Senate File 2470 S-5142 Amend Senate File 2470 as follows: 1 1. Page 1, before line 1 by inserting: 2 < DIVISION I 3 DESIGNATED CONTRACT MARKET TAX > 4 2. Page 1, line 35, by striking < an authorized > and 5 inserting < a > 6 3. Page 3, line 5, by striking < ten > and inserting < twenty > 7 4. Page 3, line 8, by striking < Prediction > and inserting 8 < Designated contract > 9 5. Page 3, after line 25 by inserting: 10 < Sec. ___. NEW SECTION . 99H.8 Applicability. 11 This chapter applies to a designated contract market 12 permitting persons in this state to trade event-driven 13 contracts until such time a court of competent jurisdiction, 14 after all appeals have been exhausted, determines that 15 event-driven contracts are subject to regulation under chapter 16 99F. > 17 6. Page 5, line 18, after < this > by inserting < division of 18 this > 19 7. Page 5, line 20, by striking < Act enacting section 20 422.33 > and inserting < division of this Act enacting section 21 422.35 > 22 8. Page 5, line 23, by striking < prediction > and inserting 23 < designated contract > 24 9. Page 5, after line 26 by inserting: 25 < DIVISION ___ 26 EVENT-DRIVEN CONTRACT EXCISE TAX 27 Sec. ___. NEW SECTION . 453F.1 Definitions. 28 As used in this chapter, unless the context otherwise 29 requires: 30 1. “Department” means the department of revenue. 31 2. “Designated contract market” means a digital marketplace 32 for trading event-driven contracts that is also regulated by 33 the federal commodity futures trading commission. 34 3. “Director” means the director of revenue. 35 -1- SF 2470.3707 (1) 91 jm/jh 1/ 4 #1. #2. #3. #4. #5. #6. #7. #8. #9.

4. “Economic indicators” means a statistic or data point 1 about an economic activity that allows an analyst to assess 2 current economic performance. 3 5. “Event-driven contract” means a financial derivative 4 traded on a designated contract market that provides a fixed 5 binary payout based upon the occurrence or nonoccurrence of a 6 specific future event that is contingent upon and determined 7 solely by the definitive outcome of a verifiable specific event 8 or external measure rather than being based upon the continuous 9 fluctuation of a security price, commodity value, or interest 10 rate that may or may not correlate with traditional market 11 prices or broad economic measures. An “event-driven contract” 12 is limited to those financial derivatives that provide a fixed 13 binary payout related to sporting activities, lotteries, 14 elections, legislative actions, and economic indicators. 15 6. “Sporting activities” means the outcome of a sporting 16 event, outcomes within the event, or outcomes surrounding the 17 event. 18 7. “Trader” means any person buying or selling event-driven 19 contracts on a designated contract market. 20 Sec. ___. NEW SECTION . 453F.2 Scope of chapter. 21 This chapter does not apply to the pari-mutuel system of 22 wagering used or intended to be used in connection with the 23 horse-race or dog-race meetings as authorized under chapter 24 99D, fantasy sports contests as authorized under chapter 25 99E, sports wagering authorized under chapter 99F, or other 26 financial derivatives that are not event-driven contracts. 27 Sec. ___. NEW SECTION . 453F.3 Event-driven contract excise 28 tax. 29 For the privilege of doing business in the state as a 30 designated contract market, a tax is imposed on the amount 31 to buy an event-driven contract on a designated contract 32 market at the rate of twenty percent of the amount to buy the 33 event-driven contract. The taxes imposed for event-driven 34 contracts under this chapter shall be collected by the 35 -2- SF 2470.3707 (1) 91 jm/jh 2/ 4

designated contract market and paid to the treasurer of state 1 as determined by the department. 2 Sec. ___. NEW SECTION . 453F.4 Revenues. 3 All revenues generated under this chapter shall be deposited 4 into the general fund of the state. 5 Sec. ___. NEW SECTION . 453F.5 Administration. 6 1. The director shall administer the excise tax imposed 7 under this chapter as nearly as possible in conjunction with 8 the administration of the state sales and use tax law, except 9 that portion of the law that implements the streamlined sales 10 and use tax agreement. The director shall provide appropriate 11 forms, or provide on the regular state tax forms, for reporting 12 event-driven contract excise tax liability, and for ease 13 of administration may require event-driven contract excise 14 tax liability to be identified, reported, and remitted to 15 the department as sales and use tax liability, provided the 16 department has the ability to properly identify such amounts as 17 event-driven contract excise tax revenues upon receipt. 18 2. The director may require all persons who are engaged 19 in the business of deriving any sales price or purchase 20 price subject to tax under this chapter to register with 21 the department. The director may also require a tax permit 22 applicable only to this section for any designated contract 23 market not collecting, or any trader not paying, taxes under 24 chapter 423. 25 3. Section 422.25, subsection 4, sections 422.30, 422.67, 26 and 422.68, section 422.69, subsection 1, sections 422.70, 27 422.71, 422.72, 422.74, and 422.75, section 423.14, subsection 28 1, and sections 423.23, 423.24, 423.25, 423.31 through 423.35, 29 423.37, 423.39 through 423.42, and 423.47, consistent with 30 the provisions of this chapter, shall apply with respect to 31 the tax authorized under this chapter in the same manner and 32 with the same effect as if the excise taxes on the trades 33 were retail sales taxes within the meaning of those statutes. 34 Notwithstanding this subsection, the director shall provide for 35 -3- SF 2470.3707 (1) 91 jm/jh 3/ 4

monthly filing of returns and for other than monthly filing of 1 returns both as prescribed in section 423.31. 2 4. The tax imposed by this chapter shall not apply with 3 respect to any trades which under the constitution and laws of 4 the United States may not be made the subject of taxation by 5 this state. 6 5. The tax imposed by this chapter shall be in addition to 7 any other taxes imposed by law. 8 6. All excise taxes collected under this chapter by any 9 person are deemed to be held in trust for the state of Iowa. 10 7. The department shall adopt rules pursuant to chapter 17A 11 to administer this chapter. 12 Sec. ___. CONTINGENT EFFECTIVE DATE. This division of this 13 Act takes effect six months from the date the attorney general 14 notifies the general assembly and the Code editor that the tax 15 imposed in section 99H.5, if enacted by this Act, has been 16 declared unconstitutional or is otherwise unenforceable by the 17 state, and all appeals have been exhausted. > 18 10. Title page, line 3, after < revenues > by inserting < or 19 amounts traded > 20 11. Title page, line 5, by striking < applicability > and 21 inserting < contingent effective date, applicability, > 22 12. By renumbering as necessary. 23 ______________________________ DAN DAWSON -4- SF 2470.3707 (1) 91 jm/jh 4/ 4 #10. #11. #12.