Iowa Administrative Bulletin

IOWA ADMINISTRATIVE BULLETIN

Published Biweekly VOLUME XXII NUMBER 3 August 11, 1999 Pages 141 to 272

CONTENTS IN THIS ISSUE

Pages 152 to 263 include ARC 9233A to ARC 9275A

ALL AGENCIES

Schedule for rule making 144

Publication procedures 145

Agency identification numbers 150

ATTORNEY GENERAL[61]

Notice, Acquisition negotiation statement of
rights, ch 34 ARC 9241A 152

CITATION OF ADMINISTRATIVE RULES 149

college student aid commission[283]

EDUCATION DEPARTMENT[281]"umbrella"

Notice, Iowa tuition grant program, 12.2(1)
ARC 9244A 153

DENTAL EXAMINERS BOARD[650]

PUBLIC HEALTH DEPARTMENT[641]"umbrella"

Notice, Continuing education, 25.3
ARC 9275A 153

Filed, Monitoring of nitrous oxide inhalation
analgesia by dental hygienists, 10.3(1), 29.6,
ARC 9274A 199

ECONOMIC DEVELOPMENT, IOWA
DEPARTMENT OF[261]

Notice, CDBG--contingency fund, 23.4(5),
23.10 ARC 9245A 153

Notice, Community planning and development
fund, ch 41; rescind chs 42, 46 to 49
ARC 9247A 154

Filed Emergency, CDBG--contingency fund,
23.4(5), 23.10 ARC 9246A 194

EDUCATIONAL EXAMINERS BOARD[282]

EDUCATION DEPARTMENT[281]"umbrella"

Filed, Student loan default/noncompliance
with agreement for payment of obligation,
ch 9 ARC 9259A 199

Filed, Sexual involvement with a student,
12.2(1)"c" ARC 9261A 200

Filed, Late renewal fee, 14.32(6), 14.21(6)
ARC 9260A 200

ENGINEERING AND LAND SURVEYING
EXAMINING BOARD[193C]

Professional Licensing and Regulation Division[193]

COMMERCE DEPARTMENT[181]"umbrella"

Filed Emergency After Notice, Cutoff dates for
applications to take examinations, 1.5
ARC 9256A 195

Filed, Peer review; civil penalties, 4.5(2),
4.36(5) ARC 9257A 200

ENVIRONMENTAL PROTECTION
COMMISSION[567]

NATURAL RESOURCES DEPARTMENT[561]"umbrella"

Filed, Agency procedures, chs 4 to 6
ARC 9250A 201

Filed, Public and private drinking water supply,
40.1 to 40.7 ARC 9248A 201

Filed, Water supplies, 41.1 to 41.5, 41.7 to
41.11 ARC 9249A 205

Filed, Public notification, public education,
consumer confidence reports, reporting, and
record maintenance, ch 42 ARC 9255A 206

Filed, Water supplies--design and operation,
43.1 to 43.3, 43.5, 43.7, 43.8, Table A;
rescind Table B ARC 9254A 240

Filed, Aquifer storage and recovery: criteria
and conditions for authorizing storage,
recovery, and use of water, ch 55
ARC 9252A 240

Filed, Laboratory certification, 83.1 to 83.7
ARC 9251A 244

EXECUTIVE DEPARTMENT

Proclamations of disaster emergency 264

HISTORICAL DIVISION[223]

CULTURAL AFFAIRS DEPARTMENT[221]"umbrella"

Filed Emergency, Historic site preservation
grant program, 50.2, 50.3, 50.6
ARC 9265A 195

HUMAN SERVICES DEPARTMENT[441]

Amended Notice, Drug prior authorization;
therapeutic classes of drugs, 78.1(2),
78.28(1) ARC 9243A 156

Notice, Healthy and well kids in Iowa (HAWK-I)
program, 86.2, 86.16 ARC 9242A 156

Filed, Food stamp program, 65.10, 65.19(17),
65.27, 65.28, 65.40, 65.46(5) ARC 9233A 244

Filed, Form names and numbers; adoption
expenses, 78.13(10), 150.5(5), 151.28(4),
151.49(6), 151.70, 151.86, 153.57(3), 156.8,
167.3(2), 167.5, 176.16(3), 179.9(2), 179.10,
201.3(2) ARC 9234A 247

Filed, Rebasing and recalibration of hospital
costs, 79.1 ARC 9235A 249

Filed, Debts due from transfers of assets, 89.5,
89.7 ARC 9237A 252

Filed, Collection of child support, 95.1 to 95.3,
95.6, 95.7, 95.13, 95.14, 95.18 to 95.22,
ch 97 ARC 9238A 253

Filed, Rehabilitative treatment services--
bachelor and master social workers,
185.10(1) ARC 9239A 257

INSURANCE DIVISION[191]

COMMERCE DEPARTMENT[181]"umbrella"

Amended Notice, Aftermarket crash parts,
15.15 ARC 9253A 157

Notice, Viatical settlement contracts, 50.120 to
50.124 ARC 9273A 158

IOWA FINANCE AUTHORITY[265]

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]"umbrella"

Notice, Low-income housing tax credits,
ch 12 ARC 9271A 160

PETROLEUM UST FUND BOARD, IOWA
COMPREHENSIVE[591]

Notice, Insurance deductibles, 10.2
ARC 9263A 175

Notice, Remedial or insurance claims,
11.1(3)"n," 11.1(5)"g" ARC 9264A 176

PROFESSIONAL LICENSURE DIVISION[645]

PUBLIC HEALTH DEPARTMENT[641]"umbrella"

Notice, Barber examiners, 20.214(9)
ARC 9269A 176

Notice, Cosmetology, 61.1(6)"f," 62.1
ARC 9270A 177

PUBLIC HEARINGS

Summarized list 146

REAL ESTATE COMMISSION[193E]

Professional Licensing and Regulation Division[193]

COMMERCE DEPARTMENT[181]"umbrella"

Notice, Prelicense and continuing education,
3.2, 3.3(2), 3.4(1) ARC 9258A 177

REVENUE AND FINANCE DEPARTMENT[701]

Notice, Agency procedures, 6.2, 6.4, 6.5,
11.6, 12.9, 38.7, 38.11, 40.46(4), 43.2,
51.2(1), 51.8, 54.6(1), 54.9, 55.4, 57.2(1),
59.29, 63.2, 63.22, 67.2, 67.20, 67.23,
68.11, 81.6, 81.11(2), 81.12, 86.3(4), 89.11,
103.2, 103.6(2), 104.6 ARC 9262A 179

TRANSPORTATION DEPARTMENT[761]

Filed, For-hire intrastate motor carrier authority,
ch 524; rescind chs 523, 525, 528 ARC 9236A 258

Filed, For-hire interstate motor carrier authority,
ch 529 ARC 9240A 262

USURY

Notice 185

UTILITIES DIVISION[199]

COMMERCE DEPARTMENT[181]"umbrella"

Notice of Oral Presentation, U S WEST
communications ARC 9266A 185

Notice, Rule making, 1.3, 3.1 to 3.11
ARC 9272A 185

Notice, Unauthorized changes of telecommunica-
tions service, 6.8, 22.23 ARC 9267A 189

Filed Emergency, Unauthorized changes of
telecommunications service, 6.8, 22.23
ARC 9268A 196

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.

July 1, 1999, to June 30, 2000 $253.86 plus $12.69 sales tax

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 - $1,163.76 plus $58.19 sales tax

(Price includes 22 volumes of rules and index, plus a one-year subscription to the Code Supplement and the Iowa Administrative Bulletin.)

Iowa Administrative Code Supplement - $409.24 plus $20.46 sales tax

(Subscription expires June 30, 2000)

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 '00
Apr. 3 '00
Oct. 1
Oct. 20
Nov. 9
Nov. 24
Nov. 26
Dec. 15
Jan. 19 '00
Apr. 17 '00
Oct. 15
Nov. 3
Nov. 23
Dec. 8
Dec. 10
Dec. 29
Feb. 2 '00
May 1 '00
Oct. 29
Nov. 17
Dec. 7
Dec. 22
Dec. 24
Jan. 12 '00
Feb. 16 '00
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
5
Friday, August 20, 1999
September 8, 1999
6
Friday, September 3, 1999
September 22, 1999
7
Friday, September 17, 1999
October 6, 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, 1st 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.

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

AGRICULTURE AND LAND STEWARDSHIP DEPARTMENT[21]

Organic certification and organic
standards, ch 47
IAB 7/14/99 ARC 9200A
Public Library
507 Poplar
Atlantic, Iowa
August 12, 1999
7 p.m.

Chamber of Commerce
119 W. 6th St.
Storm Lake, Iowa
August 17, 1999
7 p.m.

Conference Room--2nd Floor
Wallace State Office Bldg.
Des Moines, Iowa
August 19, 1999
10 a.m.
DENTAL EXAMINERS BOARD[650]

Continuing education,
25.3
IAB 8/11/99 ARC 9275A
Conference Room--2nd Floor
Executive Hills West
1209 E. Court Ave.
Des Moines, Iowa
September 8, 1999
1 p.m.
ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

Community development block grant
program--contingency fund,
23.4(5), 23.10
IAB 8/11/99 ARC 9245A
(See also ARC 9246A herein)
Main Conference Room
200 E. Grand Ave.
Des Moines, Iowa
August 31, 1999
2:30 p.m.
Community planning and
development fund,
ch 41; rescind chs 42, 46 to 49
IAB 8/11/99 ARC 9247A
Main Conference Room
200 E. Grand Ave.
Des Moines, Iowa
August 31, 1999
1:30 p.m.
EDUCATION DEPARTMENT[281]

Standards for practitioner preparation
programs, ch 79
IAB 6/30/99 ARC 9130A
Conference Room 3 North--3rd Floor
Grimes State Office Bldg.
Des Moines, Iowa
August 30, 1999
2 p.m.
HUMAN SERVICES DEPARTMENT[441]

Drug prior authorization; therapeutic
classes of drugs,
78.1(2), 78.28(1)
IAB 8/11/99 ARC 9243A
(See also ARC 9143A, IAB 6/30/99)
Conference Room--6th Floor
Iowa Bldg., Suite 600
411 Third St. S.E.
Cedar Rapids, Iowa
September 1, 1999
10 a.m.

Administrative Conference Room
417 E. Kanesville Blvd.
Council Bluffs, Iowa
September 1, 1999
9 a.m.
HUMAN SERVICES DEPARTMENT[441] (Cont'd)

Large Conference Room--5th Floor
Bicentennial Bldg.
428 Western
Davenport, Iowa
September 1, 1999
10 a.m.

Conference Room 102
City View Plaza
1200 University
Des Moines, Iowa
September 1, 1999
10 a.m.

Liberty Room
Mohawk Square
22 N. Georgia Ave.
Mason City, Iowa
September 1, 1999
10 a.m.

Conference Room 3
120 E. Main
Ottumwa, Iowa
September 1, 1999
10 a.m.

Fifth Floor
520 Nebraska St.
Sioux City, Iowa
September 2, 1999
1:30 p.m.

Conference Room 420
Pinecrest Office Bldg.
1407 Independence Ave.
Waterloo, Iowa
September 1, 1999
10 a.m.
INSURANCE DIVISION[191]

Unfair trade practices--aftermarket
crash parts in auto insurance policies,
15.15
IAB 8/11/99 ARC 9253A
(See also ARC 9090A, IAB 6/16/99)
Hearing Room
350 Maple St.
Des Moines, Iowa
September 7, 1999
10 a.m.
Viatical settlement contracts,
50.120 to 50.124
IAB 8/11/99 ARC 9273A
330 E. Maple St.
Des Moines, Iowa
September 8, 1999
10 a.m.
IOWA FINANCE AUTHORITY[265]

Low-income housing tax credits,
ch 12
IAB 8/11/99 ARC 9271A
(ICN Network)
IPTV 1
6450 Corporate Dr.
Johnston, Iowa
September 1, 1999
1 p.m.

National Guard Armory
10400 18th St. SW
Cedar Rapids, Iowa
September 1, 1999
1 p.m.

State Room
Clear Lake AEA
9184B 265th St.
Clear Lake, Iowa
September 1, 1999
1 p.m.

National Guard Armory
2415 Kanesville Blvd.
Council Bluffs, Iowa
September 1, 1999
1 p.m.
IOWA FINANCE AUTHORITY[265] (Cont'd)
(ICN Network)

Mt. Joy Army Aviation Support
Facility
9650 S. Harrison St.
Davenport, Iowa
September 1, 1999
1 p.m.

National Guard Armory
1000 S. Walnut
Mt. Pleasant, Iowa
September 1, 1999
1 p.m.

National Guard Armory
Park West Rd. -- Old Hwy. 34
Red Oak, Iowa
September 1, 1999
1 p.m.

National Guard Armory
102 S. Main St.
Sioux City, Iowa
September 1, 1999
1 p.m.
PETROLEUM UST FUND BOARD, IOWA COMPREHENSIVE[591]

Insurance eligibility,
10.2
IAB 8/11/99 ARC 9263A
Conference Room
1000 Illinois St., Suite B
Des Moines, Iowa
August 31, 1999
10 a.m.
Remedial or insurance claims,
11.1
IAB 8/11/99 ARC 9264A
Conference Room
1000 Illinois St., Suite B
Des Moines, Iowa
August 31, 1999
10 a.m.
PROFESSIONAL LICENSURE DIVISION[645]

Barber examiners,
20.214(9)
IAB 8/11/99 ARC 9269A
Conference Room--5th Floor
Lucas State Office Bldg.
Des Moines, Iowa
August 31, 1999
8 to 9 a.m.
Cosmetology,
61.1(3), 62.1
IAB 8/11/99 ARC 9270A
Board Room 525--5th Floor
Lucas State Office Bldg.
Des Moines, Iowa
August 31, 1999
8 to 9 a.m.
PUBLIC HEALTH DEPARTMENT[641]

Mutual consent voluntary
adoption registry, ch 107
IAB 7/28/99 ARC 9222A
South Conference Room--5th Floor
Lucas State Office Bldg.
Des Moines, Iowa
August 17, 1999
1 to 2 p.m.
PUBLIC SAFETY DEPARTMENT[661]

Sex offender registry,
8.302 to 8.304
IAB 7/28/99 ARC 9217A
(See also ARC 9218A)
Conference Room--3rd Floor
Wallace State Office Bldg.
Des Moines, Iowa
September 2, 1999
9:30 a.m.
Fingerprints and photographs--
juveniles,
11.8 to 11.10, 11.19
IAB 7/28/99 ARC 9219A
(See also ARC 9220A)
Conference Room--3rd Floor
Wallace State Office Bldg.
Des Moines, Iowa
September 2, 1999
10 a.m.
REAL ESTATE COMMISSION[193E]

Prelicense education and
continuing education,
3.2, 3.3(2), 3.4(1)
IAB 8/11/99 ARC 9258A
Conference Room--2nd Floor
1918 S.E. Hulsizer
Ankeny, Iowa
August 31, 1999
9 a.m.
UTILITIES DIVISION[199]

U S WEST communications,
IAB 8/11/99 ARC 9266A
Board Hearing Room
350 Maple St.
Des Moines, Iowa
October 12, 1999
10 a.m.
Rule-making procedures,
1.3, 3.1 to 3.11
IAB 8/11/99 ARC 9272A
Board Hearing Room
350 Maple St.
Des Moines, Iowa
September 15, 1999
10 a.m.
Unauthorized changes of
telecommunications service,
6.8, 22.23
IAB 8/11/99 ARC 9267A
Board Hearing Room
350 Maple St.
Des Moines, Iowa
October 21, 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]

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 African-Americans, Division on the[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 9241A

ATTORNEY GENERAL[61]

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 1999 Iowa Acts, House File 476, section 3, the Attorney General hereby gives Notice of Intended Action to adopt Chapter 34, "Acquisition Negotiation Statement of Rights," Iowa Administrative Code.

1999 Iowa Acts, House File 476, section 3, mandates that an acquiring agency provide a statement of rights to owners of record who may have all or a part of their property acquired by condemnation. It also directs the Attorney General to adopt rules prescribing a statement of rights which an acquiring agency may use to meet its obligation. There is no provision for waiver since use of the statement is permissive under the statute.

Any person or agency may submit written comments concerning these proposed rules. The comments shall:

1. Include the name, address, and telephone number of the person or agency authoring the comments.

2. Reference the number and title of the proposed rule, as given in this Notice, that is the subject of the comments.

3. Be addressed to the Attorney General's Office, Special Assistant Attorney General, Transportation Division, 800 Lincoln Way, Ames, Iowa 50010; fax (515)239-1120; Internet E-mail address dferree@idot.e-mail.com.

4. Be received by the Transportation Division of the Attorney General's Office no later than August 31, 1999.

Requests for oral presentation regarding this rule making must be submitted in writing to General Counsel by August 31, 1999, at the address above.

These rules are intended to implement 1999 Iowa Acts, House File 476, section 3.

The following new chapter is proposed.

CHAPTER 34
ACQUISITION NEGOTIATION
STATEMENT OF RIGHTS

61--34.1(78GA,HF476) Statement of property owner's rights. 1999 Iowa Acts, House File 476, section 3, mandates that an acquiring agency provide a statement of rights to owners of record who may have all or a part of their property acquired by condemnation. It also directs the attorney general to adopt rules prescribing a statement of rights which an acquiring agency may use to meet its obligation. Pursuant to that directive, the following statement of property owner's rights is adopted:

STATEMENT OF PROPERTY OWNER'S RIGHTS

Just as the law grants certain entities the right to acquire private property, you as the owner of the property have certain rights. You have the right to:

1. Receive just compensation for the taking of property. (Iowa Constitution, Article I, section 18)

2. An offer to purchase which may not be less than the lowest appraisal of the fair market value of the property. (Iowa Code section 6B.45 as amended by 1999 Iowa Acts, House File 476, section 18; Iowa Code section 6B.54 as amended by 1999 Iowa Acts, House File 476, section 20)

3. Receive a copy of the appraisal, if an appraisal is required, upon which the acquiring agency's determination of just compensation is based not less than ten days before being contacted by the acquiring agency's acquisition agent. (Iowa Code section 6B.45 as amended by 1999 Iowa Acts, House File 476, section 18)

4. An opportunity to accompany at least one appraiser of the acquiring agency who appraises your property when an appraisal is required. (Iowa Code section 6B.54)

5. Participate in good-faith negotiations with the acquiring agency before the acquiring agency begins condemnation proceedings. (1999 Iowa Acts, House File 476, section 3)

6. A determination of just compensation by an impartial compensation commission and the right to appeal its award to the district court if you cannot agree on a purchase price with the acquiring agency. (Iowa Code section 6B.4; Iowa Code section 6B.7 as amended by 1999 Iowa Acts, House File 476, section 8; Iowa Code section 6B.18)

7. A review by the compensation commission of the necessity for the condemnation if your property is agricultural land being condemned for industry. (1999 Iowa Acts, House File 476, section 7)

8. Payment of the agreed upon purchase price or, if condemned, a deposit of the compensation commission award before you are required to surrender possession of the property. (Iowa Code section 6B.25; Iowa Code section 6B.26; Iowa Code section 6B.54(11))

9. Reimbursement for expenses incidental to transferring title to the acquiring agency. (Iowa Code section 6B.33 as amended by 1999 Iowa Acts, House File 476, section 15; Iowa Code section 6B.54(10))

10. Reimbursement of certain litigation expenses: (a) if the award of the compensation commissioners exceeds 110 percent of the acquiring agency's final offer before condemnation; and (b) if the award on appeal in court is more than the compensation commissioners' award. (Iowa Code section 6B.33)

11. At least 90 days' written notice to vacate occupied property. (Iowa Code section 6B.54(4))

12. Relocation services and payments, if you are eligible to receive them, and the right to appeal your eligibility for and amount of the payments. (Iowa Code section 316.9; Iowa Code section 6B.42 as amended by 1999 Iowa Acts, House File 476, section 17)

The rights set out in this statement are not claimed to be a full and complete list or explanation of an owner's rights under the law. They are derived from Iowa Code chapters 6A, 6B and 316. For a more thorough presentation of an owner's rights, you should refer directly to the Iowa Code or contact an attorney of your choice.

61--34.2(78GA,HF476) Alternate statement of rights. Rule 61--34.1(78GA,HF476) is not intended to prohibit acquiring agencies from providing a statement of rights in a different form, a more detailed statement of rights, or supplementary material expanding upon an owner's rights.

These rules are intended to implement 1999 Iowa Acts, House File 476, section 3.

ARC 9244A

COLLEGE STUDENT AID COMMISSION[283]

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 261.1(5) and 261.3, the College Student Aid Commission proposes to amend Chapter 12, "Iowa Tuition Grant Program," Iowa Administrative Code.

This amendment will conform institutional eligibility requirements to the Iowa Code.

Interested persons may submit comments orally or in writing to the Executive Director, College Student Aid Commission, 200 Tenth Street, Fourth Floor, Des Moines, Iowa, 50309; telephone (515)281-3501, on or before August 31, 1999.

This amendment is intended to implement Iowa Code section 261.9.

The following amendment is proposed.

Amend subrule 12.2(1) as follows:

12.2(1) Methods of gaining institutional eligibility under Iowa Code section 261.9. An Iowa institution requesting participation in the Iowa tuition grant program must apply to the college student aid commission utilizing the commission's designated application.

The applicant institution must:

a. Be accredited by the North Central Association of Colleges (NCA); or

b. Be certified by the NCA as a candidate for accreditation; or

~~c. Provide documentation from the NCA that it has the potential for accreditation and is making progress toward accreditation under the time frame established by the NCA; or~~

d c. Be a school of nursing accredited by the National League for Nursing and approved by the board of nurse examiners, including one operated, controlled, and administered by a county public hospital.

ARC 9275A

DENTAL EXAMINERS BOARD[650]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 147.76, the Board of Dental Examiners gives Notice of Intended Action to amend Chapter 25, "Continuing Education," Iowa Administrative Code.

Chapter 25 is being amended to decrease continuing education hours allowed for attendance at convention-type meetings and to clarify the types of subject matter acceptable for continuing education.

Any interested person may make written suggestions or comments on these proposed amendments prior to August 31, 1999. Such written comments should be directed to Constance L. Price, Executive Director, Board of Dental Examiners, Executive Hills West, 1209 East Court, Des Moines, Iowa 50319.

There will be a public hearing on September 8, 1999, at1 p.m. in the Second Floor Conference Room, Executive Hills West, 1209 East Court, 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 amendments.

The proposed amendments are intended to implement Iowa Code section 147.10.

The following amendments are proposed.

ITEM 1. Amend subrule 25.3(4) as follows:

25.3(4) Activity types acceptable for continuing dental education credit may include:

a. Attendance at a multiday convention-type meeting. A multiday, convention-type meeting is held at a national, state or regional level and involves a variety of concurrent educational experiences directly related to the practice of dentistry. Attendance shall receive ~~five~~ three hours of credit with the maximum allowed ~~ten~~ six hours of credit per biennium. Four hours of credit shall be allowed for presentation of an original table clinic at a convention-type meeting as verified by the sponsor when the subject matter conforms with 25.3(7). Attendance at the table clinic session of a dental or dental hygiene convention shall receive two hours of credit as verified by the sponsor.

b. to e. No change.

ITEM 2. Amend subrule 25.3(7), paragraph "b," as follows:

b. Nonacceptable subject matter includes: personal development, business aspects of practice (this does not exclude courses in patient treatment record keeping, risk management, and OSHA regulations), personnel management, ~~practice management, communication,~~ government regulations, insurance, collective bargaining, and community service presentations. While desirable, those subjects are not applicable to the dental and dental hygiene skills, knowledge, and competence as expressed in the legislation. Therefore, such courses will receive no credit toward relicensure. The board may deny credit for any course.

ARC 9245A

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 15.104 and 15.106, the Iowa Department of Economic Development hereby gives Notice of Intended Action to amend Chapter 23, "Iowa Community Development Block Grant Program," Iowa Administrative Code.

The proposed amendments establish a contingency fund within the Community Development Block Grant Program. The Contingency Fund provides funds for (1) projects that address an imminent threat to public health or safety and (2) projects that take advantage of a community development opportunity that would otherwise be foregone. There are no waiver provisions proposed because the Department is required by federal regulations to establish the method of allocation of funds prior to award.

Public comments concerning the proposed amendments will be accepted until 4:30 p.m. on August 31, 1999. Interested persons may submit written or oral comments by contacting Roselyn McKie Wazny, Iowa Department of Economic Development, 200 East Grand Avenue, Des Moines, Iowa 50309; telephone (515)242-4822.

A public hearing to receive comments about the proposed amendments will be held at 2:30 p.m. on August 31, 1999, at the above address in the IDED main conference room. Individuals interested in providing comments at the hearing should contact Roselyn McKie Wazny by 4 p.m. on August 30, 1999, to be placed on the hearing agenda.

These amendments were also Adopted and Filed Emergency and are published herein as ARC 9246A. The content of that submission is incorporated by reference.

These rules are intended to implement Iowa Code section 15.108(1)"a."

ARC 9247A

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 15.104 and 15.106, the Iowa Department of Economic Development hereby gives Notice of Intended Action to rescind Chapter 42, "Governmental Enterprise Fund," Chapter 46, "Rural Enterprise Fund," Chapter 47, "Rural Leadership Development Program," Chapter 48, "Rural Action Development Program," and Chapter 49, "Rural Innovation Grants," and to adopt Chapter 41, "Community Planning and Development Fund," Iowa Administrative Code.

The proposed amendments rescind Chapters 42, 46, 47, 48, and 49 and adopt a new Chapter 41. The purpose is threefold: (1) to combine all programs under one set of administrative rules that will be flexible and responsive to local needs; (2) to enhance provision of services and resources to communities; and (3) to reduce administrative costs and reduce confusion in the delivery of five separate programs. The proposed rules do not include waiver provisions at this time. The Department desires to study the issue further before taking action.

Public comments concerning the proposed new chapter will be accepted until 4:30 p.m. on August 31, 1999. Interested persons may submit written or oral comments by contacting Roselyn McKie Wazny, Division of Community and Rural Development, Department of Economic Development, 200 East Grand Avenue, Des Moines, Iowa 50309; telephone (515)242-4822.

A public hearing to receive comments about the proposed new chapter will be held on August 31, 1999, at the above address in the IDED main conference room at 1:30 p.m. Individuals interested in providing comments at the hearing should contact Roselyn McKie Wazny by 4 p.m. on August 30, 1999, to be placed on the hearing agenda.

These rules are intended to implement Iowa Code section 15.108(3) and 1999 Iowa Acts, House File 745, section 1(3)"c."

The following amendments are proposed.

ITEM 1. Rescind and reserve 261--Chapters 42, 46, 47, 48 and 49.

ITEM 2. Adopt the following new chapter:

CHAPTER 41
COMMUNITY PLANNING
AND DEVELOPMENT FUND

261--41.1(78GA,HF745) Purpose. The purpose of this program is to assist communities in addressing community and economic development challenges and opportunities. Technical and financial assistance will be provided to communities to access planning, training, education, consultation and technical assistance to further local initiatives or to select and prioritize strategies for the improvement of operations and structures to meet business and residential demands.

261--41.2(78GA,HF745) Program eligibility.

41.2(1) Eligible applicants include cities, counties, and councils of government on behalf of economic develop-ment groups; individual city and county projects; multicommunity or county projects; or coalitions of public/private entities including but not limited to local governments, fire/EMS departments, educational institutions, not-for-profit corporations, hospitals, state agencies, or development organizations. Applicants must be able to demonstrate a minimum match which equals at least 25 percent of the grant amount requested in the form of cash, and an additional in-kind services match of 25 percent.

41.2(2) Eligible projects. Examples of eligible projects include but are not limited to the following:

a. To hire staff or consultation to implement or expand community development opportunities;

b. To hire staff or consultative services to design, develop or implement new systems of delivery of governmental services;

c. For the direct purchase of consultative or technical services to conduct feasibility studies, economic impact studies, examination of commercial, tourism, industrial, small business, or recreational development activities;

d. To conduct targeted marketing studies for specific strategies or emerging opportunities, or other marketing planning or technical assistance services;

e. To purchase educational/training materials to support leadership or professional development for economic/community development initiative;

f. To support a pilot study for a new or innovative approach to support community/economic development or to improve access to government services;

g. To conduct assessments of governmental or other services, issues and needs that, if modified, would improve climate for local economic development;

h. To conduct assessments of organizations or to engage in strategic planning;

i. Other targeted assistance necessary to enhance the economic vitality of the proposed area.

261--41.3(78GA,HF745) General policies for applications.

41.3(1) The maximum award for a single project is $50,000 over a period not to exceed three years. Awards may be in the form of either cash or technical assistance. Cash or technical assistance awards will vary depending upon the complexity of the issue, geographic area of service, level of population in the service area, number of issues involved, and diversity of the consortium.

41.3(2) If a consortium of entities applies, applications shall include letters of support from each entity indicating roles, responsibilities, and support in the form of either cash or in-kind services.

41.3(3) If a consortium of entities applies, one community, county, or council of governments shall be designated as the recipient of funds. An official of that legal entity shall sign the application accepting responsibility for the funds.

41.3(4) Program implementation timetables shall not exceed 36 months, unless prior written approval is given by the department.

41.3(5) The department will disseminate a request for proposals to appropriate entities.

261--41.4(78GA,HF745) Application procedures. Pre-applications shall be submitted to the Community Development Project Manager, Community Planning and Development Fund, Iowa Department of Economic Development, 200 East Grand Avenue, Des Moines, Iowa 50309. Preapplications will be reviewed by the community development program manager, and written comments will be returned to applicant with appropriate application forms and instructions available at this address.

261--41.5(78GA,HF745) Application contents. Required contents of the application include:

1. A summary sheet including title and project overview; name, address, and telephone number of one person who will serve as the contact for the application; the geographic area to be served; and total program budget including applicant match.

2. A description of needs or problems, objectives, activities, project timetable, and a description of the final product/manual/outcome.

3. A budget for the project including cash and in-kind match.

261--41.6(78GA,HF745) Review process. Each eligible application will be reviewed by a committee within the department. Applications that score fewer than 400 points under subrule 41.6(2) will not be recommended for funding. Applicants may be interviewed further to explore the potential for providing technical assistance, gain additional information concerning the proposal, and negotiate the project's work plan and budget.

41.6(1) Ranking. The committee will rank the applications based on the following criteria:

a. Economic or community enhancement impact to the area. (How the project will improve the development potential of the project area, improve access to services, or create an environment for community improvement.)

b. Capacity of the applicant to sustain, implement, or reach stated objectives once grant period is concluded. (Ability of the applicant to sustain a new position, if requested, to build or implement a new system, building.)

c. Demonstrated networking, cooperation and partnerships with other entities, organizations, and local governments necessary to meet stated goals and objectives. (Past successful cooperative efforts that have been sustained over time. Multicommunity groups are strongly encouraged; some of the areas involved must also directly serve or impact a rural area.)

d. Local financial and volunteer contribution to the project. (Cash, office materials, supplies, volunteer support, office space, equipment, administrative assistance.)

e. Creativity and innovation of the proposed project to address issues presented. (Project demonstrates a new and creative approach to address a common issue/concern.)

f. Evidence of participation in local planning that supports the request for funds. (Community builder plan, housing needs assessment, comprehensive land use planning, or a similar planning activity that has led the applicant to the proposed activity for which application addresses.)

41.6(2) Scoring. The scoring system has a maximum of 700 points.

a. Economic or community enhancement impact to the area. 150 points possible.

b. Capacity of the applicant to sustain, implement or reach stated objectives. 150 points possible.

c. Demonstrated networking, cooperation and partnerships with other entities, organizations, and local governments. 150 points possible.

d. Local effort. 100 points possible.

e. Creativity and innovation of the proposed project. 75 points possible.

f. Evidence of local planning. 75 points possible.

261--41.7(78GA,HF745) Award process. Recommendations by the committee for funding will be forwarded to the director of the department for final decisions. Applicants will be notified in writing after the final decisions on grants are made.

41.7(1) Expenses eligible for reimbursement may include but are not limited to the following:

a. Coordinating staff for the governmental units or community groups participating in the project.

b. Feasibility studies or implementation of a locally developed study or plan.

c. Educational/training materials, supplies, postage necessary to the outcome of the project.

d. Travel expenses of the local coordinator, if hired through a participating governmental unit.

e. Direct purchase of consultative or technical assistance services.

f. In-state conference, workshop or seminar fees necessary to the outcome of the project for staff or volunteers directly involved in the project.

g. Travel expenses to visit other sites or locations in state necessary to the outcome of the project for staff or volunteers directly involved in the project.

41.7(2) Expenses ineligible for reimbursement may include but are not limited to the following:

a. Purchase of land, buildings or improvements thereon.

b. Expenses for development of sites and facilities.

c. Expenses for equipment, materials, supplies, telephones, and faxes related to the project.

d. Expenses for studies or plans that are routinely developed as a part of city or county function or operation, such as development of comprehensive planning documents, community builder plans, master plans or engineering studies of water, sewer, streets/roads, parks, unless a new or innovative approach is used such as a city/county joint planning process for land use, service provision or other collaborative actions.

261--41.8(78GA,HF745) Program management.

41.8(1) Record keeping. Financial records, supporting documents, statistical records and all other records pertinent to the project shall be retained by the recipient of funds for a period of three years after the contract expiration date.

41.8(2) A contract will be negotiated with the successful applicant which includes, but is not limited to, the terms for disbursement of funds and responsibilities.

41.8(3) Representatives of the department and state auditors shall have access to all books, accounts and documents belonging to or in use by the grantee pertaining to the receipt of assistance under this program.

41.8(4) All contracts under this program are subject to audit.

261--41.9(15) Performance reviews.

41.9(1) Applicants will be required to submit performance reports to the department. The report will assess progress on the goals and project activities. Some projects may require the completion of a final product (such as a manual), study or report to be submitted to the department before final payment is made. Performance reports may be quarterly or semiannually, and for some projects, may be required for a period of time after contract period expires.

41.9(2) The department may perform field visits as deemed necessary.

These rules are intended to implement 1999 Iowa Acts, House File 745, section 1(3)"c."

ARC 9243A

HUMAN SERVICES DEPARTMENT[441]

Amended Notice of Intended Action

Pursuant to the authority of Iowa Code section 249A.4, the Department of Human Services hereby gives Notice of Intended Action that public hearings as set forth below will be held in order to receive oral or written comments on amendments to subrule 78.1(2), paragraph "a," subparagraph (3), and subrule 78.28(1), paragraph "d," that revise the current drug prior authorization rules and add new therapeutic classes of drugs which will require prior authorization. These amendments were published under Notice of Intended Action in the Iowa Administrative Bulletin on June 30, 1999, as ARC 9143A.

Oral presentations may be made by persons appearing at the following meetings. Written comments will also be accepted at these times.

Cedar Rapids--September 1, 1999 10 a.m.

Cedar Rapids Regional Office

Iowa Building - Suite 600

Sixth Floor Conference Room

411 Third St. S.E.

Cedar Rapids, Iowa 52401

Council Bluffs--September 1, 1999 9 a.m.

Administrative Conference Room

Council Bluffs Regional Office

417 E. Kanesville Boulevard

Council Bluffs, Iowa 51501

Davenport--September 1, 1999 10 a.m.

Davenport Area Office

Bicentennial Building - Fifth Floor

Large Conference Room

428 Western

Davenport, Iowa 52801

Des Moines--September 1, 1999 10 a.m.

Des Moines Regional Office

City View Plaza

Conference Room 102

1200 University

Des Moines, Iowa 50314

Mason City--September 1, 1999 10 a.m.

Mason City Area Office

Mohawk Square, Liberty Room

22 North Georgia Avenue

Mason City, Iowa 50401

Ottumwa--September 1, 1999 10 a.m.

Ottumwa Area Office

Conference Room 3

120 East Main

Ottumwa, Iowa 52501

Sioux City--September 2, 1999 1:30 p.m.

Sioux City Regional Office

Fifth Floor

520 Nebraska St.

Sioux City, Iowa 51101

Waterloo--September 1, 1999 10 a.m.

Waterloo Regional Office

Pinecrest Office Building

Conference Room 420

1407 Independence Avenue

Waterloo, Iowa 50703

Any persons who intend to attend a public hearing and have special requirements such as hearing or vision impairments should contact the Bureau of Policy Analysis at (515)281-8440 and advise of special needs.

ARC 9242A

HUMAN SERVICES DEPARTMENT[441]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 514I.5(8), the Department of Human Services proposes to amend Chapter 86, "Healthy and Well Kids in Iowa (HAWK-I) Program," appearing in the Iowa Administrative Code.

These amendments implement the following changes to the HAWK-I program:

* A 20 percent deduction to earned income is allowed when determining eligibility for the program. This will create more consistency on how income is counted between the Medicaid and HAWK-I program.

Federal legislation allows states to define how income is counted when comparing it to the income limit. While the HAWK-I program uses gross income to compare to 185 percent of the federal poverty level when determining eligibility, the Medicaid program allows deductions to income before comparing income to 133 percent of the federal poverty level. This confuses the public and makes it difficult to know which program to apply for. This amendment will more closely align the programs by allowing a 20 percent standard deduction to earned income when determining eligibility for the HAWK-I program in the same manner that is allowed for Medicaid. This deduction is intended to offset some of the costs of employment (e.g., taxes) and does not apply to unearned income (e.g., child support and social security).

* Children participating in the HAWK-I program do not have to provide a social security number as a condition of eligibility to participate in the program.

The Health Care Financing Administration (HCFA) has clarified that a child does not have to provide a social security number in order to participate in the HAWK-I program. HCFA has also clarified that provision of a social security number remains a requirement for Medicaid and that children who would be eligible for Medicaid except for the failure to provide a social security number are not eligible for the HAWK-I program.

* Children who are voluntarily excluded from Medicaid due to financial reasons are allowed to participate in the HAWK-I program.

Medicaid rules specify which household members (and thus whose income) must be included when determining eligibility. The family may voluntarily exclude certain persons from the eligibility determination in order to avoid consideration of their income when determining eligibility for the remaining members of the household. If the family voluntarily excludes a child from the Medicaid household, that child is not eligible to participate in the Medicaid program under any other coverage group.

The Attorney General's Office has clarified that a child who is voluntarily excluded from the household due to the child's excess income or resources can participate in the HAWK-I program if otherwise eligible. This provision does not apply to children who are voluntarily excluded from the household for nonfinancial reasons (e.g., the parent excludes the child in order to avoid cooperation with the child support recovery office).

* The appointment terms for persons on the clinical advisory committee to the HAWK-I Board are established.

These amendments do not provide for waivers in specified situations because:

* The amendments allowing a 20 percent deduction to earned income when determining eligibility for the HAWK-I program, clarifying that children participating in the HAWK-I program do not have to provide a social security number as a condition of eligibility to participate in the program and allowing children who are voluntarily excluded from Medicaid due to financial reasons to participate in the HAWK-I program confer a benefit on those children.

* The amendment establishing the appointment terms for persons on the clinical advisory committee to the HAWK-I Board already allows persons to serve more than one term.

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 September 1, 1999.

These amendments are intended to implement Iowa Code chapter 514I.

The following amendments are proposed.

ITEM 1. Amend rule 441--86.2(514I) as follows:

Amend subrule 86.2(2), paragraph "a," subparagraph (1), by adding the following new numbered paragraph "3."

3. Earned income deduction. Each person in the household whose nonexempt income, earned as an employee or from self-employment, is considered in determining HAWK-I eligibility is entitled to a 20 percent earned income deduction. The deduction is intended to include work-related expenses other than child care. These expenses may include taxes, transportation, meals, uniforms and other work-related expenses.

Amend subrule 86.2(5) as follows:

86.2(5) Ineligibility for Medicaid. The child shall not be receiving Medicaid or eligible to receive Medicaid if application were made except when the child would be required to meet a spenddown under the medically needy program in accordance with the provisions of 441--subrule 75.1(35). Additionally, a child who would be eligible for Medicaid except for the parent's failure or refusal to cooperate in establishing initial or ongoing eligibility shall not be eligible for coverage under the HAWK-I program. Children who are excluded from the household due to the child's excess income can participate in the HAWK-I program if otherwise eligible. This does not apply to children who are voluntarily excluded from the household for nonfinancial reasons.

Rescind subrule 86.2(12).

ITEM 2. Amend 441--Chapter 86 by adopting the following new rule:

441--86.16(514I) Clinical advisory committee. Members of the clinical advisory committee established in accordance with the provisions of 441--paragraph 1.10(2)"c" shall be appointed to three-year terms. Members may be appointed for more than one term. No more than one-third of the membership of the committee shall rotate off the committee in any given calendar year.

ARC 9253A

INSURANCE DIVISION[191]

Amended Notice of Intended Action

Pursuant to Iowa Code section 505.8, Notice is hereby given that a public hearing will be held on Tuesday, September 7, 1999, at 10 a.m. in the Hearing Room, Utilities Board, 350 Maple Street, Des Moines, Iowa, in order to receive oral or written comments on rule 191--15.15(507B), regarding notice required for use of aftermarket crash parts in automobile insurance policies, published in the Iowa Administrative Bulletin on June 16, 1999, as ARC 9090A. Persons wishing to speak at the hearing should contact Angela Burke Boston at the Insurance Division, 330 Maple Street, Des Moines, Iowa 50319, no later than 4:30 p.m. on Friday, September 3, 1999.

ARC 9273A

INSURANCE DIVISION[191]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 502.607, the Insurance Division hereby gives Notice of Intended Action to amend Chapter 50, "Regulation of Securities Offerings and Those Who Engage in the Securities Business," Iowa Administrative Code.

The proposed rules impose certain advertising, examination, and disclosure requirements upon issuers and agents who wish to sell viatical settlement contracts within the state of Iowa. A waiver provision is also included herein which applies specifically to these rules.

Any interested person may make written suggestions or comments on these proposed rules prior to Friday, September 10, 1999. These written materials may be mailed to Craig A. Goettsch, Iowa Securities Bureau, 340 East Maple Street, Des Moines, Iowa 50319-0066, or may be transmitted via facsimile to (515)281-3059.

A public hearing will be held on Wednesday, September 8, 1999, at 10 a.m. at the Iowa Insurance Division, 330 East Maple Street, Des Moines, Iowa 50319-0065.

These rules are intended to implement Iowa Code chapter 502 as amended by 1999 Iowa Acts, Senate File 410.

The following rules are proposed.

Adopt the following new rules:

VIATICAL SETTLEMENT CONTRACTS

191--50.120(502) Advertising of viatical settlement contracts.

50.120(1) Under this rule, the term "advertisement" means any written or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet, or similar communications media, including film strips, motion pictures and videos, published in connection with the offer or sale of a viatical settlement contract.

50.120(2) The issuer and agent shall file all viatical settlement contract advertisements not less than ten days prior to the date of use or a shorter period as the administrator may permit. The advertisements shall not be used in Iowa until a copy thereof, marked with allowance for use, has been received from the administrator.

50.120(3) Viatical settlement contract advertisements should contain no more than the following:

a. The name of the issuer;

b. The address and telephone number of the issuer;

c. A brief description of the security, including minimum purchase requirements and liquidity aspects;

d. If rate of return is advertised, it must be stated as the annual averaged rate of return, with a disclaimer that this is an annual averaged rate of return, that individual investor rates of return will vary based upon the viator's projected and actual date of death, and that an annual rate of return on a viatical settlement contract cannot be guaranteed;

e. The name, address and telephone number of the agent of the issuer authorized to sell the viatical settlement contracts;

f. A statement that the advertisement is neither an offer to sell nor a solicitation of an offer to purchase and that any offer or solicitation may only be made by providing a disclosure document; and

g. How a copy of the disclosure document may be obtained.

50.120(4) Notwithstanding the provisions of rule 191-- 50.25(502), certain viatical settlement advertisements are deemed false and misleading on their face by the administrator and are prohibited under Iowa Code sections 502.407 and 502.602. False and misleading viatical settlement advertisements include, but are not limited to, the following representations:

a. "Fully secured," "100% secured," "fully insured," "secure," "safe," "backed by rated insurance company(ies)," "backed by federal law," "backed by state law," or similar representations;

b. "No risk," "minimal risk," "low risk," "no speculation," "no fluctuation," or similar representations;

c. "Qualified or approved for IRA, Roth IRA, 401K, SEP, 403B, Keogh plans, TSA, other retirement account rollovers," "tax deferred," or similar representations;

d. "Guaranteed fixed return, annual return, principal, earnings, profits, investment," or similar representations;

e. "No sales charges or fees," or similar representations;

f. "High yield," "superior return," "excellent return," "high return," "quick profit," or similar representations;

g. "Perfect investment," "proven investment," or similar representations;

h. Purported favorable representations or testimonials about the benefits of viaticals as an investment, taken out of context from newspapers, trade papers, journals, radio and television programs, and all other forms of print and electronic media.

191--50.121(502) Application by viatical contract issuers and registration of agents to sell viatical settlement contracts.

50.121(1) Under this rule, the term "viatical settlement contract issuer" includes, but is not limited to, any individual, company, corporation or other entity that offers or sells, directly or indirectly, viatical settlement contracts to investors.

50.121(2) A viatical settlement contract issuer employing agents in Iowa must make prior application to the administrator for this authority. The application shall be made by letter and shall include:

a. A statement of the issuer's intent to employ agents for the sale of its viatical settlement contracts; and

b. Name, address, social security number and proof of satisfaction of subrule 50.121(3) for each agent.

50.121(3) An applicant for registration as an Iowa-licensed agent of an issuer of viatical settlement contracts shall file with the administrator:

a. Proof of obtaining a passing grade on the NASD Series 7 examination;

b. Proof of obtaining a passing grade on the NASD Series 63 examination;

c. An accurate, complete and signed Form U-4; and

d. A $30 filing fee.

191--50.122(502) Risk disclosure. Viatical settlement contract issuers and registered agents of issuers must provide specific, written disclosures of risk to Iowa investors at the time of the initial offer to sell a viatical settlement contract. These disclosures must be preceded by the following caption, which must be in bold, 16-point typeface:

IMPORTANT RISK DISCLOSURE INFORMATION--READ BEFORE SIGNING ANY VIATICAL SETTLEMENT CONTRACT

Certain items must be disclosed including, but not limited to, the following:

1. That the actual annual rate of return on any viatical settlement contract is dependent upon (a) an accurate projection of the viator's life expectancy, and (b) the actual date of the viator's death. An annual "guaranteed" rate of return is not possible;

2. Whether, after purchasing the viatical settlement contract, the investor will be responsible for payment of premiums on the contract if the viator lives longer than projected. If the investor will be responsible for such premiums, the amount of the premium payment and its negative effect on the investor's return must be disclosed to the investor;

3. Whether any premium payments on the contract have been escrowed. The investor must be provided the date upon which the escrowed funds will be depleted, informed whether the investor will be responsible for payment of premiums thereafter, and informed of the amount of such premiums;

4. Whether any premium payments on the contract have been waived. The investor must be informed whether the investor will be responsible for payment of the premiums if the insurer who wrote the policy terminates the waiver after purchase, and informed of the amount of such premiums;

5. Whether the investor is responsible for payment of premiums on the contract if the viator returns to health, and the amount of such premiums;

6. Whether the investor is entitled to all or part of the investor's investment under the contract if the viator's underlying policy is later determined to be null and void;

7. Whether the insurance policy is a group policy and, if so, the special risks associated with group policies including, but not limited to, whether the investor is responsible for payment of additional premiums if the policies are sold or converted;

8. Whether the insurance policy is term insurance and, if so, the special risks associated with term insurance including, but not limited to, whether the investor is responsible for additional premium costs if the viator continues the term policy at the end of the current term;

9. Whether the investor will be the beneficiary or owner of the insurance policy and, if the investor is the beneficiary, the special risks associated with beneficiary status;

10. Whether the insurance policy is contestable and, if so, the special risks associated with contestability including, but not limited to, the risk that the investor will have no claim or only a partial claim to death benefits should the insurer cancel the policy within the contestability period;

11. Who is making the projection of the viator's life expectancy, the information this projection is based upon, and the relationship of the projection maker to the issuer;

12. Who is monitoring the viator's condition, how often the monitoring is done, how the date of death is determined, and how and when this information will be transmitted to the investor;

13. Whether the insurer who wrote the viator's underlying policy has any additional rights which could negatively affect or extinguish the investor's rights under the viatical settlement contract, what these rights are, and under what conditions these rights are activated;

14. That a viatical settlement contract is not a liquid investment and that there is no established secondary market for resale of these products by the investor;

15. That the investor will receive no returns (i.e., dividends and interest) until the viator dies; and

16. That the investor may lose all benefits or receive substantially reduced benefits if the insurer goes out of business during the term of the viatical investment.

191--50.123(502) Duty to disclose. Issuers and agents equally share an affirmative duty to disclose all relevant and material information to prospective investors in viatical settlement contracts. The required disclosure is the registration statement required by Iowa Code section 502.207 which has been reviewed and made effective by the administrator.

191--50.124(502) Waivers. The administrator may grant a waiver of a rule pertaining to issuer and agent applications for viatical licensure.

50.124(1) No waiver shall be granted from a requirement imposed by statute. Any waiver must be consistent with statutory requirements.

50.124(2) A waiver under this subrule may be granted only upon a showing of all the following:

a. Because of special circumstances, applying the rule would impose an undue burden or extreme hardship on the requester;

b. Granting the waiver would not adversely affect the public interest and the protection of investors; and

c. Granting the waiver would provide substantially equal protection of public health and safety as would compliance with the rule.

50.124(3) A request for waiver shall be made at any time within 60 days of the initial application and shall include the following information:

a. The name, address, and telephone number of the person requesting the waiver;

b. The specific rule from which a waiver is requested;

c. The nature of the waiver requested;

d. An explanation of all facts relevant to the waiver request, including all material facts necessary for the administrator to evaluate the criteria for granting a waiver as defined in subrule 50.124(2); and

e. A description of any prior communication between the administrator and the requester regarding the proposed waiver.

50.124(4) The administrator shall rule upon all waiver requests and transmit the ruling to the requester. The ruling shall include the reason for granting or denying the request. The administrator's ruling shall constitute final agency action for the purposes of Iowa Code chapter 17A.

50.124(5) The administrator may impose reasonable conditions when granting a waiver to achieve the objectives of the particular rule being waived.

50.124(6) If at any time the administrator finds the facts as stated in the waiver request are not true, that material facts have been withheld, or that the requester has failed to comply with conditions set forth in the waiver, the administrator may cancel the waiver and seek additional sanctions against the issuer and agent as provided by this chapter and Iowa Code chapter 502.

50.124(7) Any request for an appeal from a decision granting, denying, or canceling a waiver shall comply with the procedures provided in Iowa Code chapter 17A. An appeal shall be made within 30 days after the administrator's ruling in response to the waiver request.

50.124(8) All final rulings in response to waiver requests shall be indexed and available to members of the public at the administrator's office.

ARC 9271A

IOWA FINANCE AUTHORITY[265]

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 17A.3(1)"b" and 16.5 (17), the Iowa Finance Authority proposes to rescind Chapter 12, "Low-Income Housing Credit," and adopt a new Chapter 12, "Low-Income Housing Tax Credits," Iowa Administrative Code.

The purpose of the new chapter is to satisfy the requirements of Iowa Code section 16.52 which requires the Iowa Finance Authority (Authority) to promulgate rules and allocation procedures which will ensure the maximum use of available tax credits in order to encourage development of low-income housing in the state. Additionally, the Authority is required to promulgate rules that specify the application procedure and the allowance of low-income housing tax credits under the state housing credit ceiling.

The Authority does not intend to grant waivers under the provisions of this rule. Waivers would cause an imbalance in the selection process and a perception of unfairness in the scoring. Additionally, the evaluators could be subject to undue pressure to grant a waiver of a requirement imposed by state or federal law that could imperil the validity of the grant of low-income housing tax credits.

In rule 265--12.1(16), the Authority expands the definitions of its current rules to provide more detail to applicants.

In rule 265--12.2(16), the Authority describes the purposes and objectives of the low-income housing tax credit program.

In rule 265--12.3(16), the Authority describes the fees charged for the low-income housing tax credit program. The Authority is charging an application fee, a reservation fee and a compliance fee for participation in this program.

In rule 265--12.4(16), the Authority describes the application process and supplies general information regarding the application process and requirements.

In rule 265--12.5(16), the Authority describes the nonprofit set-aside required by state and federal law.

In rule 265--12.6(16), the Authority describes the contents of the application for low-income housing tax credits. The application provides great detail for the information required to apply for tax credits.

In rule 265--12.7(16), the Authority describes the threshold requirements for all applicants. If the threshold requirements are not met, an application will be rejected outright.

Rule 265--12.8(16) describes the additional threshold requirements for applicants who are nonprofit organizations. If these applicants do not meet these additional threshold requirements, an application will be rejected outright.

In rule 265--12.9(16), the Authority describes the selection criteria and the scoring available for each category required by Iowa Code section 16.52 and Section 42 of the Internal Revenue Code. The selection criteria are detailed so that all potential applicants will understand the requirements.

In rule 265--12.10(16), the Authority reserves for itself the discretion to award credits based upon criteria other than the results of scoring the applications. The Authority may award credits based upon projects that further the stated purposes and objectives of the low-income housing program. The Authority may consider the number of projects or units that are proposed for a certain county. The Authority may allow no more than one or two projects per county in any given application cycle. The Authority may consider the number of projects a developer is awarded and limit the total amount of credits or projects awarded for any annual ceiling cap. No single project owner shall be awarded more than $500,000 in tax credits for multiple projects. No single project owner shall be awarded tax credits for more than three projects. The Authority may consider the total number of units in a proposed project. No single project owner shall be allowed more than 10 percent of the total state allocation ceiling for any single project. The Authority may ask an applicant to phase a project if the project requires more than 10 percent of the state allocation ceiling and may require completion and rent-up of the first phase of the project prior to the consideration of awarding additional credits for any subsequent phase to the project.

In rule 265--12.11(16), the Authority provides for notice of the tax credit reservation award. The notice is contingent upon the passage of the appeal period. Once the appeal period has passed and no appeals have been filed, the tax credit reservation becomes final.

In rule 265--12.12(16), the Authority provides for postaward filing and certification requirements. Also, this rule permits an applicant to amend its application in order to substitute sources and uses of funds the Authority deems appropriate.

In rule 265--12.13(16), the Authority provides for a streamlined contested case proceeding for project owner appeals. The time to appeal is 5 days. The hearing must be held within 45 days from the date of the appeal. The rule provides for discovery. The rule is linked to the Authority's general rule on contested case proceedings except that the time periods are shortened to allow for the timely commencement of projects during a calendar year.

Rule 265--12.14(16) describes the monitoring andrecord-keeping requirements of Section 42 of the Internal Revenue Code. These rules reflect the requirements of the U.S. Treasury regulations that govern this program.

Rule 265--12.15(16) describes the treatment of projects funded by tax-exempt financing. The rule indicates that these projects will be subject to the selection criteria and the threshold criteria in considering the projects, but that these projects will not compete in the competitive round of financing as required by Section 42 of the Internal Revenue Code.

The Authority anticipates that it will receive significant comment on these rules. The rules were prepared under a very short time frame and the Authority will look to public comment to refine the rules. Some of the areas that are in preliminary form include but are not limited to the threshold requirements, the selection requirements, remedies for appeals, the appeal process, the application process, the contents of the application and amendments to the applications filed by October 1, 1998. These rules are intended to implement the requirements of Iowa Code section 16.52 and 26 U.S.C. Section 42 and further the purposes and objectives of the low-income housing tax credit program in Iowa. They are intended to provide the public with notice of the requirements for the qualified allocation plan, the selection criteria, the threshold criteria, and all other requirements to qualify for tax credits available under state and federal law.

The Authority will hold a public hearing to receive public comments on these rules on September 1, 1999, at 1 p.m. over the Iowa Communications Network (ICN) at the following sites:

IPTV 1

6450 Corporate Drive

Johnston, Iowa

National Guard Armory

10400 18th St. SW

Cedar Rapids, Iowa

State Room

Clear Lake AEA

9184B 265th St.

Clear Lake, Iowa

National Guard Armory

2415 Kanesville Blvd.

Council Bluffs, Iowa

Mt. Joy Army Aviation Support Facility

9650 S. Harrison St.

Davenport, Iowa

National Guard Armory

1000 S. Walnut

Mt. Pleasant, Iowa

National Guard Armory

Park West Road - Old Hwy. 34

Red Oak, Iowa

National Guard Armory

102 S. Main St.

Sioux City, Iowa

Consideration will be given to all written data, views, and arguments thereto received by the Iowa Finance Authority, Attention: Mary Ericson, 100 E. Grand Avenue, Suite 250, Des Moines, Iowa 50309, on or before August 31, 1999.

These rules are intended to implement Iowa Code section 16.52.

The following chapter is proposed.

Rescind 265--Chapter 12 and adopt the following new chapter in lieu thereof:

CHAPTER 12
LOW-INCOME HOUSING TAX CREDITS

265--12.1(16) Definitions.

"Affiliate" means an individual, corporation, partnership, joint venture, limited liability company, trust, estate, association, cooperative or other organization or entity of any nature whatsoever that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with any other person, and specifically shall include parents or subsidiaries.

"Applicable fraction" means the fraction used to determine the qualified basis of the qualified low-income building, which is the smaller of the unit fraction or the floor space fraction, as defined more fully in IRC Section 42(c)(1).

"Applicable percentage" means the percentage used to determine the amount of the low-income housing tax credit, as defined more fully in IRC Section 42(b).

"Applicant" means any person and any affiliate of such person, corporation, a partnership, joint venture, association, or other entity that submits an application to the authority requesting a tax credit allocation pursuant to the rules and the qualified allocation plan. Each project owner, and each of the project owner's successors in interest, shall be obligated to carry out the commitments made to the authority by the applicant.

"Application" means those forms required by the authority, including any required attachments, exhibits or other supporting materials, filed with the authority by an applicant requesting a low-income housing tax credit allocation. The application must include all information required by rule and as may be subsequently required by the authority.

"Application acceptance period" means October 1, 1998. Only those applications received by the authority on October 1, 1998, shall be considered for the round of tax credit reservations to be awarded during 1999.

"Application round" means the period beginning with the start of the application acceptance period lasting until such time as all available credits from the state housing credit ceiling (as stipulated by the authority) are allocated, provided that the application round not extend beyond the last day of the 1999 calendar year.

"Area gross median income (AGMI)" means the tenant income requirements pursuant to the qualified low-income housing project requirements of IRC Section 42(g).

"Board" means the board of directors of the authority.

"Carryover agreement and allocation and taxpayer's election statement" means an allocation of current year tax credit authority by the authority pursuant to the provisions of IRC Section 42(h)(1)(E) and Treasury Regulations, § 1.42-6.

"Code" or "IRC" means the Internal Revenue Code of 1986 together with any applicable regulations, rules, rulings, revenue procedures, information statements or other official pronouncements issued thereunder by the United States Department of the Treasury or the Internal Revenue Service relating to the low-income housing tax credit program authorized by IRC Section 42. A copy of the Internal Revenue Code and Treasury regulations relating to this program are found in the state law library and are available for review by the public.

"Compliance period," as defined in IRC Section 42(i)(1) as amended to January 1, 1986, means, with respect to any building, the period of 15 consecutive taxable years beginning with the first taxable year of the credit period.

"Control" (including the terms "controlling," "controlled by," "under common control with," or some variation or combination of all three) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any person, whether through the ownership of voting securities, by contract or otherwise, including specifically ownership of more than 50 percent of the general partner interest in a limited partnership, or designation as a managing general partner or the managing member of a limited liability company.

"Cost certification procedures" means those procedures described by these rules for the filing of requests for IRS Form 8609 for projects placed in service under the low-income housing tax credit program and for carryover agreements and allocations and taxpayer's election statements.

"Credit" means the low-income housing tax credit issued pursuant to the program, IRC Section 42 and Iowa Code section 16.52.

"Credit period" means, with respect to a building within a project, the period of ten taxable years beginning with the taxable year the building is placed in service or, at the election of the project owner, the succeeding taxable year, as more fully defined in IRC Section 42(f)(1).

"Declaration of land use restrictive covenants (LURA)" means an agreement between the authority, the project owner and all successors in interest to the project owner which encumbers the project with respect to provisions stipulated in IRC Section 42(h), this chapter and Iowa Code section 16.52.

"Determination notice" means a notice issued by the authority to the owner of a tax-exempt bond project which states that the project may be eligible to claim low-income housing tax credits without receiving an allocation of credits from the state housing credit ceiling, sets forth conditions which must be met by the individual project before the authority shall issue the IRS Form(s) 8609 to the project owner, and specifies the amount of tax credits necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period.

"Difficult development area" means any area that is so designated by the Secretary of the United States Department of Housing and Urban Development (HUD) as an area which has high construction, land, and utility costs relative to area median family income.

"Elderly project" means a project for persons 62 years of age or older as defined by the Federal Fair Housing Act. An elderly project must have the following characteristics: (1) the housing is intended for, and solely occupied by, persons 62 years of age or older; or (2) all units (excluding those occupied by an employee or owner) are occupied by at least one person who is 60 years of age or older; and (3) the housing adheres to a written commitment by the project owner and management agent to provide housing for persons 60 years of age or older.

"Eligible basis" means, with respect to a building within a project, the building's eligible basis as defined in IRC Section 42(d).

"Equity gap" means the difference between the total sources of financing for the project and the total project costs that is to be filled with the proceeds of the credit.

"Fannie Mae" means the Federal National Mortgage Association.

"Freddie Mac" means the Federal Home Loan Mortgage Corporation.

"Governmental entity" means federal or state agencies, departments, boards, bureaus, commissions, authorities, and political subdivisions, special districts and other similar entities, their employees, board members or agents.

"HART team" means the housing assistance review team. It is a committee comprised of representatives of governmental and quasi-governmental entities which administer the low-income housing tax credit programs and other affordable housing programs that may contribute financing and market information to low-income housing projects eligible for low-income housing tax credits. Members of the HART team include representatives from the authority, the Iowa department of economic development, the United States Department of Agriculture, the Federal Home Loan Bank of Des Moines, HUD and Fannie Mae.

"Housing credit agency" means the authority. Pursuant to Iowa Code section 16.52, the authority is charged with the responsibility of allocating low-income housing tax credits pursuant to IRC Section 42(h)(8)(A) and pursuant to Iowa Code section 16.52.

"HUD" means the United States Department of Housing and Urban Development, or its successor.

"Intermediary costs" means costs associated with the sale or use of credits to raise equity capital. Such costs include, but are not limited to, syndication and partnership organization costs and fees, filing fees, broker commissions, related attorney and accounting fees, appraisal, and engineering and environmental site assessment costs.

"IRS" means the Internal Revenue Service, or its successor.

"Low-income housing credit allocation amount" means, with respect to a project or a building within a project, the amount the authority allocates to a project and determines to be necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the compliance period.

"Low-income housing tax credit (LIHTC)" means the credit determined under IRC Section 42(a) for any taxable year in the credit period equal to the amount of the applicable percentage of the qualified basis for each qualified low-income building.

"Low-income unit" means any residential rental unit if such unit is rent-restricted and the occupant's income meets the limitations applicable as required for a qualified low-income housing project.

"Market study" means a study of the rental market conditions for the communities where projects are or will be located. An outline of the market study requirements is included in the application.

"Metropolitan statistical area (MSA)" means a central city containing at least 50,000 people with a total metropolitan population of at least 100,000.

"Per capita component" means an item of the state housing credit ceiling, as defined in IRC Section 42(h)(3)(C)(I). The per capita component is based upon the calendar year population estimates as determined by IRC Section 146(j), and promulgated on an annual basis by an IRS Service Notice.

"Person" shall have the same meaning as contained in Iowa Code chapter 4.

"Program" means the low-income housing tax credit program.

"Project" means a low-income rental housing property the owner of which represents that it is or will be a qualified low-income housing project within the meaning of IRC Section 42(g). With regard to this definition, the "project" is that property which is the basis for the application.

"Project owner" or "owner" means any person or affiliate thereof that owns or proposes to own and develop a project or expects to acquire control of a project consistent with control documents provided by the owner to the authority as part of the application for low-income housing tax credits.

"Property" means the real estate and all improvements thereon which are the subjects of the application, including all items of personal property affixed or related thereto, whether currently existing or proposed to be built thereon in connection with the application.

"Qualified allocation plan (the QAP)" means an allocation plan approved by the authority pursuant to these rules, approved by the governor of Iowa, and discussed at a public hearing which sets forth the threshold criteria, selection criteria, priorities, preferences, compliance procedures and monitoring requirements as provided in IRC Section 42(m)(1) and Iowa Code section 16.52 and as further provided in this chapter. The requirements set forth in these rules also apply to tax-exempt bond financed projects, which may be eligible for credits apart from the annual state housing credit per capita component, and must also satisfy the requirements for allocation under the qualified allocation plan.

"Qualified basis" means, with respect to a building within a project, the building's eligible basis multiplied by the applicable fraction, within the meaning of IRC Section 42(c)(1).

"Qualified census tract" means any census tract which is so designated by the Secretary of HUD and, for the most recent year for which census data are available on household income in such tract, in which 50 percent or more of the households have an income which is less than 60 percent of the area median family income for such year.

"Qualified nonprofit organization" means an organization that is described in IRC Section 501(c)(3) or (4), that is exempt from federal income taxation under IRC Section 501(a), that is not affiliated with or controlled by a for-profit organization, and includes as one of its exempt purposes the fostering of low-income housing within the meaning of IRC Section 42(h)(5)(C) and is allowed by law or otherwise to hold and develop property.

"Qualified nonprofit project" means a project in which a qualified nonprofit organization has control (directly or through a partnership or wholly owned subsidiary) and materially participates (within the meaning of IRC Section 469(h)) in its development and operation throughout the compliance period.

"Real estate owned (REO) projects" means any existing residential development that is owned or that is being sold by an insured depository institution in default, or by a receiver or conservator of such an institution, or is a property owned by HUD, Fannie Mae, Federal Home Loan Mortgage Corporation (Freddie Mac), a federally chartered bank, a savings bank, a savings and loan association, the Federal Home Loan Bank, a federally approved mortgage company or any other federal agency.

"Recovered credits" means credits from projects that were previously awarded tax credits that either cannot use all the credits the project was awarded or the project cannot be placed in service by the owner.

"Rehabilitation expenditure" means amounts incurred in connection with the rehabilitation which the project owner represents to be "rehabilitation expenditures" within the meaning of IRC Section 42(e)(2).

"Rural project" means a project located in Iowa within an area which:

1. Is situated outside the boundaries of a MSA; or

2. Is situated within the boundaries of a MSA if it has a population of not more than 20,000 and does not share boundaries with an urbanized area; or

3. Is located in an area that is eligible for funding by the United States Department of Agriculture, Rural Home Division.

"Selection criteria" means the criteria described in this chapter to determine the housing priorities of the state under the low-income housing tax credit program.

"State housing credit ceiling" means the limitation imposed by IRC Section 42(h) on the aggregate amount of housing credit allocations that may be made by the authority during any calendar year, as determined from time to time by the authority in accordance with IRC Section 42(h)(3).

"Tax-exempt organization" means an entity which is described in IRC Section 501(c)(3) or (4), and which is either registered or qualified to conduct business in the state or in the governmental unit wherein the project may be situated.

"Threshold criteria" means criteria used to determine the project's qualifications that are the minimum level of acceptability for consideration under the credit program. If a project fails to meet threshold criteria, it shall not be scored.

"Unallocated or unreserved credits" means credits from the 1999 round of financing that are not awarded by the authority during its round of financing. These credits would be eligible for redistribution in accordance with the rules of the authority.

"Utilities" means gas, electricity, water and sewer service.

265--12.2(16) Purpose and objectives. The purpose of the low-income housing tax credit program is to provide an incentive to developers to construct or to acquire or to substantially rehabilitate, or in some combination thereof, affordable rental housing units throughout the state for qualified individuals and families. These individuals or families must have an income that is at 60 percent or below the area median gross income. The units must remain in compliance for a minimum period of fifteen years. The intent of the program is to allocate tax credits to those projects which best meet and serve the objectives outlined as follows:

1. To assist in the creation of affordable housing units for individuals and families which serve qualified individuals and families at the lowest income levels for the longest periods of time.

2. To assist in the creation of affordable housing units in areas of the greatest needs for such housing in the state.

3. To encourage the preservation and rehabilitation of existing affordable housing units.

4. To encourage the construction of new affordable housing units.

5. To encourage the efficient use, leveraging, and coordination of various federal, state, community and private sources of funding and incentives to finance low-income housing development.

6. To encourage the efficient use of tax credit financing to leverage other forms of public financing for low-income housing developments.

7. To maximize the utilization of the state housing ceiling available for low-income housing tax credits to produce the highest number of low-income housing units in the state on an annual basis.

8. To assist in the creation of quality, decent, safe and affordable housing units for limited income individuals and families at reasonable costs.

265--12.3(16) Fees. The authority shall collect the following fees for the low-income housing tax credit program.

12.3(1) A nonrefundable $300 application processing fee for projects with up to 12 units. The authority shall collect a nonrefundable application fee of $500 for proposed projects with 13 or more units. The authority may accept checks made payable to the Iowa Finance Authority for the application fee. The fee shall be due with the application. An application shall not be reviewed or scored unless the application fee accompanies the application.

12.3(2) The authority shall collect a reservation fee of 5 percent of the total annual credit amount for projects receiving $100,000 or less in annual credit, and a reservation fee equal to 7 percent of the total annual credit shall be required for projects receiving $100,001 or more in annual credit. The reservation fee is nonrefundable.

12.3(3) A compliance monitoring fee will be charged once the project has been placed in service, but prior to the issuance of IRS 8609 form after the authority has received, reviewed and approved the IRS 8609 request package. A compliance monitoring manual may be provided with the IRS 8609 forms free of charge. The compliance fee shall be 2.55 percent of the total annual credit amount awarded to the owner. The compliance monitoring manual is incorporated in this rule by this reference.

265--12.4(16) Application process and general information. Upon request, the authority shall forward an application packet to a potential applicant. As may be necessary for the benefit of the program, the authority may distribute unsolicited application packets to local financial institutions, regional councils of government, landlord associations, and other rental housing groups.

12.4(1) The application packet shall consist of the qualified allocation plan as described in these rules and the application form prepared by the authority to reflect the requirements of the qualified allocation plan.

a. All applications shall be typed, not handwritten. The application form provided by the authority must be used. The authority may supply the application form to any applicant in electronic form upon request.

b. Applications submitted on forms that have been retyped or on a form other than the application form supplied by the authority shall not be accepted.

c. All exhibits shall be labeled to match the applicable page of the application and must be submitted in numerical order.

12.4(2) For purposes of the applications due for the 1999 cycle of tax credit reservations, the authority shall consider only the applications, attachments and supporting documents filed on October 1, 1998, for the 1999 cycle. All applications filed on October 1, 1998, shall be considered newly filed as of October 7, 1999. Any site visit conducted by the authority between August 1, 1999, and October 6, 1999, may be relied upon during the scoring of these applications after October 6, 1999.

12.4(3) Amendments to the applications filed on October 7, 1999, shall be due on October 22, 1999. Thereafter, no amendments to the 1999 applications shall be accepted. If no amendments are filed, the application filed on October 7, 1999, shall be scored as is. The authority shall not consider any amendment filed after October 1, 1998, and before March 9, 1999, provided the authority is able to determine when an amendment was made to an application.

a. Applicants may amend any relevant portions of their applications to conform with or address changes made in the qualified allocation plan as described in these rules.

b. Reserved.

12.4(4) Incomplete applications shall not be scored. An incomplete application is any application that is missing any document required by these rules whether included with the original application or filed as an amendment.

12.4(5) Questions concerning the qualified allocation plan and the application may be addressed in writing to the authority's contact person set forth in the application instructions, by mail, E-mail, hand delivery or facsimile, no later than the time and date designated in the application instructions sent with the application. For the 1999 cycle, the authority shall notify all applicants of the name of the contact person and pertinent contact information. Questions received and answers the authority provides shall be mailed or faxed on the date designated in the application instructions sent with the application. Responses shall not be E-mailed to applicants. Oral questions shall not be accepted. The authority shall not be bound by any oral representation made in connection with the application or award of tax credit reservations. For the 1999 cycle, the authority shall have an in-person question and answer period for all applicants regarding the 1999 applications on October 15, 1999. The authority shall notify all applicants of the time and place of the meeting.

12.4(6) The authority is not responsible for any costs incurred by an applicant which are related to the preparation or delivery of the application or any other activities carried out by the applicant related to its response to the qualified allocation plan and application.

12.4(7) By submitting an application, an applicant agrees that the authority shall copy the application for purposes of facilitating the evaluation or to respond to requests for public records. The applicant agrees that such copying shall not violate the rights of any third party. The authority shall have the right to use ideas or adaptations of ideas that are presented in the applications.

12.4(8) All applications become property of the authority and shall not be returned to the applicants even in the event that no tax credits are awarded. At the conclusion of the selection process, the contents of all proposals shall be placed in the public domain and be opened to inspection by interested parties subject to the provisions of Iowa Code chapter 22.

12.4(9) All information submitted by an applicant may be treated as a public record by the authority unless the applicant properly requests that the information be treated as confidential information at the time the application is submitted. Public records shall be copied by the authority as necessary to comply with Iowa's public record laws and consistent with the authority's rules.

a. Any request for confidential treatment of information must be included with the application and must enumerate the specific grounds in Iowa Code chapter 22 which support treatment of the material as confidential and must indicate why disclosure is not in the best interest of the public. The request must also include the name, address, and telephone number of the person authorized by the applicant to respond to any inquiries by the authority concerning the confidential status of the materials.

b. In the event the authority receives a request for the release of information that includes material an applicant has marked as confidential, the authority shall provide a written notice to the applicant regarding the request by fax as soon as practicable. Unless otherwise directed by a court of competent jurisdiction, the authority shall release the requested information within 15 days after faxing and mailing a written notice to the affected applicant.

c. The applicant's failure to request confidential treatment of material pursuant to this subrule and the relevant laws and administrative rules shall be deemed by the authority as a waiver of any right to confidentiality that the applicant may have had.

12.4(10) The amount of tax credits available in Iowa in each calendar year shall reflect the sum of the amounts allowed as the state credit ceiling under IRC Section 42(h)(3)(C). One or more reservation cycles may be established for each calendar year. The executive director, in consultation with authority staff, may determine in each calendar year the dates for each reservation cycle and the amount of tax credit (up to 100 percent of the state credit ceiling) available for reservation in each cycle. The authority shall maintain a list of persons who have expressed an interest in receiving a copy of the QAP and the application. Notices announcing specific dates and the amounts of tax credit available for reservation in each cycle shall be mailed to the persons on the list and posted on the authority's web site (http://ifahome.com) or otherwise made available prior to the beginning of each reservation cycle. The notice shall be deemed to have been given for the 1999 cycle.

12.4(11) The following conditions shall apply to the 1999 cycle of tax credits:

a. Any credit not reserved at the end of the first cycle shall be carried over to the next cycle, if any, for the same purpose.

b. After the 1999 cycle, any unallocated or recovered credits or a combination of both shall be carried over to 2000.

12.4(12) Any determinations by the authority in connection with any aspect of the low-income housing tax credit program shall not be construed to be a representation or warranty to any person, sponsor, investor, or lender as to the feasibility or viability of any project. The authority's review of the applications and the supporting exhibits is for its own purposes. The authority makes no representations or warranties to owners, investors, lenders or any other persons as to compliance with the Internal Revenue Code, the Iowa Code, Treasury regulations or any other laws or regulations governing low-income housing tax credits.

12.4(13) The authority shall make a determination as to the amount of credit as required by IRC Section 42 (m)(2) at each of the following times:

1. When application is made.

2. When the allocation is made.

3. When the project is placed in service (if subsequent to allocation).

Prior to each determination above, the applicant shall certify to the authority the full extent of all federal, state and local subsidies which apply (or which the applicant expects to apply) to the project.

12.4(14) The authority may request additional information from an applicant. The information requested shall not be used to amend any category that is scored except as described herein. The information obtained from the applicant shall be reduced to writing and shall be added to the project file. The authority may request that an applicant whose project request for tax credit reservations exceeds 10 percent of the state per capita component available for distribution to phase the project so that the request for tax credits is below 10 percent of the state per capita component. The request shall be in writing and shall be included in the project file. The written response to the request shall also be included in the project file maintained by the authority for the low-income housing tax credit program. In the event the applicant elects to amend its application to phase its proposed project, the amendments to the application shall be due ten days from the date the applicant agrees in writing to phase its project. In the event the applicant does not respond to the authority in writing within the ten-day period, the request to amend the project shall be deemed rejected and shall be noted in the project file.

12.4(15) The authority may make site visits as it deems necessary to review proposed project sites. Applicants shall not be notified of a site visit unless access to a building is required.

12.4(16) Once the time has expired for making amendments to the applications, applicants may not contact the evaluators assigned by the authority to review and score the applications for the cycle under consideration. Any such contact may be considered an ex parte communication and may require the authority to reject the applicant's proposal.

12.4(17) Consistent with Iowa Code section 16.32, no member, officer, agent, or employee of the authority shall be personally liable concerning any matters arising out of, or in relation to, the allocation of the affordable housing tax credits.

12.4(18) Applicants who have no previous history of receiving tax credit allocations in the state of Iowa must submit a certification to the authority concerning the applicant's previous participation and histories as principals in rental housing projects.

265--12.5(16) Nonprofit set-aside.

12.5(1) In accordance with IRC Section 42 and Iowa Code section 16.52, at least 10 percent of the annual state housing credit ceiling must be set aside for qualified nonprofit organizations which own an interest in and materially participate in the development and the operation of a qualified low-income housing project. This credit amount cannot be used for any other purpose, and any unused credit portion may be carried over at the end of the allocation year.

12.5(2) The authority shall allocate housing credits from the 10 percent set-aside to qualified nonprofit organizations based upon the selection criteria and scoring and other factors described in these rules. Nonprofit applicants shall be scored with all of the for-profit applicants except that the 10 percent nonprofit set-aside shall be available in its entirety beginning with the first cycle, until fully allocated.

265--12.6(16) Application contents. Applicants shall be required to respond to the following questions or provide the following information in the application prepared by the authority:

12.6(1) Identify the type of low-income housing tax credit requested.

12.6(2) Identify whether the applicant is requesting credit from the nonprofit set-aside, housing assistance fund, HOME, or Federal Home Loan Bank.

12.6(3) Identify project information including legal name of owner, whether the owner is formed or will be formed, the name of the general partner or managing partner, or both.

12.6(4) Identify the contact person for the project, including address, telephone number, fax number and E-mail address, if applicable.

12.6(5) Identify the name of the project, the project address including all buildings, the city, the ZIP code, the census tract, census block and the county.

12.6(6) Identify whether the project is in a metropolitan statistical area.

12.6(7) Identify whether the project is in a qualified census tract or high-cost area.

12.6(8) Identify the congressional district, the state senate district and the state house district in which the project is located.

12.6(9) Calculate the applicable fraction using the number of low-income units, the total number of units in the project, the percentage of low-income units, the total floor space of the low-income units measured in square feet, the total floor space of all units measured in square feet, and the percentage of floor space of low-income units.

12.6(10) Identify other project characteristics including the total number of buildings, the gross floor area of all buildings in the project, the residential floor area, and the nonresidential or commercial floor area.

12.6(11) Identify the types of units in the project including detached housing, transient housing, townhouse, row house, detached single family, multifamily rental residential, garden apartments, single-room occupancy housing, or other type of housing that is specified in the application.

12.6(12) Identify whether the building has an elevator, basement and the number of stories in the building.

12.6(13) Identify whether the units have been targeted to specific populations including elderly, (62 years of age or older), family (three or more bedrooms), units specifically designed for persons with disabilities, persons on the public housing waiting list, persons needing transitional housing, or other targeted groups as identified by the applicant. The applicant must indicate the number of units for each target population.

12.6(14) Identify accessory buildings and areas, recreation facilities, commercial facilities, the total number of parking spaces, and the total number of garages.

12.6(15) Identify whether the building has four or fewer units that will be occupied by the owner of the building or any person related to the owner.

12.6(16) Identify whether the site is controlled by the owner/taxpayer for the project and describe the site control form, i.e., purchase contract, option, recorded warranty deed, executed long-term lease through compliance and extended use period.

12.6(17) Identify information regarding the form of site control including the expiration date of the contract or option, the total cost of the land, the exact area of the site, the name of the seller, the seller's address and telephone number.

12.6(18) Identify whether the site has proper zoning for the project.

12.6(19) Identify whether all utilities are presently available at the site.

12.6(20) Identify any activities anticipated to be located within a 100-year flood plain.

12.6(21) Identify whether the applicant is a for-profit entity or a not-for-profit entity and include the name of the entity, the contact person, the address, the city, state and ZIP code for the entity, the telephone number, fax number andE-mail address for the developer.

12.6(22) If the applicant is a partnership, identify the name of the partnership, the type of partnership, the federal identification number for the partnership, and the names of each of the partners indicating which are the general partners, the partners' share of ownership and the telephone number for each partner.

12.6(23) If the applicant is a corporation, identify the name of the corporation, its federal identification number, the name and titles of the corporate officers and shareholders, an indication of the number of shares owned by each shareholder, and the telephone number of the officers and shareholders.

12.6(24) Identify all projects in which the developer(s) or general partner(s) have received an allocation of low-income housing tax credits or sold a project which received an allocation of low-income housing tax credits. Additionally, if the applicant has not received tax credits for projects in Iowa, additional information shall be required by the authority. An applicant shall be required to describe all previous projects and certify the project list.

12.6(25) Identify each member of the development team for a project. An applicant must submit a résumé that lists qualifications, address, and telephone number. The development team includes the developer, general partner, majority shareholder, contractor, architect, management company, sponsoring organization, consultant, tax accountant, attorney, engineer, and any other person assisting with the application or project. Identify the function for each person on the development team. An applicant must also identify whether any member of the development team has an indirect or direct financial interest or other interest with any other member of the development team. The applicant must identify the nature of the interest. If there is no identification of interests, the applicant should list "None."

12.6(26) An applicant that seeks a portion of the nonprofit set-aside must demonstrate that it owns an interest in the proposed project and that it is materially participating in the development and operation of the project throughout the compliance period. Consistent with IRC Section 469(h), "materially participating" means an activity only if the nonprofit is involved in the operations of the activity on a basis which is regular, continuous and substantial. The nonprofit must identify that it is a tax-exempt organization pursuant to IRC Section 501(c)(3); that one of its exempt purposes includes fostering low-income housing; that it is exempt from taxation pursuant to IRC Section 501(a); that it is a 501(c)(4) organization or that it is not affiliated with or controlled by a for-profit corporation.

12.6(27) Describe the nonprofit's ownership or percentage of ownership in the project.

12.6(28) Describe the nonprofit's participation in the development and operation of the project, including management, social services, development and funding.

12.6(29) Describe any support services to be offered by the nonprofit to tenants of the project and where these services will be offered.

12.6(30) Identify the names of its board members and its officers.

12.6(31) Identify all paid full-time staff and sources of funding for annual operation expenses and current programs. Additionally, a nonprofit applicant must indicate whether its ownership of the project will remain the same throughout the compliance period.

12.6(32) Indicate whether it is a certified community housing development organization (CHDO).

12.6(33) Identify how many buildings, if any, will be acquired for the proposed project. An applicant must also indicate whether the buildings are currently under the control of the project owner and if not, when the buildings will be under the control of the project owner for acquisition. An applicant must list the buildings under its control, the type of control, the expiration of the control document, the number of units and the acquisition cost of the building.

12.6(34) Identify whether the building or buildings acquired or to be acquired were acquired from a related party or an unrelated party.

12.6(35) Identify whether the building or buildings acquired or to be acquired with buyer's basis are or are not determined with reference to seller's basis.

12.6(36) Identify whether the building or buildings were acquired or are to be acquired from an insured depository institution in default or from a receiver or conservator of such institution. If so, an applicant must identify the name of the institution.

12.6(37) Identify whether the building or buildings were acquired or are to be acquired from an owner in default or as a result of foreclosure. If so, an applicant must identify the name of the owner.

12.6(38) Identify whether the building or buildings were acquired or are to be acquired from a governmental unit or a qualified nonprofit organization. If so, an applicant must identify the governmental unit or the nonprofit organization.

12.6(39) Identify whether the building or buildings were acquired or are to be acquired from an owner who used such residence for no other purpose than the owner's principal residence. If so, the applicant must identify the name of the owner.

12.6(40) An applicant must confirm eligibility under IRC Section 42(d)(2)(B)(ii) (the ten-year rule) by listing each building by building address, the date the building was placed in service by the owner from whom the building was or will be acquired, the date the building was or is planned for acquisition by the applicant, and the number of years between the date the building was last placed in service and the expected date of acquisition. If the number of years for any building is less than ten years, an applicant must explain any exception under the Internal Revenue Code, which would make the building eligible for credit under IRC Section 42(d)(2)(B)(ii).

12.6(41) If the applicant is proposing to rehabilitate a building or several buildings, information regarding rehabilitation expenditures for each building must be provided. An applicant must identify, with respect to each building, the rehabilitation expenditures as defined in IRC Section 42(e)(2) which shall be allocable to or substantially benefit the affordable units in such building. An applicant must show the calculations for whether the amount of rehabilitation expenditures is at least equal to the greater of 10 percent of the expected adjusted basis of the building or $3,000 rehabilitation expenditure per low-income unit. Additionally, an applicant must indicate that all buildings in the project qualify forthe exception provided for in IRC Section 42(e)(3)(B) regarding the 10 percent basis requirement or all the buildings qualify for the exception provided for in IRC Section 42(f)(5)(B)(ii)(II) regarding the $3,000 per unit requirement or that there are different circumstances for each building as described by an applicant.

12.6(42) Identify whether the project involves the relocation of tenants and describe any relocation assistance, if any.

12.6(43) An applicant must list the total project costs and eligible basis by credit type for the residential portion of a project. Based on this information, the eligible basis for the project shall be calculated along with the total adjusted eligible basis, the total qualified basis, the maximum allowable credit amount, the combined present value of the credit and the total credit requested per unit. The qualified eligible basis must be determined on a building-by-building basis. Project costs include costs for:

1. Land and broker fees;

2. Existing structures;

3. On-site work;

4. Off-site work;

5. Demolition;

6. Relocation;

7. Other work around the site;

8. A new building;

9. Rehabilitation;

10. General requirements for rehabilitation and new construction;

11. Contractor overhead;

12. Contractor profit;

13. Other items for rehabilitation and new construction;

14. Architect fees;

15. Engineer fees;

16. Attorney fees;

17. Accountant fees;

18. Consultant fees;

19. Processing agent fees;

20. Other professional fees;

21. Construction insurance;

22. Construction interest;

23. Construction loan origination fees;

24. Construction loan credit enhancement;

25. Taxes during construction;

26. A permanent loan origination fee;

27. Permanent loan credit enhancement;

28. Title and recording fees;

29. Other financing fees and expenses;

30. Property appraisal;

31. Market study;

32. Environmental report;

33. Tax credit fees;

34. The organization of a partnership;

35. Bridge loan fees or expenses;

36. Tax opinion;

37. Developer overhead;

38. Developer fees;

39. Other items related to the developer fees;

40. The rent-up reserve;

41. The operation reserve.

12.6(44) Identify the sources of construction financing including the amount of funds and the term of the loan.

12.6(45) Identify the sources of permanent financing not including equity funds.

12.6(46) Identify all sources of funds for the project.

12.6(47) Identify all sources and amounts of funds that are financed directly or indirectly with federal, state or local government funds.

12.6(48) Indicate whether the applicant will exclude any below market federal loan from the eligible basis of the project building.

12.6(49) Indicate whether tax-exempt financing is used for the project and the percentage of tax-exempt financing used in comparison to the total cost of the project.

12.6(50) Indicate whether taxable bond financing is used and in what amount.

12.6(51) Indicate whether the project's permanent financing will have any type of credit enhancement and, if so, the type of enhancement.

12.6(52) Indicate whether the project has any existing subsidies provided by a federal, state, local or other source.

12.6(53) Indicate whether HUD approval is required for the transfer of any physical assets associated with the project.

12.6(54) Indicate whether a project investor will be providing equity funds for the project in exchange for tax credits. If so, provide information concerning any syndication or placement of interest in the owner entity and estimated proceeds to be received from such sale or placement as follows:

a. Amount of low-income tax credit proceeds;

b. Amount of historic tax credit proceeds;

c. Date the proceeds from the low-income tax credits and historic tax credits will be paid;

d. Whether the funds result from a public or private offering;

e. The type of investors; and

f. The name of the fund, the name, address and telephone number of the syndicator.

12.6(55) The authority shall provide space where an applicant can calculate a trial amount for the tax credit needed for a project. However, the authority shall calculate the actual amount of the credit needed for the proposed project. The trial amount calculated for the tax credit may differ from the amount calculated by the authority. The amount calculated by the authority shall be the amount relied upon by the authority.

12.6(56) The applicant shall make an irrevocable election to follow the minimum set-aside requirements established by IRC Section 42. The minimum set-aside elections shall include the following:

a. At least 20 percent of the rental residential units in the project are rent-restricted and are to be occupied by individuals whose income is 50 percent or less of area gross median income;

b. At least 40 percent of the rental residential units in the project are rent-restricted and are to be occupied by individuals whose income is 60 percent or less of area gross median income;

c. In addition to the minimum set-aside requirement contained in this rule, the project shall meet the deep rent skewing option defined in IRC Section 142(d)(4); that is, 15 percent of the units are occupied by individuals whose income is 40 percent or less of area gross median income and other requirements included therein.

12.6(57) Indicate whether any of the low-income units receive or have been approved to receive rental assistance at the time the application for low-income tax credits was filed with the authority. If so, an applicant must list the type of rental assistance received, the number of units receiving rental assistance, the number of years of the rental assistance contract, the details of the rent restrictions including the actual rent for one month, the actual utilities paid by the tenant for one month and the total rent and utilities paid by the tenant for one month.

12.6(58) Based upon an applicant's response to the minimum set-aside election, the applicant must indicate the maximum monthly rent that may be charged per unit based upon 40 percent of the area gross median income for one unit for one month, 50 percent of the area gross median income for one unit for one month, and 60 percent of the area gross median income for one unit for one month, using the information attached to the application to calculate these amounts.

12.6(59) For the low-income units in a project, an applicant must estimate the monthly income for the low-income units. The estimate must include an estimate of the annual percentage increase in the annual income from the project.

12.6(60) For market rate units, an applicant must estimate the monthly income for the market rate units. The estimate must include an estimate of the annual percentage increase in the annual income from the project.

12.6(61) An applicant must calculate the amount of the monthly utilities for the units in a project and identify whether the tenant or the owner is paying the cost. An applicant must indicate the source of information for the calculation.

12.6(62) Identify administrative expenses including advertising, management fees, legal fees, partnership fees, accounting and audit fees and other expenses.

12.6(63) Identify maintenance costs including decorating, repair, exterminating, ground expense and any other cost items identified and detailed as to amount.

12.6(64) Identify operating expenses including elevator maintenance, water and sewer, electric, gas, and trash removal costs and payroll and related employment costs, including taxes, insurance costs and other costs related to operating expenses.

12.6(65) Identify real estate tax costs or special assessments or any other fee levied by a local or state governmental unit.

12.6(66) Identify the annual replacement reserve for the units in the project and provide an estimate for the annual percentage increase in annual expenses.

12.6(67) Identify the project schedule including site preparation, ownership completion, financing for construction, permanent loan, other loans and grants, plans and specifications, closing and transfer information, construction start date, completion of construction, the date the building is placed in service and the date lease is completed.

12.6(68) Identify the name of the local jurisdiction in which the project will be located and include the name and address of the chief executive officer of the political jurisdiction. See IRC Section 42(m)(1)(A)(ii). If this information is not provided, the authority shall not be able to notify the local jurisdiction that an application has been filed. An award of tax credits may be invalid if this notification is not accomplished.

12.6(69) An applicant must indicate that the project shall be subject to an extended use agreement for 15 years, 30 years or for some period of time after 15 years.

12.6(70) An applicant must indicate whether:

a. The project is located in a community that is experiencing a shortage of low-income housing;

b. The project combines the tax credit with financial assistance from the local community, or other state or federal sources;

c. The project is in an official neighborhood preservation or other organized community revitalization program.

The applicant shall attach documentation to support the items identified in this subrule including, but not limited to, a current market study, letters from the local housing authority indicating that the project is located in a neighborhood preservation area or other organized community revitalization program or a letter from state or local officials indicating financial commitments for the project. A general statement that a city, town or other community is a designated revitalization area is insufficient to meet this requirement.

12.6(71) Include a list of previous projects on a form prescribed by the authority. The applicant must make a full disclosure regarding all previous projects and participation history as a principal in any rental housing project including, but not limited to, the name and address of all principals in the projects, the name, location, governmental agency and number of units in the project, the role, interest, and year when participation began and ended, the year the project was placed in service, and whether there have been any sales, foreclosures, defaults, instances of IRS noncompliance and issuance of IRS Form 8823.

12.6(72) An applicant must sign the taxpayer certification and attach it to the application.

12.6(73) An applicant must sign a certification of ownership, disclosure, prior experience, and release relating to all previous projects.

12.6(74) The following exhibits must support the application:

1. Site control documentation.

2. Documentation of zoning as described in rule 12.7(16).

3. Evidence of availability of utilities at the site as described in rule 12.7(16).

4. Evidence of a conditional or final financing commitment from all sources as described in rule 12.7(16).

5. A market study if the project contains more than 12 units.

6. A sketch plan of the site including plans and specifications or work write-ups.

7. A legible site location map.

8. A copy of the recorded deed showing that the owner or the taxpayer or both hold the title to the site must be provided before a carryover agreement can be signed or an IRS Form 8609 can be issued, whichever is applicable in the year in which the project receives a reservation.

9. A copy of the letter from the Internal Revenue Service indicating the federal identification number for a partnership and a copy of the executed partnership agreement file stamped by the secretary of state are required before a carryover agreement shall be executed or an IRS Form 8609 shall be issued by the authority.

10. A copy of the letter from the Internal Revenue Service indicating the federal identification number for a corporation and an executed copy of the articles and bylaws. These documents must be present before a carryover agreement shall be executed or an IRS Form 8609 shall be issued by the authority.

11. If the applicant is seeking a portion of the nonprofit set-aside, the nonprofit organization must include a copy of its articles of incorporation or partnership agreement and the determination letter of tax-exempt status from the Internal Revenue Service.

12. If the applicant has obtained a waiver for its building or buildings, a copy of the waiver must be included with the application. An allocation cannot be made until the waiver has been received.

13. A copy of any agreement or contract relating to syndication or placement of partnership interests.

14. A copy of any rental assistance contract, agreements or approvals from a public housing authority.

15. Documentation of the utility calculations. The most recent public housing assistance, HUD or rental development utility calculation chart must be used for the calculations.

16. A legal description of the site.

17. Articles of incorporation for nonprofit organizations.

18. A 15-year after-tax cash flow of the project.

19. A 15-year total benefit approximation that includes the after-tax cash flow or requested tax credit showing the estimated percentage of return on the owner's investment and limited partner's investment.

20. An AIA construction contract or other contract detailing the estimated construction costs for the project.

21. Utility allowance charts.

22. A list of previous projects for a developer or a general partner who has not had previous tax credit allocations in Iowa.

23. A résumé of each member of the development team for projects of five or more units.

24. Documents supporting housing needs characteristics.

25. If the project is designed to serve tenants with special housing needs, documentation supporting the previous experience of the development team with the type of housing or service delivery proposed.

26. Other documentation as identified in the application or these rules.

265--12.7(16) Threshold requirements--all applicants. To be considered for a reservation of tax credits, a project described in an application must first demonstrate that it meets all of the following basic requirements. Any application that fails to meet any one of these requirements shall be rejected and shall not be scored.

12.7(1) The applicant has certified in writing that the proposed project is a qualified residential rental project that is consistent with the requirements of IRC Section 42. The certification must be attached to the application.

12.7(2) The applicant is ready to proceed. Readiness includes but is not limited to a showing of the following:

a. The applicant has site control. Adequate evidence of site control is accomplished through one of the following (one of these items must be attached to the application as an exhibit):

(1) A copy of a recorded warranty deed in the name of the ownership entity, or entities, which comprise the project owner;

(2) A contract for sale or lease (the minimum term of the lease must be at least 45 years) in the name of the ownership entity, or entities which comprise the project owner. The contract for sale or the lease must be valid for the entire period of development that is under consideration for tax credits or at least 90 days, whichever is greater.

(3) A copy of an exclusive option to purchase in the name of the ownership entity or entities which comprise(s) the applicant. The option must be valid for the entire period the project is under consideration for tax credits or at least 90 days from the date of the filing of the application, whichever is greater.

b. The applicant shall provide evidence of current and appropriate zoning in the form of a letter from the appropriate municipal authority. Adequate evidence attached as an exhibit to the application of zoning approval includes but is not limited to:

(1) A copy of the letter from the city or town where the project will be located indicating that appropriate zoning approvals for the project have been or will be granted.

(2) A copy of a letter or other written evidence that documents that a zoning request has been filed with the appropriate municipal authority prior to October 1, 1998.

c. The project site must have utilities presently available at the site. Adequate evidence showing the existence of utilities includes, but is not limited to:

(1) A copy of a letter from the appropriate municipal provider or local provider, or

(2) A copy of the last monthly utility bill which must clearly identify the project by its full address.

Either of these documents must be attached to the application as an exhibit.

d. The applicant must supply documentation of housing needs of the community. Adequate evidence of housing needs is a market study. The market study must be attached to the application as an exhibit. For the 1999 cycle of tax credit awards, a market study is current if it was completed between October 2, 1997, and October 1, 1998. The market study is not required for projects with fewer than 12 units.

e. The applicant must file a complete and timely application.

f. The applicant must exhibit a willingness to enter into a land use restrictive covenant (LURA) for the project with the authority, as required by IRC Section 42(h)(6). Adequate evidence of willingness to enter into an extended use agreement is a copy of the agreement or a certification that the applicant shall execute an extended use agreement with the authority.

12.7(3) The applicant must demonstrate that the project is financially feasible and viable using the least amount of housing credit dollar. See IRC Section 42(m)(2) and Iowa Code section 16.52(2). Adequate evidence of financial feasibility and continuing viability must include a detailed description of the following:

a. The sources and uses of funds and the total financing planned for the project;

b. Any proceeds or receipts expected to be generated by reason of tax benefits;

c. The percentage of the housing credit dollar amount used for project costs other than the costs of intermediaries; and

d. The reasonableness of the development and operational costs of the project.

The authority shall use generally accepted underwriting criteria to assess the financial feasibility and continuing viability of a project. Based upon its own assessment and the financial information submitted to support the project, the authority shall determine whether the applicant has requested the least amount of housing credit dollar necessary to ensure project feasibility.

12.7(4) An application shall be rejected outright if the authority determines that an applicant or any of its principals or affiliates who own at least 5 percent of the applicant or any of the officers or board members of the applicant have been convicted of, entered an agreement for immunity from prosecution or pled guilty, including a plea of no contest, to a crime of dishonesty, fraud, tax fraud, embezzlement, bribery, payments of illegal gratuities, perjury, false statements, racketeering, blackmail, extortion, or falsification or destruction of records. Applicants that have been debarred from any program administered by the authority, any other state agency, or any federal agency are ineligible for tax credits. Applicants that have an identity of interest with any debarred entity may not be eligible as determined by the authority.

12.7(5) An application shall be rejected if the developer fees and overhead and consultant fees exceed 15 percent of the total adjusted basis of the project. The authority shall determine this amount by subtracting the developer fees and overhead and consultant fees from the eligible basis before calculating the fees as a percentage of the adjusted eligible basis.

12.7(6) The contractor's profit exceeds 6 percent of the project costs.

12.7(7) The contractor's overhead exceeds 2 percent of project costs.

12.7(8) The general requirements for a project exceed 6 percent of the project costs.

12.7(9) The applicant fails to disclose any direct or indirect financial or other interest a member of the project development team may have with another member of the project development team.

12.7(10) If the applicant is a partnership or a limited partnetship, the authority shall reserve tax credits to a partnership and the general partners. Reservations are not transferable. In the event there is a change in a general partner after an allocation of credits has been made, the authority shall be notified by the partnership to obtain approval of the change. The new general partner shall meet the requirements described in these rules before the authority shall consent to the change. If the requirements outlined in these rules are not met, the request for transfer shall not be approved.

12.7(11) If the applicant is a corporation, the authority shall reserve tax credits to a corporation. Reservations are not transferable. In the event there is a change in the majority shareholder after an allocation of credits has been made, the authority shall be notified by the corporation to obtain approval of the change. The new majority shareholder shall meet the requirements described in these rules before the authority shall consent to the change. If the requirements outlined in these rules are not met, the request for transfer shall not be approved.

265--12.8(16) Threshold requirements for nonprofit applicants. To be considered for a reservation of tax credits, a project described in an application must first demonstrate that it meets all of the requirements of rule 12.7(16). In addition, nonprofit applicants must meet the requirements of rule 12.8(16). Any application that fails to meet any of the requirements of rule 12.7(16) or 12.8(16) shall not be scored and the application shall be rejected.

12.8(1) For applicants (project owners) seeking credits from the nonprofit set-aside, all of the following documents that confirm that the project owner is a qualified nonprofit organization pursuant to IRC Section 42(h)(5)(C) must be attached to the application:

a. An IRS determination letter which states that the qualified nonprofit organization is a 501(c)(3) or (4) entity;

b. If the project involves a joint venture between a qualified nonprofit organization and a for-profit entity, an agreement which shows that the nonprofit organization controls the project (directly or indirectly) and shall materially participate (within the meaning of the IRC Section 469(h)) in the development and operation of the project throughout the compliance period;

c. A current list of all directors and officers of the nonprofit organization, including their names, addresses, and primary occupations. All directors and officers must disclose any relationship with an affiliate or otherwise with other members of the applicant or any members of an affiliate of the development team or any combination thereof; and

d. A copy of the articles of incorporation of the nonprofit organization that specifically states that the fostering of affordable housing is one of the exempt purposes for the qualified nonprofit organization.

12.8(2) The applicant must show that the nonprofit organization owns an interest in the project (directly or through a partnership) and must materially participate in the development and operation of the project throughout the compliance period. Adequate evidence of ownership includes but is not limited to a certified statement of ownership. Adequate evidence of material participation includes but is not limited to a description of the management and operational plan for the project demonstrating the material participation of the nonprofit organization.

12.8(3) The authority reserves the right to conduct additional due diligence to determine whether or not an entity is a qualified nonprofit organization.

265--12.9(16) Selection criteria and scoring. The authority shall evaluate applications for tax credit allocations using the selection and point system described in this rule. A project may receive all or a portion of the maximum points listed in each subrule. In the event of a tie among the projects based on scoring, the authority shall consider the projects and select the project or projects it believes best furthers the purposes and objectives of the low-income housing tax credit program as identified in this chapter. Points shall be awarded based on the following selection criteria:

12.9(1) The project is located outside a MSA (5 points).

12.9(2) The project is located in a qualified census tract or a difficult development area and qualifies for up to a 30 percent increase in eligible basis, pursuant to IRC Section 42(d)(5)(C). A list of these areas is provided in the application package (5 points).

12.9(3) The sources of funding for the project combine the low-income housing tax credit with community-based financial assistance, such as tax abatements, tax increment financing, local CDBG or HOME funds, local housing trust funds, or other local financial assistance. A maximum total score of 15 points is possible for this item. Each source of local funding identified in the property budget in the application shall receive 5 points. In order to score in this category, the local funding contribution must be at least 5 percent of the total project costs.

12.9(4) The project includes the project owner's equity contribution or deferred development fees. Adequate evidence of this item must be reflected in the application and evidenced by the identification of a commitment in the form of a letter specifying the amount and terms of the project owner's equity contribution (5 points).

12.9(5) The project utilizes conventional mortgage financing from an Iowa-based financial institution as evidenced by a commitment letter from the local Iowa lending office of the financial institution (5 points).

12.9(6) The project must have local support. The project is supported by the local governmental entity as evidenced by a letter from a senior governmental entity official which states that the governmental entity supports or does not oppose the proposed project (5 points).

12.9(7) The project supports a specific neighborhood preservation or other organized community revitalization program as evidenced by a letter from a local government, housing authority, neighborhood-based nonprofit organization or other responsible party, which describes a specific plan for preservation or revitalization of the neighborhood (5 points).

12.9(8) The project utilizes only the amount of credit deemed necessary to reasonably meet the needs of low-income tenants likely to reside in the project, rather than the maximum amount of credit as required by IRC Section 42(m). The authority's analysis regarding this item may include, but is not limited to, the actual credit cost per unit in comparison with other proposed projects received for the current round of financing. A maximum of 15 points shall be awarded to this item on a sliding scale.

a. For projects that do not involve rehabilitation, the points shall be allocated as follows:

Credit Request Per Unit
Points
Less than $4,900
15
$4,901 to $6,000
10
$6,001 to $7,500
5
$7,501 to $10,000
3
Over $10,001
0
b. For projects involving rehabilitation of buildings, the points shall be allocated as follows:

Rehabilitation Cost Per Unit
Points
Less than $30,000
15
$30,001 to $60,000
10
$60,001 to $90,000
5
Over $90,000
2
12.9(9) The project preserves existing low-income housing as evidenced by one of the following items:

a. The project owner must show that the property in the project would be subject to foreclosure or default were no credit allowed, or is or shall be acquired from an insured depository institution in default or from a receiver or conservator of such institution. Adequate evidence of this item is a letter from the institution to which the project is in danger of being assigned (15 points); or

b. The project owner must show that the project owner is purchasing or has purchased a property owned by HUD, an insured depository institution in default, or a receiver or conservator of such an institution, or is an REO property. Adequate evidence of this item must be in the form of a binding contract to purchase from such federal or other entity as described in this rule, closing statements, or a copy of recorded warranty deed (15 points).

12.9(10) The project consists of "mixed-use" units, i.e., qualified tax credit and market rate units (5 points).

12.9(11) The project consists of 12 or fewer units (5 points).

12.9(12) A high percentage of the total costs of the project are allocated to actual construction costs as illustrated in the construction budget as opposed to the use of intermediary costs which include consultant, syndication, legal, appraisal, and other fees (15 points).

12.9(13) Local governmental or nonprofit organizations have evidenced support of the project and are committed to participating in supplying supportive services as evidenced by a letter of commitment to provide such services. The maximum number of points for this item is 10 points with 5 points awarded for each supportive service identified in the application package.

12.9(14) For a project owner of five or more units, the project owner has a successful track record as a developer or owner, or both, of completing and placing in service low-income housing in Iowa (10 points).

12.9(15) For a project owner of five or more units, the project owner has a successful track record as a developer or owner, or both, of providing housing under the LIHTC program as evidenced by having placed a LIHTC project in service prior to October 1, 1998 (5 points).

12.9(16) For a project owner with a management agent of five or more units, the project owner has signed a contract or a letter of intent with a management agent who has successful experience in the management of affordable housing, including LIHTC projects or other federally assisted projects, as evidenced by a copy of the contract or letter of intent and the resume of the management agent (10 points).

12.9(17) The project owner has a construction contract for the project with an Iowa contractor. A copy of the construction contract detailing the estimated costs of construction must be provided with the application (10 points).

12.9(18) The project owner is addressing special needs of tenants such as families with children, the elderly, or otherwise. The project owner must provide written evidence of previous successful experience in addressing the special needs which shall be addressed and provide a written commitment to provide appropriate services to meet these needs at the project (10 points).

12.9(19) The project owner is a qualified Iowa nonprofit organization with previous successful experience in the development of housing similar to that proposed in the application. The project owner must provide a list of previous housing projects that the nonprofit organization has developed (10 points).

12.9(20) For elderly projects only, the project must not contain any units with three or more bedrooms (5 points).

12.9(21) At least 10 percent of the units in the project have three or more bedrooms and are suitable for occupancy by families with children (5 points).

12.9(22) At least 10 percent of the units in the project are specifically designed for persons with disabilities (5 points).

12.9(23) The project is designed for transitional housing for the homeless (5 points).

12.9(24) The project shall provide housing for persons on waiting lists for public housing. An applicant must submit a letter from the applicable public housing authority addressed to the project owner describing the public housing waiting list. The letter must indicate the number of persons on the list (5 points).

12.9(25) The project shall serve tenants with maximum household incomes lower than the AGMI requirements of IRC Section 42(g). This is a federally mandated requirement pursuant to IRC Section 42(m)(1)(B)(ii)(I) and (II) (20 points).

12.9(26) The project shall be obligated to serve qualified tenants for additional years beyond the minimum 15-year compliance period required by IRC Section (42)(i)(l). A maximum of 35 points is possible for this item. Each additional year of compliance beyond the minimum 15-year requirement shall receive one additional point. This is a federally mandated requirement pursuant to IRC Section 42(m)(1)(B)(ii)(I) and (II).

265--12.10(16) Other considerations to award tax credit reservations. When the authority considers awarding tax credit reservations, at a minimum, it shall consider, during its public meeting, the relative scoring for each project, the sources and uses of funds, the location of the project and whether the developer is a nonprofit owner or a for-profit owner. In addition and irrespective of scoring and the location of a project, the authority may determine that a project shall not be funded for any of the reasons identified in this rule. In the event the authority elects to reject a project for the reasons identified herein, the reasons must be clearly identified during the public meeting where the authority considers applications for tax credits.

12.10(1) The project does not further the stated purposes and objectives of the low-income tax credit program as described in rule 12.2(16).

12.10(2) The project is in a market that is saturated with low-income housing projects. The authority may rely on information provided by the staff regarding the concentration of projects.

12.10(3) The project is not preferred by other state or federal governmental units or political subdivisions with an interest in housing. The authority may consider the recommendations of the HART team where relevant or any other comments received from other state or federal agencies regarding a proposed project. The authority may consider whether funding commitments made by other governmental units have been received by a project. The authority may consider oral or written presentations at the public meeting where the authority's board decides to award tax credit reservations.

12.10(4) The applicant has a history of noncompliance with IRC Section 42 and the Treasury regulations implementing IRC Section 42.

12.10(5) The applicant has failed to complete and place in service a previous allocation.

12.10(6) The project is in a county that has more than one project proposed for the county. The authority may consider the number of projects proposed for a certain county. The authority may allow no more than one or two projects per locality for each cycle of tax credits.

12.10(7) The project is one of several proposed by a single developer. The authority may consider the number of projects an applicant is awarded during any one cycle and limit the total amount of credits or projects awarded for any annual ceiling cap. No single applicant shall be awarded more than $500,000 in tax credits for multiple projects. No single applicant shall be awarded tax credits for more than three projects.

12.10(8) The project proposed by the applicant consumes a share of the total available state credit ceiling allowance in excess of 10 percent of the total per capita component. The authority may consider the size of a project. No developer shall be awarded tax credits that exceed 10 percent of the total state per capita component for any one project. The authority may ask a developer to phase a project if the project requires more than 10 percent of the state allocation ceiling.

265--12.11(16) Notice of the tax credit award. Once the authority has reserved credits, a written contingent notice of reservation shall be faxed and mailed to all approved applicants. The unsuccessful applicants shall be notified by fax and by mail that the authority did not select their projects. All notices shall be sent on the same day the awards are made. The reservations shall become final on the sixth day after the date of the notice of award sent to all approved applicants.

265--12.12(16) Postreservation requirements.

12.12(1) An applicant may amend its application after an award of tax credits is made for the purposes of showing changes in sources and uses of funds.

12.12(2) Each applicant receiving a reservation of credit is required to execute and record a declaration of land use restrictive covenants. The original recorded document must be recorded before an IRS Form 8609 shall be issued or a carryover agreement executed, whichever form of allocation is applicable.

12.12(3) All applicants receiving a carryover allocation must submit a carryover agreement and allocation and taxpayer's election statement and a certified public accountant's (CPA) cost certification evidencing that the taxpayer has accumulated at least 10 percent of its reasonably expected basis. In addition, all applicants receiving an IRS Form 8609 allocation must submit an IRS Form 8609 request package in its entirety, which includes a CPA cost certification evidencing final project costs, and pay the compliance monitoring fee before the IRS Form 8609 shall be issued.

265--12.13(16) Applicant appeals. Any applicant whose application has been timely filed and who is aggrieved by the award of the authority may appeal the decision by filing a written notice of appeal within five days before the Iowa Finance Authority, 100 East Grand, Suite 250, Des Moines, Iowa 50309. The notice of appeal must actually be received at this address within the time frame specified to be considered timely. A written notice of appeal may also be filed by fax transmission at (515)242-4957 within five days of the date of the award, exclusive of Saturdays, Sundays, and state legal holidays. The notice of appeal shall state the grounds upon which the applicant challenges the authority's award.

12.13(1) Procedures for applicant appeal. The aggrieved applicant shall file a contested case and follow the procedure set out in this rule.

12.13(2) Hearing. Upon receipt of a notice of an applicant appeal, the authority may contact the department of inspections and appeals to arrange for a hearing. The department of inspections and appeals shall send a written notice of the date, time and location of the appeal hearing to the aggrieved applicant or applicants. The authority shall select a presiding officer and hold a hearing on the applicant appeal in conformance with its rules on contested cases within 30 days of the date the notice of appeal was received by the authority.

12.13(3) Discovery. Any discovery requests shall be served simultaneously on the parties within 15 days of the notice of appeal.

12.13(4) Witnesses and exhibits. Within 15 days following the notice of appeal, the parties shall contact each other regarding witnesses and exhibits. There is no requirement for witness and exhibit lists. However, the parties must meet prior to the hearing regarding the evidence to be presented in order to avoid duplication or the submission of extraneous materials. The parties may request a prehearing conference to discuss witnesses, exhibits or other matters relating to the hearing.

12.13(5) Evidence for a telephone or network hearing. If the hearing is conducted by telephone or on the fiberoptic network, all exhibits must be delivered to the office of the authority three days prior to the time the hearing is conducted. Any exhibits which have not been served on the opposing party should be served at least seven days prior to the hearing.

12.13(6) Contents of decision. The presiding officer shall issue a decision in writing that includes findings of fact and conclusions of law stated separately. The decision shall be based on the record of the contested case and shall conform with Iowa Code chapter 17A. The decision shall be sent to all parties by first-class mail.

12.13(7) Record requirements. The record of the contested case shall include all materials specified in Iowa Code subsection 17A.12(6). The record shall also include any request for a contested case hearing and other relevant procedural documents regardless of their form.

a. Oral proceedings in connection with an applicant appeal shall be recorded either by mechanized means or by certified shorthand reporters. Parties requesting that the hearing be recorded by certified shorthand reporters shall bear the costs of the reporter.

b. Oral proceedings in connection with a hearing in a case or any portion of the oral proceedings shall be transcribed at the request of any party with the expense of the transcription charged to the requesting party.

c. Copies of tapes of oral proceedings may be obtained from the board at the requester's expense.

d. The recording or stenographic notes of oral proceedings or the transcription shall be filed and maintained by the board for at least two years from the date of the proposed decision.

12.13(8) Dismissal. A ruling dismissing all of a party's claims or a voluntary dismissal is a decision under Iowa Code section 17A.15.

12.13(9) Requests for rehearing. Requests for rehearing shall be made to the authority within 20 days of issuing a final decision. A rehearing may be granted when new legal issues are raised, new evidence is available, an obvious mistake is corrected, or when the decision fails to include adequate findings or conclusions on all issues. A request for rehearing is not necessary to exhaust administrative remedies.

12.13(10) Judicial review. Judicial review of the authority's final decisions may be sought in accordance with Iowa Code section 17A.19.

265--12.14(16) Monitoring procedures and record-keeping requirements.

12.14(1) The authority is required to establish procedures for monitoring compliance with the provisions of IRC Section 42 and for notifying the Internal Revenue Service of any noncompliance of which it becomes aware. In order to satisfy its monitoring and reporting obligations, the authority shall require each owner of a low-income housing project to comply with the requirements described in this rule.

12.14(2) For each year in the compliance period, the owner of an affordable housing project shall keep records for each qualified low-income building in the project that show the following:

a. The total number of residential rental units in the building including the number of bedrooms and the size in square feet of each residential rental unit;

b. The percentage of residential rental units in the building that are low-income units;

c. The rent charged on each residential rental unit in the building including any utility allowance;

d. The number of occupants in each low-income unit, but only if rent is determined by the number of occupants in each unit under IRC Section 42(g)(2) (as in effect before the amendments made by the Revenue Reconciliation Act of 1989);

e. The low-income unit vacancies in the building and information that shows when and to whom the next available units were rented;

f. The annual income certification of each low-income tenant per unit;

g. Documentation to support each low-income tenant's income certification (e.g., a copy of the tenant's federal income tax return, Form W-2, or verifications of income from third parties such as employers or state agencies paying unemployment compensation). Tenant income shall be calculated in a manner consistent with the determination of annual income under Section 8 of the United States Housing Act of 1937 ("Section 8"), and not in accordance with the determination of gross income for federal income tax liability. In the case of a tenant receiving housing assistance payments under Section 8, the documentation requirement of this rule is satisfied if the public housing authority provides a statement to the building owner declaring that the tenant's income does not exceed the applicable income limit under IRC Section 42(g);

h. The eligible basis and qualified basis of the building at the end of the first year of the credit period; and

i. The character and use of the nonresidential portion of the building included in the building's eligible basis under IRC Section 42(d) (e.g., tenant facilities that are available on a comparable basis to all tenants and for which no separate fee is charged for use of the facilities, or facilities reasonably required by the project).

12.14(3) The owner of a low-income housing tax credit project shall retain the records described in subrule 12.14(2) for each building in the project for at least six years after the due date (with extensions) for filing the federal income tax return for that year. The records for the initial taxable year must be retained for at least six years after the due date for filing the federal income tax return for the last year of the compliance period of the building.

12.14(4) The owner of an affordable housing project shall certify at least annually to the authority that, for the preceding 12-month period:

a. The project met the requirements of:

(1) The 20-50 test under IRC Section 42(g)(1)(A) or the 40-60 test under IRC Section 42(g)(1)(B), whichever minimum set-aside test is applicable to the project, and

(2) If applicable to the project, the 15-40 test under IRC Sections 42(g)(4) and 142(d)(4)(B) for "deep rent skewed" projects;

b. There was no change in the applicable fraction (as defined in IRC Section 42(c)(1)(B)) of any building in the project, or that there was a change and a description of such change;

c. The owner has received an annual income certification from each low-income tenant and documentation to support that certification or, in the case of a tenant receiving Section 8 housing assistance payments, the statement from a public housing authority as described at 12.14(4)"g" shall satisfy the income verification requirement;

d. Each low-income unit in the project was rent-restricted under IRC Section 42(g)(2);

e. All units in the project were for use by the general public and used on a nontransient basis (except for transitional housing for the homeless provided under IRC Section 42(i)(3)(B)(iii));

f. Each building in the project was suitable for occupancy, taking into account local health, safety and building codes;

g. There was no change in the eligible basis (as defined in IRC Section 42(d)) of any building in the project, or if there was a change, the nature of the change;

h. All tenant facilities included in the eligible basis under IRC Section 42(d) of any building in the project, such as swimming pools, other recreational facilities, and parking areas, are provided on a comparable basis without charge to all tenants in the building;

i. If a low-income unit in the project became vacant during the year, reasonable attempts were or are being made to rent that unit or the next available unit of comparable or smaller size to tenants having a qualifying income before any units in the project were or shall be rented to tenants not having a qualifying income;

j. If the income of tenants of a low-income unit in the project increased above the limit allowed in IRC Section 42(g)(2)(D)(ii), the next available unit of comparable or smaller size in the project was or will be rented to tenants having a qualifying income; and

k. An extended affordable housing commitment as described in IRC Section 42(h)(6) was in effect (for buildings subject to Section 7108(c)(1) of the Revenue Reconciliation Act of 1989).

12.14(5) Review.

a. The authority shall review the certifications submitted under subrule 12.14(4) for compliance with the requirements of IRC Section 42.

b. The owners of all affordable housing projects shall submit to the authority each year general information on tenant income and rent for each low-income unit in the form and manner designated by the authority. Additionally, each year the authority shall select at least 20 percent of the tenants in at least 20 percent of the projects for whom the owners shall submit to the authority for compliance review a copy of the annual income certification, the documentation the owner has received to support that certification, and the rent records.

c. The authority may also inspect a reasonable number of projects each year, review on site the low-income tenant income certifications for that year, the documentation the owner has received to support those certifications, and the rent records for the project.

d. The authority shall determine which records are to be inspected or submitted by the owner for review. The rec-ords to be inspected pursuant to 12.14(5)"c" shall be chosen in a manner that shall not give owners of low-income housing tax credit projects advance notice that their records for a particular year are subject to inspection. However, the authority may give an owner reasonable notice that an inspection may occur so that the owner may assemble records.

12.14(6) The certifications and review of certifications described in subrules 12.14(4) and 12.14(5) shall be made at least annually covering each year of the 15-year compliance period under IRC Section 42(i)(1). The certifications shall be made under penalty of perjury. The authority may require that certifications and reviews be made more frequently, provided that all months within each 12-month period are subject to certification.

12.14(7) Exceptions for certain buildings.

a. If the authority has met the requirements of 12.14(7)"b," owners are not required to submit, and the authority is not required to review, the tenant income certification, supporting documentation, and rent records for:

1. Buildings financed by the USDA under the Section 515 program, or

2. Buildings of which 50 percent or more of the aggregate basis (taking into account the building and the land) is financed with tax-exempt bonds.

b. The authority shall enter into an agreement with USDA or the tax-exempt bond issuer pursuant to which USDA or the tax-exempt bond issuer agrees to provide information to the authority concerning the income and rent of the tenants in the building. The authority may assume the accuracy of the information provided by USDA or the tax-exempt bond issuer without verification. The authority shall review the information and determine that the income limitation and rent restriction of IRC Section 42(g)(1) and (2) are met. However, if the information provided by the USDA or tax-exempt bond issuer is not sufficient for the authority to make this determination, the authority shall request the necessary additional income or rent information from the owner of the buildings.

12.14(8) Inspection provisions. The authority shall have the right to perform an on-site inspection of any project at least through the end of the compliance period of the buildings in the project. The inspection provision of this rule is separate from any review of low-income certifications, supporting documentation and rent records under subrule 12.14(5). Advance notice to the owner is not necessary for purposes of the inspection provisions set forth in this rule.

12.14(9) Notification of noncompliance provisions. The authority is required to give the notice described in subrule 12.14(10) to the owner of an affordable housing project and the notice described in subrule 12.14(11) to the Internal Revenue Service.

12.14(10) Notice to owner. The authority shall provide prompt written notice to the owner of a low-income housing project if the authority does not receive the certification described in subrule 12.14(4) or does not receive or is not permitted to inspect the tenant income certifications, supporting documentation, and rent records described in subrule 12.14(5), or discovers by inspection, review, or in some other manner, that the project is not in compliance with the provisions of IRC Section 42.

12.14(11) Notice to Internal Revenue Service. The authority is required to file IRS Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition, with the Internal Revenue Service no later than 45 days after the end of the correction period (as described in subrule 12.14(12)), including extensions permitted under subrule 12.14(12), and no earlier than the end of the correction period, whether or not the noncompliance or failure to certify is corrected. The authority must explain on Form 8823 the nature of the noncompliance or failure to certify and indicate whether the owner has corrected the noncompliance or failure to certify. Any change in either the applicable fraction or eligible basis under subrule 12.14(4) that results in a decrease in the qualified basis of the project under IRC Section 42(c)(1)(A) is noncompliance that must be reported to the Internal Revenue Service under subrule 12.14(9). If the authority reports on IRS Form 8823 that a building is entirely out of compliance and shall not be in compliance at any time in the future, the authority need not file IRS Form 8823 in subsequent years to report that building's noncompliance.

12.14(12) Authority retention of records. The authority shall retain records of noncompliance or failure to certify for six years beyond the authority's filing of the respective IRS Form 8823. In all other cases, the authority must retain the certifications and records described in this subrule for three years from the end of the calendar year for which the authority receives the certification and records.

12.14(13) Correction period. The correction period shall be a period not exceeding 90 days from the date of the notice to the owner described in subrule 12.14(10), during which the owner must supply any missing certifications and bring the project into compliance with the provisions of IRC Section 42. The authority may extend the correction period for up to six months, but only if the authority determines there is good cause for granting the extension.

12.14(14) Delegation of monitoring. The authority may retain an agent or other private contractor (the "authorized delegate") to perform compliance monitoring. The authorized delegate must be unrelated to the owner of any building that the authorized delegate monitors. The authorized delegate may be delegated all of the functions of the authority to monitor compliance, except for the responsibility of notifying the Internal Revenue Service under subrule 12.14(11). The authorized delegate must notify the authority of any noncompliance or failure to certify.

12.14(15) Limitations. The authority shall use reasonable diligence to ensure that any authorized delegate to whom compliance monitoring is delegated properly perform the delegated monitoring functions. Delegation of compliance monitoring functions by the authority to an authorized delegate does not relieve the authority of its obligation to notify the Internal Revenue Service of any noncompliance of which the authority becomes aware.

12.14(16) Liability. Compliance with the requirements of IRC Section 42 is the responsibility of the owner of the building for which the credit is allowable. The authority's obligation to monitor for compliance with the requirements of IRC Section 42 shall not make the authority liable for an owner's noncompliance.

12.14(17) Effective date. These procedures for monitoring for noncompliance became effective on January 1, 1992, were amended on February 3, 1993, and apply to buildings placed in service for which a low-income housing tax credit is, or has been, allowable at any time. Notwithstanding the effective date, if the authority becomes aware of noncompliance that occurred prior to January 1, 1992, it is required to notify the Internal Revenue Service of that noncompliance.

265--12.15(16) Tax-exempt bond financed projects. Pursuant to IRC Section 42(m)(2)(D), projects which do not receive an allocation from the state housing credit ceiling because they qualify pursuant to IRC Section 42(h)(4) and are financed with tax-exempt bond obligations issued after December 31, 1998, must satisfy the requirements for allocation of a housing dollar amount under the qualified allocation plan and these rules. These projects shall be subject to the threshold requirements and evaluation procedures of the qualified allocation plan as described in these rules. However, tax-exempt bond financed projects shall not participate in the competitive funding rounds. A project that qualifies for an allocation of tax credit pursuant to IRC Section 42(h)(4) shall be eligible only for an allocation at the 4 percent present value credit level.

These rules are intended to implement Iowa Code section 16.52.

ARC 9263A

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

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 455G.4(3) and 455G.11, the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board (Board) hereby gives Notice of Intended Action to amend Chapter 10, "Eligibility for Insurance," Iowa Administrative Code.

Chapter 10 describes the guidelines for insurance eligibility. Rule 10.2(455G) lists the deductible options for the insurance coverage offered by the Board. Effective January 1, 1995, the Board restructured the deductible options.

This amendment corrects the existing deductible wording to reflect the Board's decision, whereby an insured site can obtain a policy with either a $5,000 or $10,000 deductible and the $25,000 deductible is eliminated.

Any interested person may make written suggestions or comments on this proposed amendment on or before August 31, 1999. Such written comments should be directed to the Administrator, Iowa Comprehensive Petroleum Underground Storage Tank Fund Board, 1000 Illinois Street, Suite B, Des Moines, Iowa 50314.

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

There will be a public hearing on August 31, 1999, at10 a.m. in the Conference Room of the Administrator's Office, 1000 Illinois Street, Suite B, Des Moines, Iowa. Persons may present their views at this public hearing either orally or in writing.

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

This amendment is intended to implement Iowa Code section 455G.11.

The following amendment is proposed.

Amend rule 591--10.2(455G) as follows:

591--10.2(455G) Deductibles. The following deductibles are established under the Iowa plan:

10.2(1) ~~For locations with three tanks or less, there~~ There is a $5,000 deductible.

10.2(2) ~~For locations with more than three tanks, there~~ There is a $10,000 deductible ~~at minimum~~.

~~10.2(3)~~ ~~A $25,000 deductible may be used if it is determined that the scope of the risk warrants higher retention levels, at the discretion of the board or administrator.~~

~~10.2(4)~~ Deductibles may be reduced from $10,000 to $5,000 for sites with more than three tanks for an additional premium payment of 50 percent of policy totals with administrative approval. There is no provision to buy down deductibles on sites with $5,000 or $25,000 deductibles.

ARC 9264A

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

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 455G.4(3), 455G.6(15), 455G.9 and 455G.21, the Iowa Comprehensive Petroleum Underground Storage Tank Fund Board (Board) hereby gives Notice of Intended Action to amend Chapter 11, "Remedial or Insurance Claims," Iowa Administrative Code.

Chapter 11 describes the guidelines for remedial or insurance claims. Subrule 11.1(3) lists the eligibility criteria for remedial and retroactive claimants. The purpose of these amendments is to broaden the rules in accordance with 1999 Iowa Acts, House File 442, which amended Iowa Code section 455G.9, subsection 1. This legislation provides for 100 percent of the cost of corrective action for a governmental subdivision in connection with a petroleum underground storage tank that the governmental subdivision did not own or operate when the release occurred and subsequently acquired the property via eminent domain after the release occurred.

This legislation also allows for reimbursement of reasonable expenses incurred by a governmental subdivision for treating, handling, or disposing, as required by the Department of Natural Resources, of petroleum-contaminated soil and groundwater encountered in a public right-of-way during the installation, maintenance or repair of a public improvement. The legislation provides the ability for the Board to seek full cost recovery from the responsible party for any and all such expenses paid for by the Fund. This will include the ability to place a lien on a property as provided under Iowa Code section 424.11.

Any interested person may make written suggestions or comments on these proposed amendments on or before August 31, 1999. Such written comments should be directed to the Administrator, Iowa Comprehensive Petroleum Underground Storage Tank Fund Board, 1000 Illinois Street, Suite B, Des Moines, Iowa 50314.

There will be a public hearing on August 31, 1999, at 10 a.m. in the Conference Room of the Administrator's Office, 1000 Illinois Street, Suite B, Des Moines, Iowa. Persons may present their views at this public hearing either orally or in writing.

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

These amendments are intended to implement Iowa Code sections 455G.9 and 455G.21.

The following amendments are proposed.

ITEM 1. Amend paragraph 11.1(3)"n" by adding the following new subparagraph (13):

(13) If the property is acquired via eminent domain by a governmental subdivision.

ITEM 2. Amend subrule 11.1(5) by adding the following new paragraph "g":

g. Costs incurred by a governmental subdivision for treating, handling or disposing as required by DNR, petroleum-contaminated soil and groundwater encountered in a public right-of-way during installation, maintenance or repair of a public improvement.

ARC 9269A

PROFESSIONAL LICENSURE DIVISION[645]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 158.15, the Board of Barber Examiners hereby gives Notice of Intended Action to amend Chapter 20, "Barber Examiners," Iowa Administrative Code.

This amendment changes the renewal fee for barbershops to reflect 1999 Iowa Acts, House File 497, section 29, which became effective July 1, 1999. Barbershop licenses will now be renewed biennially instead of annually.

Any interested person may make written or oral suggestions or comments on the proposed amendment on or before August 31, 1999. Comments should be directed to Roxanne Sparks, Professional Licensure Division, Department of Public Health, Lucas State Office Building, Fifth Floor, Des Moines, Iowa 50319-0075.

A public hearing will be held on August 31, 1999, from8 to 9 a.m. in the Fifth Floor Professional Licensure Conference Room, Lucas State Office Building, at which time persons may present their views either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the proposed amendment.

The Board has determined that this amendment will have no impact on small business within the meaning of Iowa Code section 17A.31 other than barbershop owners will be required to pay $60 every two years for renewal instead of $30 yearly.

This amendment is intended to implement Iowa Code section 158.9 as amended by 1999 Iowa Acts, House File 497, section 29.

The following amendment is proposed.

Amend subrule 20.214(9) as follows:

20.214(9) ~~Renewal~~ Biennial renewal of barbershop license is ~~$30~~ $60. Penalty for late renewal is $10, in addition to renewal fee if not postmarked by the July 1 expiration date.

ARC 9270A

PROFESSIONAL LICENSURE DIVISION[645]

Notice of Intended Action

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 61, "Licensure of Salons and Schools of Cosmetology Arts and Sciences," and Chapter 62, "Fees," Iowa Administrative Code.

These amendments change the salon license renewal period from annually to biennially due to 1999 Iowa Acts, House File 497, section 28, which became effective on July 1, 1999. The renewal fee is revised to reflect the biennial renewal.

Any interested person may make written comments on the proposed amendments no later than August 31, 1999, addressed to Sharon Cook, Professional Licensure Division, Department of Public Health, Lucas State Office Building, Des Moines, Iowa 50319-0075.

There will be a public hearing on August 31, 1999, from 8 to 9 a.m. in Professional Licensure Board Room #525, Fifth Floor, Lucas State Office Building, at which time persons may present their views either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the proposed amendments.

The Board has determined that these amendments will not have impact on small business within the meaning of Iowa Code section 17A.31 other than that salon owners will be required to pay $70 every two years for renewal instead of $35 annually.

These amendments are intended to implement Iowa Code section 157.11 as amended by 1999 Iowa Acts, House File 497, section 28.

The following amendments are proposed.

ITEM 1. Adopt new paragraph 61.1(6)"f" as follows:

f. A salon license shall be renewed on a biennial basis.

ITEM 2. Amend subrule 62.1(10) as follows:

62.1(10) Renewal of a salon license ~~and change of location of an existing salon is $35 annually~~ is $70 biennially.

ITEM 3. Amend subrule 62.1(20) as follows:

62.1(20) Fee for a name change of salon is $15. Fee for change of location of an existing salon is $35.

ARC 9258A

REAL ESTATE COMMISSION[193E]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 543B.9, the Real Estate Commission hereby gives Notice of Intended Action to amend Chapter 3, "Prelicense Education and Continuing Education," Iowa Administrative Code.

The amendments to Chapter 3 establish specific guidelines for approval of live classroom courses, distance education courses and home-study courses. Other amendments are for purposes of removing dates that have passed. An additional amendment clarifies that nonresident broker and broker associates and licensees who qualify under rule 193E--2.3(543B) or obtain a reciprocal license shall complete the brokerage management courses on a one-time-only basis, at the time of the licensee's first Iowa renewal, unless there is a reciprocal education agreement between the states.

Waivers from provisions of this rule may be sought pursuant to 193E--Chapter 8.

Consideration will be given to all written suggestions or comments on the proposed amendments received on or before August 31, 1999. Comments should be addressed to Susan Griffel, 1918 S.E. Hulsizer, Ankeny, Iowa 50021, or faxed to (515)281-7411. E-mail may be sent to susan.griffel @comm7.state.ia.us.

A public hearing will be held on August 31, 1999, at9 a.m. in the Professional Licensing Conference Room on the second floor of the Department of Commerce Building, 1918 S.E. Hulsizer, Ankeny, Iowa. Persons may present their views at the public hearing either orally or in writing. At the hearing, persons will be asked to give their names and addresses for the record and to confine their remarks to the subject of the amendments.

These amendments are intended to implement Iowa Code chapter 543B.15.

The following amendments are proposed.

ITEM 1. Amend subrule 3.2(2) as follows:

3.2(2) ~~Salespersons licensed on June 1, 1994, and thereafter must complete 36 hours of commission-approved classroom education to renew to active status by December 31 of the third year of licensure.~~ To maintain active status,all first-time salesperson renewals shall complete 36commission-approved classroom hours by December 31 of the third year of licensure. The following courses satisfy the first license renewal continuing education requirement:

Developing Professionalism and
Ethical Practices 12 hours

Buying Practices 12 hours

Listing Practices 12 hours

ITEM 2. Amend subrule 3.2(3) as follows:

3.2(3) ~~Beginning January 1, 1996, the~~ The required course of study for the broker licensing examination shall consist of at least 72 classroom hours. Approved courses shall be completed within 24 months prior to taking the broker examination and shall include the following subjects:

Contract law and contract writing 8 hours

Iowa real estate trust accounts 8 hours

Principles of appraising and market analysis 8 hours

Real estate law and agency law 8 hours

Real estate finance 8 hours

Federal and state laws affecting Iowa practice 8 hours

Real estate office organization 8 hours

Real estate office administration 8 hours

Human resources management 8 hours

ITEM 3. Amend subrule 3.3(2) as follows:

3.3(2) As a requirement of license renewal in an active status, each real estate licensee shall complete a minimum of 36 hours of approved programs, courses or activities. The continuing education must be completed during the three calendar years of the license term and cannot be carried over to another license term.

Beginning with brokers and broker associates renewing December 2001 and thereafter and salespersons renewing December 1998 and thereafter, approved courses in the following subjects shall be completed to renew to active status, except in accordance with 3.2(2):

Law update 8 hours

Ethics 4 hours

Electives 24 hours

Approved courses in the following subjects shall be completed one time only by all brokers and broker associates licensed prior to January 1,1998, beginning with those licensees renewing December 1998 and 1999, and ending with those licensees renewing December 2000: All brokers and broker associates licensed prior to January 1, 1998, shall complete courses in the following subjects on a one-time-only basis. Nonresident licensees are exempt if an education agreement is in place between Iowa and the nonresident state. Brokers and broker associates who have completed the brokerage management courses, as part of the 72-hour broker prelicense, are not required to repeat the courses and shall comply with the requirements of 3.3(2) to maintain active status.

Real estate office administration 8 hours

Real estate office organization 8 hours

Human resources management 8 hours

Electives 12 hours

Substantially similar courses may be substituted in accordance with 3.2(5). To qualify for consideration, the course content must reflect current brokerage practices and should have been completed during the three calendar years of the license term, or within a reasonable period of time prior to expiration of the license.

ITEM 4. Amend subrule 3.4(1) as follows:

3.4(1) Qualifying activity. The commission may approve live classroom instruction, ~~and~~ distance education programs, and paper and pencil home-study courses, ~~and activities~~ subject to the following conditions:

a. The course pertains to real estate topics that are integrally related to the real estate industry; and

b. The course allows the participants to achieve a high level of competence in serving the objectives of consumers who engage the services of licensees; and

c. The course qualifies for at least three credit hours.~~; and~~

d. ~~The course application is accompanied by a comprehensive course outline that includes:~~ Requirements for live instruction courses. The commission may approve live classroom programs, subject to the following requirements. The course application is accompanied by a comprehensive course outline that includes:

(1) Course description.

(2) Course purpose.

(3) Difficulty level.

(4) ~~Learning~~ Detailed learning objectives for each major topic that specify the level of knowledge or competency the student should demonstrate upon completing the course.

(5) Description of the instructional methods utilized to accomplish the learning objectives.

(6) Copies of all instructor and student course materials.

(7) Course examination(s) or the diagnostic assessment methods(s) utilized to achieve the course learning objectives, when applicable.

(8) A description of the plan in place to periodically review course material with regard to changing national and state statutes.

(9) A statement of any attendance make-up policy that the school has in place.

e. The commission may approve distance education programs, subject to the following requirements:

(1) The provider's purpose or mission statement is available to the public.

(2) The course outline must include clearly stated learning objectives and desired student competencies for each module of instruction and a description of how the program promotes interaction between the learner and the program.

(3) Course content must be accurate and up to date. Provider must describe the plan in place to periodically review course material with regard to changing national and state statutes.

(4) Course must be designed to ensure that student progress is evaluated at appropriate intervals and mastery of the material is achieved before a student can progress through the course material.

(5) Qualified individuals are involved in the design of the course.

(6) Provider must list individuals who provide technical support to students and state the specific times that support is available.

(7) A manual shall be provided to each registered student. It shall include, but not be limited to, faculty contact information, student assignments and course requirements, broadcast schedules, testing information, passing scores, resource information, fee schedule and refund policy.

(8) Provider must retain a signed statement by the student that affirms that the student completed the required work and examinations.

(9) Providers must state in the course materials that the information presented in the course should not be used as a substitute for competent legal advice.

(10) Courses submitted for approval must be sufficient in scope and content to justify the hours requested by the provider.

f. Requirements for paper and pencil home-study courses. The commission may approve paper and pencil home-study courses, subject to the following requirements:

(1) Courses must be arranged in chapter format and include a table of contents.

(2) Overview statements must be included for each chapter (a preview of the content of the chapter).

(3) Courses must be designed to ensure that student progress is evaluated at appropriate intervals. This assessment process shall measure what each student has learned and not learned at regular intervals throughout each module of the course. Quizzes must be completed and returned to the provider to receive credit for the course.

(4) Final exams must contain a minimum of 30 questions for a three-hour course and 60 questions for a six-hour course.

(5) A passing score of 90 percent is required to receive credit for a course. There is no limit to the number of times a final exam may be taken to achieve a passing score.

(6) Licensees have six months from the date of purchase to complete all quizzes and assignments and to pass the final exam.

(7) Providers must include information that clearly informs the licensee of the course completion deadline, passing score required, chapter quiz completion requirements and any other relevant information regarding the course.

(8) Providers must state in the course materials that the information presented in the course should not be used as a substitute for competent legal advice.

(9) Provider must retain a signed statement by the student that affirms that the student completed the required work and exams.

(10) Providers must be available to answer student questions or provide assistance as necessary during normal business hours.

(11) Courses submitted for approval must be sufficient in scope and content to justify the hours requested by the provider.

e g. It is conducted by individuals who have shown proof of attendance at an instructor development workshop within 12 months preceding approval by the commission and met the instructor qualification criteria. Guest speakers and individuals currently certified by a nationally recognized organization that requires similar instructor standards are exempt, with prior approval of the commission, from the following standards and the instructor development workshop requirement. An applicant may be approved as an instructor when it is determined that the applicant evidences (1) the ability to teach and communicate and (2) in-depth knowledge of the subject matter to be taught.

(1) and (2) No change.

~~f. to i. Rescinded IAB 7/3/96, effective 8/7/96.~~

ARC 9262A

REVENUE AND FINANCE DEPARTMENT[701]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 421.17, the Department of Revenue and Finance hereby gives Notice of Intended Action to amend Chapter 6, "Organization, Public Inspection"; Chapter 11, "Administration"; Chapter 12, "Filing Returns, Payment of Tax, Penalty and Interest"; Chapter 38, "Administration"; Chapter 40, "Determination of Net Income"; Chapter 43, "Assessments and Refunds"; Chapter 51, "Administration"; Chapter 54, "Allocation and Apportionment"; Chapter 55, "Assessments, Refunds, Appeals"; Chapter 57, "Administration"; Chapter 59, "Determination of Net Income"; Chapter 63, "Administration"; Chapter 67, "Administration"; Chapter 68, "Motor Fuel and Undyed Special Fuel"; Chapter 81, "Administration"; Chapter 86, "Inheritance Tax"; Chapter 89, "Fiduciary Income Tax"; Chapter 103, "Hotel and Motel--Administration"; and Chapter 104, "Hotel and Motel--Filing Returns, Payment of Tax, Penalty, and Interest," Iowa Administrative Code.

These amendments reference rules in 701--Chapter 7, Division I, to the correct citation of such rules in 701-- Chapter 7, Division II, which govern informal, formal, administrative, and judicial review procedures applicable to contested cases and other proceedings commenced on or after July 1, 1999. These amendments are proposed to implement changes in citation necessitated by Iowa Code chapter 17A as amended by 1998 Iowa Acts, chapter 1202.

The proposed amendments will not necessitate additional expenditures by political subdivisions or agencies and entities which contract with political subdivisions.

There are no waiver provisions reflected in these rules because the Department lacks the statutory authority to grant waivers where rules are mainly an interpretation of statutes.

The Department has determined that these proposed amendments may have an impact on small business. The Department has considered the factors listed in Iowa Code section 17A.31(4). The Department will issue a regulatory flexibility analysis as provided in Iowa Code sections 17A.31 to 17A.33 if a written request is filed by delivery or by mailing postmarked no later than August 30, 1999, to the Policy Section, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306. 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 Iowa Code sections 17A.31 to 17A.33, or an organization of small businesses representing at least 25 persons which is registered with this agency under Iowa Code sections 17A.31 to 17A.33.

Any interested person may make written suggestions or comments on these proposed amendments on or before September 10, 1999. Such written comments should be directed to the Policy Section, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306.

Persons who want to orally convey their views should contact the Policy Section, Compliance Division, Department of Revenue and Finance, at (515)281-4250 or at the Department of Revenue and Finance offices on the fourth floor of the Hoover State Office Building.

Requests for a public hearing must be received by September 3, 1999.

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

The following amendments are proposed.

ITEM 1. Amend rule 701--6.2(17A) as follows:

701--6.2(17A) Public inspection. Effective July 1, 1975, Iowa Code section 17A.3(1)"c" and "d" provides that the department shall index and make available for public inspection certain information. Pursuant to this requirement the department shall:

1. Make available for public inspection all rules;

2. Make available for public inspection and index by subject all written statements of law or policy, or interpretations formulated, adopted, or used by the department in the discharge of its functions;

3. Make available for public inspection and index by name and subject all final orders, decisions and opinions.

Section 17A.3(1)"c" and "d" also excepts certain matters from the public inspection requirement:

Except as provided by constitution or statute, or in the use of discovery or in criminal cases, the department shall not be required to make available for public inspection those portions of its staff manuals, instructions or other statements issued by the department which set forth criteria or guidelines to be used by its staff in auditing, in making inspections, in settling commercial disputes or negotiating commercial arrangements, or in the selection or handling of cases such as operational tactics or allowable tolerances or criteria for the defense, prosecution, or settlement of cases, when the disclosure of such statements would: (1) enable law violators to avoid detection; or (2) facilitate disregard of requirements imposed by law; or (3) give a clearly improper advantage to persons who are in an adverse position to the state.

Identifying details which would clearly warrant an invasion of personal privacy or trade secrets will be deleted from any final order, decision or opinion which is made available for public inspection upon a proper showing by the person requesting such deletion as provided in 701--~~subrule 7.16(5)~~ 7.42(17A).

Furthermore, the department shall not make available for public inspection or disclose information deemed confidential under Iowa Code sections 422.20 and 422.72.

Unless otherwise provided by statute, by rule or upon a showing of good cause by the person filing a document, all information contained in any petition or pleading shall be made available for public inspection.

All information accorded public inspection treatment shall be made available for inspection in the office of the Policy Section, Compliance Division, Department of Revenue and Finance, P.O. Box ~~10460~~ 10457, Des Moines, Iowa 50306, during established office hours.

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

ITEM 2. Amend rule 701--6.4(17A) as follows:

701--6.4(17A) Copies of proposed rules. A trade or occupational association, which has registered its name and address with the department of revenue and finance, may receive, by mail, copies of proposed rules. Registration of the association's name and address with the department is accomplished by written notification to the ~~Deputy Directorof Revenue and Finance, P.O. Box 10460,~~ Administrator, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, Fourth Floor, Des Moines, Iowa ~~50306~~ 50319. In the written notification, the association must designate, by reference to rule 701--~~7.2(17A)~~ 7.36(421,17A), the type of proposed rules and the number of copies of each rule it wishes to receive. If the association wishes to receive copies of proposed rules not enumerated in rule 701--~~7.2(17A)~~ 7.36(421,17A), it may make a blanket written request at the time of registration or at any time prior to the adoption of such rules. A charge of 20 cents per single-sided page shall be charged to cover the actual cost of providing each copy of the proposed rule. In the event the actual cost exceeds 20 cents for a single-sided page, it will be billed accordingly.

This rule does not prevent an association which has registered with the department in accordance with this rule from changing its designation of types of proposed rules or number of copies of proposed rules which the association desires to receive. If an association makes such changed designation, it must do so by written notification to the ~~deputy director of revenue and finance~~ Administrator, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, Fourth Floor, Des Moines, Iowa 50319.

This rule is intended to implement Iowa Code section 17A.4 as amended by 1998 Iowa Acts, chapter 1202.

ITEM 3. Amend 701--6.5(17A) as follows:

701--6.5(17A) Regulatory flexibility analysis procedures. Any small business as defined in Iowa Code section 17A.31 or organization of small businesses which has registered its name and address with the department of revenue and finance shall receive by mail a copy or copies of any proposed rule which may have an impact on small business. Registration of the business's or organization's name and address with the department is accomplished by written notification to the ~~Deputy Director of Revenue and Finance, P.O. Box 10460,~~ Policy Section, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, P.O. Box 10457, Des Moines, Iowa 50306. In the written notification, the business or organization must state that it wishes to receive copies of rules which may have an impact on small business, the number of copies of each rule it wishes to receive, and must also designate, by reference to rule 701--~~7.2(17A)~~ 7.36(421,17A), the types of proposed rules it wishes to receive. If the small business or organization of small businesses wishes to receive copies of proposed rules not enumerated in rule 701--~~7.2(17A)~~ 7.36(421,17A), it may make a blanket written request at the time of registration or at any time prior to the adoption of the rules. A charge of 20 cents per single-sided page shall be imposed to cover the actual cost of providing each copy of the proposed rule. In the event the actual cost exceeds 20 cents for a single-sided page, it will be billed accordingly.

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 representing at least 25 persons which is registered with the department as provided in this rule may request issuance of a regulatory flexibility analysis by writing to the ~~Director of Revenue and Finance, P.O. Box 10460,~~ Policy Section, Compliance Division, Department of Revenue and Finance, Hoover State Office Building, Des Moines, Iowa ~~50306~~ 50319. The request shall contain the following information: The name of the persons qualified as a small business and the name of the small business or the name of the organization as stated in its request for registration and an address; if a registered organization is requesting the analysis, a statement that the registered organization represents at least 25 persons; the proposed rule or portion of the proposed rule for which a regulatory flexibility analysis is requested; the factual situation which gives rise to the business's or organization's difficulties with the proposed rule; any of the methods for reducing the impact of the proposed rule on small business contained in Iowa Code section 17A.31(4) which may be particularly applicable to the circumstances; the name, address and telephone number of any person or persons knowledgeable regarding the difficulties which the proposed rule poses for small business and other information as the business or organization may deem relevant.

This rule is intended to implement Iowa Code sections 17A.31 to 17A.33 as amended by 1998 Iowa Acts, chapter 1202.

ITEM 4. Amend subrules 11.6(2) and 11.6(3) as follows:

11.6(2) Notice of assessment. If, after following the procedure outlined in subrule 11.6(1), paragraph "b," no agreement is reached and the person does not pay the amount determined to be correct, a notice of the amount of tax due shall be sent to the person responsible for paying the tax. This notice of assessment shall bear the signature of the director and will be sent by mail.

If the notice of assessment is timely protested according to the provisions of rule 701--~~7.8(17A)~~ 7.41(17A), proceedings to collect the tax will not be commenced until the protest is ultimately determined, unless the department has reason to believe that a delay caused by the appeal proceedings will result in an irrevocable loss of tax ultimately found to be due and owing the state of Iowa. The department will consider a protest to be timely if filed no later than 30 days following the date of assessment notice. See rule 701-- 7.4(17A). For notices of assessment issued on or after January 1, 1995, the department will consider a protest to be timely if filed no later than 60 days following the date of the assessment notice or, if the taxpayer fails to timely appeal a notice of assessment, the taxpayer may make payment pursuant to rule 701--~~7.8~~ 7.41(17A) and file a refund claim within the period provided by law for filing such claims.

11.6(3) Supplemental assessments and refund adjustments. The department may, at any time within the period prescribed for assessment or refund adjustment, make a supplemental assessment or refund adjustment whenever it is ascertained that any assessment or refund adjustment is imperfect or incomplete in any respect.

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8(17A)~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in the appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation.

ITEM 5. Amend rule 701--12.9(422), excluding the examples, as follows:

701--12.9(422) Claim for refund of tax. Refunds of tax shall be made only to those who have actually paid the tax. A person or persons may designate the retailer who collects the tax as an agent for purposes of receiving a refund of tax. A person or persons who claim a refund shall prepare the claim on the prescribed form furnished by the department.

A claim for refund shall be filed with the department, stating in detail the reasons and facts and, if necessary, supporting documents for which the claim for refund is based. See 1968 O.A.G. 879. If the claim for refund is denied, and the person wishes to protest the denial, the department will consider a protest to be timely if filed no later than 30 days following the date of denial. See rule 701--~~7.8~~ 7.41(17A). For refunds denied on or after January 1, 1995, the department will consider a protest to be timely if filed no later than 60 days following the date of denial.

When a person is in a position of believing that the tax, penalty, or interest paid or to be paid will be found not to be due at some later date, then in order to prevent the statute of limitations from running out, a claim for refund or credit must be filed with the department within the statutory period provided for in Iowa Code section 422.73(1). The claim must be filed requesting that it be held in abeyance pending the outcome of any action which will have a direct effect on the tax, penalty or interest involved. Nonexclusive examples of such action would be: court decisions, departmental orders and rulings, and commerce commission decisions.

ITEM 6. Amend rule 701--38.7(422) as follows:

701--38.7(422) Power of attorney. For information regarding power of attorney, see rule 701--7.34(421) and 7.38(421,17A).

ITEM 7. Amend rule 701--38.11(422) as follows:

701--38.11(422) Appeals of notices of assessment and notices of denial of taxpayer's refund claims. A taxpayer may appeal to the director at any time within 60 days from the date of the notice of assessment of tax, additional tax, interest, or penalties. For assessments issued on or after January 1, 1995, if a taxpayer fails to timely appeal a notice of assessment, the taxpayer may pay the entire assessment and file a refund claim within the period provided by law for filing such claims. In addition, a taxpayer may appeal to the director at any time within 60 days from the date of notice from the department denying changes in filing methods, denying refund claims, or denying portions of refund claims. See rule 701--~~7.8~~ 7.41(17A) for information on filing appeals or protests.

This rule is intended to implement Iowa Code sections 421.10 and 422.28 ~~and 1994 Iowa Acts, chapter 1133, section 1~~.

ITEM 8. Amend subrule 701--40.46(4), third unnumbered paragraph, as follows:

If the department rejects the team member's use of the alternative method, the team member may file a protest within 60 days of the date of the department's letter of rejection. The nonresident team member's protest of the department's rejection of the alternate formula must be made in accordance with rule 701--~~7.8~~ 7.41(17A) and must state, in detail, why the method provided in this rule is not equitable, as well as why the alternative method for allocation of the compensation is more equitable than the method set forth in this rule.

ITEM 9. Amend rule 701--43.2(422), second unnumbered paragraph, as follows:

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in the appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation. Nothing in this rule shall prevent the making of an assessment or refund adjustment for the purpose of taking into account the impact upon Iowa net income of federal audit adjustments.

ITEM 10. Amend rule 701--51.2(422) as follows:

Amend subrule 51.2(1), paragraph "h," as follows:

h. The department may, at any time within the period prescribed for assessment or refund adjustment, make a supplemental assessment or refund adjustment whenever it is ascertained that any assessment or refund adjustment is imperfect or incomplete in any respect.

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation. Nothing in this rule shall prevent the making of an assessment or refund adjustment for the purpose of taking into account the impact upon Iowa net income of federal audit adjustments.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code ~~section 422.30 and Iowa Code Supplement sections 422.25 and 422.35~~ sections 422.25, 422.30 and 422.35.

ITEM 11. Amend rule 701--51.8(422) as follows:

701--51.8(422) Power of attorney. For information regarding power of attorney, see rule 701--7.34(421) and 7.38(421,17A).

ITEM 12. Amend subrule 54.6(1), paragraph "f," last unnumbered paragraph, as follows:

If the taxpayer disagrees with the determination of the department, the taxpayer may file a protest within 60 days of the date of the letter setting forth the department's determination and the reasons therefor in accordance with rule 701--~~7.8~~ 7.41(17A). The department's determination letter shall set forth the taxpayer's rights to protest the department's determination.

ITEM 13. Amend rule 701--54.9(422), eighth unnumbered paragraph, as follows:

If the taxpayer disagrees with the determination of the department, the taxpayer may file a protest within 60 days of the date of the letter setting the department's determination and the reasons therefor in accordance with rule 701--~~7.8~~ 7.41(17A). The department's determination letter shall set forth the taxpayer's rights to protest the department's determination.

ITEM 14. Amend rule 701--55.4(422), introductory paragraph, as follows:

701--55.4(422) Abatement of tax. Iowa Code section 422.28 provides that a taxpayer may appeal to the director within ~~90 days, or~~ 60 days ~~for assessments issued on or after July 1, 1986,~~ from the date of the assessment any portion of tax, penalties or interest assessed against the taxpayer. If a taxpayer fails to appeal the assessment within the statutory period, the assessment becomes fixed as a matter of law.Iowa Department of Revenue v. Ingwersen, Des Moines County District Court, Case No. 17623, February 22, 1973; Commonwealth v. Kettenacker, 335 S.W. 2d 339 (Ky.); Heasley v. Engen, 124 N.W. 2d 398 (N.D.). If, however, the statutory period for appeal has expired, the director may abate any portion of tax, penalties or interest assessed which the director determines is excessive in amount or erroneously or illegally assessed. However, for notices of assessment issued on or after January 1, 1995, see rule 701--7.31(421) and 7.38(421,17A).

ITEM 15. Amend rule 701--57.2(422) as follows:

Amend subrule 57.2(1), paragraph "h," as follows:

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation. Nothing in this rule shall prevent the making of an assessment or refund adjustment for the purpose of taking into account the impact upon Iowa net income of federal audit adjustments.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code ~~Supplement~~ sections 422.25 and 422.66.

ITEM 16. Amend rule 701--59.29(422), eighth unnumbered paragraph, as follows:

ITEM 17. Amend rule 701--63.2(452A), second unnumbered paragraph, as follows:

If the assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation.

ITEM 18. Amend rule 701--63.22(452A) as follows:

701--63.22(452A) Time for filing protest. Any person wishing to contest an assessment, denial of all or any portion of a refund claim, or any other department action, except licensing, which may culminate in a contested case proceeding, shall file a protest with the ~~administrative law judge~~ clerk of the hearings section for the department pursuant to rule 701--~~7.8~~ 7.41(17A) within 30 days of the issuance of the assessment, denial, or other department action contested. For notices of assessment or refund denial issued on or after January 1, 1995, the department will consider a protest to be timely filed if filed no later than 60 days following the date of the assessment notice or refund denial, or if a taxpayer failed to timely appeal a notice of assessment, the taxpayer may make payment pursuant to rule 701--~~7.8~~ 7.41(17A) and file a refund claim within the period provided by law for filing such claims.

This rule is intended to implement Iowa Code section 452A.64 ~~as amended by 1994 Iowa Acts, House File 2419~~.

ITEM 19. Amend rule 701--67.2(452A), second unnumbered paragraph, as follows:

ITEM 20. Amend rule 701--67.20(452A) as follows:

701--67.20(452A) Time for filing protest. Any person wishing to contest an assessment, denial of all or any portion of a refund claim, or any other department action, except licensing, which may culminate in a contested case proceeding, must file a protest with the ~~administrative law judge~~ clerk of the hearings section for the department pursuant to rule 701--~~7.8~~ 7.41(17A) within 60 days of the issuance of the assessment, denial, or other department action contested. If a taxpayer failed to timely appeal a notice of assessment, the taxpayer may make payments pursuant to rule 701--~~7.8~~ 7.41(17A) and file a refund claim within the period provided by law for filing claims.

ITEM 21. Amend rule 701--67.23(452A) as follows:

Amend subrules 67.23(3) and 67.23(4) as follows:

67.23(3) Denial of a license. The department may deny a license to any applicant who is, at the time of application, substantially delinquent in paying any tax due which is administered by the department or the interest or penalty on the tax and will deny a permit of an individual if the department has received a certificate of noncompliance from the child support recovery unit in regard to an individual. If the applicant is a partnership, a license may be denied if a partner is substantially delinquent in paying any tax, penalty, or interest regardless of whether the tax is in any way a liability of or associated with the partnership. If an applicant for a license is a corporation, the department may deny the applicant a license if any officer with a substantial legal or equitable interest in the ownership of the corporation owes any delinquent tax, penalty, or interest of the applicant corporation. See rule 701--13.16(422) for a characterization of the terms "tax administered by the department" and "substantially delinquent" in paying a tax. If the application for a license is denied, see rule 701--~~7.24~~ 7.55(17A) for rights to appeal.

67.23(4) Revocation of a license. The department may revoke the license of any licensee who becomes substantially delinquent in paying any tax which is administered by the department or the interest or penalty on the tax and will revoke a permit of an individual if the department has received a certificate of noncompliance from the child support recovery unit in regard to an individual. If a licensee is a corporation, the department may revoke the license if any officer with a substantial legal or equitable interest in the ownership of the corporation owes any delinquent tax, penalty, or interest of the applicant corporation. If the licensee is a partnership, the license may not be revoked for a partner's substantial delinquency in paying any tax, penalty, or interest which is not a liability of the partnership. See rule 701-- 13.16(422) for characterizations of the terms "tax administered by the department" and "substantially delinquent" in paying a tax. The department may also revoke the license of any licensee who abuses the privileges for which the license was issued, who files a false report, or who fails to file a report (including supporting schedules), pay the full amount of tax due, produce records requested, or extend cooperation to the department. See rule 701--~~7.24~~ 7.55(17A) for rights to appeal.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code sections 452A.4 and 452A.6 ~~as amended by 1995 Iowa Acts, chapter 155~~.

ITEM 22. Amend rule 701--68.11(452A) as follows:

701--68.11(452A) Revocation of refund permit. The following violations will result in the revocation of the permit: (1) using a false or altered invoice in support of a claim, (2) making a false statement in a claim for refund or in response to an investigation by the department of a claim for refund, (3) refusal to submit the claimant's books and records for examination by the department, and (4) nonuse for a period of one year. If the permit is revoked for reasons (1), (2), or (3) above, the permit will not be reissued for a period of at least one year. If the permit is revoked for reason (4) above, the permit will be reissued upon proper application. (See rule 701--~~7.24~~ 7.55(17A) for revocation procedure.)

This rule is intended to implement Iowa Code section 452A.19.

ITEM 23. Amend rule 701--81.6(453A), third unnumbered paragraph, as follows:

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation.

ITEM 24. Amend rule 701--81.11(453A) as follows:

Amend subrule 81.11(2) as follows:

81.11(2) Appeals--time limitations. For assessments or denials of refund claims made on or after July 1, 1987. An assessment or denial of all or any portion of a refund claim issued pursuant to Iowa Code section 453A.28 or 453A.46 may be appealed pursuant to rule 701--~~7.8~~ 7.41(17A) and the protest must be filed within 30 days of the issuance of the assessment or denial of the refund claim. For notices of assessment or refund denial issued on or after January 1, 1995, the department will consider a protest to be timely filed if filed no later than 60 days following the date of the assessment notice or refund denial, or if the taxpayer failed to timely appeal a notice of assessment, the taxpayer may make payment pursuant to rule 701--~~7.8~~ 7.41(17A) and file a refund claim within the period provided by law for filing such claims.

Amend the implementation clause as follows:

This rule is intended to implement Iowa Code chapter 17A as amended by 1998 Iowa Acts, chapter 1202, and sections 453A.25, ~~and~~ 453A.28;, ~~sections~~ 453A.29, 453A.46, ~~and~~ 453A.48, ~~as amended by 1994 Iowa Acts, House File 2419;~~ and ~~section~~ 453A.49.

ITEM 25. Amend rule 701--81.12(453A) as follows:

701--81.12(453A) Permit--license revocation.

81.12(1) Cigarette permits. Cigarette permits issued by the department must be revoked if the permittee willfully violates the provisions of Iowa Code section 453A.2 (sale or gift to minors). The department may revoke permits issued by the department for violation of any other provision of division I of Iowa Code chapter 453A or the rules promulgated thereunder. (Also see Iowa Code chapter 421B and rule 701--84.7(421B).) The revocation shall be subject to the provisions of rule 701--~~7.24~~ 7.55(17A). The notice of revocation shall be given to the permittee at least ten days prior to the hearing provided therein. The department will revoke a permit of a permit holder, who is an individual, if the department has received a certificate of noncompliance from the child support recovery unit in regard to the permit holder, unless the unit furnishes the department with a withdrawal of the certificate of noncompliance.

The board of supervisors or the city council that issued a retail permit is required by Iowa Code section 453A.22 to revoke the permit of any retailer violating Iowa Code section 453A.2 (sale or gift to minors). The board or council may revoke a retail permit for any other violation of division I of Iowa Code chapter 453A. The revocation procedures are governed by Iowa Code section 453A.22(2) and the individual council's or board's procedures. Iowa Code chapter 17A does not apply to boards of supervisors or city councils. (See rule 701--84.7(421B).) The board of supervisors or the city council that issued a retail permit is required by ~~1995 Iowa Acts, chapter 115,~~ Iowa Code chapter 252J to revoke the permit of any retailer, who is an individual, if the board or council has received a certificate of noncompliance from the child support recovery unit in regard to the retailer, unless the unit furnishes the board of supervisors or the city council with a withdrawal of the certificate of noncompliance.

If a permit is revoked under this subrule, except for the receipt of a certificate of noncompliance from the child support recovery unit, the permit holder cannot obtain a new cigarette permit of any kind nor may any other person obtain a permit for the location covered by the revoked permit for a period of one year unless good cause to the contrary is shown to the issuing authority.

81.12(2) Tobacco licenses. The director may revoke, cancel or suspend the license of any tobacco distributor or tobacco subjobber for violation of any provision in division II of Iowa Code chapter 453A, the rules promulgated thereunder, or any other statute applicable to the sale of tobacco products. The licensee shall be given ten days' notice of a revocation hearing under Iowa Code section 453A.48(2) and rule 701--~~7.24~~ 7.55(17A). No license may be issued to any person whose license has been revoked under Iowa Code section 453A.44(11) for a period of one year. The department will revoke a license of a licensee, ~~that~~ who is an individual, if the department has received a certificate of noncompliance from the child support recovery unit in regard to the licensee, unless the unit furnishes the department with a withdrawal of the certificate of noncompliance.

This rule is intended to implement Iowa Code sections 453A.22, 453A.44(11) and 453A.48(2) ~~and 1995 Iowa Acts, chapter 115~~ Iowa Code chapter 252J.

ITEM 26. Amend subrule 86.3(4) as follows:

86.3(4) Supplemental assessments and refund adjustments. The department may, at any time within the period prescribed for assessment or refund adjustment, make a supplemental assessment or refund adjustment whenever it is ascertained that any assessment or refund adjustment is imperfect or incomplete in any respect.

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation.

ITEM 27. Amend rule 701--89.11(422) as follows:

701--89.11(422) Appeals to the director. An estate or trust has the right to appeal to the director for a revision of an assessment for additional tax due, the denial or reduction of a claim for refund, the denial of a request for a waiver of a penalty and the denial of a request for an income tax certificate of acquittance. The beneficiary of an estate or trust has the right to appeal a determination of the correct amount of income distributed and a determination of the correct allocation of deductions, credits, losses and expenses between the estate or trust and the beneficiary. The personal representative of an estate and the trustee of a trust have the right to appeal a determination of personal liability for income taxes required to be paid or withheld and for a penalty personally assessed. An appeal to the director must be in writing and must be made within 60 days of the notice of assessment and the other matters which are subject to appeal or for assessments issued on or after January 1, 1995, if the beneficiary of an estate or trust, the personal representative of an estate, or the trustee of a trust fails to timely appeal a notice of assessment, the person may pay the entire assessment and file a refund claim within the period provided by law for filing such claims. 701--Chapter 7 shall govern appeals to the director. See specifically rules 701--~~7.8~~ 7.41(17A) to ~~7.23~~ 7.54(17A) governing taxpayer protests.

~~These rules are~~ This rule is intended to implement Iowa Code ~~section~~ chapter 17A as amended by 1998 Iowa Acts, chapter 1202 and sections 421.60 and 422.28 ~~and chapter 17A and 1994 Iowa Acts, chapter 1133, section 1~~.

ITEM 28. Amend rule 701--103.2(422A), third unnumbered paragraph, as follows:

If an assessment or refund adjustment is appealed (protested under rule 701--~~7.8~~ 7.41(17A)) and is resolved whether by informal proceedings or by adjudication, the department and the taxpayer are precluded from making a supplemental assessment or refund adjustment concerning the same issue involved in such appeal for the same tax period unless there is a showing of mathematical or clerical error or a showing of fraud or misrepresentation.

ITEM 29. Amend subrule 103.6(2) as follows:

103.6(2) Notice of assessment. If, after following the procedure outlined in subrule 103.6(1)"b," no agreement is reached and the person does not pay the amount determined to be correct within 20 days, a notice of the amount of tax due shall be sent to the person responsible for paying the tax. This notice of assessment shall bear the signature of the director and will be sent by mail.

If the notice of assessment is timely protested according to the provisions of rule 701--~~7.8~~ 7.41(17A) and Iowa Code subsection 422.54(2), proceedings to collect the tax will not be commenced until the protest is ultimately determined, unless the department has reason to believe that a delay caused by such appeal proceedings will result in an irrevocable loss of tax ultimately found to be due and owing the state of Iowa. The department will consider a protest to be timely if filed no later than 30 60 days following the date of the assessment notice. See rule 701--~~7.8~~ 7.41(17A).

ITEM 30. Amend rule 701--104.6(422A) as follows:

701--104.6(422A) Claim for refund of tax. Refunds of tax shall be made only to those who have actually paid the tax. A person or persons may designate the retailer to collect the tax as an agent for purposes of receiving a refund of tax. Anyone claiming a refund shall prepare the claim on the prescribed form furnished by the department.

A claim for refund shall be filed with the department within five years from the date the tax became due or one year from the date of payment, whichever is later, stating in detail the reasons and facts and, if necessary, attaching supporting documents ~~for~~ on which the claim for refund is based. If the claim for refund is denied, and the person wishes to protest the denial, the department will consider a protest to be timely if filed no later than ~~thirty (30)~~ 60 days following the date of denial. See rule 701--~~7.8~~ 7.41(17A).

This rule is intended to implement Iowa Code sections 422.73 and 422A.1.

NOTICE--USURY

In accordance with the provisions of Iowa Code section 535.2, subsection 3, paragraph "a," the Superintendent of Banking has determined that the maximum lawful rate of interest shall be:

July 1, 1998 -- July 31, 1998 7.75%

August 1, 1998 -- August 31, 1998 7.50%

September 1, 1998 -- September 30, 1998 7.50%

October 1, 1998 -- October 31, 1998 7.25%

November 1, 1998 -- November 30, 1998 6.75%

December 1, 1998 -- December 31, 1998 6.50%

January 1, 1999 -- January 31, 1999 6.75%

February 1, 1999 -- February 28, 1999 6.75%

March 1, 1999 -- March 31, 1999 6.75%

April 1, 1999 -- April 30, 1999 7.00%

May 1, 1999 -- May 31, 1999 7.25%

June 1, 1999 -- June 30, 1999 7.25%

July 1, 1999 -- July 31, 1999 7.50%

August 1, 1999 -- August 31, 1999 8.00%

ARC 9266A

UTILITIES DIVISION[199]

Notice of Oral Presentation

The Utilities Board (Board) hereby gives notice that on July 15, 1999, the Board issued an order in Docket No. INU-99-3, In Re: U S WEST Communications, Inc., "Order Initiating Formal Notice and Comment Proceeding," pursuant to Iowa Code section 476.1D, to consider whether local exchange telecommunications services should be deregulated in certain areas where two facilities-based providers are alleged to be competing.

On May 25, 1999, U S WEST Communications, Inc. (U S West), filed a petition asking the Board to determine that certain portions of U S West's existing local exchange service area have become subject to effective competition and should be deregulated. U S West calls these areas "competitive zones." Pursuant to Iowa Administrative Code 199-- subrule 5.3(1), the Board is initiating a formal notice and comment proceeding to determine whether all telecommunications services offered within the alleged competitive zones are subject to effective competition and should be deregulated. U S West's petition provides indications the criteria for effective competition in Iowa Administrative Code 199--subrule 5.6(1) may be met, including availability of comparable services from a choice of suppliers, inability of a single provider to determine or control prices, ease and likelihood of entry, and substitutability of one provider's service for another. The petition makes a sufficient initial showing of competition to justify these proceedings.

In order to ensure an adequate record is made in this proceeding, the Board asks all participants to, at a minimum, respond to the following questions:

1. What should constitute a "competitive zone"?

2. What (if any) specific criteria, beyond those listed in 199 IAC 5.6(1), should be used to determine whether a geographic area is subject to effective competition?

3. What (if any) communications services or facilities should the Board deem to be essential under Iowa Code section 476.1D(5) and 199 IAC 5.6(2)? What additional criteria beyond those listed in 199 IAC 5.6(2), if any, should the Board consider when determining whether a service or facility is essential?

4. What essential communications services or facilities warrant retention of service regulation, even if the Board concludes the rates should be deregulated?

5. What revisions to 199 IAC 5 are necessary orappropriate to accommodate deregulation on a less-than-statewide basis?

While the Board asks all participants to respond to each of these questions, the Board is not limiting statements to these issues. Each participant is free to include in its statement any information the participant believes to be relevant to the matter before the Board.

Copies of the Board's complete order initiating formal notice and comment proceedings may be obtained from the Board by calling (515)281-6240 or accessing the Board's Web site at http://www.state.ia.us/iub.

Any interested person may file, on or before September 10, 1999, a statement of position concerning deregulation of the listed services. Statements of position must substantially comply with 199 IAC 2.2(2). Ten copies must be filed with the original. All written statements should clearly state the author's name and address and should make specific reference to Docket No. INU-99-3.

Any person filing a statement of position may file a counterstatement replying to the comments of other participants no later than September 28, 1999. Ten copies must be filed with the original and copies must be served upon all participants filing statements to which the counterstatement responds. Counterstatements must substantially comply with 199 IAC 2.2(3).

All statements and counterstatements shall be sworn and directed to the Executive Secretary, Iowa Utilities Board, 350 Maple Street, Des Moines, Iowa 50319-0069.

An oral presentation is scheduled, pursuant to 199 IAC 5.3(4) and 199 IAC 5.5(476), for the purpose of taking sworn testimony concerning the statements and counterstatements. The oral presentation shall be held October 12, 1999, beginning at 10 a.m. in the Board's hearing room at 350 Maple Street, Des Moines, Iowa. All persons filing written statements shall have at least one witness available at the oral presentation who may be cross-examined on the subject matter of the written statement. Cross-examination may be by the Board, the Consumer Advocate Division of the Department of Justice, and other participants as the Board may deem appropriate to develop the record fully. Persons with disabilities requiring assistive services or devices to observe or participate should contact the Board at (515)281-5256 in advance of the scheduled date to request that appropriate arrangements be made.

ARC 9272A

UTILITIES DIVISION[199]

Notice of Intended Action

Pursuant to the authority of Iowa Code sections 476.1 and 476.2, the Utilities Board (Board) gives notice that on July 23, 1999, the Board issued an order in Docket No. RMU-99-6, Rule-Making Procedures, "Order Commencing Rule Making," to receive public comment on the adoption of revisions to the Board's existing rule-making procedures. The Board proposes to revise its existing procedures to reflect certain changes required by amendments to the Iowa Administrative Procedure Act, 1998 Iowa Acts, chapter 1202.

The Board previously conducted a rule-making inquiry, identified as Uniform Rules On Agency Procedure, Docket No. RMU-99-2, in which the Board sought public comment concerning the possible adoption of the state's uniform rule-making procedures. The comments received did not support adoption of the uniform rules; instead, they favored minimal modification of the Board's existing rules to accommodate the statutory changes. The Board is proposing to adopt the approach favored by the public comments, that is, modification of its existing rules.

The Board is proposing to revise and update all of its rule-making procedures. As a part of that process, various editorial and grammatical changes are proposed that do not affect the substance of the rules. The changes are intended to simplify the rules and make the language more consistent. In this proceeding, the Board invites comment on any part of its rule-making procedures, including but not limited to the changes proposed in this proceeding.

Waiver of rules can be considered to be a part of rule making. The Board's existing general waiver rule, 199 IAC 1.3(17A,474), permits the Board to waive any of its rules "to prevent undue hardship to a party to a proceeding." The term "party" is defined in 199 IAC 7.2(7) in terms of "complainants, petitioners, applicants, respondents, and intervenors." These categories may fail to accommodate all of the persons for whom a waiver may be appropriate. For example, an objector in a pipeline permit proceeding may seek a waiver of a filing requirement; the objector may not be a "party" as that term is defined, but the waiver may be perfectly appropriate because the purpose of the rule in question will not be served if it is enforced as to the objector. Because the definition of "party" may be unduly restrictive in this context, the Board is proposing to amend its waiver rule to permit waiver of any rule in appropriate circumstances.

The first proposed substantive amendment to the Board's rule-making procedures is the addition of a new rule providing for notices of inquiry, by which the Board may seek public comment on the subject matter of possible future rule-making activities. The Board has conducted numerous such proceedings in the past but does not have a rule explicitly providing for inquiry proceedings.

The second proposed substantive amendment is the addition of a new subrule relating to fiscal impact statements pursuant to Iowa Code section 25B.6 and providing for issuance of such statements when appropriate.

The third proposed substantive amendment is the addition of a rule explaining when, and to what extent, the Board may adopt rules that vary from the proposed rules contained in the Notice of Intended Action. This may occur in various situations recognized by Iowa law, such as differences that are within the scope of the subject matter announced in the Notice of Intended Action and are in character with the issues raised in the Notice.

The Board is proposing to delete its existing rule providing for regulatory flexibility analyses and to adopt new procedures for regulatory analysis. This reflects the repeal of Iowa Code section 17A.31 in 1998 Iowa Acts, chapter 1202, section 45, and the addition of section 17A.4A in 1998 Iowa Acts, chapter 1202, section 10. The new rules provide that the schedule for a rule-making proceeding will automatically be extended when a timely written request for a regulatory analysis is filed, to permit the Board time to prepare the analysis before public comment is received on the rules in question.

Finally, the proposed amendments include a new provision for review of the Board's existing rules upon the request of the administrative rules coordinator, as required by the revised statute.

Any interested person may file a written statement of position on the proposed amendments no later than September 3, 1999, by filing an original and ten copies in a form substantially complying with 199 IAC 2.2(2). All written statements should be directed to the Executive Secretary, Utilities Board, 350 Maple Street, Des Moines, Iowa 50319-0069.

A public hearing to receive comments on the proposed amendments will be held at 10 a.m. on September 15, 1999, in the Board's hearing room at the address listed above.

These amendments are intended to implement Iowa Code section 476.2.

The following amendments are proposed.

ITEM 1. Rescind 199 IAC 1.3(17A,474) and adopt the following new rule in lieu thereof:

199--1.3(17A,474) Waiver of any rule. The board may, on its own motion or at the request of any party, waive any of its rules for good cause shown, unless otherwise provided by law.

ITEM 2. Amend 199 IAC 3 as follows:

CHAPTER 3
RULE MAKING

199--3.1(17A,474) Purpose and scope.

3.1(1) In general. These rules shall govern the practice and procedure in all rule-making proceedings of the Iowautilities board (board).

3.1(2) Rules of construction. If any provision of a rule or the application of a rule to any person or circumstance is itself or through its enabling statute held invalid, the invalidity does not affect other provisions or applications of the rule which can be given effect without the invalid provision or application, and to this end the provisions of the rule are severable.

3.1(3) Waiver. The board may waive the application of any of these rules pursuant to 199 IAC 1.3(17A,474).

3.1(4) Forms and filing requirements. All rule-making filings shall substantially comply with the forms prescribed in 199 IAC 2.2(17A,474). All filings shall include an original and ten copies.

199--3.2(17A,474) Notice of inquiry. In addition to seeking information by other methods, the board may solicit comments from the public on the subject matter of possible rule making by the board by causing notice of the subject matter to be published in the Iowa Administrative Bulletin, indicating where, when, and how persons may comment.

199--3.2 3(17A,474) Petition for adoption of rules.

~~3.2(1)~~ ~~Petitioner.~~ Any interested person may petition the board for the adoption, amendment, or repeal of a rule.

~~3. 2(2)~~ ~~Form of petition. A petition for rule making shall substantially comply with the form prescribed in 199--subrule 2.2(1). The original and ten copies of the petition shall be filed with the board.~~

~~This rule is intended to implement Iowa Code section 476.2.~~

199--3.3 4(17A,474) Commencement of proceedings.

3.3 4(1) Commenced by order. Rule-making proceedings shall be commenced only upon written order of the board. The board may commence a rule-making proceeding by order upon its own motion or upon the filing of a petition for rule making by any interested person.

3.3 4(2) Board action on petition. Within 60 days after the filing of a petition for rule making, the board shall either deny the petition by written order on the merits, stating the reasons therefor, commence by written order a rule-making proceeding, or adopt by written order a rule pursuant to Iowa Code section 17A.4(2).

3.3 4(3) Notice of rule making. Upon the commencement by written order of a rule-making proceeding, the board shall~~, if required by law,~~ cause the required notice of the proceeding to be published in the Iowa Administrative Bulletin.

3.4(4) Fiscal impact statement. Pursuant to Iowa Code section 25B.6, a proposed rule that mandates additional combined expenditures exceeding $100,000 by all affected political subdivisions, or agencies and entities which contract with political subdivisions to provide services, shall be accompanied by a fiscal impact statement outlining the costs associated with the proposed rule. If the board determines at the time it adopts a rule that the earlier fiscal impact statement contains errors or that a fiscal impact statement should have been prepared but was not, the board will issue a corrected or delayed fiscal impact statement.

199--3. 4 5(17A,474) Written statements of position.

3. 4 5(1) Persons. Any interested person may file a written statement of position containing data, views, comments, or arguments concerning the proposed adoption, amendment, or repeal of a rule.

3. 4 5(2) Filing. The time period~~, as directed by the board,~~ for filing of written statements of position shall be not less than 20~~, nor more than 30~~ calendar days after publication of the notice of rule making in the Iowa Administrative Bulletin. If the publication of a notice of rule making is not required by law, written statements of position may be filed as authorized by the board.

~~3.4(3)~~ Form of written statement of position. A written statement of position shall substantially comply with the form prescribed in 199--subrule 2.2(2). The original and ten copies of a written statement of position shall be filed with the board.

3. 4 5( 4 3) Service. Written statements of position shall be served by the author upon the petitioner, if any, and consumer advocate at the time of filing.

~~This rule is intended to implement Iowa Code section 476.2.~~

199--3.5 6(17A,474) Counterstatements of position.

3.5 6(1) Petitioner. The petitioner, if any, may file a counterstatement of position with the board in response to written statements of position.

3.5 6(2) Filing. Counterstatements of position, if any, shall be filed with the board prior to the oral presentation or, if no oral presentation is scheduled, not later than 15 calendar days after the petitioner's receipt of the written statement of position to which the petitioner is responding.

~~3.5(3)~~ Form of counterstatements of position. A counterstatement of position shall substantially comply with the form prescribed in 199--subrule 2.2(3). The original and ten copies of a counterstatement of position shall be filed with the board.

3.5 6( 4 3) Service. Counterstatements of position shall be served by the petitioner at the time of filing upon the authors of written statements of position to which the petitioner is responding and to consumer advocate.

~~This rule is intended to implement Iowa Code section 476.2.~~

199--3.6 7(17A,474) Requests for oral presentation. If an oral presentation is not scheduled by the board on its own motion, any interested person may file a request for an oral presentation.

3.6 7(1) Filing. The time period, as directed by the board, for filing of requests for oral presentation shall be not less than 20~~, nor more than 30~~ calendar days after the publication of the notice of rule making in the Iowa Administrative Bulletin.

~~3.6(2)~~ Form of requests for oral presentation. A request for oral presentation shall substantially comply with the form prescribed in 199--subrule 2.2(4). The original and ten copies of a request for oral presentation shall be filed with the board.

3.6 7(3 2) Action on proper request. Within 15 calendar days of the filing of a request for oral presentation, the board shall determine if the request is in accordance with Iowa Code section 17A.4. If the board determines that the request complies with section 17A.4, the board shall by written order schedule oral presentation on the rule making and shall cause a notice of the oral presentation to be published in the Iowa Administrative Bulletin. The notice shall state the date, time, and place of the oral presentation and shall briefly describe the subject matter of the rule-making proceeding. The oral presentation on the rule making shall be not less than ten calendar days after the publication of the notice. The board shall serve a similar notice on the party requesting oral presentation, on any other persons filing written comments, and on the petitioner, if any.

3.6 7( 4 3) Action on improper request. If the board determines that a request for oral presentation does not comply with Iowa Code section 17A.4, it may by written order deny such request stating the reasons therefor, or it may, in its discretion, grant the request and schedule an oral presentation ~~in accordance with the procedures hereinbefore prescribed~~.

3.6 7(5 4) Action on own motion. The board may, on its own motion, schedule an oral presentation on the rule making ~~in accordance with the procedures hereinbefore prescribed~~.

~~This rule is intended to implement Iowa Code section 476.2.~~

199--3.7 8(17A,474) Rule-making oral presentation.

3.7 8(1) Written appearance. ~~Upon the filing of a written appearance, any~~ Any interested person may participate in rule-making oral presentations in person or by counsel. A written appearance ~~shall~~ may be filed not less than five calendar days prior to oral presentation. The board may, in its discretion, waive the filing of a written appearance as a condition precedent to participation in said oral presentation. The general counsel shall not be required to file a written appearance.

~~3.7(2)~~ Form of written appearance. A written appearance shall substantially comply with the form prescribed in 199--subrule 2.2(15). The original and ten copies of a written appearance shall be filed with the board.

3.7 8(3 2) Oral presentations. Participants in rule-making oral presentations may submit exhibits and present oral statements of position which may include data, views, comments, or arguments concerning the proposed adoption, amendment, or repeal of the rule. Participants shall not be required to take an oath and shall not be subject to cross-examination.~~, provided however, that the~~ The board may, in its discretion, permit the questioning of participants by any interested person, ~~and provided further, that~~ but no participant shall be required to answer any question.

3.7 8( 4 3) Rebuttal and limitations. The board may, in its discretion, permit rebuttal statements of position and request the filing of written statements of position subsequent to the adjournment of the rule-making oral presentation. The board may limit the time of any oral presentation and the length of any written presentation.

~~This rule is intended to implement Iowa Code section 476.2.~~

199--3.8 9(17A,474) Rule-making decisions.

3.8 9(1) Adoption, amendment, or repeal. The board shall by written order adopt, amend, or repeal the rule pursuant to the rule-making proceeding, or dismiss the proceeding in accordance with Iowa Code section 17A.4. The written order shall include a preamble to the adopted rules explaining the principal reasons for the action taken and, if applicable, a brief explanation of any decision not to permit waiver of the adopted rules. The board may, by order, specify the effective date of the adoption, amendment, or repeal of the rule.

3.9(2) Variance between adopted rule and proposed rule. The board may adopt a rule that differs from the rule proposed in the Notice of Intended Action in the following situations:

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

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

c. The Notice indicated that the outcome of the rule making could be the rule in question;

d. The differences are so insubstantial as to make additional notice and comment proceedings unnecessary; or

e. As otherwise permitted by law.

3.8 9(2 3) Statements. Upon the adoption, amendment, or repeal of a rule or termination of a rule-making proceeding, and if timely written request is filed by any interested person pursuant to Iowa Code section 17A.4(1)"b," the board shall, within 35 days of the request, issue a formal written statement of the principal reasons for and against the adoption, amendment, or repeal of the rule, or termination of the rule-making proceeding, including the reasons why the board overruled the positions in opposition to the board's decision. ~~A request for statement shall substantially comply with the form prescribed in 199--subrule 2.2(5).~~

~~199--3.9(17A,474) Regulatory flexibility analysis.~~

~~3.9(1)~~ ~~For purposes of these rules "small business" shall have the same definition as in Iowa Code section 17A.31(1).~~

~~3.9(2)~~ Published notice of small business impact. If the board proposes a rule which may have an impact on small business, the notice of intended action shall expressly recite this possibility and describe the procedure to be followed for making a timely request for a regulatory flexibility analysis to the board.

~~3.9(3)~~ Registration for the small business impact list. Small businesses or small business organizations as defined in Iowa Code section 17A.31 may register to be included on the board's small business impact list by making a specific, written request addressed to the Executive Secretary, Iowa Utilities Board, 350 Maple Street, Des Moines, Iowa 50319. The request for registration shall state:

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

~~b. Its address.~~

~~c. The name of a person authorized to transact business for the requesting party.~~

~~d. A description of the requesting party's business or its organizational purposes.~~

The board may request additional information from the applicant to determine whether the applicant is qualified as a small business or a small business organization. The board will send a letter every year to each small business or small business organization on the list asking whether the small business or organization wishes to remain on the list. The name of the small business or organization will be removed from the list if a negative response is received or if no response is received within one month after the letter is sent.

~~3.9(4)~~ Mailed notice of small business impact. Prior to the publication of a notice of intended action described in subrule 3.9(2), the board shall notify small businesses or small business organizations on the small impact list, by ordinary first-class mail, of the changes it proposes to make to its rules. In the case of a rule made effective under Iowa Code section 17A.4(2) or 17A.5(2)"b," the board shall provide mailed notice to small businesses or small business organizations on the small business impact list within seven days after publication of the rule.

~~3.9(5)~~ Request for regulatory flexibility analysis. Requests for regulatory flexibility analysis to reduce the impact of a rule on small business may be made within 20 days after the publication of the notice of intended action.

~~a. The board shall entertain a request for a regulatory flexibility analysis from:~~

~~(1) The governor.~~

~~(2) The administrative rules review committee.~~

~~(3) A political subdivision of the state.~~

~~(4) Twenty-five or more persons who sign the request, provided that each represents a different small business.~~

~~(5) An organization registered on the small business impact list which represents at least 25 persons.~~

~~b. A request for a regulatory flexibility analysis should specify the proposed rule or portion of the proposed rule for which the analysis is requested.~~

c. Upon the receipt of a timely valid request for a regulatory flexibility analysis, the board shall consider whether it may reduce the impact of the proposed rule on small business by considering each of the following methods:

~~(1) Establishing less stringent compliance or reporting requirements.~~

~~(2) Establishing less stringent schedules or deadlines for compliance or reporting requirements.~~

~~(3) Consolidating or simplifying compliance or reporting requirements.~~

~~(4) Replacing design or operational standards with performance standards.~~

~~(5) Exempting small business from any or all rule requirements.~~

~~(6) Considering the nature and cost of preparation of any required reports weighed against the benefits to be gained from such reports.~~

~~(7) Considering the nature and estimated cost of measures or investments required of small business for compliance, weighed against the benefits to be gained.~~

~~(8) Considering the nature and estimated cost of professional, legal, consulting or accounting services incurred for compliance, weighed against the benefits to be gained.~~

~~(9) Considering the probable cost to the board or any other agency of the implementation and enforcement of the rule and its anticipated effect on state revenue.~~

~~(10) Comparing the possible cost and benefits which would accrue from a proposed rule as opposed to the probable effect of inaction.~~

~~(11) Determining whether the purposes sought by the board might be achieved by other less costly or less intrusive methods.~~

~~(12) Describing alternative methods seriously considered by the board, and the reasons that such methods were rejected in favor of the proposed rule.~~

~~(13) Considering any other method provided by a requesting party which is legal and feasible in meeting the statutory objective which is the basis of the proposed rule.~~

d. When the board is required to issue a regulatory flexibility analysis of a proposed rule, the board shall cause to be published a concise summary of the regulatory flexibility analysis in the Iowa Administrative Bulletin at least 20 days prior to the adoption of the proposed rule. In the case of a rule made effective under Iowa Code section 17A.4(2) or 17A.5(2)"b," the board shall publish the summary within 90 days after the publication of the rule. The published summary shall state how interested persons may obtain the full text of the board's analysis at cost. The published summary shall also fix a time and place where interested persons may make an oral presentation on the analysis.

~~These rules are intended to implement Iowa Code sections 474.1, 474.10, 476.2 and 546.7.~~

199--3.10(17A,474) Regulatory analysis.

3.10(1) Regulatory analysis. The board shall issue a regulatory analysis of a proposed rule, or of a rule adopted without prior notice and opportunity for public participation, when required by 1998 Iowa Acts, chapter 1202, section 10.

3.10(2) Request for regulatory analysis. A request for a regulatory analysis shall be in writing and shall specify the proposed rule or adopted rule for which the analysis is requested.

3.10(3) Schedule extended. Upon receipt of a timely written request for a regulatory analysis of a proposed rule, the time periods for filing written comments and for requesting an oral proceeding are extended to a date 20 days after publication of a concise summary of the regulatory analysis in the Iowa Administrative Bulletin. Any oral proceeding that may already have been scheduled will be rescheduled by the board to a date at least 20 days after publication of the summary.

199--3.11(17A,474) Review of rules. Pursuant to Iowa Code section 17A.7, upon receipt from the administrative rules coordinator of a request for formal review of a specified rule, the board will determine whether the rule has been reviewed within the preceding five years. If such a review was conducted, the board will report that fact to the administrative rules coordinator. If no such review has been conducted, the board will consider whether the rule should be repealed or amended or a new rule adopted in its place. The board will prepare a written report summarizing its findings, supporting reasons, and proposed course of action. Copies of the report will be sent to the administrative rules review committee, the administrative rules coordinator, and will be made available for public inspection.

These rules are intended to implement Iowa Code section 476.2.

ARC 9267A

UTILITIES DIVISION[199]

Notice of Intended Action

Pursuant to the authority of Iowa Code section 476.2 and 1999 Iowa Acts, House File 588, section 1, the Utilities Board (Board) gives notice that on July 23, 1999, the Board issued an order in Docket No. RMU-99-7, Unauthorized Changes of Telecommunications Service, "Order Commencing Rule Making," to receive public comment on the adoption of proposed rules relating to changes in telephone services that are not authorized by the affected customer. On the same date, the Board also issued an order adopting many of the same proposed rules on an emergency basis and without notice and public participation, pursuant to Iowa Code section 17A.4(2), effective on August 2, 1999, pursuant to Iowa Code section 17A.5(2)"b." The emergency rule making, ARC 9268A, is being published simultaneously with this Notice of Intended Action. It is the Board's intention that the proposed rules contained in this Notice, modified if necessary based upon the comments received, will be adopted to replace the emergency rules.

These amendments are intended to implement a new statute contained in 1999 Iowa Acts, House File 588, which became effective on July 1, 1999. Entitled "An Act Prohibiting Unauthorized Changes in Telecommunications Service, Prohibiting Certain Acts in the Advertisement or Solicitation of Changes in Telecommunications Service, and Providing Remedies and Penalties," the new statute provides the Board with the authority to adopt rules to protect consumers from unauthorized changes in their telecommunications service, even if the service has been deregulated pursuant to Iowa Code section 476.1D. 1999 Iowa Acts, House File 588, also provides the Attorney General with additional remedies to address the issue of fraud in the sale of telecommunications services.

Unauthorized changes in telecommunications service may take a variety of forms. Unauthorized changes in a customer's preferred carrier are sometimes referred to as slamming, while the addition of unauthorized services to a customer's bill is sometimes called cramming. These activities represent a growing area of concern for telecommunications customers in Iowa.

In 1996, the Board deregulated most interexchange services, pursuant to Iowa Code section 476.1D. Since that time, the Board has had limited jurisdiction over the part of the telecommunications market where most slamming has occurred. Nonetheless, the Board continues to receive a significant number of complaints. In 1998, Board staff responded to 428 calls regarding slamming issues and 174 calls alleging cramming. In 1997, Board staff fielded 211 slamming calls (cramming complaints were not separately tracked).

The Consumer Protection Division of the Attorney General's Office also processes many complaints regarding telecommunications services. The Board understands that the Consumer Protection Division received about 275 such complaints in 1995, 480 complaints in 1996, 937 complaints in 1997, and approximately 1,300 complaints in 1998. The trend is clear and disturbing.

Pursuant to 1999 Iowa Acts, House File 588, the proposed new rules will apply with equal force to regulated and deregulated services. The Board's rules must be consistent with the regulations of the Federal Communications Commission (FCC) regarding procedures for verification of customer authorization of a change in service. The FCC verification procedures include written or electronic authorization or independent third-party verification. The Board's rules must also provide for (1) customer notification of any changes in service, (2) procedures for customer account change freezes, and (3) procedures for correcting unauthorized changes and compensating customers and other persons whose interests may be damaged by an unauthorized change in service. Finally, 1999 Iowa Acts, House File 588, gives the Board expanded remedial authority with respect to telecommunications service providers that make unauthorized changes, including civil penalties for any violations of the statute or rules and more severe penalties for patterns of violations.

On December 17, 1998, the FCC issued an order in The Matter of Implementation of the Subscriber Carrier Selection Provisions of the Telecommunications Act of 1996, CC Docket No. 94-129 (the "FCC Order"), adopting new rules intended to protect each consumer's choice of telecommunications service providers. In this rule making, the Board proposes to adopt the FCC verification procedures by reference, so there can be no question regarding consistency.

Item 1 of the proposed rules adds a new rule 6.8(476) to the Board's rules, specifying certain special complaint procedures for allegations of unauthorized changes in telecommunications services. Generally, the complaints will be resolved pursuant to the Board's standard complaint procedures, with informal proceedings, a proposed resolution from Board staff, and an option for formal complaint proceedings in appropriate cases. However, a few special procedures will apply. For example, the time for the telephone utility's response to the initial complaint will be reduced to ten days, to be consistent with the FCC's verification procedures, and the proposed resolution may include an assessment of damages among the interested persons in each complaint proceeding, pursuant to 1999 Iowa Acts, House File 588, section 1. In this context, the Board interprets the term "assessment of damages" to mean, in most cases, only an allocation of the various telecommunications service charges at issue. Thus, the proposed resolution (or a Board order following formal complaint proceedings) will allocate responsibility for primary interexchange carrier (PIC) change charges, service charges, and other charges that have appeared or may appear on the customer's bill, but in the absence of unusual circumstances the proposed resolution or order will not assess among the parties any responsibility for incidental, consequential, punitive, or similar damages.

In Item 2, subrule 22.23(1) includes definitions of "slamming" (unauthorized changes in a consumer's preferred service provider), "cramming" (unauthorized additions or changes to the services on a customer account, for which a separate charge is made), and "jamming" (unauthorized account freezes that make it more difficult for a customer to change service providers upon demand).

Also in Item 2, proposed subrule 22.23(2) prohibits unauthorized changes in service and provides for verification of all changes to a customer account, along with customer notification of any such changes. Changes made at the request of a submitting service provider must be verified using one of the three FCC-approved verification procedures. Changes made as a result of a direct customer request to the executing service provider may be verified using the FCC procedures or through the internal records of the executing service provider, if those records contain sufficient information to establish the date and time of the request and the identity of the requesting customer. The proposed rules require that all verifications must be maintained for at least two years from the date the change is implemented. Verification of a preferred carrier freeze, however, must be maintained for the life of the freeze, since a customer may not be aware of an unauthorized freeze until the customer tries to change the service.

The proposed rules require customer notification of all changes in service within 30 days of the effective date of the change, as required by 1999 Iowa Acts, House File 588, section 1. The notice must clearly and conspicuously identify the change, any charge or fee associated with the change, and the name and toll-free contact number of the service provider responsible for the change. This information may be included as a line item in the billing portion of the customer's bill, as a separate written statement on the bill, in a separate mailing to the customer, or by such other means as will provide the required information in a clear and conspicuous manner.

The proposed rules adopt by reference the FCC regulations regarding preferred carrier freezes. The Board notes that the FCC rules do not make express provision for verification of the lifting of a freeze if that occurs separate from a change in service. The Board invites comment concerning the question of whether some form of verification is, or should be, required when a service freeze is lifted, especially if that change occurs separate from any other service changes.

Proposed subrule 22.23(3) requires that all carriers providing or billing for telecommunications services to customers located in Iowa register with the Board, using the form provided. This will allow the Board to assemble a directory of telephone service providers offering services in Iowa, permitting Board staff to contact each of them in the event a customer complaint is received. This directory is a critical part of the Board's power to enforce these rules. As noted previously, in 1998 the Board received 428 calls alleging slamming. These calls appeared to involve over 100 non-local service providers. In some cases, the service provider's name (as provided by the complaining customer) appears to be a variation on the name of another, often well-known, carrier. This sometimes makes it difficult for the Board to determine whether the alleged slammer is an established carrier or a new entrant that may have intentionally adopted a similar name in an attempt to confuse potential customers. The directory should help to resolve these issues more easily and quickly.

Proposed subrule 22.23(4) refers the reader to Chapter 6 of the Board's rules for the applicable complaint procedures.

Proposed subrule 22.23(5) provides penalties for violations of the anti-slamming statute or rules. These include civil penalties for any violation of the provisions of 1999 Iowa Acts, House File 588, or the proposed Board rules, along with more severe sanctions for behavior revealing a pattern of violations on the part of a telephone service provider. The Board is not proposing a specific number of violations that will establish a pattern of violations; the number may vary depending upon the circumstances. For example, a service provider that has only 10 customers in the state, all 10 of whom are the victims of slamming, may have demonstrated a pattern of violations sufficient to justify severe sanctions, while a service provider with hundreds of thousands of customers in Iowa and 20 slamming complaints may be experiencing only a small percentage of inadvertently mishandled customer requests, which may not amount to a pattern of violations. Further complicating the question of what constitutes a pattern of violations is the fact that as service offerings become more numerous and complex, the resulting confusion is likely to produce more service order errors, both by customers and service providers. For these reasons, the Board proposes to determine whether a provider has shown a pattern of violations based upon the facts of each specific situation, after notice to the affected persons and an opportunity for hearing.

Finally, proposed subrule 22.23(7) includes provisions for addressing complaints between telephone service providers. 1999 Iowa Acts, House File 588, grants primary jurisdiction over this subject matter to the Board. The proposed rule includes a provision permitting any party to request that a matter be immediately docketed as a formal complaint proceeding, bypassing the informal process, in appropriate circumstances.

Any interested person may file a written statement of position on the proposed rules no later than October 4, 1999, by filing an original and ten copies in a form substantially complying with 199 IAC 2.2(2). All written statements should be directed to the Executive Secretary, Iowa Utilities Board, 350 Maple Street, Des Moines, Iowa 50319-0069.

A public hearing to receive comments on the proposed amendments will be held at 10 a.m. on October 21, 1999, in the Board's hearing room at the address listed above.

These amendments are intended to implement Iowa Code sections 476.2 and 476.3(1) and 1999 Iowa Acts, House File 588.

The following amendments are proposed.

ITEM 1. Amend 199 IAC 6 by adopting the following new rule:

199--6.8(476) Special procedures for complaints alleging unauthorized changes in telecommunications services. Notwithstanding the deregulation of a communications service or facility pursuant to Iowa Code section 476.1D, complaints alleging an unauthorized change in telecommunications service (see rule 199--22.23(476)) will be processed pursuant to the rules set forth in this chapter with the following additional or substituted procedures:

6.8(1) Upon receipt of the written complaint and with the customer's acknowledgement, a copy of the complaint will be forwarded to the executing service provider and the preferred service provider as a request for a change in the subscriber's service to the subscriber's preferred service provider, unless the service has already been changed to the preferred service provider.

6.8(2) The complaint will also be forwarded to the alleged unauthorized service provider. That entity shall file a response to the complaint within ten days of the date the complaint was forwarded. The response must include proof of verification of the subscriber's authorization for a change in service or a statement that the unauthorized service provider does not have such proof of verification.

6.8(3) If the alleged unauthorized service provider includes with its response alleged proof of verification of the subscriber's authorization for a change in service, then the response will be forwarded to the customer. The customer will have ten days to challenge the verification or otherwise reply to the service provider's response.

6.8(4) As a part of the informal complaint proceedings, board staff may issue a proposed resolution to determine the potential liability, including assessment of damages, for unauthorized changes in service among the customer, the previous service provider, the executing service provider, and the submitting service provider, and any other interested person. In the event of a soft slam (as defined in 199 IAC 22.23(1)), board staff may also propose joint and several liability between the reseller and the facilities-based service provider. In all cases, the proposed resolution shall allocate responsibility among the interested persons on the basis of their relative responsibility for the events that are the subject matter of the complaint. For purposes of this rule and in the absence of unusual circumstances, the term "damages" means charges directly relating to the telecommunications services provided to the customer that have appeared or may appear on the customer's bill. The term "damages" does not include incidental, consequential, or punitive damages.

6.8(5) If the complainant, the service provider, consumer advocate, or any other interested person directly affected by the proposed decision is dissatisfied with the proposed resolution, a request for formal complaint proceedings may be filed. A request for civil penalties or for other penalties pursuant to 199 IAC 22.23(5) or (6) may also be filed with the request for formal complaint proceedings, although failure to request civil penalties as a part of the request for formal complaint proceedings does not preclude a later request for civil penalties. A request for formal complaint proceedings will be processed by the board pursuant to 199 IAC 6.5(476) et seq.

If no request for formal complaint proceedings is received by the board within 14 days after issuance of the proposed resolution, the proposed resolution will be deemed binding upon all persons notified of the informal proceedings and affected by the proposed resolution. Notwithstanding the binding nature of any proposed resolution as to the affected persons, the board may at any time and on its own motion initiate formal proceedings which may alter the allocation of liability and which may seek civil and other penalties.

6.8(6) No entity shall commence any actions to re-bill, directly bill, or otherwise collect any disputed charges for a change in service until after board action on the complaint is final. If final board action finds that the change in service was unauthorized and determines the customer should pay some amount less than the billed amount, the service provider is prohibited from re-billing or taking any other steps whatsoever to collect the difference between the allowed charges and the original charges.

ITEM 2. Amend 199 IAC 22 by adopting the following new rule:

199--22.23(476) Unauthorized changes in telephone service.

22.23(1) Definitions. As used in this rule, unless the context otherwise requires:

"Change in service" means the designation of a new provider of a telecommunications service to a consumer, including the initial selection of a service provider, and includes the addition or deletion of a telecommunications service for which a separate charge is made to a consumer account.

"Consumer" means a person other than a service provider who uses a telecommunications service.

"Cramming" means the addition or deletion of a product or service for which a separate charge is made to a telecommunications consumer account without the verified consent of the affected consumer. Cramming does not include the addition of extended area service to a customer account pursuant to board rules, even if an additional charge is made.

"Executing service provider" means, with respect to any change in telecommunications service, a service provider who executes an order for a change in service received from another service provider or from its own customer.

"Jamming" means the addition of a preferred carrier freeze to a consumer's account without the verified consent of the consumer.

"Letter of agency" means a written document complying with the requirements of 47 CFR § 64.1160 (1999).

"Preferred carrier freeze" means the limitation of a consumer's account so as to prevent any change in preferred service provider for one or more services unless the consumer gives the service provider from which the freeze was requested the consumer's express consent.

"Service provider" means a person providing a telecommunications service, not including commercial mobile radio service.

"Slamming" means the designation of a new provider of a telecommunications service to a consumer, including the initial selection of a service provider, without the verified consent of the consumer.

"Soft slam" means an unauthorized change in service by a service provider that uses the carrier identification code (CIC) of another service provider, typically through the purchase of wholesale services for resale.

"Submitting service provider" means a service provider who requests another service provider to execute a change in service.

"Telecommunications service" means a local exchange or long distance telephone service other than commercial mobile radio service.

"Verified consent" means verification of a consumer's authorization for a change in service.

22.23(2) Prohibition of unauthorized changes in telecommunications service.

a. Verification required. No telecommunications carrier shall submit a preferred carrier change order or other change in service order to another service provider unless and until the change has first been confirmed in accordance with the procedures set forth in 47 CFR § 64.1150 (1999). No telecommunications carrier shall execute a change in service on one of its own customer accounts unless and until the change has first been confirmed in accordance with the procedures set forth in 47 CFR § 64.1150 (1999) or through maintenance of sufficient internal records to establish a valid customer request for the change in service. At a minimum, any such internal records must include the date and time of the customer's request and adequate verification of the identification of the person requesting the change in service. The burden will be on the telecommunications carrier to show that its internal records are adequate to verify the customer's request for the change in service.

All verifications shall be maintained for at least two years from the date the change in service is implemented. Verification of service freezes shall be maintained for as long as the preferred carrier freeze is in effect.

b. Letter of agency form and content. A letter of agency must conform to the requirements of 47 CFR § 64.1160 (1999).

c. Customer notification. Every change in service shall be followed by a written notification to the affected customer to inform the customer of the change. Such notice shall be provided within 30 days of the effective date of the change. Such notice may include, but is not limited to, a conspicuous written statement on the customer's bill, a separate mailing to the customer's billing address, or a separate written statement included with the customer's bill. Each such statement shall clearly and conspicuously identify the change in service, any associated charges or fees, the name of the service provider associated with the change, and a toll-free number by which the customer may inquire about or dispute any provision in the statement.

d. Preferred carrier freezes. Preferred carrier freezes must comply with the requirements of 47 CFR § 64.1190 (1999).

22.23(3) Carrier registration.

a. Registration required. Each carrier that provides or bills for telecommunications services to customers located in Iowa shall register with the board and shall provide, at a minimum, the information specified in the form that appears in this subrule.

DEPARTMENT OF COMMERCE

UTILITIES BOARD

TELECOMMUNICATIONS SERVICE PROVIDER REGISTRATION

1. FULL NAME OF CARRIER PROVIDING SERVICE IN IOWA:

2. CARRIER MAILING ADDRESS (including 9-digit zip code):

3. NAME, TITLE, TELEPHONE NUMBER, AND FAX NUMBER OF CONTACT PERSON:

4. ALL TRADE NAMES OR D/B/A'S USED BY CARRIER IN IOWA OR IN ADVERTISING OR BILLING THAT MAY REACH IOWA CUSTOMERS:

5. NAME, MAILING ADDRESS, AND TELEPHONE NUMBER OF AGENT IN IOWA AUTHORIZED TO ACCEPT SERVICE OF PROC-ESS ON BEHALF OF CARRIER:

6. TYPES OF TELECOMMUNICATIONS SERVICE PROVIDED (CHECK ALL THAT APPLY):

____ LOCAL EXCHANGE SERVICE

____ INTEREXCHANGE SERVICE

____ DATA TRANSMISSION

____ ALTERNATIVE OPERATOR SERVICES ONLY

____ OTHER--PLEASE SPECIFY:___________________________

7. ATTESTATION. I, ___________________, certify that I am the company officer responsible for this registration, that I have examined the foregoing registration, and that to the best of my knowledge, information, and belief the information is accurate and will be updated as required.

Dated ____/____/____

SIGNATURE_________________________________

b. Failure to register. Failure to file and reasonably update a registration, or provision of false, misleading, or incomplete information, may result in civil penalties under subrule 22.23(5) and may be considered as evidence of a pattern or practice of violation of these rules.

22.23(4) Subscriber complaints regarding changes in service--procedures. When a telecommunications service provider is contacted by an Iowa customer alleging an unauthorized change in service, the service provider shall inform the customer of the customer's right to contact the board regarding the complaint. The service provider shall provide the customer with the board's toll-free number for complaints, (877)565-4450.

When a subscriber submits to the board a written complaint alleging an unauthorized change in service, the complaint will be processed by the board pursuant to 199--Chapter 6, "Complaint Procedures."

22.23(5) Civil penalties and assessment of damages.

a. Civil penalties. In addition to any applicable civil penalty set out in Iowa Code section 476.51, a service provider who violates a provision of the anti-slamming statute,a rule adopted pursuant to the anti-slamming statute, or anorder lawfully issued by the board pursuant to the anti-slamming statute, is subject to a civil penalty, which, after notice and opportunity for hearing, may be levied by the board, of not more than $10,000 per violation. Each violation is a separate offense.

b. Amount. A civil penalty may be compromised by the board. In determining the amount of the penalty, or the amount agreed upon in a compromise, the board may consider the size of the service provider, the gravity of the violation, any history of prior violations by the service provider, remedial actions taken by the service provider, the nature of the conduct of the service provider, and any other relevant factors.

c. Collection. A civil penalty collected pursuant to this subrule shall be forwarded by the executive secretary of the board to the treasurer of state to be credited to the general fund of the state and to be used only for consumer education programs administered by the board.

d. Exclusion from regulated rates. A penalty paid by a rate-of-return regulated utility pursuant to this subrule shall be excluded from the utility's costs when determining the utility's revenue requirement and shall not be included either directly or indirectly in the utility's rates or charges to its customers.

e. Civil actions. The board shall not commence an administrative proceeding to impose a civil penalty under this rule for acts subject to a civil enforcement action pending in court under Iowa Code section 714D.7.

f. Assessment of damages among interested persons. As a part of formal complaint proceedings, the board may determine the potential liability, including assessment of damages, for unauthorized changes in service among the customer, the previous service provider, the executing service provider, the submitting service provider, and any other interested persons. In the event of a soft slam, the board may impose joint and several liability on the reseller and the facilities-based service provider. For purposes of this rule and in the absence of unusual circumstances, the term "damages" means charges directly relating to the telecommunications services provided to the customer that have appeared or may appear on the customer's bill. The term "damages" does not include incidental, consequential, or punitive damages.

22.23(6) Penalties for patterns of violations. If the board determines, after notice and opportunity for hearing, that a service provider has shown a pattern of violations of these rules, the board may by order do any of the following:

a. Prohibit any other service provider from billing charges to residents of Iowa on behalf of the service provider determined to have engaged in such a pattern of violations.

b. Prohibit certificated local exchange service providers from providing exchange access services to the service provider.

c. Limit the billing or access services prohibition under paragraph "a" or "b" above to a period of time. Such prohibition may be withdrawn upon a showing of good cause.

d. Revoke the certificate of public convenience and necessity of a local exchange service provider.

22.23(7) Service provider complaints regarding changes in service. When a service provider files a written complaint charging another service provider with causing unauthorized changes in end user services to the detriment of the complaining service provider, the complaint will be processed pursuant to 199--Chapter 6, "Complaint Procedures," except that any party to the proceeding may petition the board for an order initiating formal complaint proceedings at any time, regardless of the status of the informal complaint proceedings. The board will grant such petitions or enter such an order on its own motion if the board finds that informal complaint proceedings are unlikely to aid in the resolution of the complaint.

FILED EMERGENCY

ARC 9246A

ECONOMIC DEVELOPMENT, IOWA DEPARTMENT OF[261]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code sections 15.104 and 15.106, the Iowa Department of Economic Development adopts amendments to Chapter 23, "Iowa Community Development Block Grant Program," Iowa Administrative Code.

The amendments create a flexible contingency fund that reserves up to 5 percent of the federal allocation to address imminent threat situations and exceptional opportunities that communities may encounter outside the parameters of normal funding cycles of the Community Development Block Grant Program.

In compliance with Iowa Code section 17A.4(2), the Department finds that notice and public participation are impracticable and contrary to the public interest because the need exists to implement this provision immediately in order to address community responses to natural disasters occurring in the spring and summer of 1999. There are no waiver provisions in the rules because the Department does not want to delay the award of funds, and the Department is required by federal regulations to establish the method of allocation of funds prior to award.

The Department finds, pursuant to Iowa Code section 17A.5(2)"b"(2), that the normal effective date of the amendments, 35 days after publication, should be waived and the rules be made effective on July 23, 1999. These amendments confer a benefit on the public by allowing the immediate ability to apply for funds to leverage other sources of state and federal funds in addressing threats to public health and safety.

The agency is taking the following steps to notify potentially affected parties of the effective date of the amendments: publishing the final amendments in the Iowa Administrative Bulletin, providing free copies on request, and having copies available wherever requests for information about the program are likely to be made.

The IDED Board adopted these amendments on July 22, 1999.

These amendments are also published herein under Notice of Intended Action as ARC 9245A to allow public comment.

These amendments are intended to implement Iowa Code section 15.108(1)"a."

These amendments became effective July 23, 1999.

The following amendments are adopted.

ITEM 1. Amend subrule 23.4(5) as follows:

23.4(5) ~~Imminent threat contingency fund. Up to $500,000 shall be reserved to fund projects that address an imminent threat to public health, safety or welfare that necessitates immediate corrective action.~~ Contingency funds. IDED reserves the right to allocate up to 5 percent of funds for projects dedicated to addressing threats to public health and safety and opportunities that would be foregone without immediate assistance.

ITEM 2. Rescind rule 261--23.10(15) and adopt the following new rule in lieu thereof:

261--23.10(15) Requirements for the contingency fund. The contingency fund is reserved for communities experiencing a threat to public health, safety or welfare that necessitates immediate corrective action sooner than can be accomplished through normal community development block grant procedures, or communities responding to an immediate community development opportunity that necessitates action sooner than can be accomplished through normal funding procedures. Up to 5 percent of CDBG funds may be used for this purpose.

23.10(1) Application procedure. Those local governments applying for contingency funds shall submit a written request to IDED, Division of Community and Rural Development, 200 East Grand Avenue, Des Moines, Iowa 50309. The request shall include a description of the situation, the project budget including the amount of the request from IDED, projected use of funds and an explanation of the reason that the situation cannot be remedied through normal CDBG funding procedures.

23.10(2) Application review. Upon receipt of a request for contingency funding, IDED shall determine whether the project is eligible for funding and notify the applicant of its determination. A project shall be considered eligible if it meets the following criteria:

a. Projects to address a threat to health and safety.

(1) An immediate threat to health, safety or community welfare must exist that requires immediate action.

(2) The threat must be the result of unforeseeable and unavoidable circumstances or events.

(3) No known alternative project or action would be more feasible than the proposed project.

(4) Sufficient other local, state or federal funds either are not available or cannot be obtained in the time frame required.

b. Projects to address an exceptional opportunity.

(1) A significant opportunity exists for the state that otherwise would be forgone if not addressed immediately.

(2) The opportunity is such that it was neither possible to apply to the CDBG program in a previous normal application time frame, nor is it possible to apply in a future normal CDBG application time frame.

(3) The project meets the funding standards established by the funding criteria set forth in this rule.

(4) Applicants can provide adequate information to IDED on total project design and cost as requested.

23.10(3) Additional information. IDED reserves the right to request additional information on forms prescribed by IDED prior to making a final funding decision. IDED reserves the right to negotiate final project award and design components.

23.10(4) Future allocations. IDED reserves the right to reserve future funds anticipated from federal CDBG allocations to the contingency fund to offset current need for commitment of funds which may be met by amounts deferred from current awards.

[Filed Emergency 7/22/99, effective 7/23/99]

[Published 8/11/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 8/11/99.

ARC 9256A

ENGINEERING AND LAND SURVEYING EXAMINING BOARD[193C]

Adopted and Filed Emergency After Notice

Pursuant to the authority of Iowa Code section 542B.6, the Engineering and Land Surveying Examining Board hereby amends Chapter 1, "Administration," Iowa Administrative Code.

This amendment clarifies and revises the cutoff dates for applications to take examinations. Applications for senior engineering students to take the Fundamentals of Engineering examination have been extended from August 1 to September 1 for the fall examination and from February 1 to March 1 for the spring examination. This revision is being made to set the deadline after school starts in the fall semester at the request of the engineering colleges and because these applications do not require board review. The cutoff dates for all other examinations remain the same at August 1 and February 1 because those applications require a more extensive review by administrative staff and the Board to determine eligibility to sit for the examinations.

Notice of Intended Action was published in the Iowa Administrative Bulletin on June 16, 1999, as ARC 9127A. The adopted amendment is identical to the one published under Notice.

Pursuant to Iowa Code section 17A.5(2)"b"(2), the Board is filing this amendment Emergency After Notice because the Board believes that this amendment will confer a benefit and remove a restriction on a segment of the public by allowing senior student applications to be submitted a month later than previously allowed by rules.

This amendment is intended to implement Iowa Code section 542B.13.

This amendment will become effective July 23, 1999.

The following amendment is adopted.

Rescind rule 193C--1.5(542B) and adopt the following new rule in lieu thereof:

193C--1.5(542B) Cutoff dates for applications to take examinations. Applications for the Fundamentals of Engineering Examination from college seniors studying an Accreditation Board of Engineering and Technology (ABET) or Canadian Engineering Accreditation Board (CEAB) approved curriculum must be postmarked on or before September 1 of each year for the examination given in the fall and by March 1 of each year for the examination given in the spring. All other applications for the Fundamentals of Engineering, Fundamentals of Land Surveying, Principles and Practice of Engineering, and Principles and Practice of Land Surveying examinations require a more detailed review and must, therefore, be postmarked on or before August 1 of each year for the examination given in the fall and by February 1 of each year for the examination given in the spring.

[Filed Emergency After Notice 7/23/99, effective 7/23/99]

[Published 8/11/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 8/11/99.

ARC 9265A

HISTORICAL DIVISION[223]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code sections 17A.3 and 303.1A, the Historical Division of the Department of Cultural Affairs proposes to amend Chapter 50, "Historic Site Preservation Grant Program," Iowa Administrative Code.

The amendments clarify procedures for the Historic Site Preservation Grant program as recommended by the grants advisory committee. The committee recommended the amendments to allow for more funding to be available to a variety of applicants in a broader distribution of counties in Iowa.

In compliance with Iowa Code section 17A.4(2), the Department finds that notice and public participation are impracticable because of the immediate need for rule change to implement new provisions of the grants rules prior to this year's deadline of September 14.

The Department also finds, pursuant to Iowa Code section 17A.5(2)"b"(2), that the normal effective date of the amendments should be waived and these amendments should be made effective upon filing on July 23, 1999, as they confer a benefit on the public by allowing more funding for a variety of applicants.

These amendments are intended to implement Iowa Code sections 303.1A and 303.2.

These amendments became effective July 23, 1999.

The following amendments are adopted.

ITEM 1. Amend rule 223--50.2(303), definition of "Infrastructure," as follows:

"Infrastructure" is defined in Iowa Code section 8.57(5c) as "vertical infrastructure" and shall include only land acquisition ~~and~~ for construction, major rehabilitation of buildings, all appurtenant structures, utilities, and site developments.

ITEM 2. Amend subrule 50.3(2) as follows:

50.3(2) Eligible projects. Grants under this program shall be used for "vertical infrastructure" as defined in Iowa Code section 8.57(5c). Applicants shall submit only one grant application per funding cycle. Projects that received designated legislative earmarking of funds ~~as set forth in 1998 Iowa Acts, Senate File 2381, section 3,~~ in the current fiscal year shall not be eligible for funding through this program. Projects that received funding from this program are ineligible to apply for three years from the date of grant award.

ITEM 3. Amend subrule 50.3(6) as follows:

50.3(6) Assistance ceiling and cost share. Grants to any individual project shall not exceed ~~$200,000~~ $100,000. Project sponsors shall provide cash match at the rate of one dollar for each state grant dollar. An applicant shall certify that it has committed its share of project costs by the time final payment is made. State funds shall not be used as cash match for this program. Indirect costs and staff salaries shall not be used as match.

ITEM 4. Amend subrule 50.3(8) as follows:

50.3(8) Geographic distribution of funds. No more than ~~25 percent of the undesignated funds shall be~~ two projects may be awarded in any grant cycle ~~to projects~~ within a single county.

ITEM 5. Amend subrule 50.6(4) as follows:

50.6(4) Disbursement of funds. All project moneys, including grant funds and matching funds, shall be expended within the period established by legislation. ~~Projects awarded during state fiscal year 1999 shall incur all costs, including the required cash match, by June 30, 2001.~~ Disbursement of grant funds shall be made on a schedule as determined in the contractual agreement.

ITEM 6. Adopt new subrule 50.6(9) as follows:

50.6(9) Technical assistance. The department may use up to 2 percent of the total appropriation for providing technical assistance to grant applicants and for administrative costs incurred in implementing the program.

[Filed Emergency 7/23/99, effective 7/23/99]

[Published 8/11/99]

EDITOR'S NOTE: For replacement pages for IAC, see IAC Supplement 8/11/99.

ARC 9268A

UTILITIES DIVISION[199]

Adopted and Filed Emergency

Pursuant to the authority of Iowa Code sections 17A.4(2), 17A.5(2)"b"(2) and 476.2 and 1999 Iowa Acts, House File 588, section 1, the Utilities Board (Board) gives notice that on July 23, 1999, the Board issued an order in Docket No. RMU-99-8, Unauthorized Changes of Telecommunications Service (Emergency Rules), "Order Adopting Rules Without Notice and Providing for Early Effective Date," adopting procedural rules for complaints alleging changes in telephone services that are not authorized by the affected customer. On the same date, the Board also issued an order proposing to adopt the same rules (and other proposed rules, described below) through a regular notice-and-comment proceeding. A Notice of Intended Action, ARC 9267A, is being published simultaneously with this emergency filing. By this reference, the Board incorporates herein the preamble from the proposed rules to explain the reasons for adopting these rules. It is the Board's intention that the proposed rules, modified if necessary based upon the comments received, will be adopted to replace these emergency rules.

The Board finds it is appropriate to adopt these rules without notice and public participation, pursuant to Iowa Code section 17A.4(2), because it would be contrary to the public interest to delay the effectiveness of these rules while public comment is received. As described in the Notice of Intended Action for the proposed rules, the problems of unauthorized changes in telecommunications service, sometimes known as "slamming" and "cramming," are increasing rapidly. In 1999 Iowa Acts, House File 588, the Iowa General Assembly declares that unauthorized changes in telecommunications service are a form of consumer fraud. 1999 Iowa Acts, House File 588, gives the Board the authority to adopt rules prohibiting unauthorized changes and to hear and decide complaints alleging unauthorized changes. Without procedural rules, however, the Board cannot process those complaints. It would be contrary to the public interest to delay these procedural rules to receive public comment when the rules do little more than implement the new statute.

For similar reasons, the Board finds, pursuant to Iowa Code section 17A.5(2)"b"(2), that these rules will confer a benefit on the public sufficient to justify an effective date of August 2, 1999, which is earlier than the effective date that would otherwise apply. With these rules, the Board will be able to offer Iowa telecommunications customers an efficient mechanism for resolving slamming and cramming complaints. Swift, certain resolution of these complaints will decrease or eliminate the existing economic incentive to engage in this particular form of consumer fraud, thereby conferring a benefit on all Iowans who use local or long-distance telephone services.

The rules being adopted on an emergency basis are described as follows:

Item 1 of the adopted rules adds a new rule 6.8(476) to the Board's rules, specifying the complaint procedures for allegations of unauthorized changes in telecommunications services. Generally, the complaints will be resolved pursuant to the Board's standard complaint procedures, with informal proceedings, a proposed resolution from Board staff, and an option for formal complaint proceedings in appropriate cases.

Item 2 of the adopted rules provides definitions applicable only to this particular type of utility action. Item 2 also includes subrule 22.23(2), which prohibits unauthorized changes in service and provides for verification of all changes to a customer account, along with customer notification of any such changes. Changes made at the request of a submitting service provider must be verified using one of the three FCC-approved verification procedures (written, electronic, and independent third party). Because the Board is adopting the existing FCC verification procedures, adoption of these emergency rules will not require any telephone service provider to change its existing verification procedures.

Changes made as a result of a direct customer request to the executing service provider may be verified using the FCC procedures or through the internal records of the executing service provider, if those records contain sufficient information to establish the date and time of the request and the identity of the requesting customer. Again, because all three FCC-approved verifications methods are permitted (along with an additional option), adoption of these emergency rules should not require any telephone service provider to change its existing verification procedures.

The adopted rules require customer notification of all changes in service within 30 days of the effective date of the change, as required by 1999 Iowa Acts, House File 588, section 1. The notice must clearly and conspicuously identify the change, any charge or fee associated with the change, and the name and toll-free contact number of the service provider responsible for the change. This information may be included as a line item in the billing portion of the customer's bill, as a separate written statement in the bill envelope, in a separate mailing to the customer, or by such other means as will provide the required information in a clear and conspicuous manner.

The next section of the adopted rules, identified as proposed subrule 22.23(4), requires each telephone service provider to inform complaining customers of their right to contact the Board and refers the reader to Chapter 6 of the Board's rules for the applicable complaint procedures.

Finally, adopted subrule 22.23(7) includes provisions for addressing complaints between telephone service providers. 1999 Iowa Acts, House File 588, grants primary jurisdiction over this subject matter to the Board. The rule includes a provision permitting any party to request that a matter be immediately docketed as a formal complaint proceeding, bypassing the informal process, in appropriate circumstances.

The proposed rules in Docket No. RMU-99-7, set forth in the companion Notice of Intended Action, ARC 9267A, include other provisions that the Board is not adopting on an emergency basis. These include a requirement that all telephone service providers in Iowa must register with the Board and various penalties applicable to a service provider that demonstrates a pattern of violations.

Because of the practice changes that will have to be implemented by telephone service providers as a result of these rules, the Board is taking steps to provide affected companies with immediate notice of these emergency-adopted rules. First, the Board will mail copies of this notice and the notice of proposed rule making to each telephone company that holds a certificate of public convenience and necessity under Iowa Code section 476.29, to each company that has an application for certificate pending, and to the Iowa Telecommunications Association. Second, the Board will post copies of this notice and the notice of proposed rule making on the Board's web page, http://www.state.ia.us/government/com/util/orders.htm. Finally, the Board will cause this notice to be published in the Iowa Administrative Bulletin.

These amendments became effective August 2, 1999.

These amendments are intended to implement Iowa Code sections 476.2 and 476.3(1) and 1999 Iowa Acts, House File 588.

The following amendments are adopted.

ITEM 1. Amend 199 IAC 6 by adopting the following new rule:

6.8(1) Upon receipt of the written complaint and with the customer's acknowledgment, a copy of the complaint will be forwarded to the executing service provider and the preferred service provider as a request for a change in the subscriber's service to the subscriber's preferred service provider, unless the service has already been changed to the preferred service provider.

6.8(4) As a part of the informal complaint proceedings, board staff may issue a proposed resolution to determine the potential liability, including assessment of damages, for unauthorized changes in service among the customer, the previous service provider, the executing service provider, and the submitting service provider, and any other interested person. In the event of a soft slam (as defined in 199 IAC 22.23(1)"j"), board staff may also propose joint and several liability between the reseller and the facilities-based service provider. In all cases, the proposed resolution shall allocate responsibility among the interested persons on the basis of their relative responsibility for the events that are the subject matter of the complaint. For purposes of this rule and in the absence of unusual circumstances, the term "damages" means charges directly relating to the telecommunications services provided to the customer that have appeared or may appear on the customer's bill. The term "damages" does not include incidental, consequential, or punitive damages.