Iowa Administrative Bulletin

IOWA ADMINISTRATIVE BULLETIN

Published Biweekly VOLUME XX! NUMBER 16 January 27, 1999 Pages 1433 to 1472

CONTENTS IN THIS ISSUE

Pages 1445 to 1467 include ARC 8624A to ARC 8637A

AGENDA

Administrative rules review committee 1436

ALL AGENCIES

Schedule for rule making 1435

Publication procedures 1436

Agency identification numbers 1442

ATTORNEY GENERAL

Opinions summarized 1469

CITATION OF ADMINISTRATIVE RULES 1441

economic impact statement

Revenue and Finance Department[701]
Property tax on condominiums, 71.1 1468

EDUCATIONAL EXAMINERS BOARD[282]

EDUCATION DEPARTMENT[281]"umbrella"

Notice, Science endorsement, 14.21(17)
ARC 8633A 1445

EMERGENCY MANAGEMENT DIVISION[605]

PUBLIC DEFENSE DEPARTMENT[601]"umbrella"

Filed Without Notice, Enhanced 911 telephone
systems, 10.2, 10.14(2) ARC 8630A 1465

HUMAN SERVICES DEPARTMENT[441]

Notice, Statewide average costs--nursing
facilities, 75.23(3), 75.24(3) ARC 8627A 1445

Notice, Medicaid--diabetic supplies and
binaural hearing aids, 78.1(2), 78.10(4),
78.14(6), 78.28(4) ARC 8626A 1446

LABOR SERVICES DIVISION[875]

WORKFORCE DEVELOPMENT DEPARTMENT[871]"umbrella"

Notice, General industry safety and health,
10.20 ARC 8634A 1447

Notice, Construction safety and health,
26.1 ARC 8637A 1448

Filed Emergency After Notice, General industry
safety and health--methylene chloride,
10.20 ARC 8635A 1459

PROFESSIONAL LICENSURE DIVISION[645]

PUBLIC HEALTH DEPARTMENT[641]"umbrella"

Notice, Chiropractic examiners, 40.1, 40.12(3),
40.13, 40.18, 40.19, 40.24(3), 40.62(6),
40.64(5), 40.70, 40.73(2) ARC 8631A 1448

Notice, Cosmetology, 60.2(4), 60.3, 60.4(4),
60.13(1) ARC 8629A 1451

PUBLIC FUNDS--AVAILABILITY

Public Health Department[641]
Substance abuse 1444

PUBLIC HEALTH DEPARTMENT[641]

Notice of Public Funds Availability 1444

PUBLIC HEARINGS

Summarized list 1439

REVENUE AND FINANCE DEPARTMENT[701]

Economic Impact Statement, Property tax
on condominiums, 71.1 1468

Filed Emergency After Notice, Net capital
gains, 40.38 ARC 8632A 1459

SECRETARY OF STATE[721]

Notice Terminated, Notarial acts, 43.1 to 43.87
ARC 8628A 1451

TRANSPORTATION DEPARTMENT[761]

Notice, Outdoor advertising, 117.1 to 117.8
ARC 8624A 1452

TREASURER OF STATE

Notice--Public funds interest rates 1457

VETERANS AFFAIRS COMMISSION[801]

Notice, Iowa Veterans Home, 10.1,
10.12(4), 10.15(5), 10.16(2), 10.18, 10.19,
10.36, 10.42 ARC 8636A 1457

WORKERS' COMPENSATION DIVISION[876]

WORKFORCE DEVELOPMENT DEPARTMENT[871]"umbrella"

Filed, Occupational hearing loss claims, 8.10
ARC 8625A 1465

PUBLISHED UNDER AUTHORITY OF IOWA CODE SECTIONS 2B.5 AND 17A.6

__________________________________

PREFACE

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

SUBSCRIPTION INFORMATION

Iowa Administrative Bulletin

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.

Iowa Administrative Code

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

Schedule for Rule Making
1999

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
18
Friday, February 5, 1999
February 24, 1999
19
Friday, February 19, 1999
March 10, 1999
20
Friday, March 5, 1999
March 24, 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.

PUBLICATION PROCEDURES

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.

AGENDA

The Administrative Rules Review Committee will hold its regular, statutory meeting on Monday, February 8, 1999, at7:30 a.m. in Room 116, State Capitol, Des Moines, Iowa. The following rules will be reviewed:

Bulletin

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Meat and poultry inspection bureau; adoption of federal regulations, 1.6(1)"c," 1.6(6), 76.1 to 76.4, 76.13,
Filed ARC 8618A 1/13/99

EDUCATIONAL EXAMINERS BOARD[282]

EDUCATION DEPARTMENT[281]"umbrella"

Science endorsement, 14.21(17), Notice ARC 8633A 1/27/99

EMERGENCY MANAGEMENT DIVISION[605]

PUBLIC DEFENSE DEPARTMENT[601]"umbrella"

Enhanced 911 telephone systems, 10.2, 10.14(2)"k," Filed Without Notice ARC 8630A 1/27/99

ENVIRONMENTAL PROTECTION COMMISSION[567]

NATURAL RESOURCES DEPARTMENT[561]"umbrella"

Environmental self-audits, ch 12, Filed ARC 8623A 1/13/99

Landfill alternatives financial assistance program, ch 209 title, 209.1 to 209.3, 209.6 to 209.8, 209.9(2),
209.10 to 209.16, 209.17(5), 209.17(7), Notice ARC 8622A 1/13/99

ETHICS AND CAMPAIGN DISCLOSURE BOARD, IOWA[351]

General, 1.4(4), 3.4, 4.1(4), 4.42(1)"aa," 4.42(2)"c" to "f," 4.42(3)"d," 4.70(1), 4.86, 5.1(1), 5.3(2), 5.3(5),
6.2(5), 6.4, 7.2, 7.4, 7.5, 7.8, 7.14, 7.21, 7.22(2) to 7.22(4), ch 9, 11.4 to 11.6, 12.1(7), Notice ARC 8610A 1/13/99

HUMAN SERVICES DEPARTMENT[441]

Rule making, petitions for rule making, declaratory orders, chs 3 to 5, Notice ARC 8614A 1/13/99

Statewide average costs and charges for nursing care, 75.23(3), 75.24(3)"b," 75.24(3)"b"(1) to (6), Notice ARC 8627A 1/27/99

Healthy and well kids in Iowa (HAWK-I) program, 76.1, 76.1(1), 76.1(2), 76.11(4), ch 86,
Filed Emergency After Notice ARC 8615A 1/13/99

Amount, duration and scope of medical and remedial services, 78.1(2)"b"(7), 78.10(4)"a" and "b," 78.14(6),
78.28(4)"b," Notice ARC 8626A 1/27/99

Healthy and well kids in Iowa (HAWK-I) program, 86.1, 86.15(6)"c"(1), 86.15(7), 86.15(8), 86.15(9)"b"(2) and (6),
Notice ARC 8616A, also Filed Emergency ARC 8617A 1/13/99

INSURANCE DIVISION[191]

COMMERCE DEPARTMENT[181]"umbrella"

Licensing of insurance producers; continuing education for insurance producers, chs 10 and 11, Filed ARC 8621A 1/13/99

Life and accident and health self-funded plans--state exemption, 35.20(1), Filed ARC 8620A 1/13/99

Limited service organizations, ch 41, Notice ARC 8619A 1/13/99

LABOR SERVICES DIVISION[875]

WORKFORCE DEVELOPMENT DEPARTMENT[871]"umbrella"

General industry safety and health, 10.20, Notice ARC 8634A 1/27/99

General industry safety and health, 10.20, Filed Emergency After Notice ARC 8635A 1/27/99

Construction safety and health, 26.1, Notice ARC 8637A 1/27/99

PERSONNEL DEPARTMENT[581]

Elimination of the personnel commission; trainee/journey class reclassifications; definition of "substantive change";
employee reinstatement, 1.1, 3.1(2), 3.4(6), 3.5(2), 3.5(4), 3.5(6), 3.5(7), 3.6(3), 4.6(12), 8.3, 8.10(3), 8.11,
8.13, Filed ARC 8611A 1/13/99

Benefits--deferred compensation, 15.6, 15.13, Filed ARC 8612A 1/13/99

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

Installer/inspector insurance program, 15.5(4)"a"(1), 15.5(4)"b" to "g," Notice ARC 8606A 1/13/99

PROFESSIONAL LICENSURE DIVISION[645]

PUBLIC HEALTH DEPARTMENT[641]"umbrella"

Board of chiropractic examiners, 40.1, 40.12(3), 40.13(1)"i," 40.13(2), 40.18(1), 40.18(2)"a"(2), 40.18(3),
40.19(2), 40.19(3), 40.24(3)"a," 40.62(6), 40.64(5), 40.70(1), 40.70(2)"c," 40.73(2), Notice ARC 8631A 1/27/99

Board of cosmetology arts and sciences examiners, 60.2(4), 60.3(1)"b," 60.3(2)"c," 60.3(4), 60.4(4)"a" and "c,"
60.13(1)"a," Notice ARC 8629A 1/27/99

Board of mortuary science examiners, 101.101(8), Notice ARC 8605A 1/13/99

PUBLIC HEALTH DEPARTMENT[641]

Radiation protection standards, 38.1(2), 38.2, 38.5, 38.8(6), 39.1(3), 39.4(3)"c"(5), 39.4(22)"d"(3)"9,"
39.4(33)"l" to "n," 40.1(5), 40.10(4), 40.26(1), 40.28 to 40.34, 40.97, 40.97(1)"b"(6), 40.97(2)"a"(4),
40.110(1), 41.1(1), 41.1(3)"a," 41.1(3)"a"(12), 41.1(3)"c," 41.1(5)"c"(1)"4," 41.1(6)"b"(2)"2," 41.2(27),
41.3(10)"b," 41.3(17)"d"(1), 41.3(18)"e"(2), 41.3(18)"f"(2), 41.3(19)"b," ch 42 title, 42.1(2), 42.2(3)"c,"
ch 45 title, 45.1(1), 45.1(10)"a"(2), 45.1(10)"c," 46.1, 46.5(6)"a," Notice ARC 8609A 1/13/99

Maternal and child health program, ch 76, Notice ARC 8613A 1/13/99

PUBLIC SAFETY DEPARTMENT[661]

Fire safety for small group homes, 5.620, 5.620(1), Filed ARC 8602A 1/13/99

REVENUE AND FINANCE DEPARTMENT[701]

Property tax--condominiums, 71.1, (Notice ARC 8342A, IAB 9/23/98) Economic Impact Statement 1/27/98

Net capital gains received by individual taxpayers, 40.38, 40.38(6) to 40.38(14), Filed Emergency After Notice
ARC 8632A 1/27/99

SECRETARY OF STATE[721]

Notarial acts, 43.1 to 43.87, Notice ARC 8603A 1/13/99

Notarial acts, 43.1 to 43.87, Notice ARC 8603A Terminated ARC 8628A 1/27/99

TRANSPORTATION DEPARTMENT[761]

Outdoor advertising, 117.1, 117.2, 117.2(1) to 117.2(5), 117.3(1), 117.3(1)"k," 117.3(2), 117.3(3), 117.4, 117.4(5),
117.4(6), 117.5, 117.5(5), 117.6(1) to 117.6(3), 117.6(4)"c" and "d," 117.6(5)"c" and "d," 117.6(6) to 117.6(9),
117.7(5), 117.7(6), 117.8, Notice ARC 8624A 1/27/99

Definition of "hearse"; emergency medical services plates; ex-prisoner of war plates;
U.S. armed forces retired plates, 400.1(5) to 400.1(15), 401.10 to 401.12, 401.21, 401.25, Filed ARC 8604A 1/13/99

Physical inspection of remanufactured vehicle; processed emblem plates, 400.17(4), 400.17(5), 401.15, 401.16(1),
401.17, Notice ARC 8607A 1/13/99

OWI revocations--petition to reopen a hearing, 620.4(5), Notice ARC 8600A 1/13/99

Aircraft registration, 750.9, 750.10(3), Notice ARC 8608A 1/13/99

UTILITIES DIVISION[199]

COMMERCE DEPARTMENT[181]"umbrella"

Energy efficiency plans and standards, 35.1 to 35.4, 35.4(1), 35.4(4), 35.5, 35.6, 35.8, 35.8(1) to 35.8(8),
35.8(9)"b," 35.8(11) to 35.8(13), 35.9(1)"d," 35.9(2)"a"(1), 35.9(3), 35.9(5), Filed ARC 8601A 1/13/99

VETERANS AFFAIRS COMMISSION[801]

Iowa veterans home, 10.1, 10.12(4)"a," 10.15(5), 10.16(2)"a"(10), 10.18, 10.19(2)"a"(4) and (5), 10.19(3)"e,"
10.19(4)"b," 10.36(1)"e," 10.36(2)"e," 10.42, Notice ARC 8636A 1/27/99

WORKERS' COMPENSATION DIVISION[876]

WORKFORCE DEVELOPMENT DEPARTMENT[871]"umbrella"

Apportionment of age-related loss for occupational hearing loss claims, 8.10, Filed ARC 8625A 1/27/99

PUBLIC HEARINGS

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]


Science endorsement,
14.21(17)
IAB 1/27/99 ARC 8633A
Conference Room 3 South--3rd Floor
Grimes State Office Bldg.
Des Moines, Iowa
February 26, 1999
10 a.m.
ENVIRONMENTAL PROTECTION COMMISSION[567]


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.
LABOR SERVICES DIVISION[347]


General industry--permit-required
confined spaces; powered industrial
truck operator training, 10.20
IAB 1/27/99 ARC 8634A
1000 E. Grand Ave.
Des Moines, Iowa
February 18, 1999
9 a.m.
(If requested)
Construction safety--powered
industrial truck operator training,
26.1
IAB 1/27/99 ARC 8637A
1000 E. Grand Ave.
Des Moines, Iowa
February 18, 1999
9 a.m.
(If requested)
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]


Chiropractic examiners,
40.1, 40.12(3), 40.13, 40.18,
40.19, 40.24(3), 40.62(6),
40.64(5), 40.70, 40.73(2)
IAB 1/27/99 ARC 8631A
Conference Room--5th Floor
Lucas State Office Bldg.
Des Moines, Iowa
February 16, 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.

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.
PUBLIC HEALTH
DEPARTMENT[641]
(ICN Network)

(Cont'd)
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.
TRANSPORTATION DEPARTMENT[761]


Outdoor advertising,
117.1 to 117.8
IAB 1/27/99 ARC 8624A
Commission Conference Room
800 Lincoln Way
Ames, Iowa
February 18, 1999
10 a.m.
(If requested)
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)
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)
VETERANS AFFAIRS COMMISSION[801]


Iowa Veterans Home,
10.1, 10.12(4), 10.15(5), 10.16(2)
10.18, 10.19, 10.36, 10.42
IAB 1/27/99 ARC 8636A
Ford Memorial Conference Room
Iowa Veterans Home
1301 Summit
Marshalltown, Iowa
February 17, 1999
10 a.m.

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

AGENCY IDENTIFICATION NUMBERS

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]

NOTICES

ARC 8633A

EDUCATIONAL EXAMINERS BOARD[282]

Notice of Intended Action

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 272.2, the Board of Educational Examiners hereby gives Notice of Intended Action to amend Chapter 14, "Issuance of Practitioner's Licenses and Endorsements," Iowa Administrative Code.

The proposed amendments create an endorsement for all science and provide greater flexibility for districts in hiring staff to fill vacancies in grades 9-12. This would be in addition to all of the science endorsements currently available.

There will be a public hearing on the proposed amendments on February 26, 1999, at 10 a.m. in Conference Room 3 South, Third Floor, Grimes State Office Building, East 14th and Grand Avenue, Des Moines, Iowa. Persons may present their views at the public hearing orally or in writing. Persons who wish to make oral presentation at the public hearing may contact the Executive Director, Board of Educational Examiners, Grimes State Office Building, East 14th and Grand Avenue, Des Moines, Iowa 50319-0147, or at (515)281-5849, prior to the date of the public hearing.

Any interested person may make written comments or suggestions on the proposed amendments through 4:30 p.m., March 1, 1999. Written comments and suggestions should be addressed to Dr. Anne E. Kruse, Executive Director, Board of Educational Examiners, at the above address.

These amendments are intended to implement Iowa Code chapter 272.

The following amendments are proposed.

Amend subrule 14.21(17) as follows:

14.21(17) Science.

a. Science--basic. K-6. Completion of 24 semester hours in science to include coursework in biological and physical sciences.

a. Science--basic. K-6. Completion of at least 24 semester hours in science to include 6 hours in chemistry, 6 hours in physics, 6 hours in biology, and 6 hours in earth/space sciences.

(1) Competencies.

1. Understand the nature of scientific inquiry, its central role in science, and how to use the skills and processes of scientific inquiry.

2. Understand the fundamental facts and concepts in major science disciplines.

3. Be able to make conceptual connections within and across science disciplines, as well as to mathematics, technology, and other school subjects.

4. Be able to use scientific understanding when dealing with personal and societal issues.

(2) Reserved.

b. Biological. 7-12. Completion of 24 semester hours in biological science or 30 semester hours in the broad area of science to include 15 semester hours in biological science.

c. Chemistry. 7-12. Completion of 24 semester hours in chemistry or 30 semester hours in the broad area of science to include 15 semester hours in chemistry.

d. Earth science. 7-12. Completion of 24 semester hours in earth science or 30 semester hours in the broad area of science to include 15 semester hours in earth science.

e. General science. 7-12. Completion of 24 semester hours in science to include coursework in biological science, chemistry and physics.

f. Physical science. 7-12. Completion of 24 semester hours in physical sciences to include coursework in physics, chemistry, and earth science.

g. Physics. 7-12. Completion of 24 semester hours in physics or 30 semester hours in the broad area of science to include 15 semester hours in physics.

h. All science I. Grades 5-9. The holder of this endorsement must also hold the middle school endorsement listed under 14.20(15).

(1) Required coursework. Completion of at least 24 semester hours in science to include 6 hours in chemistry, 6 hours in physics, 6 hours in biology, and 6 hours in the earth/space sciences.

(2) Competencies.

1. Understand the nature of scientific inquiry, its central role in science, and how to use the skills and processes of scientific inquiry.

2. Understand the fundamental facts and concepts in major science disciplines.

3. Be able to make conceptual connections within and across science disciplines, as well as to mathematics, technology, and other school subjects.

4. Be able to use scientific understanding when dealing with personal and societal issues.

i. All science II. Grades 9-12.

(1) Required coursework.

1. Completion of one of the following endorsement areas listed under 14.21(17): biological 7-12 or chemistry 7-12 or earth science 7-12 or physics 7-12.

2. Completion of at least 12 hours in each of the other three endorsement areas.

(2) Competencies.

1. Understand the nature of scientific inquiry, its central role in science, and how to use the skills and processes of scientific inquiry.

2. Understand the fundamental facts and concepts in major science disciplines.

3. Be able to make conceptual connections within and across science disciplines, as well as to mathematics, technology, and other school subjects.

4. Be able to use scientific understanding when dealing with personal and societal issues.

ARC 8627A

HUMAN SERVICES DEPARTMENT[441]

Notice of Intended Action

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 249A.4, the Department of Human Services proposes to amend Chapter 75, "Conditions of Eligibility," appearing in the Iowa Administrative Code.

These amendments revise the statewide average cost to a private pay person for nursing care in Iowa and the average charges for nursing facility care, hospital-based skilled nursing care, non-hospital-based skilled nursing care, intermediate care facility for the mentally retarded (ICF/MR) care, mental health institute (MHI) care, and psychiatric medical institution for children (PMIC) care. The statewide average cost is used to determine the period of ineligibility when an applicant or recipient has transferred assets for less than fair market value. The statewide average charge is used to determine whether a person who has established a medical assistance income trust qualifies for Medicaid.

A person in a nursing facility who transfers assets for less than fair market value to become eligible for Medicaid becomes ineligible for Medicaid for a period of time determined by dividing the uncompensated value of the transferred assets by the statewide average cost to a private pay person in order to arrive at the number of months of ineligibility for nursing facility services or home- and community-based waiver services.

Any person is allowed to establish a medical assistance income trust under Iowa Code section 633.709. For persons whose income exceeds 300 percent of the Supplemental Security Income (SSI) benefit for one person (currently $1,500) but whose income is below the statewide average charge or the average Medicaid reimbursement rate for the type of medical facility care the person needs, a medical assistance income trust may be used to establish Medicaid eligibility.

The Department is required to update these average statewide costs and charges annually. The statewide average cost used to determine the period of ineligibility for a personwho transfers assets for less than fair market value is a cost determined using all types of nursing facilities, including hospital-based and non-hospital-based skilled care.

The average private pay cost increased from $2,567.77 to $2,673. The average charge to a private pay resident of nursing facility care increased from $2,397 to $2,536. The average charge for hospital-based skilled care increased from $7,471 per month to $8,013. The average charge for non-hospital-based skilled care increased from $3,671 to $4,097. The average charge for ICF/MR care increased from $8,319 to $8,510. The average statewide charge to a resident of a mental health institute increased from $9,975 to $11,924. The average charge of a psychiatric medical institution for children increased from $4,135 to $4,218.

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 17, 1999.

These amendments are intended to implement Iowa Code section 249A.4.

The following amendments are proposed.

ITEM 1. Amend subrule 75.23(3) as follows:

75.23(3) Period of ineligibility. The number of months of ineligibility shall be equal to the total cumulative uncompensated value of all assets transferred by the individual (or the individual's spouse) on or after the look-back date specified in 75.23(2), divided by the statewide average private pay rate for nursing facility services at the time of application. The average statewide cost to a private pay resident shall be determined by the department and updated annually for nursing facilities. For the period from July 1, 1998 1999, through June 30, 1999 2000, this average statewide cost shall be $2,567.77 $2,673 per month or $84.42 $87.87 per day.

ITEM 2. Amend subrule 75.24(3), paragraph "b," introductory paragraphs and subparagraphs (1) to (6), as follows:

b. A trust established for the benefit of an individual if the trust is composed only of pension, social security, and other income to the individual (and accumulated income of the trust), and the state will receive all amounts remaining in the trust upon the death of the individual up to the amount equal to the total medical assistance paid on behalf of the individual.

For disposition of trust amounts pursuant to Iowa Code sections 633.707 to 633.711, the average statewide charges and Medicaid rates for the period from July 1, 1998 1999, to June 30, 1999 2000, shall be as follows:

(1) The average statewide charge to a private pay resident of a nursing facility is $2,397 $2,536 per month.

(2) The average statewide charge to a private pay resident of a hospital-based skilled nursing facility is $7,471 $8,013 per month.

(3) The average statewide charge to a private pay resident of a non-hospital-based skilled nursing facility is $3,671 $4,097 per month.

(4) The average statewide Medicaid rate for a resident of an intermediate care facility for the mentally retarded is $8,319 $8,510 per month.

(5) The average statewide charge to a resident of a mental health institute is $9,975 $11,924 per month.

(6) The average statewide charge to a private pay resident of a psychiatric medical institution for children is $4,135 $4,218 per month.

ARC 8626A

HUMAN SERVICES DEPARTMENT[441]

Notice of Intended Action

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 249A.4, the Department of Human Services proposes to amend Chapter 78, "Amount, Duration and Scope of Medical and Remedial Services," appearing in the Iowa Administrative Code.

These amendments update terminology for payment of diabetic supplies, clarify that blood glucose test strips are covered by Medicaid for recipients receiving care in a nursing facility or an intermediate care facility for the mentally retarded, and remove the prior authorization requirement for binaural hearing aids.

There has been confusion regarding coverage of blood glucose test strips for recipients in nursing care facilities. The Iowa Hearing Aid Society requested removal of the prior authorization requirement for binaural hearing aids. The prior authorization requests for binaural hearing aids are routinely approved. The prior authorization procedure is no longer cost-effective and creates unnecessary delays.

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 17, 1999.

These amendments are intended to implement Iowa Code section 249A.4.

The following amendments are proposed.

ITEM 1. Amend subrule 78.1(2), paragraph "b," subparagraph (7), as follows:

(7) Diabetic supplies including disposable or reusable needles and syringes, testape, clinitest tablets, and clinistix blood glucose test strips, and diabetic urine test supplies.

ITEM 2. Amend subrule 78.10(4), paragraphs "a" and "b," as follows:

a. Only the following types of sickroom supplies, and supplies necessary for the effective use of a payable item, can be purchased through the medical assistance program:

Bed pan.

Cane.

Catheter (indwelling Foley).

Colostomy and ileostomy appliances.

Colostomy and ileostomy care dressings, liquid adhesive, and adhesive tape.

Commode pail.

Crutches.

Decubitis Decubitus equipment.

Diabetic supplies (needles and syringes disposable or reusable test tape, blood and urine glucose test strips and tablets diabetic urine test supplies).

Dialysis supplies.

Diapers (for recipients aged four and above).

Diaphragm (contraceptive device).

Disposable catheterization trays or sets (sterile).

Disposable irrigation trays or sets (sterile).

Disposable saline enemas (e.g., sodium phosphate type).

Disposable underpads.

Dressings.

Elastic antiembolism support stocking.

Enema.

Hearing aid batteries.

Hospital bed accessories.

Respirator supplies.

Surgical supplies.

Urinal (portable).

Urinary collection supplies.

Vaporizer.

b. No payment will be made for sickroom supplies for a recipient receiving care in a skilled nursing facility. Only the following types of sickroom supplies will be approved for payment for recipients receiving care in an intermediate care facility or an intermediate care facility for the mentally retarded when prescribed by the physician, physician assistant, or advanced registered nurse practitioner:

Catheter (indwelling Foley).

Colostomy and ileostomy appliances.

Colostomy and ileostomy care dressings, liquid adhesive and adhesive tape.

Diabetic supplies (needles and syringes, disposable or reusable test tape, clinitest tablets and clinistix blood glucose test strips and diabetic urine test supplies).

Disposable catheterization trays or sets (sterile).

Disposable irrigation trays or sets (sterile).

Disposable saline enemas (sodium phosphate type, for example).

ITEM 3. Amend subrule 78.14(6) as follows:

78.14(6) Purchase of hearing aid. Payment shall be made for the type of hearing aid recommended when purchased from an eligible licensed hearing aid dealer pursuant to rule 441--77.13(249A). When binaural amplification is recommended, prior approval shall be obtained from the fiscal agent before payment is made except when the binaural aid is for a child under the age of 21. Payment for binaural amplification shall be made when:

a. A child needs the aid for speech development, or

b. The aid is needed for educational or vocational purposes, or

c. The aid is for a blind individual.

Payment for binaural amplification shall also be considered approved where the recipient's hearing loss has caused marked restriction of daily activities and constriction of interests resulting in seriously impaired ability to relate to other people, or where lack of binaural amplification poses a hazard to a recipient's safety. (Cross-reference 78.28(4)"b")

ITEM 4. Amend subrule 78.28(4) by rescinding and reserving paragraph "b."

ARC 8634A

LABOR SERVICES DIVISION[875]

Notice of Intended Action

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 88.5 and 17A.3(1), the Labor Commissioner hereby gives Notice of Intended Action to amend Chapter 10, "General Industry Safety and Health Rules," Iowa Administrative Code.

The amendment relates to permit-required confined spaces and powered industrial truck operator training.

If requested by February 16, 1999, a public hearing will be held on February 18, 1999, at 9 a.m. in the office of the Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa. Any interested person will be given the opportunity to make oral or written submissions concerning the proposed amendment. Written data or arguments to be considered in adoption may be submitted by interested persons no later than February 18, 1999, to the Deputy Labor Commissioner, Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa 50319-0209.

The Division has determined that this Notice of Intended Action may have an impact on small business. This amendment will not necessitate additional annual expenditures exceeding $100,000 by any one political subdivision or agency or any contractor providing services to political subdivisions or agencies.

The Division will issue a regulatory flexibility analysis as provided by Iowa Code section 17A.31 if a written request is filed by delivery or by mailing postmarked no later than February 17, 1999, to the Deputy Labor Commissioner, Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa 50319. The request may be made by the Administrative Rules Review Committee, the Governor, a political subdivision, at least 25 persons who qualify as a small business under the Act, or an organization of small businesses representing at least 25 persons which is registered with the Division of Labor Services under the Act.

This amendment is intended to implement Iowa Code section 88.5.

The following amendment is proposed.

Amend rule 875--10.20(88) by inserting at the end thereof:

63 Fed. Reg. 66038 (December 1, 1998)

63 Fed. Reg. 66270 (December 1, 1998)

ARC 8637A

LABOR SERVICES DIVISION[875]

Notice of Intended Action

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 88.5 and 17A.3(1), the Labor Commissioner hereby gives Notice of Intended Action to amend Chapter 26, "Construction Safety and Health Rules," Iowa Administrative Code.

The amendment relates to powered industrial truck operator training.

If requested by February 16, 1999, a public hearing will be held on February 18, 1999, at 9 a.m. in the office of the Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa. Any interested person will be given the opportunity to make oral or written submissions concerning the proposed amendment. Written data or arguments to be considered in adoption may be submitted by interested persons no later than February 18, 1999, to the Deputy Labor Commissioner, Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa 50319-0209.

The Division has determined that this Notice of Intended Action may have an impact on small business. This amendment will not necessitate additional annual expenditures exceeding $100,000 by any one political subdivision or agency or any contractor providing services to political subdivisions or agencies.

The Division will issue a regulatory flexibility analysis as provided by Iowa Code section 17A.31 if a written request is filed by delivery or by mailing postmarked no later than February 17, 1999, to the Deputy Labor Commissioner, Division of Labor Services, 1000 East Grand Avenue, Des Moines, Iowa 50319. The request may be made by the Administrative Rules Review Committee, the Governor, a political subdivision, at least 25 persons who qualify as a small business under the Act, or an organization of small businesses representing at least 25 persons which is registered with the Division of Labor Services under the Act.

This amendment is intended to implement Iowa Code section 88.5.

The following amendment is proposed.

Amend rule 875--26.1(88) by inserting at the end thereof:

63 Fed. Reg. 66274 (December 1, 1998)

ARC 8631A

PROFESSIONAL LICENSURE DIVISION[645]

BOARD OF CHIROPRACTIC EXAMINERS

Notice of Intended Action

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 147.36 and 147.76, the Board of Chiropractic Examiners hereby gives Notice of Intended Action to amend Chapter 40, "Chiropractic Examiners," Iowa Administrative Code.

These proposed amendments establish definitions related to practice; revise the number of continuing education hours needed to renew a lapsed license to be consistent with current continuing education requirements; establish the requirement of an official college transcript as part of the application for licensure; revise the requirements pertaining to a personal interview with licensure candidates; revise the requirements pertaining to a temporary certificate; revise the requirements for appointment of members to the Utilization and Cost Control Review Committee; revise the procedures for utilization and cost control review; establish activities that are deemed by the board to be misleading, deceptive, untrue or fraudulent representations in the practice of the profession; establish the percentage of total continuing education hours of credit earned for National Board examination proctoring; increase the per diem for board members who monitor continuing education sponsors to the established state guidelines; require payment of the current renewal fee for reinstatement of an inactive license; and establish the board's option to require completion of a special purposes examination for reinstatement of an inactive or lapsed license.

Any interested person may make written comment on the proposed amendments no later than February 16, 1999, addressed to Sharon Dozier, Professional Licensure Division, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

A public hearing will be held on February 16, 1999, from 10 a.m. to 12 noon at the following location: Fifth Floor Professional Licensure Conference Room, Lucas State Office Building, Des Moines, Iowa. 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 proposed amendments. The Board requests that a written copy of all oral comments presented at the hearing on that date be submitted to the Professional Licensure Division.

These amendments are intended to implement Iowa Code chapters 147, 151, and 272C.

The following amendments are proposed.

ITEM 1. Amend rule 645--40.1(151) by adopting the following new definitions in alphabetical order:

"Adjustment/manipulation of neuromusculoskeletal structures" means use by a doctor of chiropractic of a skillful treatment based upon differential diagnosis of neuromusculoskeletal structures and procedures related thereto by the use of passive movements with the chiropractic physician's hands or instruments in a manipulation of a joint by thrust so the patient's volitional resistance cannot prevent the motion. The manipulation is directed toward the goal of restoring joints to their proper physiological relationship of motion and related function. Movement of the joint is by force beyond its active limit of motion, but within physiologic integrity. Adjustment or manipulation commences where mobilization ends and specifically begins when the elastic barrier of resistance is encountered by the doctor of chiropractic and ends at the limit of anatomical integrity. Adjustment or manipulation as described in this definition is directed to the goal of restoration of joints to their proper physiological relationship of motion and related function, release of adhesions or stimulation of joint receptors. Adjustment or manipulation as described in this definition is by hand or instrument. The primary emphasis of this adjustment or manipulation is upon specific joint element adjustment or manipulation and treatment of the articulation and adjacent tissues of the neuromusculoskeletal structures of the body and nervous system, using one or more of the following:

1. Impulse adjusting or the use of sudden, high velocity, short amplitude thrust of a nature that patient volitional resistance is overcome, commencing where the motion encounters the elastic barrier of resistance and ends at the limit of anatomical integrity.

2. Instrument adjusting, utilizing instruments specifically designed to deliver sudden, high velocity, short amplitude thrust.

3. Light force adjusting, utilizing sustained joint traction or applied directional pressure, or both, which may be combined with passive motion to restore joint mobility.

4. Long distance lever adjusting, utilizing forces delivered at some distance from the dysfunctional site and aimed at transmission through connected structures to accomplish joint mobility.

"Anatomic barrier" means the limit of motion imposed by anatomic structure; the limit of passive motion.

"Chiropractic manipulation" means care of an articular dysfunction or neuromusculoskeletal disorder by manual or mechanical adjustment of any skeletal articulation and contiguous articulations.

"Chiropractic physiotherapy procedures/physical medicine" is the use of physical means in the diagnosis and treatment of human disease. It includes the use of subjective and objective examination; evaluation and management assessment; and physical treatment procedures of heat, cold, water, light, electricity, sound, manipulation, mobilization, and exercise, as well as related mechanical therapeutic procedures and modalities.

"Differential diagnosis" means to examine the body systems and structures of a human subject to determine the source, nature, kind or extent of a disease, vertebral subluxation, neuromusculoskeletal disorder or other physical condition, and to make a determination of the source, nature, kind, or extent of a disease or other physical condition.

"Elastic barrier" means the range between the physiologic and anatomic barrier of motion in which passive ligamentous stretching occurs before tissue disruption.

"Extremity manipulation" means a corrective thrust or maneuver by a doctor of chiropractic by hand or instrument based upon differential diagnosis of neuromusculoskeletal structures applied to a joint of the appendicular skeleton.

"Mobilization" means movement applied singularly or repetitively within or at the physiological range of joint motion, without imparting a thrust or impulse, with the goal of restoring joint mobility.

"Physiologic barrier" means the limit of active motion, which can be altered to increase range of active motion by warm-up activity.

ITEM 2. Amend subrule 40.12(3) as follows:

40.12(3) Any licensee who allows the license to lapse by failing to renew within one year of the expiration date shall be required to pay the penalty set forth in 40.12(2) and all past renewal fees then due provided the fees shall not exceed $500 as computed by the board and show evidence of 18 30 hours of accredited continuing education, for each lapsed year, which constitutes an organized program of learning, and which contributes directly to the professional competency of the licensee for each lapsed year. Hours The hours need not exceed 90 hours for reinstatement, if obtained within the past two years, except when there is a demonstrated deficiency for specialized education as determined by the board through a personal interview with the applicant. A licensee may be reinstated without examination upon approval by the board.

ITEM 3. Amend subrule 40.13(1) by adopting the following new paragraph "i":

i. A final transcript sent directly from a board-approved college of chiropractic.

ITEM 4. Amend subrule 40.13(2) as follows:

40.13(2) Any candidate applying for licensure shall may be required to appear for a personal interview before the board or before a member thereof, unless waived by the board.

ITEM 5. Amend subrule 40.18(1) as follows:

40.18(1) The board may, in its discretion, issue a temporary certificate authorizing the applicant to practice chiropractic whenever, in the opinion of the board, a need exists and the applicant possesses the qualifications prescribed by the board for the certificate, which shall be substantially the same as those required under Iowa Code chapter 151. A temporary certificate shall be issued for one year and, at the discretion of the board, may be annually renewed, not to exceed two additional years, at a fee of $100 per year. The board may require completion of continuing education hours for renewal of a temporary certificate.

ITEM 6. Amend subrule 40.18(2), paragraph "a," subparagraph (2), as follows:

(2) A photostatic copy of high school diploma (no larger than 8½ _ 11 inches). A final transcript sent directly from a board-approved college of chiropractic.

ITEM 7. Amend subrule 40.18(3) as follows:

40.18(3) Applicants may be required to satisfactorily complete a written, oral, or practical examination. In any case, the board shall may require the applicant to appear for a personal interview before the board or a member of the board.

ITEM 8. Amend subrule 40.19(2) as follows:

40.19(2) Members of the U.C.C.R. committee shall:

a. Hold a current license.

b. Practice Have practiced chiropractic in the state of Iowa for a minimum of five years prior to appointment.

c. Be actively involved in a chiropractic practice during the term of appointment as a U.C.C.R. committee member.

d. Not assist in the review or adjudication of claims in which the committee member may reasonably be presumed to have a conflict of interest. Have no pending board disciplinary actions or discipline taken during the three years prior to appointment and no discipline pending or taken during the period of appointment.

e. Have no malpractice awards granted against the appointed committee member during the three years prior to appointment or during the period of appointment.

f. Not assist in the review or adjudication of claims in which the committee member may reasonably be presumed to have a conflict of interest.

g. Have completed a utilization review course that has been previously approved by the board.

ITEM 9. Amend subrule 40.19(3) as follows:

40.19(3) Procedures for utilization and cost control review. A request for review may be made to the board by any person governed by the various chapters of Title XX of the Code, self-insurers for health care benefits to employees, other third-party payers, chiropractic patients or licensees.

a. The fee for service shall be $100, There shall be a reasonable fee, as established by the board, for services rendered, which will be made payable directly to the U.C.C.R. committee. The committee shall make a yearly accounting to the board.

b. A request for service shall be submitted to the executive director of the U.C.C.R. committee on an approved submission form and shall be accompanied by four copies of all information. All references to identification and location of patient and doctor shall be deleted and prepared for blind review by the executive director of the U.C.C.R. committee. The information shall be forwarded to the U.C.C.R. committee.

c. The U.C.C.R. committee shall respond in writing to the parties involved with its findings and recommendations within 90 days. The committee shall review the appropriateness of levels of treatment and give an opinion as to the reasonableness of charges for diagnostic or treatment services rendered as requested. The U.C.C.R. committee shall submit a quarterly report of their activities to the board. The U.C.C.R. committee shall meet at least annually with the board chair or the board chair's designee.

ITEM 10. Amend subrule 40.24(3), paragraph "a," as follows:

a. Knowingly making misleading, deceptive, untrue or fraudulent representations in the practice of a profession includes, but is not limited to, an intentional perversion of the truth, either orally or in writing, by a chiropractic physician in the practice of chiropractic and includes any representation contrary to the chiropractic physician's legal or equitable duty, trust or confidence and is deemed by the board to be contrary to good conscience, prejudicial to the public welfare and may operate to the injury of another. Activities under this paragraph include, but are not limited to:

(1) Alleging superiority in any way.

(2) Guarantees of any type.

(3) Improper titles.

(4) Inflated or unjustified expectations of favorable results.

(5) Self-laudatory claims of specialty practice for which credentials do not exist.

(6) Representations that patients easily misunderstand.

(7) Claims of extraordinary skills that are not recognized in the profession.

ITEM 11. Amend subrule 40.62(6) as follows:

40.62(6) If a new license holder is licensed during the first year of the biennial continuing education period, the license holder is only required to complete 30 hours of continuing education for renewal. If a new license holder is licensed during the second year of the biennial continuing education period, the license holder will be exempt from meeting the continuing education requirements for the first license renewal. The new license holder will be required to obtain 60 hours of continuing education for the second license renewal. Effective January 1, 1998, at least 40 percent of the accrued hours must be prescribed credit hours. The remaining hours may be accrued as follows:

1. Not more than 10 percent of the hours from elective, self-study activities.

2. Not more than 10 percent of the hours from prescribed child abuse, dependent adult abuse, or OSHA training hours.

3. Not more than 14 percent of the hours from elective state, district, or organizational meetings.

4. Not more than 20 percent of the hours from elective chiropractic practice management.

5. Not more than 60 percent of the hours from undergraduate teaching at a CCE- or IBCE-approved institution. (Prescribed)

6. Not more than 60 percent of the hours from postgraduate teaching through a CCE- or IBCE-approved institution or organization, but no more than equal to the hours accrued for the initial session per subject matter. (Prescribed)

7. Not more than 60 percent of the hours from proctoring of the National Board examinations.

ITEM 12. Amend subrule 40.64(5) as follows:

40.64(5) When it is necessary to monitor a sponsor of continuing education, the sponsor shall reimburse the board member for necessary traveling and other expenses in ac-cordance with the guidelines of the state of Iowa for board members and per diem at the rate of $40 $50 per day for each day actually spent in travel and monitoring of the program.

ITEM 13. Amend subrule 40.70(1) as follows:

40.70(1) Submit written application for reinstatement to the board upon forms provided by the board; and, pay the current renewal fee; and

ITEM 14. Amend subrule 40.70(2), paragraph "c," as follows:

c. Successful completion of the Iowa state license examination, or a special purposes examination approved by the board, conducted within one year immediately prior to the submission of such application for reinstatement.

ITEM 15. Amend subrule 40.73(2) as follows:

40.73(2) The board may require a licensee applying for reinstatement to successfully complete the state examination or a special purposes examination when, through a personal interview, the board finds reason to doubt the licensee's ability to practice with reasonable skill and safety.

ARC 8629A

PROFESSIONAL LICENSURE DIVISION[645]

BOARD OF COSMETOLOGY ARTS
AND SCIENCES EXAMINERS

Notice of Intended Action

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 157.14, the Board of Cosmetology Arts and Sciences Examiners hereby gives Notice of Intended Action to amend Chapter 60, "Licensure of Cosmetologists, Electrologists, Estheticians, Manicurists, Nail Technologists, and Instructors of Cosmetology Arts and Sciences," Iowa Administrative Code.

These amendments eliminate the practical examination requirement for licensure. The Board intends to Adopt and File Emergency After Notice because these amendments allow applicants licensure without taking a practical examination.

Any interested person may make written comments on the proposed amendments no later than February 17, 1999, addressed to Sharon Cook, Professional Licensure, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319.

These amendments are intended to implement Iowa Code section 157.3.

The following amendments are proposed.

ITEM 1. Amend subrule 60.2(4) as follows:

60.2(4) The cosmetology board examination shall consist of a practical, written theory, and written Iowa law examination. A score of 75 percent or greater on each section of the above-listed examinations shall be a passing score. The theory and Iowa law examinations will be formulated and provided by the National Interstate Council of State Boards of Cosmetology, Inc. (NIC) and administered by the board or its designee.

ITEM 2. Amend subrule 60.3(1), paragraph "b," as follows:

b. Conditional reciprocal agreements. The board may enter into conditional reciprocal agreements with another state which conducts examinations. Every person licensed in that state, when applying for a license to practice in this state, shall successfully complete the Iowa law examination and shall comply with one or both of the following:

(1) Furnish furnish satisfactory proof to the department that the applicant has been licensed and actively engaged in the practice of any of the professions under the jurisdiction of the board for the period 12 months just prior to application.

(2) Pass a practical examination in the practice of any of the professions under the jurisdiction of the board.

ITEM 3. Amend subrule 60.3(2), paragraph "c," as follows:

c. If the applicant completes the requirements of 60.3(2)"a" and "b," the applicant shall be allowed to take the practical, theory and Iowa law examinations given by the board.

ITEM 4. Amend subrule 60.3(4) as follows:

60.3(4) Upon request, persons who are licensed in other states and countries who are determined to be eligible to take the practical, theory and Iowa law examinations shall be issued a temporary permit as set forth in subrule 60.11(1).

ITEM 5. Amend subrule 60.4(4), paragraph "a," as follows:

a. An applicant who has failed any one of the three examinations, i.e., theory, practical or Iowa law, must be reexamined. The applicant receiving a failing grade in any one of these examinations shall be reexamined in the section of the examination where the failure occurred at a regularly scheduled state board examination and obtain a passing grade of 75 percent or greater on each section of the examination. Applicants failing the Iowa law section may, at the board's discretion, Applicants receiving a failing grade in any one of these examinations may be reexamined at a time and location determined by the board.

ITEM 6. Amend subrule 60.4(4), paragraph "c," as follows:

c. An applicant who fails one section and does not pass that section within two years must be reexamined in all three sections.

ITEM 7. Amend subrule 60.13(1), paragraph "a," as follows:

a. For a lapsed cosmetology arts and sciences license, pay past due renewal and penalty fees in addition to completion of all past due continuing education to a maximum of four years. If lapsed four years or more, the person shall complete a refresher course approved by the board and retake the practical theory and Iowa law portions of the state board examination.

EXCEPTION: A person applying for reinstatement of a license which has lapsed for four years or more who can show proof of current licensure in another state and active practice for 12 out of 24 months preceding submission of the application for reinstatement will not be required to take the brush-up course, or continuing education hours and practical portion of the examination; however, they the person will be required to successfully complete the Iowa law examination. Proof of current licensure would be shown by a certification of licensure with a raised state seal from the state in which the applicant is licensed. Proof of active practice would be shown by notarized statements from previous employers.

ARC 8628A

SECRETARY OF STATE[721]

Notice of Termination

Pursuant to the authority of Iowa Code section 9E.17, the Secretary of State hereby terminates rule-making proceedings under the provisions of Iowa Code section 17A.4(1)"b" for proposed rule making relating to Chapter 43, "Notarial Acts," Iowa Administrative Code.

Notice of Intended Action was published in the Iowa Administrative Bulletin on January 13, 1999, as ARC 8603A.

The Notice proposed to modify the policies and procedures for receiving notary commissions and performing notarial acts in rules 721--43.1(9E) to 43.87(9E). The Secretary of State is terminating the rule making commenced in ARC 8603A and may renotice proposed rules if determined appropriate following further review. The public hearing on the proposed rules scheduled for February 2, 1999, is canceled.

ARC 8624A

TRANSPORTATION DEPARTMENT[761]

Notice of Intended Action

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 117, "Outdoor Advertising," Iowa Administrative Code.

The definition of "modification" has been rescinded in 117.6(5)"d" (Item 13) and adopted in 761--117.1(306B, 306C) (Item 1). The revised definition provides that a change in the number or type of support posts is a modification. The addition of an extension or a cutout for a period of 90 days or less is not a modification.

For a multiple-face advertising device, these amendments provide that a permit is required for each face (a face is visible from a single direction of travel). (Exception: Only one permit is required for a back-to-back advertising device identifying the same business on each side if each face is no larger than 32 square feet.) This is a change from the current rules in which a permit is required for each advertising message. Also, a back-to-back structure allowable under a single permit is limited to 16 square feet. These amendments also provide for tri-face and tri-vision advertising devices. Items 1, 2, 9 and 10 reflect these changes.

1997 Iowa Acts, chapter 104, section 1, repealed Iowa Code subsection 306B.2(3). This subsection allowed advertising devices that were located within 660 feet of the edge of the right of way of the interstate system if they advertised activities being conducted within 12 air miles. Item 7 rescinds subrule 117.4(5), which implemented the 12-air-mile provision. Other amendments modify the rules accordingly.

1997 Iowa Acts, chapter 104, section 3, amended the fees for outdoor advertising devices. It set the fees for calendar years 1997 and 1998 and provided that beginning January 1, 1999, fees are to be determined by rule by the Department. Item 10 continues the same fees, with no increase.

New subrule 117.6(6) (Item 14) provides that a permit for an advertising device that has not been erected within six months after the date the permit was issued shall be revoked. Amended subrule 117.6(9) (Item 15) provides that an advertising device that has been completely removed is a blank sign.

Subrules 117.7(5) and 117.7(6) (Item 16) are being rescinded and new subrules are being proposed to clarify that service club and religious notices and municipal, county and school district recognition signs may be placed within 660 feet of the right of way of an interstate highway only if they comply with outdoor advertising permit provisions. Municipal, county and school district recognition signs in other locations may identify up to two sponsors under certain conditions.

Several amendments clarify minimum spacing requirements, measurements of distance, and other provisions.

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 16, 1999.

A meeting to hear requested oral presentations is scheduled for Thursday, February 18, 1999, at 10 a.m. in the Commission Conference Room of the Department of Transportation, 800 Lincoln Way, Ames, Iowa.

The meeting will be canceled without further notice if no oral presentation is requested.

The proposed amendments may have an impact on small business. The Department has considered the factors listed in Iowa Code subsection 17A.31(4), paragraphs "a" to "l." The following may request the issuance of a regulatory flexibility analysis: the Administrative Rules Review Committee, the Governor, a political subdivision, at least 25 persons signing the request who qualify as a small business, or an organization registered with the Department and representing at least 25 persons. The request must:

1. Include the name, address, and telephone number of the person(s) authoring the request.

2. Be submitted in writing to the Director's Staff Division at the address listed in this Notice.

3. Be delivered to the Director's Staff Division or postmarked no later than 20 days after publication of this Notice in the Iowa Administrative Bulletin.

These amendments are intended to implement Iowa Code chapters 306B and 306C.

Proposed rule-making actions:

ITEM 1. Amend rule 761--117.1(306B,306C) by adopting the following new definitions in alphabetical order:

"Daylight area" means a triangular area formed by a line connecting two points each back (50 feet in city, 100 feet in unincorporated area) from the point where the right of way lines of the main traveled way and an intersecting street meet or would meet if extended.

"Interchange" means the entire area constructed for a junction of two or more public streets or highways by a system of separate levels that permit traffic to pass from one level to another without the crossing of traffic streams. This includes all acceleration and deceleration lanes constructed to accommodate this movement of traffic.

"Lease" means an agreement, oral or written, by which possession or use of land or interests therein are given by the owner or other person to another person for a specified purpose.

"Modification" means any addition to or change in dimensions, lighting, structure or advertising face, except as incidental to the customary maintenance of an advertising device.

1. A change in the number or type of support posts is a modification. A change in dimensions, other than the addition of extensions or cutouts (including forward projecting) for a period of 90 days or less, is a modification.

2. A lawful change in advertising message is not a modification. The use of a vinyl overlay or wrap on either a poster panel or paint unit is a change in advertising message, not a modification.

"Tri-face device" means an advertising device with three singular faces attached to one common structure in a triangular configuration. The maximum area of any face is 750 square feet. The inside angle formed by any two faces may not exceed 60 degrees.

"Tri-vision device" means an advertising device that has an advertising face with a mechanical device that allows three advertising messages to be alternately visible to traffic proceeding in any one direction. Each message is attached to individual vertical or horizontal louvers, which are mechanically rotated to change the message.

ITEM 2. Amend rule 761--117.1(306B,306C) by rescinding the definitions of "Entrance roadway," "Exit roadway," "Facing," and "Parkland," and by amending the following definitions:

"Face" means that part of the display area of an advertising device that is devoted to a single the display or of advertising message and that is visible to traffic proceeding in any one direction. An overlay or message across the bottom of a multifaced advertising device is not an additional face if it relates to an element common to the advertising messages, such as "exit number 64 left two blocks" or "turn left at light." However, the overlay or message is part of the display area.

"On-premise sign" means an advertising device advertising the sale or lease of, or activities being conducted upon, the property where the sign is located. The criteria to be used to determine if an advertising device qualifies as on-premise signing include but are not limited to the following:

1. A sign that consists solely of the name of the establishment or that identifies the establishment's principal or accessory products or services offered on the property is an on-premise sign.

1 2. An on-premise sign must be located on the same property as the advertised activity or the same property as that advertised for sale or lease. A subdivided property is considered to be one property if all lots remain under common ownership and all lots share a common, private access to public roads. However, if any lot in the subdivided property is sold or disposed of in any manner, that lot will be considered to be separate property.

2 3. Contiguous lots or parcels of land combined for development purposes are considered to be one property for outdoor advertising control purposes provided they are owned or leased by the same party or parties. However, land held by lease or temporary easement must be used for a purpose related to the advertised activity other than signing.

3 4. An on-premise sign shall not be located on a narrow strip of land that cannot reasonably be used for a purpose related to the advertised activity other than signing.

4 5. An on-premise sign is limited to advertising the property's sale or lease, or identifying the activities located on or products or services available on the property.

5 6. An advertising device is not an on-premise sign if it consists principally of brand- or trade-name advertising and either the product or service advertised is not a major product or service available on the property only incidental to the establishment's principal products or services or the advertising brings rental income to the property owner.

6 7. An on-premise sign concerning the sale or lease of property shall not display the legend "sold" or "leased" or a similar message.

ITEM 3. Amend rule 761--117.2(306B,306C) by rescinding subrule 117.2(1), by renumbering subrules 117.2(2) to 117.2(4) as subrules 117.2(3) to 117.2(5), respectively, and by amending the introductory paragraph as follows:

761--117.2(306B,306C) General provisions.

117.2(1) Scope. These This chapter of rules pertain pertains to all advertising devices which are visible from the main traveled way of any interstate, freeway primary, or primary highway, except advertising devices located within incorporated areas beyond 660 feet from the right-of-way. with the following exceptions:

a. Within incorporated areas, this chapter does not apply to advertising devices which are beyond 660 feet from the nearest edge of the right of way.

b. Except where specified otherwise, this chapter does not apply to official traffic control devices, logo signing, tourist-oriented directional signing, or private directional signing.

117.2(2) Address. Inquiries, requests for forms, and applications regarding this chapter shall be directed to Advertising Control Section, Office of Right of Way, Department of Transportation, 800 Lincoln Way, Ames, Iowa 50010.

ITEM 4. Amend subrule 117.3(1) as follows:

Amend the introductory paragraph as follows:

117.3(1) Prohibition. Advertising devices shall not be erected, maintained or illuminated which do not unless they comply with all applicable state or local laws, rules, regulations or ordinances, which may be more strict than the following:

Adopt the following new paragraph "k":

k. An advertising device shall comply with all applicable state and local laws, regulations and ordinances, including but not limited to zoning, building and sign codes as locally interpreted and applied and enforced, which may be stricter than this chapter.

ITEM 5. Amend subrules 117.3(2) and 117.3(3) as follows:

117.3(2) Measurements of distance. Distance from the edge of a right of way shall be measured horizontally along a line normal or perpendicular to the centerline of the highway. All other measurements of distance shall be measured horizontally between points on a line parallel to the highway centerline.

117.3(3) Measurement of area. The area of an advertising device shall be measured by the smallest square, rectangle, triangle, circle or combination thereof which will encompass the entire display area including cutouts, extensions, border and trim, but excluding temporary cutouts and extensions, base, apron, support, or and other structural members.

ITEM 6. Amend rule 761--117.4(306B,306C), introductory paragraph, as follows:

761--117.4(306B,306C) Interstate special provisions. In addition to the general provisions of rule 117.3(306B,306C), the following provisions apply This rule applies to advertising devices located within the adjacent area of any interstate highway, except that subrules 117.4(1), 117.4(2), 117.4(3), and 117.4(4) and 117.4(5) shall do not apply to advertising devices located within areas exempt from control under the bonus Act section 306B.2(5) Iowa Code Supplement section 306B.2(4).

ITEM 7. Amend rule 761--117.4(306B,306C) by rescinding subrule 117.4(5) and by amending subrule 117.4(6) as follows:

117.4(6) 117.4(5) Interstate advertising devices not previously subject to control until July 1, 1972. The following advertising devices along interstate highways became subject to control on July 1, 1972, and shall comply with rule 761--117.5(306C):

a. Advertising devices which are visible from any interstate highway, but which are located beyond the adjacent area of any interstate highway in unincorporated areas, and.

b. Within adjacent areas, advertising devices which are located in commercial or industrial zones traversed by segments of the interstate system within the boundaries of incorporated municipalities as these boundaries existed September 21, 1959, where the use of property adjacent to the interstate system is subject to municipal regulation and control, or other areas where the land on September 21, 1959, was clearly established by law for industrial or commercial purposes, shall be subject to the provisions of rule 117.5(306C).

ITEM 8. Amend rule 761--117.5(306C), introductory paragraph, as follows:

761--117.5(306C) Special provisions interstate Interstate highways not previously controlled subject to control until July 1, 1972, by Iowa Code chapter 306B, freeway primary highways, and primary highways. Subject to the more strict provisions of rule 761--117.4(306B,306C), pertaining to advertising devices within the adjacent area of previously controlled segments of interstate highways, no advertising devices which are no advertising device which is visible from any interstate, freeway primary, or primary highway shall be erected or maintained except on-premise advertising devices, and except official directional or other traffic control devices, which do not comply with the provisions of this rule in addition to the general provisions of rule 117.3(306B,306C) unless it complies with this rule. This rule does not apply to on-premise signs.

ITEM 9. Amend subrule 117.5(5) as follows:

117.5(5) Advertising devices erected after July 1, 1972. After July 1, 1972, no No advertising device which is visible from any interstate, freeway primary, or primary highway shall be erected after July 1, 1972, or subsequently maintained within the adjacent area in incorporated areas or within or beyond the adjacent area in unincorporated areas, which does not comply unless it complies with the following:

a. Permit required. No advertising device shall be erected or maintained without a A current permit from the department is required for the erection or subsequent maintenance of the advertising device.

b. Commercial or industrial area. No The advertising device shall be erected or maintained outside of must be located within a zoned or unzoned commercial or industrial areas area.

c. Spacing within city--interstate and freeway primary highway. Within the corporate limits of a municipality, no the following provisions apply to an advertising device which is visible from any a freeway primary highway; no or an advertising device which is located in a commercial or industrial zones zone traversed by segments a segment of the interstate system within the boundaries of an incorporated municipalities municipality as these boundaries existed on September 21, 1959, where the use of the property adjacent to the interstate system is subject to municipal regulation or control, shall be erected or maintained:

(1) Within The advertising device shall not be located within 250 feet of another advertising device facing in the same direction when both are visible to traffic proceeding in the same direction.

(2) Within The advertising device shall not be located within the adjacent area on either side of the highway within 250 feet of an interchange or rest area. Measurements shall be taken The 250 feet shall be measured along a line parallel to the centerline from a point opposite the end or beginning of whichever acceleration or deceleration ramp extends the farthest from the interchange or rest area nearest pavement widening constructed for the purpose of acceleration or deceleration of traffic to or from the main traveled way, to a point opposite the advertising device.

(3) In an area where two interchanges are in such close proximity that the acceleration or deceleration lanes or ramps merge or overlap or where there are continuous acceleration or deceleration lanes between interchanges, the area will be treated as one continuous interchange.

d. Spacing outside city--interstate and freeway primary highway. Outside the corporate limits of a municipality, no the following provisions apply to an advertising device which is visible from any a freeway primary highway; no an advertising device which is visible from any an interstate highway and is located within the adjacent area in a commercial or industrial zones zone traversed by segments a segment of the interstate system where the land use as of September 21, 1959, was clearly established by Iowa law as industrial or commercial; no or an advertising device which is visible from any an interstate highway and is located beyond the adjacent area shall be erected or maintained:

(1) Within The advertising device shall not be located within 500 feet of another advertising device facing in the same direction when both are visible to traffic proceeding in the same direction.

(2) Within the adjacent area, The advertising device shall not be located within the adjacent area on either side of the highway within 250 feet of an interchange or rest area. Measurements shall be taken The 250 feet shall be measured along a line parallel to the centerline from a point opposite the end or beginning of whichever acceleration or deceleration ramp extends the farthest from the interchange or rest area nearest pavement widening constructed for the purpose of acceleration or deceleration of traffic to or from the main traveled way, to a point opposite the advertising device.

(3) In an area where two interchanges are in such close proximity that the acceleration or deceleration lanes or ramps merge or overlap or where there are continuous acceleration or deceleration lanes between interchanges, the area will be treated as one continuous interchange.

e. Spacing within city--nonfreeway primary highway. Within the corporate limits of a municipality, no the following provisions apply to an advertising device which is visible from any a nonfreeway primary highway shall be erected or maintained:

(1) Within The advertising device shall not be located within 100 feet of another advertising device facing the same direction when both are visible to traffic proceeding in the same direction.

(2) Within The advertising device shall not be located within the triangular daylight area. formed by a line connecting two points each 50 feet back from the point where the right-of-way lines of the main traveled way and an intersecting street meet or would meet if extended, except However, if a building is located within the triangular daylight area, a wall advertising device may be attached to the building provided it the device does not protrude more than 12 inches, exclusive of catwalk and lights. No part of a catwalk or lights may overhang the right of way. The permit for the advertising device shall be revoked if the building the device is attached to is removed.

f. Spacing outside city--nonfreeway primary highway. Outside the corporate limits of a municipality, no the following provisions apply to an advertising device which is visible from any a nonfreeway primary highway shall be erected or maintained:

(1) Within The advertising device shall not be located within 300 feet of another advertising device facing in the same direction when both are visible to traffic proceeding in the same direction.

(2) Within The advertising device shall not be located within the triangular daylight area. formed by a line connecting two points each 100 feet back from the point where the right-of-way lines of the main traveled way and an intersecting roadway meet, or would meet if extended, except However, if a building is located within the triangular daylight area, a wall advertising device may be attached to the building provided it the device does not protrude more than 12 inches exclusive of catwalk and lights. No part of a catwalk or lights may overhang the right of way. The permit for the advertising device shall be revoked if the building the device is attached to is removed.

g. Spacing--signs separated by a building. The distance and spacing requirements of subparagraphs "c"(1), "d"(1), "e"(1), and "f"(1), above, shall not apply to advertising devices which are separated by a building in such a manner that only one advertising device located with within the minimum spacing distance is visible from a highway at any one time.

h. Spacing--measurement of distance. The minimum distance between two advertising devices facing the same direction visible to traffic proceeding in the same direction shall apply without regard to the side of the highway on which the advertising devices may be located and shall be measured along a line parallel to the centerline of the highway between points directly opposite the advertising devices.

i. Spacing--rural area next to incorporated area.

(1) In a rural area adjacent next to an incorporated area, the first rural sign placement shall be no closer than the rural spacing requirement measured along the centerline of the highway between from the point where the corporation line intersects the centerline or from the point where a line normal or perpendicular to the centerline of the highway intersects the first unincorporated area within the adjacent area and to a point directly opposite the advertising device first potential sign location.

j. (2) In those areas where the adjacent area on one side of the highway is incorporated and on the opposite side of the highway it all or part of the adjacent area is not, the spacing on both sides of the highway shall be regulated by the rural or unincorporated area spacing requirements.

k j. Signs not considered when determining spacing. Directional and other official signs and notices and on-premise advertising devices shall not be taken into consideration in determining compliance with spacing requirements.

l. No single face advertising device shall be erected or maintained which exceeds 1200 square feet in area.

m. Only the following types of multiple-face advertising devices are permitted: back-to-back, v-type, side-by-side, and double-deck.

k. Sizes and types. Only the following types of advertising devices are permitted: single-face, side-by-side, double-deck, tri-vision, back-to-back, v-type, and tri-face.

(1) The multiple faces or panels of an advertising device must be contiguous or on a common structure. Side-by-side structures are contiguous if the faces are not more than two feet apart and they are owned by the same permit holder. Side-by-side structures must be on the same vertical and horizontal plane planes.

(1) A maximum of two faces not to exceed a combined display area of 750 square feet may be visible to traffic proceeding in any one direction.

(2) An advertising device may have no more than two facings.

(2) A maximum of one face of an advertising device may be visible to traffic proceeding in any one direction. An advertising device other than a tri-face device may have no more than two faces.

(3) For an advertising device with one face, the maximum display area of the face is 1200 square feet. This applies to single-face, side-by-side, double-deck and tri-vision devices.

(4) For an advertising device with two or more faces, the maximum display area of each face is 750 square feet. This applies to back-to-back and v-type devices (which have two faces) and tri-face devices (which have three faces).

(5) Each message on a tri-vision device must be displayed for a minimum of four seconds and the transition between messages must be completed in two seconds.

l. Spacing--transition to freeway-primary highway. As a segment of a noninterstate primary highway changes to a freeway-primary highway, the first freeway-primary highway sign placement shall be no closer than the freeway-primary highway spacing requirements measured along a line parallel to the centerline from a point opposite the point where the centerline of the highway and centerline of the at-grade crossing intersect to a point opposite the first potential sign location.

ITEM 10. Amend subrules 117.6(1) and 117.6(2) as follows:

117.6(1) Application. Application for a permit shall be made in accordance with Iowa Code section 306C.18.

a. A permit is required for each face of an advertising device; thus, a permit application must be filed submitted for each face. Three permits are required for a tri-face device if all three faces are visible from the main traveled way of an interstate, freeway-primary, or primary highway. However, only one application and permit are required for a single panel with identical messages appearing on the reverse sides of the panel back-to-back advertising device that identifies the same business or service on each face if the panel each face is no larger than 4 feet in length, 8 feet in width or height and 16 32 square feet in area.

b. A copy of the current lease shall be submitted upon application for a permit.

c. Any falsification or misrepresentation of information in the application or renewal process shall result in immediate denial or revocation of the permit.

117.6(2) Fees.

a. The initial fee, payable at the time of application, is $50 $100 per permit. This fee is not refundable unless the application is withdrawn prior to the department's field review of the proposed location.

b. The annual renewal fee for each permit, due on or before June 30 of each year, is $10 per permit. as follows:

Area of Sign Annual Renewal Fee

Up to 375 square feet $15

376 to 999 square feet $25

1000 square feet or more $50

For tri-vision signs, the area shall be calculated by multiplying the area of the face by three.

(1) This The renewal fee is not refundable.

(2) Failure to timely pay the annual renewal fee when due is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device as an abandoned sign.

c. Fees shall not be prorated.

d. If an outdoor advertising permit is revoked, any permit fee paid is forfeited.

ITEM 11. Amend subrule 117.6(3), introductory paragraph, as follows:

117.6(3) Permits to be issued. The department shall issue a permit in accordance with Iowa Code section 306C.18. Upon timely application for a permit containing all of the required information in due form and properly executed, together with the required fee being paid, the department shall issue a permit to be affixed to the advertising device, if it will not violate any provision of law or rule or regulation promulgated hereunder.

ITEM 12. Amend paragraphs 117.6(4)"c" and "d" as follows:

c. The owner of an advertising device is responsible for replacing a permit plate that is lost, damaged or destroyed missing or illegible. To obtain a replacement, the owner shall apply to the department and pay a $10 fee.

d. If the department notifies the owner of the advertising device that a permit plate is not properly displayed, the owner shall within 90 days of notification either correct the situation or secure and display a replacement permit plate. Failure to properly display a permit plate after the 90-day period has expired is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable.

ITEM 13. Amend subrule 117.6(5) by amending paragraph "c" as follows and by rescinding paragraph "d":

c. Reconstruction or modification of an advertising device prior to the issuance of the required permit is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable.

ITEM 14. Amend rule 761--117.6(306C) by adopting new subrule 117.6(6) as follows:

117.6(6) Six months to erect advertising device. The permit for an advertising device that has not been erected within six months after the date the permit was issued shall be revoked. After revocation, a new permit is required. To obtain a new permit, the owner of the advertising device shall submit a new application to the department, accompanied by the initial application fee and a copy of the current lease.

ITEM 15. Amend subrules 117.6(7) to 117.6(9) as follows:

117.6(7) Access. Access to the private property upon which an advertising device is located shall be gained from highway right of way only at access points designated or allowed by the department in accordance with 761--Chapter 112. An initial violation of this requirement by or on behalf of the permit holder shall result in the department sending a written warning by certified mail to the permit holder. A second violation of this requirement is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable. If a permit is revoked for an access violation, the permit holder is ineligible to apply for a permit for at least 12 months after revocation for any location within 500 feet of the revoked permit's sign location.

117.6(8) Destruction of vegetation. Without the written authorization of the department, vegetation growing on the highway right of way shall not be cut, trimmed, removed, or in any manner altered or damaged to improve the visibility of an advertising device. Violation of this prohibition by or on behalf of the permit holder is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable. If a permit is revoked for destruction of vegetation, the permit holder is ineligible to apply for a permit for 12 months after revocation for any location within 500 feet of the revoked permit's sign location.

117.6(9) Blank sign.

a. A blank sign is:

(1) An advertising device that has had a face physically removed.

(2) An advertising device that has been completely removed.

(2) (3) An advertising device that does not display copy. "This space for rent" or a similar message is not copy.

(3) (4) An advertising device that qualifies as an obsolete sign.

b. A sign that is a blank sign for at least six months is grounds for shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable.

ITEM 16. Amend rule 761--117.7(306C) by rescinding subrules 117.7(5) and 117.7(6) and adopting in lieu thereof the following new subrules:

117.7(5) Service club and religious notices.

a. Service club and religious notices shall not be placed within the right of way.

b. Service club and religious notices may be placed within the adjacent area of an interstate highway only if they are eligible for issuance of an outdoor advertising permit. All permit provisions apply, including but not limited to size and spacing requirements of subrule 117.5(5) and permit fees.

c. Service club and religious notices may be placed outside the right of way of a freeway-primary or primary highway and outside the adjacent area of an interstate highway. Notices in these locations may be grouped upon a common panel or on a municipal, county or school district recognition sign and shall comply with the following:

(1) The message shall comply with the definition of "service club or religious notice" in rule 761--117.1(306B, 306C).

(2) A notice shall not exceed eight square feet in area.

(3) A notice shall comply with rule 761--117.3(306B, 306C).

(4) The department's approval shall be obtained prior to erection. A special application form shall be filed with the department, but no fees are required.

117.7(6) Municipal, county and school district recognition signs.

a. Municipal, county and school district recognition signs shall not be placed within the right of way.

b. Municipal, county and school district recognition signs may be placed within the adjacent area of an interstate highway only if they are eligible for issuance of an outdoor advertising permit. All permit provisions apply, including but not limited to the size and spacing requirements of subrule 117.5(5) and permit fees.

c. A municipal, county or school district recognition sign may be placed outside the right of way of a freeway-primary or primary highway and outside the adjacent area of an interstate highway if the following conditions are met:

(1) The recognition sign shall comply with the definition of "Municipal, county or school district recognition sign" in rule 761--117.1(306B,306C).

(2) The recognition sign shall comply with rule 761-- 117.3(306B,306C).

(3) The recognition sign shall not display advertising.

(4) The recognition sign may identify no more than two sponsors of the sign. Each sponsor's message is limited to eight square feet in area and is limited to identifying the sponsor. No advertising or product logos are allowed.

(5) The department's approval of the recognition sign and its proposed location shall be obtained prior to the sign's erection. A special application form shall be filed with the department, but no fees are required.

ITEM 17. Amend rule 761--117.8(306B,306C), intro-ductory paragraph, as follows:

761--117.8(306B,306C) Acquisition and removal procedures. The department shall cause to be removed every advertising device illegally erected or maintained, and every abandoned advertising device which violates the provision of these rules. The department shall acquire by purchase, gift, or condemnation, and shall pay "just compensation" upon the removal of any advertising device for which a provisional permit has been issued, provided the permit has not been revoked.

NOTICE--PUBLIC FUNDS INTEREST RATES

In compliance with Iowa Code chapter 74A and section 12C.6, the committee composed of Treasurer of StateMichael L. Fitzgerald, Superintendent of Credit Unions James E. Forney, Superintendent of Banking Michael K. Guttau, and Auditor of State Richard D. Johnson have established today the following rates of interest for public obligations and special assessments. The usury rate for January is 6.75%.

INTEREST RATES FOR PUBLIC

OBLIGATIONS AND ASSESSMENTS

74A.2 Unpaid Warrants Maximum 6.0%

74A.4 Special Assessments Maximum 9.0%

RECOMMENDED for 74A.3 and 74A.7: A rate equal to 75% of the Federal Reserve monthly published indices for U.S. Government securities of comparable maturities.

The rate of interest has been determined by a committee of the state of Iowa to be the minimum interest rate that shall be paid on public funds deposited in approved financial institutions. To be eligible to accept deposits of public funds of the state of Iowa, a financial institution shall demonstrate a commitment to serve the needs of the local community in which it is chartered to do business. These needs include credit services as well as deposit services. All such financial institutions are required to provide the committee with a written description of their commitment to provide credit services in the community. This statement is available for examination by citizens.

New official state interest rates, effective January 13, 1999, setting the minimums that may be paid by Iowa depositories on public funds are listed below.

TIME DEPOSITS

7-31 days Minimum 4.40%

32-89 days Minimum 4.40%

90-179 days Minimum 4.60%

180-364 days Minimum 4.60%

One year Minimum 4.70%

Two years or more Minimum 4.75%

These are minimum rates only. The one year and less are four-tenths of a percent below average rates. Public body treasurers and their depositories may negotiate a higher rate according to money market rates and conditions.

Inquiries may be sent to Michael L. Fitzgerald, Treasurer of State, State Capitol, Des Moines, Iowa 50319.

ARC 8636A

VETERANS AFFAIRS COMMISSION[801]

Notice of Intended Action

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 35A.3(2), the Commission of Veterans Affairs hereby gives Notice of Intended Action to amend Chapter 10, "Iowa Veterans Home," Iowa Administrative Code.

The intent of the proposed amendments is to incorporate existing procedures used by the Iowa Veterans Home to pay member Medicare deductible charges if the member does not carry coinsurance supplement, to refine computation of member support rates, and to establish medical furloughs. New rule 10.18(35D) is proposed to give the Commandant of the Iowa Veterans Home the authority to file a civil action to collect a member's or former member's support when the member or former member has failed to pay the member's support in accordance with 801 IAC 10.12(35D). This may confer a significant benefit to the public because without this rule there is no means to enforce the member's contractual agreement to pay. New rule 10.42(35D) incorporates existing procedures for the disposition of personal property and funds of a discharged or deceased member.

Any interested person may make written suggestions or comments on the proposed amendments on or before February 16, 1999. Such written materials should be directed to Jack J. Dack, Commandant, Iowa Veterans Home, 1301 Summit, Marshalltown, Iowa 50158-5485, or faxed to (515) 753-4278. E-mail may be sent to jdack@dhs.state.ia.us. Persons who wish to convey their views orally should contact the Commandant's office at (515)753-4309 at the Iowa Veterans Home.

If requested in writing, a public hearing on the proposed amendments will be held on February 17, 1999, at 10 a.m. in Ford Memorial Conference Room at the Iowa Veterans Home 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. Any persons who intend to attend a public hearing and have special requirements, such as hearing or mobility impairments, should contact the Iowa Veterans Home to advise of specific needs. If no written or oral requests for a public hearing are received, the public hearing will be canceled without further notice.

These amendments are intended to implement Iowa Code chapter 35D.

The following amendments are proposed.

ITEM 1. Amend rule 801--10.1(35D), definition of "Diversion," as follows:

"Diversion" means income that is transferred to a spouse or dependents per court order before the member support is determined.

ITEM 2. Amend paragraph 10.12(4)"a" as follows:

a. If a member who is treated at a DVA medical center has coinsurance to supplement Medicare, IVH shall pay the Medicare deductible charge this coinsurance shall be used for the DVA medical center charges. Members IVH shall be responsible for Medicare deductible all DVA medical center charges if they do the member does not carry coinsurance supplement.

ITEM 3. Amend subrule 10.15(5), introductory paragraph, as follows:

10.15(5) Payment of support is due on the tenth of the month in which the monthly support bill is received., or ten business days after the member's last income deposit for that month.

ITEM 4. Amend subparagraph 10.16(2)"a"(10) as follows:

(10) An amount that is irrevocable and separately identifiable, not in excess of $7500 principal, for the member or spouse to meet the burial and related expenses of that person.

ITEM 5. Adopt new rule 801--10.18(35D) as follows:

801--10.18(35D) Commencement of civil action. The commandant or designee may file a civil action for money judgment against a member or discharged member or the member's legal representative for support charges when the member or discharged member fails to pay member support in accordance with 801--Chapter 10.

ITEM 6. Amend subparagraph 10.19(2)"a"(4) as follows:

(4) Nonrecurring gifts, contributions or winnings, not to exceed $50 $60 in a calendar quarter.

ITEM 7. Amend subparagraph 10.19(2)"a"(5) as follows:

(5) Interest income of less than $10 $20 per month from any one source.

ITEM 8. Amend paragraph 10.19(3)"e" as follows:

e. All current court orders order proceedings andguardian/conservatorship appointments regarding financial obligations, such as except child support or alimony, shall be honored. An established amount not to exceed one-half of the available income shall be paid on a monthly basis to the appropriate clerk of court.

ITEM 9. Amend paragraph 10.19(4)"b" as follows:

b. All checks shall be mailed no later than the eighth day of any given month to proper recipient. or at IVH's option, five business days after the member's last income deposit for that month.

ITEM 10. Amend paragraph 10.36(1)"e" as follows:

e. Medical furloughs. Furloughs spent in approved medical facilities away from IVH shall not be counted against the 59-day furlough time limit as set out in paragraph 10.14(3)"c."

Hospital furloughs shall be granted and the charges for such furloughs shall be as follows: During the first ten days of any hospital stay, the member shall pay the regular and usual assessed charge of the level of care of the bed held. Beginning on the eleventh day through the remainder of the hospitalization, the member shall not be charged. Each monthly member support bill shall reflect any adjustments related to hospitalization. Members discharged from IVH shall have the account closed after before the first of the month following the discharge.

Furloughs to other medical facilities for the purpose of treatment shall be treated as hospital furloughs.

ITEM 11. Amend paragraph 10.36(2)"e" as follows:

e. A bed shall be held for a hospitalized member. The member's client participation shall be the amount determined by the department of human services income maintenance worker an exception to department of human services' rules as the member's bed will be held free of charge after the first ten days of a hospital stay until member returns or is discharged.

ITEM 12. Adopt new rule 801--10.42(35D) as follows:

801--10.42(35D) Disposition of personal property and funds.

10.42(1) A discharged member will remove all personal property at the time of discharge or within 30 days. Personal property not removed within 30 days after discharge shall become the property of IVH to dispose of as the commandant or designee directs. Personal property may be forwarded at the member's expense to the member's last-known address. When the member is discharged from IVH, the member's funds shall be released to the member or legal representative with a statement provided no later than the tenth day of the month following the month of discharge.

10.42(2) Following written notification to the legal representative, a deceased member's personal property remaining at IVH 30 days after written notification shall become the property of IVH to dispose of as the commandant or designee directs. If there is a known legal representative, the property may be shipped to the legal representative at the expense of the estate or legal representative.

10.42(3) Upon death of a member with personal funds deposited at IVH, IVH will convey the member's funds with a final statement to the legal representative administering the member's estate. When an estate is not opened or in cases where no executor is appointed, IVH will attempt to locate the deceased member's heirs and deliver the funds and property to the heirs within one year after date of death.

FILED EMERGENCY

ARC 8635A

LABOR SERVICES DIVISION[875]

Adopted and Filed Emergency After Notice

Pursuant to the authority of Iowa Code sections 88.5, 17A.3(1) and 17A.5(2), the Labor Commissioner adopts an amendment to Chapter 10, "General Industry Safety and Health Rules," Iowa Administrative Code.

The amendment relates to methylene chloride.

Notice of Intended Action was published in the IowaAdministrative Bulletin on November 18, 1998, as ARC 8498A.

In compliance with Iowa Code section 88.5(1)"b," a public hearing was scheduled for December 10, 1998. No comments were received. This amendment is identical to the Notice of Intended Action.

Pursuant to Iowa Code section 17A.5(2)"b"(2) and (3), this amendment shall become effective upon publication on January 27, 1999. The Commissioner finds that this amendment confers a benefit on employees by permitting them to be provided with safety and health equal those found in states under federal OSHA's jurisdiction and is necessary because of the safety and health of employees in this state.

This amendment is intended to implement Iowa Code section 88.5.

The amendment will become effective January 27, 1999.

The following amendment is adopted.

Amend rule 875--10.20(88) by inserting at the end thereof:

63 Fed. Reg. 50729 (September 22, 1998)

[Filed Emergency After Notice 1/8/99, effective 1/27/99]

[Published 1/27/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/27/99.

ARC 8632A

REVENUE AND FINANCE DEPARTMENT[701]

Adopted and Filed Emergency After Notice

Pursuant to the authority of Iowa Code sections 17A.5(2), 421.14, and 422.68(1), the Department of Revenue and Finance hereby adopts amendments to Chapter 40, "Determination of Net Income," Iowa Administrative Code.

Notice of Intended Action was published in IAB, Volume XXI, Number 12, on December 2, 1998, page 1074, as ARC 8535A.

A public hearing was held on January 5, 1999. No comments were received.

1998 Iowa Acts, chapter 1177 [House File 2513], Division I, made a number of changes in the individual income tax laws relating to the taxation of net capital gains received by individual taxpayers. These changes are retroactively applicable on January 1, 1998, for tax years beginning on or after that date.

The amendments clarify that net capital gains from the sale of the real property of a business, tangible personal property of a business, and service of a business are not taxable on the Iowa individual income tax return if the individuals receiving the capital gains have met criteria for ownership of the business and material participation in the business. The amendments clarify that it is the net capital gains from the sale of assets of a business that are excluded if the taxpayers receiving those capital gains meet certain qualifications for length of time of ownership and length of time for material participation in the business.

However, the amendments specify that capital gains from the sale of capital stock of a corporation are taxable even if the capital stock was for an S corporation.

Capital gains from the sale of real property, tangible personal property and services owned by a partnership, an S corporation, or a limited liability company, where the capital gains of the entity flow through to the individual owners of the entity for federal income tax purposes, are not taxable on the owners' individual Iowa income tax returns where the owners meet the requirements for time of ownership of the entity and the time of material participation in the entity. The rules clarify that services of a business are certain intangible assets of the business. In addition, the rules clarify that capital gains from the sale of these intangible assets are not taxed if the intangible assets are sold as part of a sale of a business and other criteria are met.

In addition, the amendments clarify that a change in the organization of a business entity will not affect an individual's ability to exclude capital gains from sales of assets of the business if the individual maintained ownership and material participation requirements for the ten-year period prior to the sale of the assets.

In situations where clarification in these rules impacts capital gains reported and taxed on Iowa returns for tax years within the three-year statute of limitations for refund, amended returns may be filed.

The amendments also describe a provision whereby capital gains from the sales of assets of a business sold to a lineal descendant of an individual are not taxable on the Iowa return of an individual that had owned the business for ten years but had not met the requirement for material participation in the business. The amendments specify which relatives of an individual are the lineal descendants of the individual.

The amendments provide that capital gains from the sales of certain cattle and horses and certain other livestock of a business are not taxable on the Iowa individual returns in cases where the individuals selling the cattle, horses, and other livestock derive more than half their gross incomes in the tax year from farming and ranching activities. The amendments provide that capital gains from the sale of certain cattle and horses and other livestock of a business are not taxable on the Iowa income tax return of an individual when the sale of these animals was to a lineal descendant of the individual in cases where less than half of the individual's gross income was from farming and ranching.

The amendments make reference to prior rules for definitions of animals which are livestock other than horses and cattle and which incomes are gross incomes from farming and ranching.

The amendments provide that capital gains from the sale of certain timber products are not taxable on the Iowa individual income tax return.

The amendments mention certain capital gains which are realized from liquidations of corporations for federal income tax purposes which may be eligible for the capital gain exclusion.

The amendments mention capital gains from certain stock sales which are treated as acquisitions of assets of a corporation for federal income tax purposes. The amendments specify that these capital gains may qualify for exclusion if the individual taxpayers receiving the capital gains had owned an interest in the target corporation and had materially participated in the corporation for ten years prior to the date of sale.

Finally, the amendments specify that the capital gain exclusion otherwise allowed is not allowed for purposes of computation of a net operating loss or for the computation of income for a tax year to which a net operating loss is carried.

A number of examples are provided with some of the amendments to illustrate various aspects of the rules.

Members of the state taxation committee of the Iowa Society of CPAs, state taxation committee of the Iowa Bar Association, Iowa Farm Bureau Federation, and Iowans for Tax Relief assisted the Department as an advisory committee in the drafting of amendments to rule 40.38(422).

Three additions to the amendments are being made for clarification based on inquiries as to the meaning of the amendments filed under Notice. A new paragraph is added to subrule 40.38(8) after the seventh unnumbered paragraph that defines the term "lineal descendant." A second new paragraph is added to subrule 40.38(8) before the tenth unnumbered paragraph which refers to the sale of stock of an Iowa corporation. In the first sentence of subrule 40.38(13), the phrase "or was employed in the corporation" has been added before the phrase "for ten years." Except for these changes, the amendments are identical to those published under Notice of Intended Action.

The rule confers a benefit and has an immediate impact on the general public as it impacts individual income tax returns for the 1998 calendar year which can be filed beginning January 1, 1999. The subject matter of the rule is an exclusion from taxation due to sale of certain assets which result in a capital gain which would otherwise be taxable. Pursuant to Iowa Code section 17A.5(2)"b"(2), these amendments became effective January 8, 1999.

These amendments are intended to implement Iowa Code section 422.7 as amended by 1998 Iowa Acts, chapter 1177 [House File 2513].

The following amendments are adopted.

ITEM 1. Amend rule 701--40.38(422), introductory paragraph, as follows:

701--40.38(422) Capital gains deduction or exclusion for limited amounts of certain types of net capital gains. Effective for tax years beginning on or after January 1, 1990, but prior to January 1, 1998, a deduction is allowed in computing net income for 45 percent of the net capital gains described in subrules 40.38(1) to 40.38(4). See subrules 40.38(6) through 40.38(14) for the capital gain deduction or exclusion which is applicable for net capital gains received in tax years beginning on or after January 1, 1998. However, the aggregate net capital gains from the four subrules 40.38(1) to 40.38(4) which are to be considered for the tax year for the capital gain deduction cannot exceed $17,500 for all individual taxpayers except married taxpayers filing separate state returns. In the case of married taxpayers filing separate returns, the aggregate net capital gains to be considered for the deduction cannot exceed $8,750 per spouse. Married taxpayers filing separately on the combined return form shall prorate the $17,500 capital gain deduction limitation between the spouses in the ratio of each spouse's net capital gains from subrules 40.38(1) to 40.38(4) to the total net capital gains of both spouses from subrules 40.38(1) to 40.38(4). The capital gain deduction authorized in this rule does not apply to estates or trusts. Effective for tax years beginning on or after January 1, 1994, the capital gain deduction is not allowed for purposes of computation of a net operating loss for the tax year and for purposes of computing the income for a tax year to which a net operating loss is carried. Subrule 40.38(5) includes information on how the capital gain deduction is treated in a tax year with a net operating loss and in a tax year with the capital gain deduction where a net operating loss deduction is carried.

ITEM 2. Amend rule 701--40.38(422) by adopting the following new subrules:

40.38(6) Exclusion of net capital gains from the sales of real property, from the sales of assets of a business entity, from the sales of certain livestock of a business, from the sales of timber, from liquidation of assets of certain corporations, and from certain stock sales which are treated as acquisition of assets of the corporation. For tax years beginning on or after January 1, 1998, net capital gains from the sale of the assets of a business described in subrules 40.38(7) to 40.38(13) are excluded in the computation of net income for qualified individual taxpayers. Net capital gains means capital gains net of capital losses because Iowa's starting point for computing net income is federal adjusted gross income. This capital gain exclusion does not apply to estates and trusts. Subrule 40.38(14) describes situations in which the capital gain deduction otherwise allowed is not allowed for purposes of computation of a net operating loss or for computation of the taxable income for a tax year to which a net operating loss is carried.

40.38(7) Net capital gains from the sale of real property used in a business. Net capital gains from the sale of real property used in a business are excluded from net income on the Iowa return of the owner of a business to the extent the owner had held the real property in the business for ten or more years and the owner had materially participated in the business for at least ten years. For purposes of this provision, material participation is defined in Section 469(h) of the Internal Revenue Code and described in detail in subrule 40.38(1), paragraph "c."

Note that for purposes of taxation of capital gains from the sales of real property of a business by a taxpayer, there is no waiver of the ten-year material participation requirement when the property is sold to a lineal descendant of the taxpayer as there is for capital gains from sales of businesses described in subrule 40.38(8).

In situations in which real property was sold by a partnership, subchapter S corporation, or limited liability company, and the capital gain from the sale of the real property flows through to the owners of the business entity for federal income tax purposes, the owners can exclude the capital gain from their net incomes if the real property was owned for ten or more years and the owners had materially participated in the business for ten years prior to the date of sale of the real property, irrespective of whether the type of business entity changed during the ten-year period prior to the date of sale. That is, if the owner of the business had owned and materially participated in the business in the entire ten-year period before the sale, the fact that the business changed from one type of entity to another during the period does not disqualify the owner from excluding capital gains from the sale of real estate owned by the business during that whole ten-year period.

Capital gains from the sale of real property by a C corporation do not qualify for the capital gain exclusion except under the specific circumstances of a liquidation described in subrule 40.38(12).

Capital gains from the sale of real property held for ten or more years for speculation but not used in a business also do not qualify for the capital gain exclusion.

EXAMPLE 1. ABC Company, an S corporation, owned 1,000 acres of land. John Doe is the sole shareholder of ABC Company and had materially participated in ABC Company and owned ABC Company for more than ten years at the time 500 acres of the land were sold for a capital gain of $100,000 in 1998. The capital gain recognized in 1998 by ABC Company and which passed to John Doe as the shareholder of ABC Company is exempt from Iowa income tax because Mr. Doe met the material participation and ownership time requirements.

EXAMPLE 2. John Smith and Sam Smith both owned 50 percent of the stock in Smith and Company which was an S corporation that held 1,000 acres of farmland. Sam Smith had managed all the farming operations for the corporation from the time the corporation was formed in 1980. John Smith was an attorney who lived and practiced law in Denver, Colorado. John Smith was the father of Sam Smith. In 1998, Smith and Company sold 200 acres of the farmland for a $50,000 gain. $25,000 of the gain passed through to John Smith and $25,000 of the gain passed through to Sam Smith. The farmland was sold to Jerry Smith, who was another son of John Smith. Both John Smith and Sam Smith had owned the corporation for at least ten years at the time the land was sold, but only Sam Smith had materially participated in the corporation for the last ten years. Sam Smith could exclude the $25,000 capital gain from the land sale because he had met the time of ownership and time of material participation requirements. John Smith could not exclude the $25,000 gain since although he had met the time of ownership requirement, he did not meet the material participation requirement. Although the land sold by the corporation was sold to John Smith's son, a lineal descendant of John Smith, the capital gain John Smith realized from the land sale does not qualify for exemption for state income tax purposes. There is no waiver of the ten-year material participation requirement for taxpayer's sales of real estate from a business to a lineal descendant of the taxpayer as is described for sales of business assets in subrule 40.38(8).

EXAMPLE 3. Jerry Jones had owned and had materially participated in a farming business for 15 years and raised row crops in the business. There were 500 acres of land in the farming business; 300 acres had been held for 15 years, and 200 acres had been held for 5 years. If Mr. Jones sold the 200 acres of land that had been held only 5 years, any capital gain from the sale of this land would not be excludable since the land was part of the farming business but had been owned for less than 10 years. If the 300 acres of land that had been held for 15 years had been sold, the capital gain from that sale would qualify for exclusion.

EXAMPLE 4. John Pike owned a farming business for more than ten years. In this business, Mr. Pike farmed a neighbor's land on a crop-share basis throughout the period. Mr. Pike bought 80 acres of land in 1992 and farmed that land until the land was sold in 1998 for a capital gain of $20,000. The capital gain was taxable on Mr. Pike's Iowa return since the farmland had been held for less than ten years although the business had been operated by Mr. Pike for more than ten years.

EXAMPLE 5. Joe and John Perry were brothers in a partnership for six years which owned 80 acres of land. The brothers dissolved the partnership in 1993, formed an S corporation, and included the land in the assets of the S corporation. The land was sold in 1998 to Brian Perry, who was the grandson of John Perry. The Perry brothers realized a capital gain of $15,000 from the land sale which was divided equally between the brothers. Joe Perry was able to exclude the capital gain he had received from the sale as he had owned the land and had materially participated in the business for at least ten years at the time the land was sold. John Perry was unable to exclude the capital gain because although he had owned the land for ten years, he had not materially participated in the business for ten years when the land was sold. The fact that the land was sold to a lineal descendant of John Perry is not relevant because the sale involved only real property held in a business and not the sale of all, or substantially all, of the tangible personal property and intangible property of the business.

EXAMPLE 6. Todd Myers had a farming business which he had owned and which he had materially participated in for 20 years. There were two tracts of farmland in the farming business. In 1998 he sold one tract of farmland in the farming business that he had owned for more than ten years for a $50,000 capital gain. The farmland was sold to a person who was not a lineal descendant. During the same year, Mr. Myers had $30,000 in long-term capital losses from sales of stock. In this situation, on Mr. Myers's 1998 Iowa return, the capital gains would be applied against the capital losses and the remaining $20,000 in capital gains could be excluded.

40.38(8) Net capital gains from the sale of assets of a business by an individual that had owned the business ten years and had materially participated in or had been employed in the business for ten years. Net capital gains from the sale of the assets of a business are excluded from an individual's net income to the extent the individual had owned the business for ten or more years and the individual had materially participated in or had been employed in the business for ten or more years. In addition to the ownership and material participation qualifications for the capital gain exclusion, the owner of the business must have sold substantially all of the tangible personal property or the service of the business in order for the capital gains to be excluded from taxation.

For purposes of this rule, the term "substantially all of the tangible property or service of the business" means that the sale of the assets of a business during the tax year must represent at least 90 percent of the fair market value of all of the tangible personal property and service of the business on the date of sale of the business assets. Thus, if the fair market value of a business's tangible personal property and service was $400,000, the business must sell tangible personal property and service of the business that had a fair market value of 90 percent of the total value of those assets to achieve the 90 percent or more standard. However, this does not mean that the amount raised from the sale of the assets must be $360,000 in order for the 90 percent standard to be met, only that the assets involved in the sale of the business must represent 90 percent of the total value of the business assets.

Note that if the 90 percent of assets test is met, capital gains from other assets of the business can also be excluded. Some of these assets include, but are not limited to, stock of another corporation, bonds, including municipal bonds, and interests in other businesses. Note also that if the 90 percent test has been met, all of the individual assets of the business do not have to have been held for ten years on the date of sale for the capital gains from the sale of these assets to be excluded in computing the taxpayer's net income. This statement is made with the assumption that the taxpayer has owned the business and materially participated in the business for ten years prior to the sale of the assets of the business.

In most instances, the sale of merchandise or inventory of a business will not result in capital gains for the seller of a business, so the proceeds from the sale of these items would not be excluded from taxation.

For the purposes of this rule, the term "service of the business" means intangible assets used in the business or for the production of business income which, if sold for a gain, would result in a capital gain for federal income tax purposes. Intangible assets that are used in the business or for the production of income include, but are not limited to, the following items: (1) goodwill, (2) going concern value, (3) information base, (4) patent, copyright, formula, design, or similar item, (5) client lists, and (6) any franchise, trademark, or trade name. The type of business that owns the intangible asset is immaterial, whether the business is a manufacturing business, retail business, or a service business, such as a law or accounting firm.

However, when the business owned by the taxpayer for a minimum of ten years is sold to an individual or individuals who are all lineal descendants of the taxpayer, the taxpayer does not need to have materially participated in the business for ten years prior to the sale of the business in order for the capital gain to be excluded in the computation of net income.

For purposes of these rules, the term "lineal descendant" means children of the taxpayer, including legally adopted children and biological children, stepchildren, grandchildren, great-grandchildren, and any other lineal descendants of the taxpayer.

In situations in which substantially all the tangible personal property or service was sold by a partnership, subchapter S corporation, or limited liability company, and the capital gains from the sale of the assets flow through to the owners of the business entity for federal income tax purposes, the owners can exclude the capital gains from their net incomes if the owners had owned the business for ten or more years and the owners had materially participated in the business for ten years prior to the date of sale of the tangible personal property or service, irrespective of whether the type of business entity changed during the ten-year period prior to the sale.

Note that additional information on sales of business assets which may qualify for the exclusion and criteria for material participation in a business may be found in subrule 40.38(1).

Installments received in the tax year from installment sales of businesses are eligible for the exclusion if all relevant criteria were met at the time of the installment sale which would make the capital gains from the sale exempt from taxation if the installment sale of the business had occurred on or after January 1, 1998.

Sale of capital stock of an Iowa corporation or an Iowa farm corporation to a lineal descendant or to another individual does not constitute the sale of a business for purposes of the capital gain exclusion, whether the corporation is a C corporation or an S corporation.

Capital gains from the sale of an ownership interest in a partnership, limited liability company or other entity are not eligible for the capital gain exclusion.

Note that the sale of one activity of a business or one distinct part of a business may not constitute the sale of a business for purposes of this rule unless the activity or distinct part is a separate business entity such as a partnership or sole proprietorship which is owned by the "business" or unless it represents the sale of at least 90 percent of the fair market value of the tangible personal property or service of the business.

In order to determine whether the sale of the business assets constitutes the sale of a business for purposes of excluding capital gains recognized from the sale, refer to 701--subrule 54.2(1) relating to a unitary business. If activities or locations comprise a unitary business, then 90 percent or more of that unitary business must be sold to meet the requirement for capital gains from the sale to be excluded from taxation. If the activity or location constitutes a separate, distinct, non-unitary business, then 90 percent of the assets of that location or activity must be sold to qualify for the exemption of the capital gain. The burden of proof is on the taxpayer to show that a sale of assets of a business meets the 90 percent standard.

EXAMPLE 1. Joe Rich is the sole owner of Eagle Company, which is an S corporation. In 1998, Mr. Rich sold all the stock of Eagle Company to his son, Mark Rich, and recognized a $100,000 gain on the sale of the stock. This capital gain would be taxable on Joe Rich's 1998 Iowa return since the sale of stock of a corporation did not constitute the sale of the tangible personal property and service of a business.

EXAMPLE 2. Randall Insurance Agency, a sole proprietorship, is owned solely by Peter Randall. In 1998, Peter Randall received capital gains from the sale of all tangible assets of the insurance agency. In addition, Mr. Randall had capital gains from the sale of client lists and goodwill to the new owners of the business. Since Mr. Randall had owned the insurance agency for more than ten years and had materially participated in the insurance agency for more than ten years at the time of the sale of the tangible property and intangible property of the business, Mr. Randall can exclude the capital gains from the sale of the tangible assets and the intangible assets in computing net income on his 1998 Iowa return.

EXAMPLE 3. Joe Brown owned and materially participated in a sole proprietorship for more than ten years. During the 1998 tax year, Mr. Brown sold two delivery trucks and had capital gains from the sale of the trucks. The trucks were valued at $30,000 at the time of sale which was about 10 percent of the tangible personal property of the business. Mr. Brown could not exclude the capital gains from the sale of the trucks on his 1998 Iowa return as the sale of those assets did not involve the sale of substantially all of the tangible personal property and service of Mr. Brown's business.

EXAMPLE 4. Rich Bennet owned a restaurant and a gift shop in the same building that were part of a sole proprietorship owned only by Mr. Bennet, who had owned and materially participated in both business activities for over ten years. Mr. Bennet sold the gift shop in 1998 for $100,000 and had a capital gain of $40,000 from the sale. The total fair market value of all tangible personal property and intangible assets in the proprietorship at the time the gift shop was sold was $250,000. Mr. Bennet could not exclude the capital gain on his 1998 Iowa return because he had not sold at least 90 percent of the tangible and intangible assets of the business.

EXAMPLE 5. Joe and Ray Johnson were partners in a farm partnership that they had owned for 12 years in 1998 when the partnership was sold to Ray's son Charles. Joe Johnson had materially participated in the partnership for the whole time that the business was in operation, so he could exclude the capital gain he had received from the sale of his interest in the partnership. Although Ray Johnson had not materially participated in the farm business, he could exclude the capital gain he received from the sale of the partnership because the sale of the partnership was to his son, a lineal descendant.

EXAMPLE 6. Kevin and Ron Barker owned a partnership which held a chain of six gas stations in an Iowa city. In 1998, the Barkers sold 100 percent of the property of two of the gas stations and received a capital gain from the sale of $30,000. Separate business records were kept for each of the gas stations. Since the partnership was considered to be a unitary business and the Barkers sold less than 90 percent of the fair market value of the business, the Barkers could not exclude the capital gain from the sale of the gas stations from the incomes reported on their 1998 Iowa returns. However, any gain from the sale of the real property may qualify for exclusion, assuming the ten-year ownership and material participation qualifications are met.

EXAMPLE 7. Rudy Stern owned a cafe in one Iowa city and a fast-food restaurant in another Iowa city. Mr. Stern had owned both businesses and had materially participated in the operation of both businesses for ten years. Each business was operated with a separate manager and kept separate business records. In 1998, Mr. Stern sold all the tangible and intangible assets associated with the cafe and received a capital gain from the sale of the cafe. Mr. Stern can exclude the capital gain from his net income for 1998 because the cafe and fast-food restaurant were considered to be separate and distinct non-unitary businesses.

40.38(9) Net capital gains from the sales of cattle or horses held for two years and used for certain purposes. Net capital gains from the sales of certain cattle or horses held for 24 months or more before the sale and which were owned by taxpayers who received more than one-half of their gross incomes in the tax year from farming or ranching operations are excluded from taxation. The cattle or horses must have been held the required two-year period for breeding, dairy, or sporting purposes in order for the capital gain from the sale of the horses and cattle to qualify for exclusion. These are the same sales of horses and cattle that are eligible for capital gain treatment for federal income tax purposes under Section 1231 of the Internal Revenue Code.

In situations where the qualifying cattle or horses are sold by the taxpayer to a lineal descendant of the taxpayer, the taxpayer does not need to have had more than 50 percent of gross income in the tax year from farming or ranching activities in order for the capital gain to be excluded.

Capital gains from sales of qualifying cattle or horses by an S corporation, partnership, or limited liability company, where the capital gains flow through to the individual owners for federal income tax purposes are eligible for the exclusion only in situations in which the individual owners have more than 50 percent of their gross incomes in the tax year from farming or ranching activities, or where the sale of the qualifying cattle or horses was to lineal descendants of the owners reporting the capital gains from the sales of the qualifying cattle or horses.

However, capital gains from sales of qualifying cattle or horses by a C corporation are not eligible for the capital gain exclusion.

Information about whether cattle or horses were held for draft, breeding, dairy, or sporting purposes is described in detail in subrule 40.38(2). The same subrule includes criteria for determining if more than 50 percent of a taxpayer's gross income in a tax year was from farming or ranching. Note that this standard for determining a taxpayer's qualification for the capital gain deduction or exclusion is if the taxpayer's gross income from farming or ranching, not net income from those activities, is greater than 50 percent of the taxpayer's total gross income and not total net income.

EXAMPLE. Bob Deen had a cattle operation that held black angus cattle in the operation for breeding purposes. In 1998, Mr. Deen sold 40 head of cattle that had been held for breeding purposes for two years. Mr. Deen's total gross income from farming was $125,000, but he had a $10,000 loss from his farming operation. Mr. Deen also had wages of $25,000 from a job at a local farming cooperative. Because Mr. Deen had more than 50 percent of his gross income in 1998 from farming operations, he could exclude the capital gain from the sale of the breeding cattle. Although Mr. Deen had a loss from his farming activities, he still had more than 50 percent of his gross income in the tax year from those activities.

40.38(10) Net capital gains from sales of certain livestock other than horses and cattle. Net capital gains from sale of breeding livestock, other than cattle or horses held 12 or more months by taxpayers who have more than 50 percent of their gross incomes in the tax year from farming or ranching operations, are excluded from taxation. These are the same sales of breeding livestock other than cattle or horses that are eligible for capital gain treatment for federal income tax purposes under Section 1231 of the Internal Revenue Code. In an instance in which a taxpayer sells breeding livestock other than cattle or horses which have been held 12 or more months, and the sale of the livestock is to a lineal descendant of the taxpayer, the taxpayer does not need to have more than 50 percent of the gross income in the tax year from farming or ranching operations to be eligible for the capital gain exclusion.

Capital gains from sales of qualifying livestock other than cattle or horses by an S corporation, partnership, or limited liability company, where the capital gains flow through to the owners of the respective business entity for federal income tax purposes, qualify for the exclusion to the extent the owners receiving the capital gains meet the qualifications for the exclusion on the basis of having more than 50 percent of the gross income in the tax year from farming or ranching activities.

Capital gains from the sale of qualifying livestock other than cattle or horses by a C corporation are not eligible for the exclusion.

Animals that are considered livestock other than cattle or horses for purposes of this rule are listed in subrule 40.38(3). Criteria for determining whether more than 50 percent of a taxpayer's gross income in the tax year is from farming or ranching are defined in subrule 40.38(2).

40.38(11) Capital gains from the sales of timber held by the taxpayer more than one year. These sales of timber are sales that would qualify for capital gain treatment for federal income tax purposes under Section 1231 of the Internal Revenue Code. Thus, if the sale of timber products meets the criteria for capital gain treatment for federal income tax purposes, the capital gain will qualify for exclusion on the Iowa income tax return.

Subrule 40.38(4) includes information on which tree products are considered to be timber for purposes of this rule as well as which sales of timber qualify for the capital gain exclusion. Additional information about gains and losses from the sale of timber products is found in Treasury Regulations §1.631-1 and §1.631-2.

Capital gains from the sale of qualifying timber by an S corporation, partnership, or limited liability company, which flow to the owners of the respective business entity for federal individual income tax purposes, are eligible for the capital gain exclusion.

Capital gains from the sale of timber by a C corporation do not qualify for the capital gain exclusion.

40.38(12) Capital gains from the liquidation of assets of corporations which are recognized as sales of assets for federal income tax purposes. Capital gains realized from liquidations of corporations which are recognized as sales of assets for federal income tax purposes under Section 331 of the Internal Revenue Code may be eligible for the capital gain exclusion. To the extent the capital gains are reported by the shareholders of the corporations for federal income tax purposes and the shareholders are individuals, the shareholders are eligible for the capital gain deduction if the shareholders meet the qualifications for time of ownership and time of material participation in the corporation being liquidated. The burden of proof is on the shareholders to show they meet these time of ownership and material participation requirements.

40.38(13) Capital gains from certain stock sales which are treated as acquisitions of assets of the corporation for federal income tax purposes. Capital gains received by individuals from a sale of stock of a target corporation which is treated as an acquisition of the assets of the corporation under Section 338 of the Internal Revenue Code may be excluded if the individuals receiving the capital gains had owned an interest in the target corporation and had materially participated in the corporation or were employed in the corporation for ten years prior to the date of the sale of the corporation. Note that the burden of proof is on the taxpayer to show eligibility to exclude the capital gains from these transactions in the computation of net income for Iowa individual income tax purposes.

40.38(14) Net capital gain deduction or exclusion not allowed for purposes of computation of a net operating loss or for computation of income for a tax year to which a net operating loss is carried. Although the net capital gain deduction or exclusion in this rule is allowed for the purposes of computation of a taxpayer's net income for a tax year, the deduction or exclusion is not allowed for the purposes of the computation of a net operating loss in the tax year. In addition, if a net operating loss for a tax year beginning on or after January 1, 1998, is carried forward to a subsequent tax year or is carried back to a prior tax year, the net capital gain deduction or exclusion is not allowed for the purposes of computing the income for the tax year to which the net operating loss was carried.

ITEM 3. Amend rule 701--40.38(422), implementation sentence, as follows:

This rule is intended to implement Iowa Code Supplement section 422.7 as amended by 1994 1998 Iowa Acts, Senate File 2057 chapter 1177.

[Filed Emergency After Notice 1/8/99, effective 1/8/99]

[Published 1/27/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/27/99.

FILED

ARC 8630A

EMERGENCY MANAGEMENT DIVISION[605]

Adopted and Filed Without Notice

Pursuant to the authority of Iowa Code sections 17A.3, 34A.6, and 34A.22, the Emergency Management Division hereby amends Chapter 10, "Enhanced 911 Telephone Systems," Iowa Administrative Code.

Item 1 clarifies the definitions of "E911 program manager" and "public safety answering point." Item 2 strengthens the existing language regarding limiting the use of automatic dialers, alarm systems, and automatic dialing and announcing devices on a 911 telephone trunk.

In compliance with Iowa Code section 17A.4(2), the Division finds that notice and public participation are unnecessary because these amendments have been reviewed and discussed by the affected parties, including the Administrative Rules Review Committee, as part of the Adopted and Filed rule making published in the Iowa Administrative Bulletin on December 2, 1998, as ARC 8517A.

The Emergency Management Division adopted these amendments on January 7, 1999.

These amendments are intended to implement Iowa Code chapter 34A.

These amendments shall become effective March 3, 1999.

The following amendments are adopted.

ITEM 1. Amend rule 605--10.2(34A), definitions of "E911 program manager" and "Public safety answering point (PSAP)," as follows:

"E911 program manager" means that person appointed by the administrator of the emergency management division, and working with the E911 communications council, to administer the state-enhanced 911 program and the provisions of perform the duties specifically set forth in Iowa Code chapter 34A and this chapter.

"Public safety answering point (PSAP)" means a 24-hour, state, or local, jurisdiction or contracted communications facility, which has been designated by the local service board to receives receive 911 service calls and directly dispatches dispatch emergency response services or relays or transfers calls to the appropriate public or private safety agency in accordance with the E911 service plan.

ITEM 2. Amend paragraph 10.14(2)"k" as follows:

k. The PSAP shall make every attempt to disallow the intrusion by automatic dialers, alarm systems, or automatic dialing and announcing devices on a 911 trunk. If intrusion by one of these devices should occur, those responsible for PSAP operations shall make every attempt to contact the responsible party to ensure there is no such further occurrence by notifying the party that knowing and intentional interference with emergency telephone calls constitutes a crime under Iowa Code section 727.5. Those responsible for PSAP operations shall report persons who repeatedly use automatic dialers, alarm systems, or automatic announcing devices on 911 trunk lines to the county attorney for investigation of possible violations of section 727.5.

[Filed Without Notice 1/7/99, effective 3/3/99]

[Published 1/27/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/27/99.

ARC 8625A

WORKERS' COMPENSATION DIVISION[876]

Adopted and Filed

Pursuant to the authority of Iowa Code section 86.8, the Workers' Compensation Commissioner hereby amends Chapter 8, "Substantive and Interpretive Rules," Iowa Administrative Code.

New rule 8.10(85B) provides the procedures for apportioning age-related hearing loss for workers' compensation occupational hearing loss claims as provided in 1998 Iowa Acts, chapter 1160 [Senate File 2333], section 7.

This amendment was previously Adopted and Filed Emergency and published in the July 29, 1998, Iowa Administrative Bulletin as ARC 8188A. Notice of Intended Action to solicit comments on that submission was published simultaneously as ARC 8187A. An Amended Notice of Intended Action was published in the Iowa Administrative Bulletin on November 18, 1998, as ARC 8452A to extend time for comment to December 8, 1998. Written comments were received.

The adopted amendment is identical to that published under Notice of Intended Action.

This amendment will become effective March 3, 1999, at which time the Adopted and Filed Emergency amendment is hereby rescinded.

This amendment is intended to implement 1998 Iowa Acts, chapter 1160 [Senate File 2333], section 7, and Iowa Code section 86.8.

The following amendment is adopted.

Amend 876-Chapter 8 by adopting the following new rule:

876--8.10(85B) Apportionment of age-related loss for occupational hearing loss claims.

8.10(1) Effective date. This rule is effective for claims for occupational hearing loss filed on or after July 1, 1998.

8.10(2) Purpose. The purposes of this rule are to adopt tables and the method for calculating age-related hearing loss and to adopt a worksheet for apportionment of age-related hearing loss for occupational hearing loss claims.

8.10(3) Table. In 1972 the National Institute for Occupational Safety and Health (NIOSH) published the Criteria for a Recommended Standard: Occupational Exposure to Noise (NIOSH Publication No.73-11001). Table B-1, page I-16, provides the Age Corrections Values to be Used for Age Correction of Initial Baseline Audiograms for Males and Table B-2, page I-17, provides the Age Corrections Values to be Used for Age Correction of Initial Baseline Audiograms for Females. These NIOSH tables are used to calculate the correction value for age for males and females for 500, 1000, 2000 and 3000 hertz.

For example, the age correction for a male 21 years of age is 10 decibels at 500 hertz, 5 decibels at 1000 hertz, 3 decibels at 2000 hertz and 4 decibels at 3000 hertz. The correction for age is 5.50 decibels (the sum of 10+5+3+4 divided by 4).

The following table is to be used to determine an employee's age-related change in hearing level during the period of employment. To determine the age-related change in hearing level in decibels during the period of employment, subtract the value shown in the table for the employee's age at the beginning of employment from the value shown in the table for the employee's age on the date of injury.

NOTE: This table should not be used to compute standard threshold shift as required by rules of the Occupational Safety and Health Administration or Iowa occupational safety and health administration.

Age in Years Correction in dB

Males Females

20 or younger 5.50 7.25

21 5.50 7.75

22 5.50 7.75

23 5.50 8.00

24 5.75 8.00

25 6.00 8.25

26 6.25 8.50

27 6.50 8.75

28 6.75 8.75

29 6.75 8.75

30 6.75 9.00

31 7.25 9.25

32 7.50 9.50

33 7.50 9.75

34 7.75 9.75

35 8.00 10.00

36 8.25 10.25

37 8.75 10.25

38 8.75 10.50

39 9.00 11.00

40 9.00 11.00

41 9.25 11.25

42 10.00 11.50

43 10.25 11.75

44 10.25 12.00

45 10.50 12.25

46 10.75 12.50

47 11.00 12.50

48 11.50 13.00

49 12.00 13.25

50 12.25 13.50

51 12.25 13.75

52 12.75 13.75

53 13.25 14.25

54 13.50 14.50

55 14.00 15.00

56 14.25 15.00

57 14.50 15.25

58 15.25 15.75

59 15.50 16.00

60 or older 16.00 16.25

8.10(4) Apportionment. The apportionment of age-related hearing loss shall be made by reducing the total binaural percentage hearing loss as calculated pursuant to Iowa Code section 85B.9(3) by the same percentage as the decibels of age-related change in hearing level occurring during the period of employment bears to the total decibel hearing level in each ear.

Age-related hearing loss is apportioned using the results of the audiogram determined to be the proper audiogram for measurement of the employee's hearing loss on the date of injury by using the following steps:

1. Separately for each ear, compute the average of the employee's decibel hearing levels at 500, 1000, 2000, and 3000 hertz for that ear.

2. Separately for each ear, compute the percentage loss for each ear.

3. Compute the employee's age-related change in hearing level in decibels during the period of employment using the table in subrule 8.10(3).

4. Separately for each ear, divide the result of step 3 by the result of step 1 to compute the age-correction factor for that ear.

5. Separately for each ear, multiply the total percentage hearing loss in that ear calculated pursuant to Iowa Code section 85B.9 by the age-correction factor for that ear.

6. Separately for each ear, subtract the result obtained in step 5 from the total percentage hearing loss in that ear to obtain the age-corrected hearing loss for that ear.

7. Multiply the age-corrected hearing loss in the better ear as calculated in step 6 by 5 and add the percentage hearing loss in the worse ear.

8. Divide the result obtained in step 7 by 6 to obtain the age-corrected binaural percentage hearing loss.

8.10(5) Worksheet. The following worksheet is used to calculate the percentage of age-corrected binaural hearing loss.

APPORTIONMENT OF PERCENT HEARING LOSS FOR AGE






Left Ear
Hearing Level

Frequency in Hertz

Right Ear
Hearing Level
1.
_________________

500
_________________

2.
_________________

1000
_________________

3.
_________________

2000
_________________

4.
_________________

3000
_________________

5.
__________
total of lines 1 through 4


__________

divide by 4
(divide the "total" by 4)


divide by 4
6.
__________
equals average equals


__________

minus 25
subtract "low fence"


minus 25
7.
__________
equals "Excess"


__________

multiply by 1.5 multiply % factor multiply by 1.5




8.
__________
equals % loss each ear


__________

(% loss left ear)


(% loss right ear)

9.
Age on date of injury


____

10.
Age at beginning of employment


____

11.

____
correction for age on date of
injury in dB from table





minus


12.

____
correction for age at beginning of employment in dB from table





equals


13.

____
age-related change in hearing
level during employment in dB



LEFT EAR



RIGHT EAR

Divide age-related change in hearing level from line 13 by average hearing level from line 6






To obtain



14.
__________
age correction factor


__________

multiply % loss from line 8 by
age-correction factor from line 14






To obtain



15.
__________
deduction for
age-correction


__________


subtract line 15 from line 8






To obtain


16.
__________
age-corrected percent hearing loss


__________

BINAURAL PERCENTAGE LOSS




17.
__________
% loss better ear (smaller amount)
from line 16, multiplied by 5





plus



18.
__________
% loss worse ear (larger amount) from line 16



19.
__________
equals





divided by 6





equals



20.
__________
% age-corrected binaural hearing loss



This rule is intended to implement 1998 Iowa Acts, chapter 1160, section 7, and Iowa Code section 86.8.

[Filed 1/5/99, effective 3/3/99]

[Published 1/27/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 1/27/99.

REVENUE AND FINANCE DEPARTMENT[701]

Economic Impact Statement

An Economic Impact Statement was requested by the Administrative Rules Review Committee on the Notice of Intended Action published in the Iowa Administrative Bulletin on September 23, 1998, as ARC 8342A to amend Chapter 71, "Assessment Practices and Equalization," Iowa Administrative Code. Iowa Code section 17A.4(1)"c" requires the agency to prepare a Statement to be published in the Iowa Administrative Bulletin at least 14 days prior to the adoption of the rules.

The Administrative Rules Review Committee requested the Department of Revenue and Finance to prepare an economic impact statement estimating the effect of proposed ARC 8342A requiring rented condominiums to be classified as commercial property the same as apartments. The Property Tax Subcommittee of The Task Force To Study Iowa's System of State and Local Taxation had already requested similar information on the valuation of apartments. Gary Bilyeu, Story County Assessor, who was a member of the subcommittee sent a survey to all assessors requesting, by assessment jurisdiction, (1) the total assessed valuation of all apartments and (2) the total assessed valuation of apartments that have been converted to condominiums. Responses were received from 61 (3 cities and 58 counties) of the 108 assessment jurisdictions (56.48%). The report was forwarded to the department by Mr. Bilyeu. Interested persons may contact the Policy Section of the Department of Revenue and Finance to obtain a complete copy of the report.

1. The information for the assessment jurisdictions reporting shows a total assessed valuation for all apartments of $1,946,072,700. The information consists of valuations for 3-4, 5-6, 7-8, and over 8 units. Applying the actual tax rate for each reporting jurisdiction to the assessed value reported results in total taxes for all apartments of $66,859,675. Applying the latest residential rollback percentage of .54909 would result in taxes of $36,711,979 if these apartments were classified as residential property rather than commercial property. The tax loss for the jurisdictions reporting would be $30,147,696 ($66,859,675 - $36,711,979). If the tax loss were to be extrapolated to estimate what the total tax loss would be if all assessment jurisdictions had reported, it would be $53,377,649 ($30,147,696 ÷ .5648). The extrapolated commercial taxes would be $118,377,612 and the extrapolated residential taxes would be $64,999,963 for a difference of $53,377,649.

2. The information for the assessment jurisdictions reporting shows a total assessed value for apartments converted to condominiums of $37,956,454. Utilizing the average statewide tax rate of 31.639891 per $1000 of assessed value results in total taxes of $1,200,938. If the apartments converted to condominiums were classified as commercial property rather than residential property, the taxes would be $2,187,142 ($1,200,938 ÷ .54909). The tax loss would be $986,204 ($2,187,142 - $1,200,938) for the reporting jurisdictions and if extrapolated to estimate what the total tax loss would be if all assessment jurisdictions had reported, it would be $1,746,112 ($986,204 ÷ .5648).

In summary, if all apartments presently classified as commercial property were to be classified as residential property, the estimated tax loss statewide would be $53,377,649. The tax loss would have to be absorbed by the other property owners in the assessment jurisdictions where the reclassifications occurred. The estimated tax loss resulting from apartments already converted to condominiums is $1,746,112. This tax loss is being absorbed by all other taxpayers in the assessment jurisdictions where the conversions have taken place.

1997 valuations and applicable tax rates for taxes payable in the 1998-1999 fiscal year were used in the study because the tax rates applicable to 1998 valuations have not yet been determined. However, it is known that additional conversions continue to occur making the tax loss greater than what is reflected in the study. Also, it is believed that many of the condominiums being built today would have been built as apartments rather than condominiums if it were not for the rollback.


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