounts of compensation deferred under the plan shall be transferred to an annuity contract described in Section 401(f) of the Internal Revenue Code within a period that is not longer than is reasonable for the proper administration of the accounts of participants. To comply with this requirement, amounts of compensation deferred under the plan shall be transferred to a contract described in Section 401(f) of such Code not later than 15 business days after the end of the month in which the compensation would otherwise have been paid to the employee.

(3) Notwithstanding any contrary provision of the plan, in accordance with Section 457(g) of the Internal Revenue Code, compensation deferred pursuant to the plan, all property and rights purchased with such amounts, and all income attributable to such amounts, property, or rights shall be held in one or more custodial accounts for the exclusive benefit of participants and beneficiaries under the plan. For purposes of this paragraph, the custodian of any custodial account created pursuant to the plan must be a bank, as described in Section 408(n) of the Internal Revenue Code, or a person who meets the nonbank trustee requirements of paragraphs (2) to (6) of Section 1.408-2(e) of the Income Tax Regulations relating to the use of nonbank trustees.

Amounts of compensation deferred under the plan shall be transferred to a custodial account described in Section 401(f) of the Internal Revenue Code within a period that is not longer than is reasonable for the proper administration of the accounts of participants. To comply with this requirement, amounts of compensation deferred under the plan shall be transferred to a custodial account described in Section 401(f) of such Code not later than 15 business days after the end of the month in which the compensation would otherwise have been paid to the employee.

15.6(5) Absolute safeguards of the employer, trustee, their employees, and agents.

a. The trustee and the plan administrator are authorized to resolve any questions of fact necessary to decide the participating employee's rights under this plan. An appeal of a decision of the plan administrator shall be made to the trustee, who shall render a final decision on behalf of the plan.

b. The trustee and the plan administrator are authorized to construe the plan and to resolve any ambiguity in the plan and to apply reasonable and fair procedures for the administration of the plan. An appeal of a decision of the plan administrator shall be made to the trustee, who shall render a final decision on behalf of the plan.

c. The participating employee specifically agrees that the employer, the trustee, the plan administrator, or any other employee or agent of the employer, shall not be liable for any loss sustained by the participating employee or the participating employee's beneficiary for the nonperformance of duties, negligence, or any other misconduct of the above-named persons except that this paragraph shall not excuse malicious or wanton misconduct.

d. The trustee, plan administrator, investment providers, their employees and agents, if in doubt concerning the correctness of their actions in making a payment of a benefit, may suspend the payment until satisfied as to the correctness of the payment or the identity of the person to receive the payment, or until the filing of an administrative appeal under Iowa Code chapter 17A, and thereafter in any state court of competent jurisdiction, a suit in such form as they consider appropriate for a legal determination of the benefits to be paid and the persons to receive them.

e. The employer, the trustee, the plan administrator, their employees and agents are hereby held harmless from all court costs and all claims for the attorneys' fees arising from any action brought by the participating employee, or any beneficiary thereof, under this plan or to enforce their rights under the plan, including any amendments hereof.

f. The investment providers shall not be required to participate in any litigation concerning the plan except upon written demand from the plan administrator or trustee.

15.6(6) Eligibility.

a. Initial eligibility. Any nontemporary executive, judicial or legislative branch employee who is regularly scheduled for 20 or more hours of work per week or who has a fixed annual salary is eligible to defer compensation under this rule except employees of the board of regents. An elected official-elect and elected members-elect of the general assembly are also eligible provided deductions meet the requirements set forth in the plan. Final determination on eligibility shall rest with the plan administrator.

b. Eligibility after terminating deferral of compensation. Any employee who terminates the deferral of compensation may choose to reenroll in the plan in accordance with the plan. Final determination on eligibility to reenroll shall rest with the plan administrator.

15.6(7) Enrollment and termination.

a. Enrollment. Employees may enroll in the plan at any time. The original account application form and the state of Iowa's required enrollment forms shall be submitted to the plan administrator for approval. An investment provider account shall become effective upon receipt of the first deduction or, where applicable, upon the transfer of assets from another investment provider. In all instances, eligible employees must enter into an agreement to defer compensation prior to the beginning of the month in which the agreement shall take effect. Employees are responsible for timely submission of payroll documents to initiate salary deductions. Enrollment is permitted for elected officials-elect and elected members-elect of the general assembly according to these rules.

b. Availability of forms. It is the responsibility of each employee interested in participating in the program to obtain the necessary forms from the employer or from the investment providers. It is the responsibility of each agency to inform its employees as to where and how they may obtain the necessary forms. The forms shall be prescribed by the plan administrator, and agencies shall be advised as to their availability.

c. Termination of participation. A participating employee may terminate participation in the plan provided notification is received by the plan administrator at least 15 days prior to the employee's next monthly deduction. Termination of plan participation does not provide for the disbursement of funds unless done in accordance with the distribution requirements of the plan.

15.6(8) Communications.

a. All enrollments, elections, designations, applications and other communications by or from an employee, participant, beneficiary, or legal representative of any such person regarding that person's rights under the plan shall be made in the form and manner established by the plan administrator and shall be deemed to have been made and delivered only upon actual receipt by the person designated to receive such communication. The employer or the plan shall not be required to give effect to any such communication that is not made on the prescribed form and in the prescribed manner and that does not contain all information called for on the prescribed form.

b. All notices, statements, reports, and other communications from the plan to any employee, participant, beneficiary, or legal representative of any such person shall be deemed to have been duly given when delivered to, or when mailed by first-class mail to, such person at that person's last mailing address appearing on the plan records.

15.6(9) Deductions from earnings.

a. When deducted. Each participating employee shall have the option as to whether the entire monthly amount of deferred compensation will be deducted from the first paycheck of the month or the second paycheck of the month, or will be equally divided between the first and second paychecks of the month. If the monthly deferral cannot be divided into two equal payments, the third option is not available. Deductions will not be taken from the third paycheck of a month. Deductions may be allocated to more than one active investment provider. A participating employee may allocate deductions to one inactive investment provider and one or more active investment providers.

b. Deferral amount changes. Participating employees may increase or decrease their monthly deferral amount as frequently as provided for by procedures established by the plan administrator to ensure the efficient administration of the plan.

c. Maximum deferral limits. Participating employees' deferrals may not exceed the lesser of the maximum limitation or 33 1/3 percent of their includable compensation as defined under IRC Section 457. In practice, it may be considered that participating employees' deferrals may not exceed 25 percent of the amount of their annual income subject to federal income tax withholding less contributions to IPERS or any other applicable retirement program and certain taxable compensation excluded from wages under the IRC, determined without taking into account contributions made to this plan. The maximum limitation is $7,500, adjusted for the calendar year to reflect increases in cost of living in accordance with Sections 457(e)(15) and 415(d) of the Internal Revenue Code.

d. Minimum amount deferred. The minimum amount of deferred compensation to be deducted from the earnings of a participating employee during any month shall be $25.

e. Method of payment. Deferred amounts shall be forwarded to the investment providers by issuance of one warrant or electronic remittance following each pay period, regardless of the number of individual accounts, accompanied by a listing of participant accounts and the amounts to be credited to each participant account. Deferred amounts will be remitted in a timely manner consistent with the requirements of IRS regulations. However, no deferrals or remittances are made when a third payday occurs in a month. Investment providers must minimize crediting errors and provide timely and accurate credit resolution.

f. The employer shall cause all deferrals and transfers to be invested as soon as practicable after such amounts are withheld from the participating employee's salary or wages or are available from the transferor plan, as applicable.

g. Deferred compensation or tax-sheltered annuity participation--maximum contribution. Employees who, under the laws of the state of Iowa, are eligible for both deferred compensation and tax-sheltered annuities shall be allowed to participate in one or the other of the programs, but not both. If, in the same calendar year, an eligible participating employee changes from the deferred compensation plan to a tax-sheltered annuity plan or vice versa, the maximum deferral for that calendar year for both plans combined may not exceed the maximum permitted under IRC § 402(g), 403(b), 415, or 457, whichever is applicable based upon the employee's participation.

15.6(10) Contribution catch-up.

a. Contribution catch-up. A participating employee may elect to catch up contributions during the employee's last three tax years before reaching the year of the employee's normal retirement age. This catch-up provision, which when added to the maximum amount that is allowed, shall not exceed the lesser of one of the following:

(1) Fifteen thousand dollars, or such larger amount permitted under IRC Section 457, as determined by IRC 415(d) and the U.S. Treasury regulations thereunder, or

(2) The employee's maximum deferral limit plus the unused portion of any prior plan year's previous deferral limit for which the employee was eligible to participate in this or any other eligible deferred compensation plan.

b. If the participating employee does not utilize this provision during the first of the three catch-up years, the "lost" catch-up amount shall not be added to either the second or third year of the catch-up period. If the participating employee does not utilize this provision during the first two years of the catch-up period, the "lost" catch-up amount shall not be added to the third year of the catch-up period. The amount to be deferred shall remain constant from the previous calendar year unless a change request is submitted.

c. Participating employees may designate as their normal retirement age the age that will be attained in any year that is not earlier than the earliest year in which the employee will be eligible to retire without actuarial or similar reduction under IPERS or another applicable retirement system and that is not later than the plan's normal retirement age. Once a participating employee has utilized the catch-up provision or a comparable provision of another eligible deferred compensation plan, that participating employee's normal retirement age may not thereafter be changed.

15.6(11) Tax status.

a. FICA and IPERS. The deferred amount elected in the authorization to deduct form shall be included in the participating employee's gross wages for purposes of determining FICA withholding, IPERS, peace officers' and judicial retirement contributions, as applicable, until the maximum taxable wages established by law have been reached.

b. Federal and state income taxes. The amount of earned compensation deferred under the agreement is exempt from federal and state income taxes until such time as the funds are paid or made available as provided in IRC Section 457.

15.6(12) Disposition of funds.

a. Termination of employment. A participating employee who has terminated employment with the employer (including retirement) may request to defer distribution of funds or withdraw funds under any option available under the plan and the chosen investment according to the following:

(1) The participating employee shall elect, within 30 calendar days after termination, a distribution date on a form approved by the plan administrator.

(2) The distribution date shall be no later than the mandatory commencement date, which is April 1 of the calendar year following the later of:

1. The calendar year in which the participating employee attains age 70½, or

2. The calendar year in which the participating employee terminates employment with the employer.

(3) The participating employee shall indicate on the appropriate form when funds are to be paid. If the participating employee wishes to begin receiving disbursements within six months, then the distribution date and the distribution option must be specified.

(4) Where allowable under the plan, if the distribution election is not made by the later of 30 days following termination or 30 days following attainment of age 70, the participating employee shall be deemed to have elected a distribution date 180 days subsequent to termination. If the participating employee does not exercise the right to one additional election to further delay the distribution of funds during this year, the funds will be distributed to the participating employee in a lump sum within a reasonable time after the expiration of this period.

(5) If a participant has elected, in accordance with the plan, to defer the commencement of distributions beyond the first permissible payout date, then the participant may make an additional election to further defer the commencement of distributions, provided that the election is filed before distributions actually begin and the later commencement date meets the required distribution commencement date provisions of Sections 401(a)(9) and 457(d)(2) of the IRC. A participant may not make more than one such additional deferral election after the first permissible payout date.

For purposes of the preceding paragraph, the "first permissible payout date" is the earliest date on which the plan permits payments to begin after separation from service, disregarding payments to a participant who has an unforeseeable emergency or attains age 70½, or under the in-service distribution provisions of the plan.

(6) When a participating employee elects to start receiving benefits after termination, the amount withdrawn must meet the following criteria consistent with the requirements of IRC § 457:

1. Be substantially nonincreasing; and

2. Meet minimum distribution requirements.

(7) A participating employee may elect to have an account distributed in one of the following methods, subject to the specific terms of the chosen investment option:

1. A single lump sum payment;

2. Substantially nonincreasing installment payments for a period of years (payable on an annual, semiannual, quarterly, or monthly basis) which extends no longer than the life expectancy of the participating employee or such longer period as permitted;

3. Partial lump sum payment of a designated amount, with the balance payable in substantially nonincreasing installment payments for a period of years, as described above;

4. Annuity payments (payable on an annual, quarterly, or monthly basis) for the participating employee's lifetime, or for the lifetimes of the participating employee and the employee's beneficiary if permitted;

5. Such other form of installment payments as may be approved by the plan administrator consistent with the limitations of the plan, the investment provider, and the applicable laws and regulations governing such choice. No distribution method may be made or changed after the commencement date for such distribution method.

(8) If a participating employee works beyond the normal retirement age or the plan's designated normal retirement age, the participating employee shall notify the plan administrator on the appropriate forms of the selected retirement option within 30 days after termination of employment.

(9) If a participating employee is rehired by an employer and is eligible to participate in the deferred compensation plan, the employee may, within 30 days following the employee's new hire date, notify the plan administrator in writing of the intent to void the previous election to delay receipt of the funds. This option is not available if the participating employee entered into a settlement option prior to the rehire date.

b. Unforeseeable emergency. A participating employee may request that the plan administrator allow the withdrawal of some or all of the funds held in the participating employee's account based on an unforeseeable emergency. Forms must be completed and returned to the plan administrator for review in order to consider a withdrawal request. The plan administrator shall determine whether the participating employee's request meets the definition of an unforeseeable emergency as provided for in U.S. Treasury Regulation 1.457-2(h). In addition to being extraordinary and unforeseeable, an unforeseeable emergency must not be reimbursable:

(1) By insurance or otherwise;

(2) By liquidation of the participating employee's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or

(3) By cessation of deferrals under the plan.

Upon the plan administrator's approval of an unforeseeable emergency distribution, the participating employee will be required to stop current deferrals for a period of no less than six months.

A participating employee who disagrees with the initial denial of a request to withdraw funds on the basis of an unforeseeable emergency may request that the director reconsider the request by submitting additional written evidence of qualification or reasons why the request for withdrawal of funds from the plan should be approved.

c. Voluntary in-service distribution. A participant who is an active employee of an eligible employer shall receive a distribution of the total amount payable to the participant under the plan if the following requirements are met:

(1) The total amount payable to the participant under the plan does not exceed $5,000 (or the dollar limit under Section 411(a)(11) of the Internal Revenue Code, if greater);

(2) The participant has not previously received an in-service distribution of the total amount payable to the participant under the plan;

(3) No amount has been deferred under the plan with respect to the participant during the two-year period ending on the date of the in-service distribution; and

(4) The participant elects to receive the distribution.

The plan administrator may also elect to distribute the accumulated account value of a participant's account without consent, if the above criteria are met.

This provision is available only once in the lifetime of the participating employee. If funds are distributed under this provision, the participating employee is not eligible under the plan to utilize this provision at any other time in the future.

d. Plan-to-plan transfers.

(1) Participating employees who have accepted employment with a new employer that offers an eligible plan as defined in U.S. Treasury Regulation § 1.457-2(c)(1) may transfer their account values to their new employer's plan if that plan provides for the acceptance of the account and the funds are placed in a like plan in accordance with IRC § 457.

(2) Transfers from other eligible deferred compensation plans as defined in U.S. Treasury Regulation § 1.457-2(c)(1) to this plan will be accepted at the participating employee's request if such transfers are in cash or covered under an investment option currently offered under the plan. Any such transferred amount shall not be subject to the yearly deferral limitations of the plan, provided, however, that the actual amount deferred during the calendar year under both plans shall be taken into account in calculating the deferral limitation for that year. For purposes of determining the limitation set forth in the catch-up provision of the plan, years of eligibility to participate in the prior plan and deferrals under that plan shall be considered.

e. Transfers under domestic relations orders.

(1) To the extent required under a final judgment, decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a participating employee's account may be paid or set aside for payment to a spouse, former spouse, or child of the participating employee. The employer will determine whether the judgment, decree, or order is valid and binding on the plan, and whether it is issued by a court or agency with jurisdiction over the plan. The judgment, decree or order must specify which of the participating employee's accounts are to be paid or set aside, the valuation date of the accounts and, to the extent possible, the exact value of the accounts. Where necessary to carry out the terms of such an order, a separate account shall be established with respect to the spouse, former spouse, or child who shall be entitled to choose investment providers in the same manner as the participating employee. Any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the participating employee, unless the judgment, decree, or order directs a different form of payment. Unless otherwise subsequently suspended or altered by federal law, all applicable taxes shall be withheld and paid from this lump sum distribution. However, the distribution and all applicable taxes shall be reported as if received by and paid by the participating employee. This shall not be construed to authorize any amount to be distributed under the plan at a time or in a form that is not permitted under Section 457 of the Internal Revenue Code.

(2) A right to receive benefits under the plan shall be reduced to the extent that any portion of a participating employee's account has been paid or set aside for payment to a spouse, former spouse, or child pursuant to these rules or to the extent that the employer or the plan is otherwise subject to a binding judgment, decree, or order for the attachment, garnishment, or execution of any portion of any account or of any distributions therefrom. The participating employee shall be deemed to have released the employer and the plan from any claim with respect to such amounts in any case in which:

1. The employer, the plan, or any plan representative has been served with legal process or otherwise joined in a proceeding relating to such amounts,

2. The participating employee has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process or by mail from the employer or a plan representative to the participating employee's last-known mailing address, and

3. The participating employee fails to obtain an order of the court in the proceeding relieving the employer and the plan from the obligation to comply with the judgment, decree, or order.

(3) Neither the employer nor any plan representative shall be obligated to incur any cost to defend against or set aside any judgment, decree, or order relating to the division, attachment, garnishment, or execution of the participating employee's account or of any distribution therefrom. Notwithstanding the foregoing, if the employer, the plan, or a plan representative is joined in any such proceeding, a plan representative shall take such steps as it deems necessary and appropriate to protect the terms of the plan.

f. Method of payment.

(1) Payments will not be initiated by the investment providers or the plan administrator until at least 31 calendar days after termination of employment. Investment providers will, upon written instruction from the plan administrator, make payments directly to the participating employee or to the participating employee's beneficiary, in satisfaction of the employer's continuing obligation under the plan. This shall not, however, give the participating employee or beneficiary any right to demand payment from the employer or the investment provider(s).

(2) Benefits paid to the participating employee shall be paid in accordance with the payment options elected by the participating employee. The form of payment and the settlement options available shall be as provided by each of the investment providers, consistent with the limitations of the plan. Amounts payable with respect to the participating employee will be paid consistent with the times specified by applicable U.S. Treasury regulations which are not later than the time determined under IRC § 401(a)(9) relating to incidental benefits.

g. Incompetence of payee. If the plan administrator shall find that any person to whom any amount is payable under the plan is unable to care for that person's affairs, is a minor, or has died, any payment due the person, or that person's estate, may be paid to the person's spouse, a child, a relative, or any other person maintaining or having custody of such person, unless a prior claim therefor has been made by a duly appointed legal representative. Any such payment shall be a complete discharge of all liability under the plan thereof.

h. Federal and state withholding taxes. It shall be the responsibility of the investment providers, when making payment directly to the participating employee or the participating employee's beneficiary, to withhold the required federal and state income taxes, to remit them to the proper government agency on a timely basis, and to file all necessary reports as required by federal and state regulations, including W-2s.

15.6(13) Death of a participant.

a. When a participant dies, the following information shall be provided by the participant's beneficiary to the plan administrator: participating employee's name, social security number and a certified copy of the death certificate. Upon receipt of the above information, the plan administrator shall initiate procedures so that the proceeds being held in the plan may be distributed as provided in the agreement, unless an irrevocable election is made by the beneficiary to defer benefits to no later than the deceased participant's normal retirement date or in accordance with the participant's irrevocable election on file with the plan administrator.

b. After the death of a participating employee, the participating employee's beneficiary shall have the right to amend the participating employee's or the beneficiary's own investment specification by signing and filing with the plan administrator a written amendment on a form and in the procedural manner approved by the plan administrator. Any change in an investment specification by a beneficiary shall be effective on a date consistent with these rules and the specifications of the investment provider. The right of a beneficiary to amend an investment specification shall terminate on the last day available for an election concerning the form of payment.

c. Payments to a beneficiary.

(1) If a participating employee dies after distribution of the account has begun, distribution shall continue to be paid to the beneficiary at the same or greater rate as under the method of distribution in effect at the time of the participating employee's death.

(2) If a participating employee dies before payments have begun, payments to a beneficiary must comply with one of the following requirements:

1. The entire account value must be distributed within five years following the participating employee's death; or

2. Distribution of the account must begin on or before December 31 of the calendar year following the participating employee's death and the entire account must be paid over a period not extending beyond 15 years (or if the beneficiary is the participating employee's spouse, the life expectancy of the beneficiary); or

3. If the beneficiary is the participating employee's surviving spouse, distribution of the account may be delayed until December 31 of the calendar year in which the participating employee would have attained age 70½.

(3) If distributions have not begun, the beneficiary shall choose a distribution commencement date by filing an election with the plan administrator within 120 days following the participating employee's death. This election shall not be changed once it has been made. If no election is made within 120 days following the participating employee's death, the distribution commencement date will be December 31 of the calendar year following the participating employee's death and shall be completed according to the applicable time period specified in subparagraph (2) above.

(4) The beneficiary shall elect the form of payment based upon the options then available. Distributions to a beneficiary shall be completed within the applicable time period spec-ified in subparagraph (2) above. Such election is irrevocable after the thirtieth day preceding the date on which benefits will commence.

(5) Failure to file an election as to the form of payment will result in the plan administrator's making a lump sum payment to the beneficiary according to subparagraph (3) above.

15.6(14) Investment providers.

a. Participation. The investment providers under the plan are authorized to offer new accounts and investment products to employees only if awarded a service agreement through a competitive bid process. A list of active investment providers shall be provided, upon request, to any employee or other interested party. Inactive investment providers shall participate to the extent necessary to fully discharge their duties under the applicable federal and state laws and regulations, the plan, their service agreements or contracts with the employer, and their investment accounts or contracts with participating employees.

b. Investment products. Investment products shall be limited to those that have been selected by the plan administrator. No new accounts shall be available to employees for life insurance under the plan.

c. Reports and consolidated statements. The investment providers will provide various reports to the plan administrator as well as consolidated statements, newsletters, and performance reports to participants as specified in their service agreements.

d. Dividends and interest. The only dividend or interest options available on policies or funds are those where the dividend or interest remains within the account to increase the value of the account.

e. Quality standards. An investment provider that issues individual or group annuity contracts, or that has issued life insurance policies, must have:

(1) A minimum credit rating of at least "A-" from the A.M. Best Corporation financial strength rating system, or equivalent ratings from two other major, recognized ratings services, and

(2) A minimum number of years in existence greater than 12.

f. In lieu of (1) and (2) above, companies that provide mutual funds shall be selected by the plan administrator using a selection process that includes quality standard requirements as set forth in a competitive bid process and in the investment provider's service agreement.

g. Minimum contract requirements. In addition to meeting selection requirements, an investment provider must meet and maintain the requirements set forth in its contract or service agreement with the state of Iowa.

h. Removal from participation. Failure to comply with the provisions of these rules, the investment provider contract or service agreement with the employer, or the terms and conditions of the investment provider account with the participating employee, may result in termination of an investment provider contract or service agreement, and all rights therein shall be exercised by the employer.

15.6(15) Marketing and education.

a. Orientation and information meetings. Employers may hold orientation and information meetings for the benefit of their employees during normal work hours using materials developed and approved by the plan administrator. Active investment providers may make presentations upon approval of individual agency or department authorities during non-work hours. There shall be no solicitation of employees by investment providers at an employee's workplace during the employee's working hours, except as authorized in writing by the plan administrator.

b. General requirements for solicitation.

(1) An active investment provider may solicit business from participants and employees through representatives, the mail, or direct presentations.

(2) Active investment providers and representatives may solicit business at a state agency's work site only with the prior permission of the agency director or other appropriate authority.

(3) All investment providers or representatives may not conduct any activity with respect to a registered investment option unless the appropriate license has been obtained.

(4) An investment provider or representative may not make a representation about an investment option that is contrary to any attribute of the option or that is misleading with respect to the option.

(5) An investment provider or representative may not state, represent, or imply that its investment options are endorsed or recommended by the plan administrator, a state agency, the state of Iowa, or an employee of the foregoing.

(6) An investment provider or representative may not state, represent, or imply that its investment option is the only option available under the plan.

c. Disclosure.

(1) Enrollment. When soliciting business for an investment product, an active investment provider or representative shall provide each participating employee or eligible employee with a copy of the approved disclosure for that option. If a variable annuity product has several alternative investment choices, the participant must receive disclosures concerning all investment choices. An investment provider is responsible for any violations of these rules by a representative who is marketing the investment provider's investment options. An active investment provider shall notify the plan administrator in writing if the investment provider will be marketing its investment options through representatives. The notification must contain a complete identification of the representatives who will be marketing the options. Every representative and agent that enrolls eligible employees in the plan and is authorized by the investment provider to sign plan forms must be included on this notification.

(2) Disbursement methods and account values. When discussing distribution methods for an investment option, investment providers or representatives shall disclose to each participating employee or eligible employee all potential distribution methods and the potential income derived from each method for that option. An investment provider is responsible for any violations of these rules by a representative who is marketing the investment provider's investment options.

d. Approval of a disclosure form.

(1) An investment provider shall complete and submit to the plan administrator a disclosure form for each approved investment product. If a variable annuity product has several investment choices, the plan administrator must receive all disclosures related to those investment choices. An investment provider shall complete a disclosure on each investment product that has participating employee funds (including those no longer offered).

(2) If changes occur during the plan year, any changes must be submitted to the plan administrator for approval prior to their implementation. Disclosure forms will be updated quarterly. Even if no changes occur, an investment provider shall resubmit its disclosure form to the plan administrator for approval every year.

(3) If an investment provider or representative materially misstates a required disclosure or fails to provide disclosure, the plan administrator may sanction the investment provider or bind the investment provider to the disclosure as stated on the form.

e. Confidentiality. The plan administrator may provide any information that can be made available under the Iowa department of personnel's rules to all active investment providers. Notwithstanding any rule of the Iowa department of personnel to the contrary, the plan administrator shall make available to all active investment providers the names and home addresses of all state employees. The plan administrator may assess reasonable costs to the active investment providers to defray the expense of producing any requested information. All information obtained under the plan shall be confidential and used exclusively for purposes relating to the plan and as expressly contemplated by the service agreement or contract entered into by the investment provider.

f. Number of companies. Only investment providers who are selected through a competitive bid process, who are subsequently awarded a service agreement, and who are authorized to do business in the state of Iowa may sell annuities, mutual funds or other approved products under the plan, and then only if they agree to the terms, conditions, and provisions of the service agreement. At any given time, no more than 11 investment providers may be authorized to open new accounts for participating employees. Beginning January 1, 1999, during the term of a service agreement with the employer, any investment provider that does not enroll an average of 25 new participating employees per plan year will not be eligible for renewal as an active investment provider upon expiration of a service agreement except through a competitive bid process.

g. Company changes/transfers. If a participating employee wishes to change deferrals to another active investment provider within the plan, the participating employee shall submit forms to the plan administrator. The funds accumulated under the prior investment option may be transferred in total or in accordance with such other options offered by the active investment providers, according to the participating employee's direction to the plan administrator, to the new investment option. The appropriate forms shall be provided to the plan administrator prior to requesting the surrender or partial withdrawal of an existing account. A participating employee may request at any time during the calendar year to transfer accumulated funds from an investment provider to another active investment provider offered under the plan. A participating employee may only transfer an account to an investment provider that is not active if the participating employee already has an established account with the investment provider and the transfer does not necessitate the creation of a new account. A participating employee may change investment providers at any time during the calendar year. Surrender charges pursuant to individual participant investment contracts may apply. In the event of a transfer, participating employees who have made irrevocable elections as required under the plan will be required to maintain this election under the new investment provider.

15.6(16) Investment of deferred amounts.

a. The deferred amounts shall be delivered by the employer to investment providers or their designated agents for investment as designated by the participating employee or beneficiary.

b. Investment providers shall use the participating employee's or beneficiary's investment specifications to determine the value of the deferred account maintained with respect to the participating employee and shall invest the deferred amounts according to such specifications.

c. All interest, dividends, charges for premiums and administrative expenses, as well as changes in value due to market fluctuations applicable to each participating employee's account, shall be credited or debited to the account as they occur.

d. All assets of the plan, including all deferred amounts, property, and rights purchased with deferred amounts, as well as all income attributable to such deferred amounts, property or rights, shall be held in a trust, custodial account, or an annuity contract, in accordance with the provisions of the plan, and shall be held (until made available to the participating employee or beneficiary) for the exclusive benefit of the participating employees and their beneficiaries.

15.6(17) Investment option removal/replacement. The plan administrator may determine that an investment option offered under the plan is no longer acceptable for inclusion in the program. If the plan administrator decides to remove an investment option from the plan as the result of the option's failure to meet the established evaluation criteria and according to the recommendations of consultants or advisors, the option shall be removed or phased out of the plan. Employees newly enrolling in the plan shall be informed in writing that the terminating investment option does not meet the evaluation criteria and that this investment option is not open to new enrollments.

a. Any participating employees already deferring to the terminating investment option shall be informed in writing that they need to redirect future deferrals from this option to an alternative investment option offered under the plan by notifying the plan administrator, unless otherwise directed, of their new investment choice.

b. At the end of a sufficient period, and with sufficient notice of not less than 45 days to participating employees, the plan administrator shall instruct an investment provider to automatically redirect any participating employee's deferrals that have not been redirected to an alternative investment option from the terminated option into another investment option offered by the plan. Existing participating employee account balances shall be allowed to remain in the terminating investment option during this period.

c. Participating employees may subsequently be directed to transfer existing balances from the terminating option to another investment option offered under the plan. If any participating employee has failed to move a remaining account balance from the terminated investment option, the plan administrator shall instruct an investment provider to automatically move that participating employee's account balance into another designated alternative investment option offered under the plan.

d. At any time during this process, the plan administrator may reexamine the performance of the terminating investment option and the recommendations of consultants and advisors to determine if the investment option's continued plan participation is justified.

15.6(18) Demutualization of companies.

a. An investment provider that is a mutual company and that provides any annuity product or life insurance product held under the plan shall provide the plan administrator with a ballot(s) for official vote registration. The ballot(s) shallbe completed and returned to the company according to thespecified deadline in the instructions. The ballot(s) shall include the owner's name, policy numbers of affected contracts, name of annuitant or insured, number of shares anticipated, and the control number for the group of shares.

b. The company shall provide the plan administrator with a policyholder booklet, as well as instructions and guide information, prior to or in conjunction with the delivery of the ballot(s). Notices of progress, time frames and meetings will also be provided to the plan administrator as such information becomes available.

c. Compensation will be provided in cash according to the terms of the demutualization plan. In the event that stocks are issued in lieu of cash, the company shall issue all certificates to the employer on behalf of the affected participants and shall provide a listing which includes participants' names, social security numbers, policy numbers, and number of shares pro rata. The certification(s) will be delivered to the treasurer of the state of Iowa by the plan administrator for safekeeping within five workdays following receipt. The certificate(s) will be retrieved from the treasurer of the state of Iowa when an arrangement has been made with a stockbroker for the sale of the stock.

d. An arrangement will be entered into between the plan administrator and a stockbroker as soon as administratively possible in order to liquidate the stock for cash. The broker shall retain commission fees according to the arrangement entered into from the value obtained at the time of sale. The employer will not realize a tax liability nor will the participating employees.

e. The proceeds of the sale of the stock, less the broker commission, shall be made payable to the company. Cash will be immediately credited to the participating employee's accounts by the company. The company shall credit each participating employee's accounts pro rata based on the allotted shares per contract, and the plan administrator will be provided with a listing of the dollar amount credited to each participating employee's accounts. The company will credit the accounts based on the printout provided to the plan administrator. A statement of this transaction will also be provided by the company to participating employees at their home addresses upon completion of crediting of the accounts. The funds will be remitted to the company on a separate warrant and day from normal contributions. The company will report the investment return credit to the plan administrator in a specified format and show the credit under the earnings column.

f. In the event that dividends are issued prior to the sale of the stock, the dividends will be returned to the company and the company will credit each eligible account with the correct dividend based on the pro-rata shares. The company will also provide a statement to the participating employees at their home addresses which shows the credit of the dividend. The plan administrator shall be provided with a printout which includes a participating employee's name, social security number, policy number, and dollars credited.

ITEM 2. Rescind rule 581--15.13(19A).

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8602A

Pursuant to the authority of Iowa Code section 100.35, the Department of Public Safety hereby amends Chapter 5, "Fire Marshal," Iowa Administrative Code.

The amendments adopted here clarify that fire safety requirements for small group homes specified in rule 661--5.620(100) apply to all such facilities licensed pursuant to Iowa Code section 135C.2 and not only to small group homes for mentally retarded persons. When this rule was originally developed, it applied to residential homes used to house mentally retarded individuals in a demonstration project; the Iowa Code provision directs that rules "no more restrictive" than those developed for the demonstration project should apply to all facilities in this classification. These amendments broaden the applicability of the rules in a manner consistent with the statutory provision.

Notice of Intended Action was published in the Iowa Administrative Bulletin on June 3, 1998, as ARC 8055A. A public hearing was held on June 29, 1998. No comments regarding the proposed amendments were received at the public hearing or otherwise. These amendments are identical to the Notice of Intended Action.

These amendments will become effective March 1, 1999.

These amendments are intended to implement Iowa Code section 135C.2.

The following amendments are adopted.

Amend rule 661--5.620(100) as follows:

Amend rule 661--5.620(100), implementation and catchwords, as follows:

661--5.620(100,135C) General requirements for small group homes (specialized licensed facilities) for the mentally retarded licensed pursuant to Iowa Code section 135C.2.

Amend subrule 5.620(1) as follows:

5.620(1) Scope. This rule applies to specialized licensed facilities licensed under the provisions of Iowa Code section 135C.2 and having three to five beds for the mentally retarded individuals who are infirm, convalescent, or mentally or physically dependent. with three to five beds.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8604A

Pursuant to the authority of Iowa Code sections 307.10 and 307.12, the Department of Transportation, on December 15, 1998, adopted amendments to Chapter 400, "Vehicle Registration and Certificate of Title," and Chapter 401, "Special Registration Plates," Iowa Administrative Code.

Notice of Intended Action for these amendments was published in the November 4, 1998, Iowa Administrative Bulletin as ARC 8420A.

Item 1 adds a definition of "hearse." Iowa Code section 321.117 sets the registration fee for hearses; however, Iowa Code chapter 321 does not define "hearse."

Item 2 adds a new rule on emergency medical services plates. 1998 Iowa Acts, chapter 1079, section 3, establishes this new special plate type.

Item 3 amends the rule on ex-prisoner of war plates to provide that the surviving spouse of a person who was issued these plates may continue to use or apply for the plates until the surviving spouse remarries. This implements 1998 Iowa Acts, chapter 1079, section 1.

Item 4 amends the rule on U.S. armed forces retired plates to provide that a person who served a minimum of ten years and received an honorable discharge due to a medical disqualification is eligible for the plates. This implements 1998 Iowa Acts, chapter 1079, section 2.

These amendments are identical to those published under Notice of Intended Action.

These amendments are intended to implement Iowa Code sections 321.34 and 321.117 and 1998 Iowa Acts, chapter 1079.

These amendments will become effective February 17, 1999.

Rule-making actions:

ITEM 1. Amend rule 761--400.1(321) by adding the following new subrule and renumbering existing subrules 400.1(5) to 400.1(14) as 400.1(6) to 400.1(15):

400.1(5) "Hearse" means a motor vehicle used exclusively to transport a deceased person.

ITEM 2. Renumber rules 761--401.10(321) and 761-- 401.11(321) as rules 761--401.11(321) and 761-- 401.12(321), respectively, and adopt new rule 761-- 401.10(321) as follows:

761--401.10(321) Emergency medical services plates. Application for emergency medical services (EMS) plates shall be submitted to the Iowa department of public health on Form 411065. This agency shall determine whether the applicant is a current member of a paid or volunteer emergency medical services agency and, if so, certify this fact on the back of the application form. A vehicle owner whose membership in a paid or volunteer emergency medical services agency is terminated shall within 30 days after termination surrender the EMS plates to the county treasurer in exchange for regular registration plates.

ITEM 3. Amend rule 761--401.21(321) as follows:

761--401.21(321) Ex-prisoner of war plates. Application for special plates with an ex-prisoner of war processed emblem shall be made on Form 411065. The application shall include a copy of an official government document verifying that the applicant was a prisoner of war. If the document is not available, a person who has knowledge that the applicant was a prisoner of war shall sign a statement to that effect on the back of the application form.

The surviving spouse of a person who was issued ex-prisoner of war plates may continue to use or apply for the plates. If the surviving spouse remarries, the surviving spouse shall surrender the plates to the county treasurer in exchange for regular registration plates within 30 days after the date on the marriage certificate.

ITEM 4. Amend rule 761--401.25(321) as follows:

761--401.25(321) U.S. armed forces retired plates. Application for special plates with a United States armed forces retired processed emblem shall be made on Form 411065. To verify retirement from the United States armed forces after service of 20 years or longer, or to verify service for a minimum of 10 years and receipt of an honorable discharge from service due to a medical disqualification, the applicant shall include a copy of one of the following:

1. The official military order confirming retirement from the armed forces.

2. The report of discharge or federal Form DD214.

3. Other documentation approved by the Iowa office of the adjutant general.

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

ARC 8601A

Pursuant to the authority of Iowa Code sections 476.1 and 476.2, the Utilities Board (Board) gives notice that on December 15, 1998, the Board issued an order in Docket No. RMU-98-2, Energy Efficiency Plans and Standards, "Order Adopting Rules," adopting amendments to 199 IAC Chapter 35.

The purpose of this rule making is to implement the legislative directive in Iowa Code section 476.6(19)"b" that the Board develop specific capacity and energy savings standards for each utility. In these amendments to Chapter 35, the Board proposes that the review of assessments of potential and development of capacity and energy savings performance standards be conducted periodically in a contested case proceeding in conjunction with the Board's review of the utilities' energy efficiency plans. New filing requirements related to the assessment of potential are included in subrule 35.8(1). The Board extends the time for collaboration in order to accommodate this new aspect of energy efficiency planning. In subrule 35.8(2), the Board also revises the Board's current energy efficiency plan rules to make them consistent with Iowa Code section 476.6(19)"b."

On April 13, 1998, the Board issued an order to consider the amendment of 199 IAC Chapter 35. The proposed rule making was published in the IAB Vol. XX, No. 23 (5/6/98), p. 2006, as ARC 7986A. Written statements of position were filed by the Iowa Department of Natural Resources (DNR), the Consumer Advocate Division of the Iowa Department of Justice (Consumer Advocate), IES Utilities Inc. (IES), Interstate Power Company (Interstate), MidAmerican Energy Company (MidAmerican), Peoples Natural Gas Company, Division of UtiliCorp United Inc. (Peoples), the Iowa Utilities Association (Association), the Izaak Walton League of America (Izaak Walton), the Sustainable Energy for Economic Development Coalition (SEED), and the Large Energy Group Customers (LEG). An oral presentation was held June 18, 1998.

MidAmerican and the Association urged the Board to extricate the development of performance standards from the contested case proceeding proposed by the Board in rule 35.6(476). MidAmerican asserted that performance standards are inherently incorporated in the requirement that programs developed by the utility must be cost-effective. In the alternative, MidAmerican stated that the Board could conduct an additional rule-making proceeding to define cost-effectiveness and incorporate standards in the definition. IES and Interstate stated that the Board's proposal implements the legislature's intent of creating a streamlined process by requiring the utility to bring forth its assessment, proposed performance standards and energy efficiency plan all at one time. The DNR commented that the Board's proposed procedure would allow it to participate in the contested case proceeding and fulfill its role as consultant to the Board.

The Board has reviewed the comments of the parties and will adopt the rule as proposed. The Board will not change the proposed procedure for evaluating the utilities' assessments, setting proposed performance standards, and reviewing plans in a single contested case proceeding. The development of an assessment of potential comprises most of the work needed to develop an energy efficiency plan. Despite MidAmerican's assertion that cost-effectiveness is itself a performance standard, it is possible to have a cost-effective energy efficiency program which achieves little energy orcapacity savings. Iowa Code section 476.6(19)"b" directsthe Board to develop specific standards for each utilityand, therefore, it would be inappropriate to define cost-effectiveness and determine standards in a rule making.

The rules direct the utilities to collaborate with other interested parties in the development of assessments and plans. After a utility files its assessment of potential and accompanying plans, the Board will determine specific capacity and energy savings performance standards for each utility and approve, reject, or modify the utility's plan.

The Association commented that several of the definitions in rule 35.2(476) should be clarified. The Board is hesitant to include specific examples or equations because this could limit ways of assembling information. After reviewing the definitions, the Board finds that the definitions of "economic potential" and "technically viable" should be clarified. The Board will clarify "economic potential" to specify that it means energy and capacity savings that could occur in future years. "Technically viable" will be simplified by leaving out the proposed phrase "does not include detrimental features which outweigh benefits."

The Board will also adopt, with minor changes, the definition of "energy savings performance standards" proposed by the Association. This definition defines the units and time frames for determining performance standards. However, the Board will add a phrase excepting low-income weatherization and tree-planting programs from the cost-effectiveness requirement. The Board will also adopt the Association's proposed definition of "assessment of potential." However, the Board will remove the last sentence of the proposed definition, which states a requirement that is stated elsewhere in the rules. The Board also will not include the phrase "it deems relevant" in the first sentence of the definition. The phrase could limit consideration to those market factors the utility deems relevant.

The Association recommended that the Board delete the language in subrule 35.4(1) which set probable time intervals between assessment and plan proceedings and prudence reviews. Since the time intervals between proceedings may vary, the Board will adopt language stating that those filings will be scheduled by order of the Board.

The Association also suggested that the Board clarify whether any customer may object and seek intervention. The Board's existing paragraph 7.2(7)"d" sets out the standards the Board will consider when a person seeks to intervene in a proceeding before the Board. Proposed paragraph 35.4(4)"d," which has to do with the written notice that will be sent to customers, will be clarified by inserting the term "consumer comment" before the word "hearing" in the notice.

The DNR suggested that the Board require the utilities to include the estimated savings of the energy efficiency plans in the notice to customers in subrule 35.4(4). Because the notice is a brief notice of possible rate increases, the current requirement that a utility include an estimate of rate and bill impacts is adequate information to be conveyed through the notice. The Board will adopt the amendment as proposed. Generally, this notice is sent to customers before the plan is filed with the Board. The DNR is correct in stating that customers should receive more education about energy efficiency. Additional information could be more clearly conveyed to customers in an educational mailer explaining the energy efficiency plan.

The Association stated that changes in spending should not trigger a modification of an energy efficiency plan as proposed in subrule 35.6(4). However, although the Board agrees that spending changes may not reduce results, spending affects ongoing cost recovery and the utilities should track spending changes and file a request for modification of their plans when appropriate. The Board will adopt the amendment as proposed.

The Board proposed to delete the procedural schedule in subrule 35.6(5). Although the Association requested that time lines be set, the Board believes it is more efficient to individually set procedural schedules by order. The Association also requested that the Board not rescind rule 35.7(476), which states that the Board may waive energy efficiency plan requirements. The Board will retain that existing rule.

In subrule 35.8(1), the Board proposed a ten-year time frame for estimating rate and bill impacts. Both SEED and Izaak Walton stated that impacts should be analyzed over the life of the energy efficiency plan. The ten-year time frame is specified in order to require the utilities to examine the potential for implementing energy efficiency programs ten years into the future. This time frame extends well beyond the time frame for the plan itself. The Board will clarify the proposed subrule by modifying it to require that economic and impact analyses be done to address benefits and costs over the estimated lives of the energy efficiency measures.

Proposed 35.8(1)"e," introductory paragraph, requires a utility to file an identification of its proposed performance goals. The LEG customers requested that the Board modify this proposed paragraph to require the utilities to more closely reflect the market prices and conditions in the market. The DNR, Izaak Walton, and SEED stated that the proposed paragraph allows utilities to constrain projected implementation of energy efficiency plans based on uncertainty associated with industry restructuring and self-constructed market factors. The Board will adopt the paragraph as proposed. The utilities must be able to consider market factors even though it is correct that market decisions are not quantifiable. The market value proposed by the utilities will be subject to review by the Board and other parties to the proceeding.

The LEG customers stated that proposed subparagraph 35.8(1)"e"(1) and paragraph 35.8(2)"a" should be modified to remove a preference for the use of the societal cost-effectiveness test. The LEG customers stated that each test should be used. Izaak Walton stated that the Board should not leave the choice of tests up to the utilities, arguing the societal test is the only test consistent with Iowa's energy efficiency goals. Iowa Code section 476.6(17) states that the Board must apply four economic tests. However, the four tests are designed to evaluate very different perspectives. The societal test looks at the effect of energy efficiency programs on both the utility and its customers. The proposed subparagraphs direct the utilities to apply all four tests, but require the utilities to justify the use of any test other than the societal test as a final criterion for determining cost-effectiveness. The Board will adopt this language but modify proposed subparagraph 35.8(1)"e"(1) to place more focus on cost-effectiveness of programs and emphasize the comparison of impacts from the tests rather than the tests themselves.

Izaak Walton also contended that subparagraph 35.8(1)"e"(2) allows the utilities to disregard cost-effectiveness by permitting a benefit/cost ratio of less than 1.0. It is conceivable that an individual program may have a ratio of less than 1.0. However, the benefit/cost ratio for the plan as a whole should not be less than 1.0. The Board will modify the proposed subparagraph and paragraph 35.8(2)"a" to reflect that the threshold ratio for the plan as a whole must be at least 1.0.

If its proposed performance standards differ from the level of capacity and energy savings resulting from the utility's current plan by more than 25 percent, paragraph 35.8(1)"f" requires a utility to provide either an analysis of a range of possible targets for spending and associated capacity and energy savings or a sensitivity analysis. Izaak Walton commented that the utilities should be required to show how the proposed plan compares with the past plan and past efforts. The Association commented that the requirements were unclear and proposed modifying the paragraph to require only a sensitivity analysis if the standards differ by more than 25 percent. The Board will adopt the Association's proposal to emphasize a sensitivity analysis and delete the proposed language describing an analysis of a range of possible targets. The Board will add a sentence clarifying the purpose of the sensitivity analysis.

In paragraph 35.8(2)"d," the Board proposed that the utilities file a comparison of energy efficiency spending to gross operating revenue. The Association objected to that requirement stating that energy and capacity savings are the relevant elements. The Board agrees with the Association and will not adopt the requirement that utilities file the comparison. If the Board determines it is necessary, the Board can obtain that information.

The utilities are directed to describe a monitoring and evaluation plan in paragraph 35.8(2)"f." The Association recommended that the Board delete the proposed language concerning whether the utility had attained its performance standards and substitute language about measuring the plan's performance against the standards. According to the Association, attainment of performance standards is irrelevant to the question of whether the plan was prudently implemented. The Board does not agree. Although it is possible that a utility might not attain its performance standards even though it prudently implemented its energy efficiency plan, the utilities must monitor the implementation of plans and measure the plan's performance by the standards set for its performance. Because it is possible a utility may be unable to attain the standards through no fault of its own, the Board will adopt the proposed rule with the clarifying language change proposed by the Association.

The LEG customers proposed changes to proposed subrule 35.9(3) that set out how existing capacity and firm commitments will be measured. LEG suggested that the subrule take into account a market situation for power. LEG also proposed amendments to proposed subrules 35.9(4) through 35.9(7). LEG's proposal would remove the requirements for specific capacity commitments and replace it with references to concepts of power supply plans with multiple market suppliers and consumer choice.

The Board will not adopt LEG's proposed changes at this time. The Board recognizes that changes are beginning to occur in the power market. However, future market prices for power remain speculative. At this time, it remains uncertain whether the market is mature enough to use for the analyses of energy efficiency programs. As the market pro-gresses, the Board will consider the effect on the analysis of energy efficiency programs and may propose an amendment to these rules at a later date.

The Association recommended substituting the word "program" where the word "measure" is used in proposed paragraphs 35.8(1)"e" and "f." These paragraphs deal with participation, cost-effectiveness, budgets, and rate impacts at the program level. The Board agrees and will substitute the word "program" where "measure" appears.

The Board will not adopt the proposed language found at paragraph 35.8(2)"g." It was erroneously included in the Notice of Intended Action.

Additional public comment on the adopted amendments is not necessary because the changes made to the rules are a logical outgrowth of the Notice of Intended Action and public hearing.

These amendments are intended to implement Iowa Code section 476.6(19).

These amendments will become effective February 17, 1999.

The following amendments are adopted.

ITEM 1. Amend rule 199--35.1(476) as follows:

199--35.1(476) Policy and purpose. The board deems the implementation of effective energy efficiency plans by utilities and the opportunity of the utilities' customers to participate in and benefit from the energy efficiency plans to be of the highest priority.

These rules are intended to implement Iowa Code sections 476.1, 476.2(7), 476.6(17, 19 to 21), and 476.10A, for rate-regulated gas and electric utilities required by statute to be rate-regulated and to provide the board the necessary information to review each utility's assessment of potential, to develop specific capacity and energy savings performance standards for each utility and to evaluate the appropriateness of each utility's energy efficiency plan.

Information provided in each plan shall be filed in the following sequence and shall include:

1. A transmittal letter, as provided in rule 35.8(476).

2. An executive summary, as provided in rule 35.8(476).

3. A forecast of the utility's future energy and capacity requirements compared with existing supplies to determine the need for and timing of new resources, as provided in rule 35.9(476) or 35.10(476).

4. A review of supply-side options which could meet the projected capacity shortfalls to develop present values of the utility's avoided costs, as provided in rule 35.9(476) or 35.10(476).

5. An assessment of various demand-side energy efficiency options reflecting potential to meet forecasted needs, as provided in rule 35.8(476).

6. A description of potential programs developed by the utility as provided in rule 35.8(476).

7. A description of the criteria to rank and select programs for inclusion in the plan and a determination of cost-effectiveness by comparing the costs of programs to avoided costs, as provided in rule 35.8(476). Demand-side programs which pass the societal benefit/cost test using a discount rate reflecting the time value of money to society are considered cost-effective.

8. A list of the utility's proposed energy efficiency programs, budgets and monitoring and evaluation procedures as provided for in rule 35.8(476).

9. An assessment of impacts of the proposed programs as provided for in rule 35.8(476).

10. An explanation of the coordination efforts with other utilities as provided in rule 35.8(476).

ITEM 2. Amend rule 199--35.2(476) as follows:

Amend the following definitions:

"Benefit/cost tests" means one of the four acceptable economic tests used to compare the present value of applicable benefits to the present value of applicable costs of an energy efficiency option or program or plan. The tests are the participant test, the ratepayer impact test, the societal test, and the utility cost test. An option or A program or plan passes a benefit/cost test if the benefit/cost ratio is equal to or greater than one.

"Energy efficiency options measures" means activities on the customers' side of the meter which reduce customers' energy use or demand including, but not limited to, end-use efficiency improvements; load control or load management; thermal energy storage; or pricing strategies.

"Incremental cost" means the difference in the customer's cost between a less energy efficient option measure and a more energy efficient option measure.

"Participant test" means an economic test used to compare the present value of benefits to the present value of costs over the useful life of an energy efficiency option measure or program from the participant's perspective. Present values are calculated using a discount rate appropriate to the class of customers to which the energy efficiency option measure or program is targeted. Benefits are the sum of the present values of the customers' bill reductions, tax credits, and customer incentives for each year of the useful life of an energy efficient option measure or program. Costs are the sum of present values of the customer participation costs (including initial capital costs, ongoing operations and maintenance costs, removal costs less a salvage value of existing equipment, and the value of the customer's time in arranging installation, if significant) and any resulting bill increases for each year of the useful life of the option measure or program. The calculation of bill increases and decreases must account for any time-differentiated rates to the customer or class of customers being analyzed.

"Process-oriented industrial assessment" means an analysis which promotes the adoption of energy efficiency options measures by examining the facilities, operations and equipment of an industrial customer in which energy efficiency opportunities may be embedded and which includes:

1. The identification of opportunities which may provide increased energy efficiency in an industrial customer's production process from the introduction of materials to the final packaging of the product for shipping by:

* Directly improving the efficiency or scheduling of energy use;

* Reducing environmental waste; and

* Technological improvements designed to increase competitiveness and to achieve cost-effective product quality enhancement;

2. The identification of opportunities for an industrial customer to improve the energy efficiency of lighting, heating, ventilation, air conditioning, and the associated building envelope;

3. The identification of cost-effective opportunities for using renewable energy technology in "1" and "2" above.

"Ratepayer impact measure test" means an economic test used to compare the present value of the benefits to the present value of the costs over the useful life of an energy efficiency option measure or program from a rate level or utility bill perspective. Present values are calculated using the utility's discount rate. Benefits are the sum of the present values of utility avoided capacity and energy costs (excluding the externality factor) and any revenue gains due to the energy efficiency options measures for each year of the useful life of the option measure or program. Costs are the sum of the present values of utility increased supply costs, revenue losses due to the energy efficiency options measures, utility program costs, and customer incentives for each year of the useful life of the option measure or program. The calculation of utility avoided capacity and energy, increased utility supply costs, and revenue gains and losses must use the utility costing periods.

"Societal test" means an economic test used to compare the present value of the benefits to the present value of the costs over the useful life of an energy efficiency option measure or program from a societal perspective. Present values are calculated using a 12-month average of the 10-year and 30-year Treasury Bond rate as the discount rate. The average shall be calculated using the most recent 12 months at the time the utility calculates its benefit/cost tests for its energy efficiency plan in subrule 35.8(6). Benefits are the sum of the present values of the utility avoided supply and energy costs including the effects of externalities. Costs are the sum of the present values of utility program costs (excluding customer incentives), participant costs, and any increased utility supply costs for each year of the useful life of the option measure or program. The calculation of utility avoided capacity and energy and increased utility supply costs must use the utility costing periods.

"Useful life" means the number of years an energy efficiency option measure will produce benefits as determined by the utility. For analysis purposes, the useful life of an energy efficiency option shall not exceed 20 years.

"Utility cost test" means an economic test used to compare the present value of the benefits to the present value of the costs over the useful life of an energy efficiency option measure or program from the utility revenue requirement perspective. Present values are calculated using the utility's discount rate. Benefits are the sum of the present values of each year's utility avoided capacity and energy costs (excluding the externality factor) over the useful life of the option measure or program. Costs are the sum of the present values of the utility's program costs, customer incentives, and any increased utility supply costs for each year of the useful life of the option measure or program. The calculation of utility avoided capacity and energy and increased utility supply costs must use the utility costing periods.

Adopt the following new definitions in alphabetical order:

"Assessment of potential" means development of energy and capacity savings available from actual and projected customer usage by cost-effectively applying commercially available technology and improved operating practices to energy-using equipment and buildings and considering market factors including, but not limited to, the effects of rate impacts, the need to capture lost opportunities, the nonenergy benefits of measures, uncertainty associated with industry restructuring, the strategic value of energy efficiency to the utility, and other market factors.

"Economic potential" means the energy and capacity savings that result in future years when measures are adopted or applied by customers at the time it is economical to do so. For purposes of this chapter, economic potential may be determined by comparing the utility's avoided cost savings to the incremental cost of the measure.

"Energy savings performance standards" means those standards which shall be cost-effectively achieved, with the exception of low-income weatherization and tree planting programs, and includes the annual capacity savings stated in either kW or dth/day or Mcf/day and the annual energy savings stated in either kWh or dth or Mcf.

"Phase-in technical potential" means the technical potential for energy and capacity savings from the adoption of commercially available technology and operating practices when existing equipment is replaced or new equipment is installed. For example, if an energy-using unit of equipment has a ten-year lifetime, the phase-in technical potential in any one year might be one-tenth of the total number of such units in existence plus units projected to be installed.

"Technically viable" means that a measure is appropriate for customers' equipment and buildings and Iowa's climatic conditions.

ITEM 3. Amend rule 199--35.3(476) as follows:

199--35.3(476) Applicability. Each rate-regulated gas or electric utility required by statute to be rate-regulated shall file an assessment of potential energy and capacity savings and an energy efficiency plan which meets the requirements of this chapter shall include economically achievable programs designed to attain the performance standards developed by the board. Combination electric and gas utilities may file combined assessments of potential and energy efficiency plans. Combined plans shall specify which energy efficiency programs are attributable to the electric operation, which are attributable to the natural gas operation, and which are attributable to both. If a combination utility files separate plans, the board may consolidate the plans for purposes of review and hearing. The board will conduct a contested case proceeding for the purpose of (1) developing specific capacity and energy savings performance standards for each utility and (2) reviewing energy efficiency plans and budgets designed to achieve those savings.

ITEM 4. Amend rule 199--35.4(476), introductory paragraph, as follows:

199--35.4(476) Schedule of filings. For purposes of staggering the filing requirements, rate-regulated utilities shall be assigned to group A or group B.

ITEM 5. Amend subrule 35.4(1) as follows:

35.4(1) Biennial filings. The board will schedule each utility's subsequent application for cost recovery at the time the board issues the final decision in the proceeding for the utility's current energy efficiency plan. The board will schedule each utility's subsequent energy efficiency plan filing at the time the board issues the final decision in the utility's cost recovery proceeding which covers the preceding plan. The board will schedule each utility's filing of an assessment of potential and energy efficiency plan and each utility's prudence review proceeding by order.

ITEM 6. Amend subrule 35.4(4) as follows:

35.4(4) Written notice of utility assessment of potential and energy efficiency plan. No more than 62 days prior to and prior to filing its assessment of potential and energy efficiency plan, a utility shall mail or deliver a written notice of its plan filing to all affected customers. The notice shall be submitted to the board for approval not less than 30 days prior to proposed notification of customers. The notice shall, at a minimum, include the following elements:

a. A brief identification of the energy efficiency programs being proposed by the utility;

b. The estimated impact of the programs upon customers and society; and

c. The telephone number and address of utility personnel, the board, and the consumer advocate for the customer to contact with questions.

a. A statement that the utility will be filing an assessment of potential and energy efficiency plan with the board;

b. A brief identification of the proposed energy efficiency programs and the estimated annual cost of the proposed energy efficiency programs during the five-year budget time frame;

c. The estimated annual rate and bills impacts of the proposed energy efficiency programs on each class of customer; and the estimated annual jurisdictional rate impact for each major customer grouping in dollars and as a percent, with the proposed actual increases to be filed at the time of notice to customers;

d. A statement that the board will be conducting a contested case proceeding to review the application and that a customer may file a written objection and request a consumer comment hearing; and

e. The telephone numbers and addresses of utility personnel, the board and the consumer advocate, for the customer to contact with questions.

ITEM 7. Rescind and reserve rule 199--35.5(476).

ITEM 8. Amend rule 199--35.6(476) as follows:

199--35.6(476) Procedures. Board review and approval of a utility's energy efficiency plan shall be governed by the following procedures: The following procedures shall govern the board's determination of performance standards and review of energy efficiency plans:

35.6(1) Collaboration. A utility shall offer interested persons the opportunity to participate in the development of its energy efficiency plan. At a minimum, a utility shall provide the opportunity to offer suggestions for programs, and for the assessment of potential and to review and comment on a draft of the assessment of potential and energy efficiency plan proposed to be submitted by the utility., or to review and comment on the existing approved plan. The utility may analyze proposals from participants to help determine the effects of the proposals on its plan. A participant shall have the responsibility to provide sufficient data to enable the utility to analyze the participant's proposal. The opportunity to participate shall commence at least 120 180 days prior to the date the utility submits its assessment of potential and plan to the board.

35.6(2) Contested case proceeding. Within 30 days after filing, each application for approval of an assessment of potential and accompanying energy efficiency plan which meets the requirements of this chapter shall be docketed as a contested case proceeding. All testimony, exhibits, and work papers shall be filed with each application for approval of an assessment of potential and energy efficiency plan or application to modify an approved energy efficiency plan. The energy bureau of the division of energy and geological resources of the Iowa department of natural resources shall be considered a party to the proceeding. All testimony, exhibits, and work papers filed by any party must be cross-referenced to the plan requirements. Any portion of any plan, application, testimony, exhibit, or work paper which is based upon or derived from a computer program shall include as a filing requirement the name and description of the computer program, and a disk and a hard copy of all reasonably necessary data inputs and all reasonably necessary program outputs associated with each such portion. One copy of the computer information will be filed with the board, one copy of this information will be provided to the energy bureau of the division of energy and geological resources of the Iowa department of natural resources, and one copy of this information will be provided to the consumer advocate. Further copies shall be provided by the utility upon request by the board or the consumer advocate. The proceeding shall follow the applicable provisions of 199 IAC 7.1(476) and 7.2(476) Chapter 7.

35.6(3) Review of proposals offered by third parties. The consumer advocate or a third-party intervenor may propose approval, modification, or rejection of a utility's assessment of potential and accompanying energy efficiency plan prior to board approval of that plan. All testimony, exhibits, and work papers shall be filed with any proposal. The testimony, exhibits, and work papers of the consumer advocate or a third-party intervenor shall include, if applicable:

a. An analysis showing why rejection of the proposed utility assessment of potential and plan is appropriate;

b. to d. No change.

35.6(4) Utility response to proposals. The utility submitting the application may respond specifically to proposals to reject or modify its plan. A response shall provide an analysis comparing its original plan and any proposed modification or alternate plan.

35.6(5) Procedural schedule. To facilitate completion of the contested case proceeding within six months from the initial date of filing, a procedural schedule based on the following guidelines shall be established:

a. Prepared direct testimony, exhibits, and work papers in support of the filing--date of initial filing.

b. Testimony, exhibits, and work papers of all other parties--filed not later than seven weeks from the date of the initial filing.

c. Utility response to proposals--filed not later than 11 weeks from the date of the initial filing.

d. Cross-examination of all testimony--initiated not later than 14 weeks after the initial filing.

e. Briefs of all parties--filed not later than 17 weeks after the initial filing.

f. Reply briefs of all parties--filed not later than 18 weeks after the initial filing.

g. Additional time may be granted a party upon a showing of good cause for the delay including, but not limited to:

(1) Delay of completion of a previous procedural step.

(2) Delays in responding to discovery requests.

35.6(6) 35.6(4) Modification after implementation. An approved energy efficiency plan and budget may be modified during implementation if the modification is approved by the board. The consumer advocate or the rate-regulated utility may file either a separate or joint application for modification. The board, on its own motion, may consider modification of the energy efficiency plan and budget.

a. The utility shall file an application to modify if any one of the following conditions occurs or is projected to occur during the current or subsequent calendar year of implementation of its plan:

(1) The total annual plan budget has changed or will change by a factor of at least plus or minus 5 percent;

(2) An individual program societal benefit/cost ratio has changed by a factor of at least plus or minus 15 percent for the programs which rank in terms of expenditures in the lower 60 percent of all programs and a factor of at least plus or minus 5 percent for the programs which rank above 60 percent in terms of expenditures;

(3 2) The percent of budget per customer class or grouping has changed or will change by a factor of at least plus or minus 10 percent;

(4) The implementation schedule of a program has changed by three months or more; or

(5 3) An approved program is eliminated or a new program is added.

b. No change.

c. Each application to modify an approved energy efficiency plan shall include:

(1) A statement of the proposed modification and the party's interest in the modification;

(2) An analysis supporting the requested modification;

(3) An estimated implementation schedule for the modification; and

(4) A statement of the effect of the modification on projected costs and benefits on attainment of the utility's performance standards and on projected results of the utility's implementation of its plan.

d. If the board finds that reasonable ground exists grounds exist to investigate the proposed modification, the application to modify a procedural schedule shall be set for hearing within 30 days after the application is filed.

e. If an application to modify is filed and the board finds that there is no reason to investigate, then the board shall issue an order stating the reasons for the board's decision relating to the application.

f. If the board rejects or modifies a utility's plan, the board may require the utility to file a modified plan and may specify the minimum acceptable contents of the modified plan.

35.6(7) Modified plan--refiling. If the board rejects or modifies a utility's plan, the board may require the utility to file a modified plan and may specify the minimum acceptable contents of the modified plan.

ITEM 9. Amend rule 199--35.8(476), introductory paragraph, as follows:

199--35.8(476) Energy Assessment of potential and energy efficiency plan requirements. A utility's plan shall include a range of programs which address all customer classes across its Iowa jurisdictional territory. At a minimum, the plan shall include a program for qualified lower-income residential customers, including a cooperative program with any community action agency within the utility's service area. The utility shall consider including in its plan a program for tree planting. Advertising which is part of an approved energy efficiency program is deemed to be advertising required by the board for purposes of Iowa Code section 476.18(3). The utility's assessment of potential and energy efficiency plan shall include a summary not to exceed five pages in length written in a nontechnical style for the benefit of the general public. Each utility's assessment of potential and accompanying energy efficiency plan shall include the following:

ITEM 10. Rescind subrules 35.8(1) to 35.8(8) and 35.8(11) to 35.8(13) and adopt the following new subrules in lieu thereof:

35.8(1) Assessment of potential and determination of performance standards. The utility shall file with the board an assessment of the potential for energy and capacity savings available from actual and projected customer usage by applying commercially available technology and improved operating practices to energy-using equipment and buildings. The utility's assessment shall address the potential energy and capacity savings in each of ten years subsequent to the year the assessment is filed. Economic and impact analyses of measures shall address benefits and costs over the entire estimated lives of energy efficiency measures. At a minimum, each utility's assessment of potential shall include data and analyses as follows:

a. A base case survey projecting annual peak demand and energy use of customers' existing and estimated newenergy-using buildings and equipment. The base case survey shall identify the annual peak demand and energy savings projected to occur from customers' adoption of measures in the absence of new or continued demand-side management programs by the utility.

b. A survey to identify and describe all commercially available energy efficiency measures and their attributes needed to perform an assessment of potential energy and capacity savings, including but not limited to all relevant costs of the measures, utility bill savings, utility avoided cost savings, peak demand and energy savings, measures' lifetimes, current market saturation of the measures, market availability of the measures, and non-energy-related features, costs and benefits.

c. A description of the methods and results for any screening or selection process used to identify technically viable energy efficiency measures. The utility shall explain its elimination of measures from further consideration. The utility shall provide an assessment of either annual economic potential or annual phase-in technical potential for peak demand and energy savings from projected adoption of technically viable measures, describing its methods and assumptions.

d. An assessment of the annual potential for utility implementation of the following special programs:

(1) Peak demand and energy savings from programs targeted at qualified low-income customers, including cooperative programs with community action agencies;

(2) Implementation of tree-planting programs; and

(3) Peak demand and energy savings from cost-effective assistance to homebuilders and homebuyers in meeting the requirements of the Iowa model energy code.

e. An identification of the utility's proposed performance goals for peak demand and energy savings from utility implementation of cost-effective energy efficiency programs and special programs. The utility shall identify annual goals, by energy efficiency program and total plan, for five years subsequent to the year of the filing. The utility may constrain or accelerate projected utility implementation of programs from estimates of economic or phase-in potential, based on its assessment of market potential. The utility may consider market factors including, but not limited to, market barriers to implementation of programs, the effects of rate impacts, lost opportunities which decrease future implementation of measures or programs, the nonenergy benefits and detriments of programs, uncertainty associated with industry restructuring, the strategic value of energy efficiency to the utility and other market factors it deems relevant. The utility shall fully describe its data and assumptions. In lieu of the data required in (1) through (5) below, the utility may reference relevant data and analyses filed in its energy efficiency plan, pursuant to subrule 35.8(2). The utility shall describe its analyses and results for factors relevant to the development of performance goals, including:

(1) Cost-effectiveness tests. The utility shall analyze for cost-effectiveness proposed programs, using the societal, utility, ratepayer impact and participant tests. The utility's analyses shall use inputs or factors realistically expected to influence cost-effective implementation of programs, including the avoided costs filed pursuant to rules 35.9(476) and 35.10(476) or avoided costs determined by the utility's alternative method. If the utility uses a test other than thesocietal test as the criterion for determining the cost-effectiveness of utility implementation of energy efficiency programs and plans, the utility shall describe and justify its use of the alternative test or combination of tests and compare the resulting impacts with the impacts resulting from the societal test.

(2) Cost-effectiveness threshold(s). The utility shall describe and justify the level or levels of cost-effectiveness, if greater or less than a benefit/cost ratio of 1.0, to be used as a threshold for cost-effective utility implementation of programs. The utility's threshold of cost-effectiveness for its plan as a whole shall be a benefit/cost ratio of 1.0 or greater.

(3) A description of the proposed programs to be implemented, proposed utility implementation techniques, the number of eligible participants and proposed rates of participation per year, and the estimated annual peak demand and energy savings.

(4) The budgets or levels of spending for utility implementation of programs, including proposed special programs addressing low-income, tree-planting and home-building assistance measures.

(5) The rate impacts and average bill impacts, by customer class, resulting from utility implementation of programs.

f. An optional sensitivity analysis. If the utility's proposed standards differ from the level of energy and capacity savings resulting from the utility's current plan by more than 25 percent, the utility shall provide a sensitivity analysis identifying key variables, including levels of spending, and showing their impact on cost-effectiveness, energy savings, and capacity savings. The purpose of the sensitivity analysis shall be to explore the range of potential for utility implementation of programs.

35.8(2) Proposed energy efficiency plan, programs, and budget and cost allocation. The utility shall file with the board an energy efficiency plan listing all proposed new, modified, and existing energy efficiency programs. The following information shall be provided:

a. The analyses and results of cost-effectiveness tests for the plan as a whole and for each program. Low-income and tree-planting programs shall not be tested for cost-effectiveness, unless the utility wishes to present the results of cost-effectiveness tests for informational purposes. The utility shall analyze proposed programs and the plan as a whole for cost-effectiveness, using the societal, utility, ratepayer impact and participant tests. If the utility uses a test other than the societal test as the criterion for determining the cost-effectiveness of utility implementation of energy efficiency measures, the utility shall describe and justify its use of the alternative test or combination of tests and compare the resulting impacts with the impacts resulting from the societal test. The utility shall describe and justify the level or levels of cost-effectiveness, if greater or less than a benefit/cost ratio of 1.0, to be used as a threshold for determining cost-effectiveness of programs. The utility's threshold of cost-effectiveness for its plan as a whole shall be a benefit/cost ratio of 1.0 or greater.

The utility shall provide an explanation of its sensitivity analysis identifying key variables showing the impact on cost-effectiveness. If appropriate and calculable, the utility shall adjust the energy and demand savings for the interactive effects of various measures contained within each program and shall adjust energy and demand savings of the plan as a whole for the interactive effects of programs. For the plan as a whole and for each program, the utility shall provide:

(1) Cost escalation rates for each cost component of the benefit/cost test that reflect changes over the lives of the options in the potential program and benefit escalation rates for benefit components that reflect changes over the lives of the options;

(2) Societal, utility cost, ratepayer impact measure, and participant test benefit/cost ratios; and

(3) Net societal benefits.

b. Descriptions of each program. If a proposed program is identical to an existing program, the utility may reference the program description currently in effect. A description of each proposed program shall include:

(1) The name of each program;

(2) The customers each program targets;

(3) The energy efficiency measures promoted by each program;

(4) The proposed utility promotional techniques, including the rebates or incentives offered through each program; and

(5) The proposed rates of program participation or implementation of measures, including both eligible and estimated actual participants.

c. The estimated annual energy and demand savings for the plan and each program for each year the measures promoted by the plan and program will produce benefits. The utility shall estimate gross and net capacity and energy savings, accounting for free riders, take-back effects, and measure degradation.

d. The budget for the plan and for each program for each year of implementation or for each of the next five years of implementation, whichever is less, itemized by proposed costs. The budget shall be consistent with the accounting plan required pursuant to subrule 35.12(1). The budget may include the amount of the remittance to the Iowa energy center and the center for global and regional environmental research and the alternative energy revolving loan fund. The plan and program budgets shall be categorized into:

(1) Planning and design costs;

(2) Administrative costs;

(3) Advertising and promotional costs;

(4) Customer incentive costs;

(5) Equipment costs;

(6) Installation costs;

(7) Monitoring and evaluation costs; and

(8) Miscellaneous costs.

Cost categories shall be further described by the following subcategories:

Classifications of persons to be working on energy efficiency programs, full-time equivalents, dollar amounts of labor costs, and purpose of work;

Type and use of equipment and other assets, including type of assets required and use of asset; and the name of outside firm(s) employed and a description of service(s) to be provided.

e. The rate impacts and average bill impacts, by customer class, resulting from the plan and each program.

f. A monitoring and evaluation plan. The utility shall describe in complete detail how it proposes to monitor and evaluate the implementation of its proposed programs and plan and shall show how it will accumulate and validate the information needed to measure the plan's performance against the standards. The utility shall propose a format for monitoring reports and describe how annual results will be reported to the board on a detailed, accurate and timely basis.

ITEM 11. Amend paragraph 35.8(9)"b" as follows:

b. A report on the participation of interested persons in the preparation of its the assessment of potential and energy efficiency plan pursuant to subrule 35.6(1) subrules 35.8(1) and 35.8(2). The report shall identify the persons with whom the utility consulted, the date and type of meetings held or other contacts made, and the results of the meetings and contacts.

ITEM 12. Amend paragraph 35.9(1)"d" as follows:

d. An explanation of all significant methods and data used, as well as assumptions made, in the current 20-year forecast. The utility shall file all forecasts of variables used in its demand and energy forecasts and shall separately identify all sources of variable inputs variables used, such as implicit price deflator, electricity prices by customer class, gross domestic product, sales by customer class, number of customers by class, fuel price forecasts for each fuel type, and other inputs.

ITEM 13. Amend subparagraph 35.9(2)"a"(1) as follows:

(1) Total system class maximum demand (in kilowatts), number of customers in the class, and system class sales (in kilowatt-hours);

ITEM 14. Amend subrule 35.9(3), introductory paragraph, as follows:

35.9(3) Existing capacity and firm commitments. Information specifying the existing generating capacity and firm commitments to provide service, which includes:. The utility shall include in its filing a copy of its most recent Load and Capability Report submitted to the Mid-continent Area Power Pool (MAPP).

ITEM 15. Amend subrule 35.9(5) as follows:

35.9(5) Capacity outside the utility's system. Information about capacity outside of the utility's system that could meet its future needs including, but not limited to, cogeneration and independent power producers, expected to be available to the utility during each of the 20 years in the planning horizon. The utility shall include in its filing a copy of its most recent Load and Capability Report submitted to the Mid-continent Area Power Pool (MAPP).

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/13/99.

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